NORTHPOINTE BANCSHARES INCNPB
NORTHPOINTE BANCSHARES INC Stock Compensation Disclosure
Stock Compensation Plans
The Company has utilized three share based compensation plans, which are described below. The stock option plan and stock appreciation rights plan are both legacy plans which the Company has not, and does not intend to, issue any new shares under following its 2024 issuance.
The Company has a stock option plan for its non-employee directors, executive officers and certain employees under which options may be granted at not less than the fair value of the underlying stock on the date of the grant. These options are subject to a vesting schedule under which one-third vests at each anniversary date of the grant. Under the stock option plan, the Company may grant options to its directors for up to 500,000 shares of common stock and up to 1,000,000 shares of common stock to its executive officers and certain employees. No stock option expense was recorded for the years ended December 31, 2025 and 2024.
All options granted expire within 10 years of the date of grant, subject to certain cancellation provisions related to an individual’s affiliation with the Company.
The calculated value of each option award was estimated on the date of grant using a Black-Scholes option valuation model that uses the weighted average assumptions. Expected volatilities are based on similar volatilities of comparable banks. The Company uses comparable bank data to estimate option exercise and employee termination 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. There were no stock option grants in the years ended December 31, 2025 or 2024.
A summary of option activity under the Plan for the year ended December 31, 2025 is presented below:
| Options | Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (in years) | |||||||||||||||||
| Outstanding at January 1, 2025 | 19,000 | $ | 2.00 | 0.6 | ||||||||||||||||
| Granted | — | — | ||||||||||||||||||
| Exercised | (19,000) | 2.00 | ||||||||||||||||||
| Forfeited or expired | — | — | ||||||||||||||||||
| Outstanding at December 31, 2025 | 0 | $ | — | NA | ||||||||||||||||
| Vested at December 31, 2025 | 0 | $ | — | NA | ||||||||||||||||
The total intrinsic value of the options exercised during the year ended December 31, 2025 was approximately $264,000. No options were exercised in 2024. There was no intrinsic value of the options outstanding at December 31, 2025, but was approximately $236,000 at December 31, 2024.
As of December 31, 2025 and 2024, there was no unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the plan.
The Company also has a stock appreciation rights plan for executive officers and certain employees. Stock appreciation rights are primarily granted with a price equal to the market value of common stock on the date of the grant. These awards generally have a five year vesting schedule but may vest early in accordance with accelerated vesting provisions. Compensation expense is recognized over the vesting period of the awards based on the fair value of the stock. For periods prior to the Company’s initial public offering, the Company utilized a third party valuation service for the measurement of fair value of the Company’s stock price as provided for in the Employee Stock Ownership Plan Report.
A summary of stock appreciation right awards for the year ended December 31, 2025 is as follows:
| Stock Appreciation Right Awards | Number of Shares | Weighted Average Exercise Price | ||||||||||||
| Non-vested at January 1, 2025 | 545,000 | $ | 11.00 | |||||||||||
| Granted | — | — | ||||||||||||
| Vested | (135,000) | 8.45 | ||||||||||||
| Forfeited or expired | (20,000) | 11.73 | ||||||||||||
| Outstanding at December 31, 2025 | 390,000 | $ | 11.85 | |||||||||||
The Company also has a restricted stock award plan which was implemented during 2024, with 4,000,000 shares initially authorized under the plan. Restricted stock awards generally have vesting periods of three years with vesting at the rate of one-third each year. Restricted stock awards granted to the Company’s Chief Executive Officer in connection with the Company’s initial public offering were assigned a five year vesting period. Restricted stock awards have no other performance conditions required for vesting.
A summary of changes in the Company’s nonvested restricted stock awards for the year ended December 31, 2025 follows (dollars in thousands for aggregate intrinsic value):
| Nonvested Stock Awards | Number of Shares | Weighted Average Grant-Date Fair Value | ||||||||||||
| Outstanding at January 1, 2025 | 849,530 | $14.40 | ||||||||||||
| Granted | 164,000 | 13.50 | ||||||||||||
| Vested | (246,840) | 14.40 | ||||||||||||
| Forfeited | — | — | ||||||||||||
| Outstanding at December 31, 2025 | 766,690 | $14.21 | ||||||||||||
Compensation expense related to restricted stock awards totaled $4.6 million for the year ended December 31, 2025 and is included in salaries and employee benefits in the consolidated statements of income. There was no compensation cost related to restricted stock awards in 2024.
Upon vesting of restricted stock units (“RSU”), the Company is required to withhold applicable federal, state, and local income taxes and the employee’s share of payroll taxes. Unless the employee provides for the payroll tax withholding, the Company generally satisfies these tax withholding obligations by withholding a portion of the shares that would otherwise be issued to the employee upon vesting (a process referred to as "net settlement"). The number of shares withheld is determined based on the fair market value of the Company’s common stock on the vesting date and the minimum statutory tax withholding requirements.
The shares withheld for tax withholding are not held as treasury shares but are immediately retired and returned to the status of authorized but unissued shares. As a result, the number of shares issued and outstanding is reduced by the number of shares withheld for tax purposes. The value of the shares withheld is presented as a reduction to additional paid-in capital in the consolidated statements of stockholders’ equity.
For the year ended December 31, 2025, the Company withheld 77,823 shares with an aggregate value of $1.4 million to satisfy employee tax withholding obligations upon the vesting of RSUs. The net settlement of RSUs for tax withholding does not impact the total compensation expense recognized for share-based awards.
As of December 31, 2025, there was $9.8 million of total remaining compensation expense related to nonvested restricted stock awards granted under the Company’s stock-based compensation plans. This expense is expected to be recognized over a weighted-average period of 1.5 years. Restricted stock awards totaling 246,840 shares vested during the year ended December 31, 2025. The intrinsic value of restricted stock awards vested totaled $4.2 million in the year ended December 31, 2025. There was no vesting of restricted stock awards during 2024.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 27, 2026 | Showing above |
| 2024 | Mar 28, 2025 | |
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.