National Bank Holdings Corp Stock Compensation Disclosure
Note 15 Stock-based Compensation and Benefits
The Company provides stock-based compensation primarily in accordance with shareholder-approved plans. On May 9, 2023, shareholders approved the 2023 Omnibus Incentive Plan, which replaced the 2014 Omnibus Incentive Plan, pursuant to which the Company grants equity awards. Pursuant to the Omnibus Plan, the Compensation Committee of the Board of Directors has the authority to grant, from time to time, awards of stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, other stock-based awards, or any combination thereof to eligible persons.
As of December 31, 2025, 878,446 shares of common stock were available for issuance under the Omnibus Plan. Any shares subject to awards issued under the Omnibus Plan are counted against the amount available for issuance as one share for every one share granted. The Omnibus Plan provides for recycling of shares, the terms of which are further described in the Omnibus Plan. Upon an option exercise, it is the Company’s policy to issue shares from treasury stock.
To date, the Company has issued stock options, restricted stock and PSUs under the plans. If awarded, the Compensation Committee sets the option exercise price at the time of grant, but in no case is the exercise price less than the fair market value of a share of Company common stock at the date of grant.
During 2023, the Compensation Committee approved the adoption of the 2UniFi Plan, an equity incentive plan with respect to Class B units of 2Unifi, LLC, a wholly owned subsidiary of the Company. The 2UniFi Plan provides for the grant of up to 200,000 Class B Units (intended to be in the form of profit interests) to the employees and other service providers of 2UniFi and its affiliates, including the executive officers of the Company. The 2UniFi Plan is administered by the Managing Member Board of 2UniFi and any grant of Class B units to an executive officer of the Company is subject to the approval of the Company’s Compensation Committee. At December 31, 2025 and 2024, there were 112,000 and 122,000 units outstanding, respectively. The awards vest over a five-year period with 50% of the awards vesting on the third anniversary of the grant date, and 25% vesting on the fourth and fifth anniversary of the grant date, respectively. At December 31, 2025, there was $35.9 thousand of total unrecognized compensation cost related to non-vested units under the 2UniFi Plan.
Stock options
Prior to 2024, the Company issued stock options, which are primarily time-vesting with vesting on each of the first, second and third anniversary of the date of grant or date of hire. The expense associated with the awarded stock options was measured at fair value using a Black-Scholes option-pricing model. The outstanding option awards vest on a graded basis over 1-3 years of continuous service and have 10-year contractual terms.
The Company issued no stock options during 2025 or 2024. Below are the weighted average assumptions used in the Black-Scholes option pricing model to determine fair value of the Company’s stock options granted in 2023:
2023 | ||
Weighted average fair value | $ | 9.01 |
Weighted average risk-free interest rate(1) | 3.57% | |
Expected volatility(2) | 32.48% | |
Expected term (years)(3) | 6.05 | |
Dividend yield(4) | 2.99% | |
(1) | | The risk-free rate for the expected term of the options was based on the U.S. Treasury yield curve at the date of grant and based on the expected term. |
(2) | | Expected volatility was calculated using historical volatility of the Company’s stock price for a period commensurate with the expected term of the options. |
(3) | | The expected term was estimated to be the average of the contractual vesting term and time to expiration. |
(4) | | The dividend yield was calculated in accordance with the Company’s dividend policy at the time of grant. |
The following table summarizes stock option activity for 2025:
Weighted | ||||||||||
average | ||||||||||
Weighted | remaining | |||||||||
average | contractual | Aggregate | ||||||||
exercise | term in | intrinsic | ||||||||
Options | price | years | value | |||||||
Outstanding at December 31, 2024 | 563,992 | $ | 32.90 | 5.37 | $ | 5,759 | ||||
Granted | — | — | ||||||||
Exercised | (5,423) | 25.70 | ||||||||
Forfeited | (17,097) | 34.62 | ||||||||
Outstanding at December 31, 2025 | 541,472 | 32.92 | 4.30 | 3,125 | ||||||
Options exercisable at December 31, 2025 | 511,155 | 32.88 | 4.12 | 2,987 | ||||||
Options vested and expected to vest | 540,712 | 32.92 | 4.29 | 3,122 | ||||||
At December 31, 2025 and 2024, the Company had 541,472 and 563,992 stock options outstanding, respectively, at a weighted average exercise price of $32.92 and $32.90, respectively. Stock option expense is a component of salaries and benefits in the consolidated statements of operations and totaled $0.1 million, $0.3 million and $0.9 million for 2025, 2024 and 2023, respectively. At December 31, 2025, there was $19.0 thousand of total unrecognized compensation cost related to non-vested stock options granted. The cost is expected to be recognized over a weighted average period of 0.3 years.
The following table summarizes the Company’s outstanding stock options:
Options outstanding | Options exercisable | ||||||||||||||
Weighted average | |||||||||||||||
Number | remaining contractual | Weighted average | Number | Weighted average | |||||||||||
Range of exercise price | outstanding | life (years) | exercise price | exercisable | exercise price | ||||||||||
$ | 18.00 | - | 22.99 | 7,297 | 0.16 | $ | 19.56 | 7,297 | $ | 19.56 | |||||
23.00 | - | 27.99 | 114,684 | 4.12 | 23.15 | 114,684 | 23.15 | ||||||||
28.00 | - | 32.99 | 68,407 | 2.14 | 32.62 | 68,407 | 32.62 | ||||||||
33.00 | - | 37.99 | 220,477 | 4.35 | 33.85 | 190,160 | 33.91 | ||||||||
38.00 | and above | 130,607 | 5.74 | 40.82 | 130,607 | 40.82 | |||||||||
Restricted stock awards
The Company issues time-based restricted stock awards that generally vest over a range of a -3 year period. Restricted stock with time-based vesting was valued at the fair value of the shares on the date of grant as they are assumed to be held beyond the vesting period.
Performance stock units
During the years ended December 31, 2025, 2024 and 2023, the Company granted 74,268, 79,254, and 79,215 performance stock units, respectively, in accordance with the Omnibus Plan. The Company grants PSUs whereby the recorded fair value represents the value of the award at the initial target performance and does not reflect potential increases or decreases resulting from the final performance results, which are to be determined at the end of the three-year performance period (vesting date). The actual number of shares of common stock to be awarded at the end of the performance period will range from 0% - 150% of the initial target awards.
For PSU components granted in 2025, of the award is based on the Company’s cumulative earnings per share (EPS target), is based on the Company’s relative ROTA, and is based on the Company’s relative TSR during the performance period. On the vesting date, the Company’s annual ROTA will be compared to the respective ROTAs of companies comprising the S&P 600 Regional Banks group. The Company’s ranking will be averaged over the measurement period to determine the shares awarded. The fair value of the ROTA award was determined based on the closing stock price of the Company’s common stock on the grant date. On the vesting date, the Company’s TSR will be compared to the respective TSRs of the companies comprising the S&P 600 Regional Banks group at the grant date to determine the shares
awarded. The fair value of the TSR target portion of the award was determined using a Monte Carlo Simulation at the grant date. The fair value of the EPS target portion of the award was determined based on the closing stock price of the Company’s common stock on the grant date.
For the awards granted during the year ended December 31, 2025, the weighted-average grant date fair values per unit of the EPS target portion, ROTA target portion and TSR target portion were $38.44, $38.44 and $32.19, respectively. The weighted-average grant date fair value per unit for the EPS target portion, ROTA target portion and the TSR target portion granted during 2024 were $35.41, $35.41 and $34.91, respectively. The initial weighted-average performance price for the TSR target portion granted during 2025 was $45.14. During 2025, the Company awarded an additional 3,723 PSUs due to final performance results related to PSUs granted in 2022. During 2024, the Company cancelled 530 units due to final performance results related to performance stock units granted in 2021.
For PSU components granted in 2023, sixty percent of the award was based on the Company’s cumulative EPS and forty percent of the award was based on the Company’s cumulative TSR during the performance period. On the vesting date, the Company’s TSR will be compared to the respective TSRs of the companies comprising the KBW Regional Index at the grant date to determine the shares awarded.
The following table summarizes restricted stock and PSU activity during 2025 and 2024:
Weighted | Weighted | |||||||||
Restricted | average grant- | Performance | average grant- | |||||||
stock shares | date fair value | stock units | date fair value | |||||||
Unvested at December 31, 2023 | 240,584 | $ | 34.47 | 171,782 | $ | 34.56 | ||||
Granted | 186,050 | 35.43 | 79,254 | 35.24 | ||||||
Adjustment due to performance | — | — | (530) | 35.75 | ||||||
Vested | (108,762) | 35.85 | (46,490) | 37.82 | ||||||
Forfeited | (25,858) | 35.97 | (5,752) | 32.66 | ||||||
Unvested at December 31, 2024 | 292,014 | $ | 34.43 | 198,264 | $ | 34.31 | ||||
Granted | 175,972 | 37.99 | 74,628 | 36.10 | ||||||
Adjustment due to performance | — | — | 3,723 | 55.54 | ||||||
Vested | (122,766) | 36.19 | (51,658) | 39.63 | ||||||
Forfeited | (42,064) | 35.94 | (12,444) | 33.16 | ||||||
Unvested at December 31, 2025 | 303,156 | $ | 35.57 | 212,513 | $ | 34.09 | ||||
As of December 31, 2025, the total unrecognized compensation cost related to the non-vested restricted stock awards and PSUs totaled $5.0 million and $3.4 million, respectively, and is expected to be recognized over a weighted average period of approximately 2.0 years and 1.8 years, respectively. Expense related to non-vested restricted stock awards totaled $5.3 million, $5.1 million and $4.3 million during 2025, 2024 and 2023, respectively. Expense related to non-vested performance stock units totaled $1.9 million, $2.7 million and $2.0 million during 2025, 2024 and 2023, respectively. Expense related to non-vested restricted stock awards and units is a component of salaries and benefits expense in the Company’s consolidated statements of operations.
Associate stock purchase plan
The ASPP is intended to be a qualified plan within the meaning of Section 423 of the Internal Revenue Code of 1986 and allows eligible employees to purchase shares of common stock through payroll deductions up to a limit of $25,000 per calendar year and 2,000 shares per offering period. The price an employee pays for shares is 90.0% of the fair market value of Company common stock on the last day of the offering period. The offering periods are the six-month periods commencing on March 1 and September 1 of each year and ending on August 31 and February 28 (or February 29 in the case of a leap year) of each year. There are no vesting or other restrictions on the stock purchased by employees under the ASPP. Under the ASPP, the total number of shares of common stock reserved for issuance totaled 400,000 shares, of which 196,759 were available for issuance at December 31, 2025.
Under the ASPP, employees purchased 17,771 shares and 21,389 shares during 2025 and 2024, respectively.
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 24, 2026 | Showing above |
| 2024 | Feb 25, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 23, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2016 | Feb 24, 2017 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.