PCB BANCORPPCB
PCB BANCORP Stock Compensation Disclosure
Share-Based Compensation
On May 25, 2023, the Company adopted the 2023 Equity Based Compensation Plan (“2023 EBC Plan”) approved by its shareholders to replace the 2013 Equity Based Stock Compensation Plan. The 2023 EBC Plan provides 700,000 shares of common stock for equity-based compensation awards including incentive and non-qualified stock options and RSAs. As of December 31, 2025, there were 378,100 shares available for future grants.
Share-Based Compensation Expense
The following table presents share-based compensation expense and the related tax benefits for the periods indicated:
| Year Ended December 31, | ||||||||||||||||||||
| ($ in thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
Share-based compensation expense related to: | ||||||||||||||||||||
| Stock options | $ | 294 | $ | 283 | $ | 143 | ||||||||||||||
| Restricted stock awards | 679 | 221 | 345 | |||||||||||||||||
| Total share-based compensation expense | $ | 973 | $ | 504 | $ | 488 | ||||||||||||||
| Related tax benefits | $ | 254 | $ | 119 | $ | 112 | ||||||||||||||
The following table presents unrecognized share-based compensation expense as of the date indicated:
| December 31, 2025 | ||||||||||||||
| ($ in thousands) | Unrecognized Expense | Weighted-Average Remaining Expected Recognition Period | ||||||||||||
Unrecognized share-based compensation expense related to: | ||||||||||||||
| Stock options | $ | 246 | 1.1 years | |||||||||||
| Restricted stock awards | 1,718 | 2.8 years | ||||||||||||
| Total unrecognized share-based compensation expense | $ | 1,964 | 2.6 years | |||||||||||
Stock Options
The Company has issued stock options to certain employees, officers and directors. Stock options are issued at the exercise price of the closing market price on the grant date, and generally have a -to five-year vesting period and contractual terms of ten years. The Company recognizes an income tax deduction upon exercise of the non-qualified stock option by the option holder in an amount equal to the taxable income reported by the option holders. The option holder of non-qualified stock option recognizes taxable income based on the closing market price immediately before the exercise date less the exercise price stated in the grant agreement.
The following table represents stock option activity as of and for the period indicated:
| Year Ended December 31, 2025 | ||||||||||||||||||||||||||
($ in thousands except per share data) | Number of Shares | Weighted-Average Exercise Price Per Share | Weighted-Average Contractual Term | Aggregated Intrinsic Value | ||||||||||||||||||||||
Outstanding at beginning of year | 576,412 | $ | 14.20 | 5.01 years | $ | 3,481 | ||||||||||||||||||||
Exercised | (206,732) | $ | 11.02 | 1.08 years | ||||||||||||||||||||||
| Balance at end of year | 369,680 | $ | 15.98 | 5.73 years | $ | 2,097 | ||||||||||||||||||||
| Exercisable at end of year | 271,361 | $ | 15.91 | 5.08 years | $ | 1,558 | ||||||||||||||||||||
The following table represents information regarding unvested stock options for the period indicated:
| Year Ended December 31, 2025 | ||||||||||||||
| Number of Shares | Weighted-Average Exercise Price Per Share | |||||||||||||
Outstanding at beginning of year | 179,659 | $ | 15.93 | |||||||||||
Vested | (81,340) | $ | 15.66 | |||||||||||
| Balance at end of year | 98,319 | $ | 16.16 | |||||||||||
The following table presents the weighted-average assumptions used to determine the fair value of options granted for the periods indicated:
| Year Ended December 31, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
Risk-free interest rate | 3.89 | % | 4.92 | % | ||||||||||
Expected term | 6.80 years | 6.04 years | ||||||||||||
Expected stock price volatility | 29.45 | % | 28.76 | % | ||||||||||
Dividend yield | 3.95 | % | 4.79 | % | ||||||||||
The following table presents information related to the stock option plan for the periods indicated:
| Year Ended December 31, | ||||||||||||||||||||
| ($ in thousands, except per share data) | 2025 | 2024 | 2023 | |||||||||||||||||
Intrinsic value of options exercised | $ | 1,865 | $ | 247 | $ | 883 | ||||||||||||||
Cash received from options exercised | $ | 2,278 | $ | 353 | $ | 1,350 | ||||||||||||||
Tax benefit from options exercised | $ | 89 | $ | 14 | $ | 103 | ||||||||||||||
Weighted-average estimated fair value per share of options granted | $ | — | $ | 4.15 | $ | 3.14 | ||||||||||||||
Restricted Stock Awards
The Company also has granted RSAs to certain employees and officers. The RSAs are valued at the closing market price of the Company's stock on the grant date and generally have a -to five-year vesting period. The Company recognizes an income tax deduction in an amount equal to the taxable income reported by the holders of the restricted stock, when vested.
The following table represents RSAs activity for the year ended December 31, 2025:
| Year Ended December 31, 2025 | ||||||||||||||
| Number of Shares | Weighted-Average Grant Date Fair Value Per Share | |||||||||||||
Outstanding at beginning of period | 119,100 | $ | 20.40 | |||||||||||
Granted | 6,200 | $ | 21.91 | |||||||||||
Vested | (32,950) | $ | 20.36 | |||||||||||
Forfeited | (1,500) | $ | 20.65 | |||||||||||
| Outstanding at end of period | 90,850 | $ | 20.52 | |||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 16, 2026 | Showing above |
| 2024 | Mar 13, 2025 | |
| 2023 | Mar 12, 2024 | |
| 2022 | Mar 9, 2023 | |
| 2021 | Mar 4, 2022 | |
| 2020 | Mar 11, 2021 | |
| 2019 | Mar 9, 2020 | |
| 2018 | Mar 18, 2019 | |
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.