CHOICEONE FINANCIAL SERVICES INC Stock Compensation Disclosure

Note 15 - Stock Based Compensation

Options to buy stock have been granted to key employees to provide them with additional equity interests in ChoiceOne under the Stock Incentive Plan of 2012, which is expired. Compensation expense in connection with stock options granted was $0 in 2025 and 2024. The Equity Incentive Plan of 2022 was approved by the Company’s shareholders at the Annual Meeting held on May 25, 2022. The Equity Incentive Plan of 2022 provides for the issuance of up to 200,000 shares of common stock. At December 31, 2025, there were 108,239 shares available for future grants.

A summary of stock options activity during the year ended December 31, 2025 was as follows:

The exercise prices for options outstanding and exercisable at the end of 2025 ranged from $20.86 to $27.25 per share. The weighted average remaining contractual life of options outstanding and exercisable at the end of 2025 was approximately 2.60 years.

The intrinsic value of all outstanding and exercisable stock options was $27,000 and $66,000 respectively, at December 31, 2025 and December 31, 2024. The aggregate intrinsic values of outstanding and exercisable options at December 31, 2025 were calculated based on the closing market price of the Company’s common stock on December 31, 2025 of $29.52 per share less the exercise price.

Information pertaining to options outstanding at December 31, 2025 was as follows:

The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model. ChoiceOne uses historical data to estimate the volatility of the market price of ChoiceOne stock and employee terminations within the valuation model. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. As of December 31, 2025, there was no unrecognized compensation expense related to stock options.

ChoiceOne has granted restricted stock units to a select group of employees under the Stock Incentive Plan of 2012 and the Equity Incentive Plan of 2022. Restricted stock units outstanding as of December 31, 2025 vest on the three year anniversary of the grant date. Certain additional vesting provisions apply. Each restricted stock unit, once vested, is settled by delivery of one share of ChoiceOne common stock. ChoiceOne recognized compensation expense of $736,000, $596,000 and $548,000 in 2025, 2024 and 2023, respectively, in connection with restricted stock units for current participants during these years.

A summary of the activity for restricted stock units outstanding during the year ended December 31, 2025 is presented below:

At December 31, 2025, there were 67,989 restricted stock units outstanding with an approximate stock value of $2.0 million based on ChoiceOne’s December 31, 2025 closing stock price of $29.52 per share. At December 31, 2024, there were 74,584 restricted stock units outstanding with an approximate stock value of $2.7 million based on ChoiceOne’s December 31, 2024 closing stock price of $35.64 per share. The grant date fair value of restricted stock units granted was $779,000 and $615,000 in 2025 and 2024, respectively. The cost is expected to be recognized over a weighted average period of 1.41 years. As of December 31, 2025, there was $824,000 of unrecognized compensation cost related to unvested shares granted.

ChoiceOne has granted performance stock units to a select group of employees under the Stock Incentive Plan of 2012 and the Equity Incentive Plan of 2022. Performance stock units outstanding as of December 31, 2025 vest on the five year anniversary of the grant date based on earnings per share growth rate from the date of the grant. Shares can vest at a rate of 125%, 100%, 75%, or 0% based on the growth rate achieved over the five year time frame. Certain additional vesting provisions apply. Each performance stock unit, once vested, is settled by delivery of one share of ChoiceOne common stock. ChoiceOne recognized compensation expense of $89,000, $84,000 and $81,000 in 2025, 2024 and 2023, respectively, in connection with performance stock units for current participants during these years.

A summary of the activity for performance stock units outstanding during the year ended December 31, 2025 is presented below:

At December 31, 2025, there were 23,712 performance stock units outstanding assuming 100% vesting with an approximate stock value of $700,000 based on ChoiceOne’s December 31, 2025 closing stock price of $29.52 per share. At December 31, 2024, there were 16,552 performance stock units outstanding assuming 100% vesting with an approximate stock value of $590,000 based on ChoiceOne’s December 31, 2024 closing stock price of $35.64 per share. The grant date fair value of performance stock units granted was $204,000 and $125,000 in 2025 and 2024, respectively. The cost is expected to be recognized over a weighted average period of 2.92 years. As of December 31, 2025, there was $327,000 of unrecognized compensation cost related to unvested shares granted.