DEF 14A of First Financial Bankshares Inc, Mar 14, 2024

DEF 14A of First Financial Bankshares Inc

Filed Mar 14, 2024 · FY20230000950170-24-031359

Open on EDGAR

  1. PROPOSAL 1 – ELECTION OF DIRECTORS

    PROPOSAL 1 – ELECTION OF DIRECTORS

  2. General

    General While our amended and restated bylaws fix the number of directors at a number not less than seven nor more than fifteen, the Board of Directors has fixed the number of current directors at eleven. Although we do not contemplate that any of the nominees will be unable to serve, if such a situation arises before the annual meeting, the proxies will be voted to elect any substitute nominee or nominees designated by the Board of Directors. At the annual meeting, eleven directors are to be elected, each for a term of one year and until their respective successors have been duly elected and qualified.

  3. Identifying and Evaluating Nominees for Director

    Identifying and Evaluating Nominees for Director The Board of Directors, acting through the Nominating/Corporate Governance Committee and pursuant to the Board of Directors’ Nominating/Corporate Governance Committee Charter and our Corporate Governance Guidelines, is responsible for identifying and evaluating candidates for membership on the Board of Directors. The Nominating/Corporate Governance Committee is responsible for recommending nominees who have the experience, qualifications, attributes, and skills appropriate to function collaboratively and effectively as the Board of Directors for the Company. The Board of Directors is committed to promoting diversity and inclusion in the governance and operations of the Company. These values are reflected in identifying candidates for Board service and in the overall makeup of the Board of Directors so that it is inclusive of members who reflect racial, gender, and ethnic diversity. The Company’s Board of Directors elects the Boards of Directors for First Financial Bank, N.A. and First Financial Trust and Asset Management Company, N.A. The Bank’s Board of Directors appoints the Bank’s regional advisory boards, the Bank’s board committees, and elects the Board of Directors for First Technology Services Inc. The regional advisory and subsidiary boards serve as a training ground for prospective Company directors. At present, there are 39 minority and/or women members on these boards. The Board of Directors and the Nominating/Corporate Governance Committee believe that the Board of Directors as a whole and its members individually should possess a combination of skills, professional experience, and diversity of backgrounds and viewpoints necessary to oversee our Company’s current and future needs. The attributes that the Board of Directors and every director should possess are set forth in our Nominating/Corporate Governance Committee charter. These criteria include: • at least a majority of the Board of Directors must be composed of independent directors; • candidates should be capable of working in a collegial manner with persons of diverse educational, business, and cultural backgrounds and should possess skills and expertise that complements the attributes of the existing directors; • candidates should represent a diversity of viewpoints, backgrounds, experiences, and other demographics, including gender, race, and ethnicity; • candidates should demonstrate notable or significant achievement and possess senior-level business management or regulatory experience that would benefit our Company; • candidates should have familiarity with and experience in the commercial banking industry; • candidates shall be individuals of highest character and integrity; • candidates shall be free of conflicts of interest that would interfere with their ability to discharge their duties, or that would violate any applicable laws or regulations; • candidates shall be capable of devoting the necessary time to discharge their duties, taking into account memberships on other boards, travel time, and other responsibilities; and candidates shall have a desire to represent the interests of all shareholders. The Nominating/Corporate Governance Committee and the Board of Directors may, from time to time, establish and consider other specific skills and experience that they believe our Company should seek in order to constitute a diverse, balanced, collaborative, and effective Board of Directors. For an incumbent director, the Nominating/Corporate Governance Committee and the Board of Directors also consider the past performance of such director on our Board. Our Corporate Governance Guidelines also provide that an individual may not stand for election or reelection as a director upon attaining seventy-five (75) years of age. See “Nominees” below for the qualifications of each nominee for election at the annual meeting. The Nominating/Corporate Governance Committee regularly reviews the composition of the Board of Directors in light of our Company’s business and structure; the changing needs of our Company because of the business environment; our operations, financial conditions, and complexity; its assessment of the Board of Directors’ performance; through evaluations of each board member, committee, and the board as a whole; and input from shareholders and other key constituencies. As part of this review, the Nominating/Corporate Governance Committee evaluates the effectiveness of the Board of Directors’ director nomination standards. The Nominating/Corporate Governance Committee will, in consultation with the Chairman of the Board of Directors and in accordance with its charter, consider candidates proposed or suggested by members of the Board of Directors, management, third-party search firms retained by the Nominating/Corporate Governance Committee and shareholders. The Nominating/Corporate Governance Committee follows the same process and uses the same criteria for evaluating candidates whether they are proposed by members of the Board of Directors, management, third-party search firms, or shareholders. Any shareholder wishing to recommend a candidate to be considered by the Nominating/Corporate Governance Committee for nomination at an annual meeting of shareholders should review the procedure outlined under “Committees of the Board of Directors − Nominating/Corporate Governance Committee” beginning on page 24 of this proxy statement.

  4. Summary of Board Diversity

    Summary of Board Diversity The following matrix, as required by Nasdaq listing rules, demonstrates our ongoing commitment to diversity:

  5. Summary of Board Diversity

    | Board Diversity Matrix (As of March 14, 2024) | | | | | Total Number of Directors | | 11 | | | | Female | | Male | | Part 1: Gender Identity | | | | | Directors | 2 | | 9 | | Part II: Demographic Background | | | | | African American or Black | - | | 1 | | Hispanic or Latinx | 1 | | - | | White | 1 | | 8 |

  6. Summary of Board Diversity

    Additionally, the following graphs illustrate the independence, average tenure, average age, and diversity of our Board of Directors, following the Annual Meeting:

  7. Board Composition

    Board Composition

  8. Board Composition

    | | | | | | | |

  9. Nominees

    Nominees Based upon recommendations of the Nominating/Corporate Governance Committee, the Board of Directors has nominated the individuals below for election to the Board of Directors at the annual meeting to serve a one-year term and until their respective successors have duly been elected and qualified. In light of the Company’s business and structure, the business environment, and the Company’s long-term strategy, the Board of Directors, upon recommendation of the Nominating/Corporate Governance Committee, selected a slate of nominees whose diversity, experience, qualification, attributes, and skills in leadership, commercial and investment banking and financial advisory services, finance and accounting, risk management, operations management, strategic planning, business development, marketing, technology, regulatory and government affairs, corporate governance, and public policy, led the Board of Directors to conclude that these persons should serve as our directors at this time. Pursuant to the Nasdaq rules, a majority of the Board of Directors must be comprised of independent directors. The Board of Directors has determined that each director nominated, except Mr. Dueser, is independent under applicable Nasdaq rules. Each nominee’s biography and the specific experiences, qualifications, attributes, and skills of each nominee are described below.

  10. Nominees

    | Dallas, Texas Director Since: 2015 Board Committees: • Audit Financial Expert | April K. Anthony Biographical Information April K. Anthony, Dallas, Texas, has served as a director of the Company since 2015. She serves on the Audit Committee and is designated as a “financial expert.” She is also a director of First Financial Bank, N.A. (the “Bank”), a wholly-owned subsidiary of the Company, and of First Technology Services, Inc. (the “Technology Company”), a wholly-owned subsidiary of the Bank. Currently, Ms. Anthony serves as the Chief Executive Officer of VitalCaring Group, a Dallas-based home health and hospice provider with locations in 6 states. Ms. Anthony has a long career in home health care and was the Founder and Chief Executive Officer of Encompass Health - Home Health and Hospice from 1998 to 2021. Under Ms. Anthony’s leadership, Encompass Health - Home Health and Hospice grew to be the nation’s 4th largest provider of Medicare certified home health services, was consistently recognized as a best place to work, and was an industry leader in quality patient care outcomes. Ms. Anthony was also the Founder and Chief Executive Officer of Homecare Homebase from 2001 to 2019, at which time she transitioned to her current role as Executive Chairman. Homecare Homebase is the leading provider of enterprise technology solutions for the home health and hospice industry, with over 40% of the industry’s volume being managed via the Homecare Homebase solution. She is a graduate of Abilene Christian University and is a certified public accountant. She is a member of the Board of Trustees of Abilene Christian University, serving for 20 years, and currently serves as Board Chair. She was named Outstanding Alumnus in February 2018. Qualifications & Experience Her experience and qualifications provide sound leadership to the Board of Directors. In addition, as a certified public accountant, Ms. Anthony brings strong accounting, management, strategic planning, technology, and financial skills important to the oversight of our financial reporting, enterprise, and operational risk management. | | Fort Worth, Texas Director Since: 2020 Board Committees: • Compensation • Risk | Vianei Lopez Braun Biographical Information Vianei Lopez Braun, Fort Worth, Texas, was elected to the Board of Directors on January 28, 2020. She serves on the Compensation and Risk Committees. She also serves as a director of the Bank and as the Chair of the advisory board of the Bank’s Fort Worth Region. She leads the labor and employment division for Decker Jones, P.C., a full-service law firm based in Fort Worth, and serves as Chief Development Officer for the firm. She has been practicing law for more than 30 years, with previous tenures in Houston and Abilene. She is an honors graduate of Princeton University and the University of Texas School of Law. She has been recognized as a Texas Monthly “Super Lawyer” in Labor & Employment law and has been selected as a “Top Lawyer” in Labor & Employment law by Fort Worth Texas and 360 West magazines and by H Texas and Houstonia magazines when she was practicing law in Houston. She has also been honored as a “Great Woman of Texas” by the Fort Worth Business Press. Qualifications & Experience Her experience and qualifications provide sound leadership to the Board of Directors. In 2022 she earned a Certificate on Systemic Cyber Risk from the Digital Directors Network, as well as Climate Leadership Certification from the Diligent Institute. In addition, as an attorney specializing in labor and employment law, she brings strong legal, human resources, compensation and benefits, management, and corporate governance experience. |

  11. Nominees

    | Abilene, Texas Director Since: 1998 Board Committees: • Audit • Executive • Risk • Nominating/Corporate Governance Financial Expert | David L. Copeland Biographical Information David L. Copeland, Abilene, Texas, has served as director of the Company since 1998. He serves as Chairman of the Audit Committee and as a member of the Executive, Risk, and Nominating/Corporate Governance Committees. He is designated as a “financial expert” for our Audit Committee. He is also a director of the Bank, serving on the asset-liability management committee, and a director of First Financial Trust & Asset Management Company, N.A. (the “Trust Company”), a wholly-owned subsidiary of the Company. He also serves as an advisory director of the Bank’s Abilene Region. He is president of the Shelton Family Foundation, a private charitable foundation, and SIPCO, Inc., the management and investment company for the Andrew B. Shelton family. He also serves as a director of Harte-Hanks, Inc., a publicly traded, targeted marketing company. He is a graduate of Abilene Christian University and is a certified public accountant and chartered financial analyst. Mr. Copeland’s service as a director to public companies adds administration and operational management experience, as well as corporate governance expertise, to the Board of Directors. Qualifications & Experience His experience and qualifications provide sound leadership to the Board of Directors. In addition, as a certified public accountant and chartered financial analyst, Mr. Copeland brings strong investment, accounting, and financial skills important to the oversight of our financial reporting, enterprise, and operational risk management. | | Abilene, Texas Director Since: 2019 Board Committees: • Audit | Mike B. Denny Biographical Information Mike B. Denny, Abilene, Texas, has served as a director of the Company since 2019. He serves on the Audit Committee. Mr. Denny is also a director of the Bank, serving on the Directors’ Loan Committee and as an advisory director of the Bank’s Abilene Region. He is an owner and President of Batjer and Associates, LLC., the largest mechanical contractor in the Abilene area, having been with the company for over 47 years. He also is Vice President and Partner in Batjer Services, LLC. He is a graduate of the University of Texas in Austin with a finance degree. He serves as a board member on the Abilene Restoration Ministries (Nehemiah, Abilene) and the Church of the Heavenly Rest Foundation. Additionally, he has served on several non-profit boards in Abilene and had served on the Abilene Industrial Foundation through 2020. Qualifications & Experience His experience and qualifications provide sound leadership to the Board of Directors. Mr. Denny brings strong finance and construction lending and other lending skills important to the oversight of our financial reporting, enterprise, and operational risk management. |

  12. Nominees

    | Abilene, Texas Director Since: 1991 Board Committees: • Executive | F. Scott Dueser Biographical Information F. Scott Dueser, Abilene, Texas, has served as a director of the Company since 1991. He is Chairman, President, and Chief Executive Officer of the Company and the Bank. He serves as chairman of the Executive Committee. He is also a director of the Bank, serving on the asset-liability management committee, the Trust Company, and Technology Company. He became CEO/President in 2001 and Chairman in 2008. Prior to his role at the Company, he was CEO/President of the Bank from 1991 to 2001 and assumed these roles again as well as Chairman of the Board effective December 30, 2012. He is a graduate of Texas Tech University with finance and accounting degrees and served on the Board of Regents of Texas Tech University from 2005 to 2009, the last two years as Chairman. He currently serves on the board of Breck Minerals LP, which is a privately held oil and gas company. He was selected as Abilene’s Outstanding Citizen of the Year in 2009 and has been awarded the Distinguished Alumni Awards by the Texas Tech University Alumni Association in 2019, Rawls College of Business in 2006, and Southwestern Graduate School of Banking at SMU in 2013. Qualifications & Experience Mr. Dueser adds financial services experience, especially lending, oil and gas expertise, and asset-liability management, to the Board of Directors, as well as a deep understanding of the Company’s business and operations. Mr. Dueser also brings risk and operations management and strategic planning expertise to the Board of Directors, skills that are important as we continue to implement our business strategy and acquire and integrate growth opportunities. | | Clyde, Texas Director Since: 2006 Board Committees: • Executive • Risk • Nominating/Corporate Governance | Murray H. Edwards Biographical Information Murray H. Edwards, Clyde, Texas, has served as director of the Company since 2006, and as lead director since 2022. He currently serves on the Executive, Nominations and Governance and Risk Committees. He also is a director of the Bank, serving as chairman of the Directors’ Loan Committee, and serves as an advisory director of the Bank’s Abilene and Fort Worth Regions. He is Principal of The Edwards Group, a privately owned investment company, and has an undergraduate degree from Texas A&M University and a Master of Business Administration from Harvard Business School. He has successfully owned and managed several businesses, including Automated Farm Systems, Alderman-Cave Feeds, Abilene Cattle Feeders, Cape & Son, Bluebonnet Feeds, and Innovation Event Management. In 2018, he received the Texas A&M University Outstanding Agribusiness Entrepreneur Award, and in 2019 was awarded the Outstanding Alumnus Award by the College of Agriculture and Life Sciences of Texas A&M. He was the largest shareholder and a director of Peoples State Bank, Clyde, Texas, prior to it being acquired by the Company. Qualifications & Experience Mr. Edwards has significant risk management, merger and acquisitions, and strategic planning skills. In addition, he brings strong agriculture, accounting, lending, and financial skills important to the oversight of our financial reporting, enterprise, and operational risk management. |

  13. Nominees

    | Bryan, Texas Director Since: 2022 Board Committees: • Compensation | Eli Jones Ph.D. Biographical Information Eli Jones, Ph.D., Bryan, Texas, has served as a director of the Company since 2022. He is also a director of the Bank. Dr. Jones is a Professor of Marketing, the Lowry and Peggy Mays Eminent Scholar, and the Emeritus of Mays Business School at his alma mater, Texas A&M University. He served as the Dean of three flagship business schools over 13 of his 26 years in higher education, Dean of Mays Business School, Dean of the Sam M. Walton College of Business, and holder of the Sam M. Walton Leadership Chair at the University of Arkansas; and as Dean of the E. J. Ourso College of Business and the E. J. Ourso Distinguished Professor of Business at Louisiana State University. He has published sales and sales management research in top academic journals and is a co-author of three professional books. Peers have cited Eli’s academic publications more than 10,000 times, according to Google Scholar. Also, Jones is the recipient of Excellence in Teaching awards on the university, national, and international levels at the undergraduate, MBA levels, and in executive education programs in Belgium, China, France, India, Malaysia, Trinidad, the U.K., and U.S. Before becoming a professor, Jones worked in sales and sales management for three Fortune 500 global companies. He is currently on the boards of Invesco Funds, Insperity, First Financial Bank, and the American Marketing Association (AMA). Dr. Jones earned a Lifetime Achievement Award from AMA for sustained contributions to the sales and sales management discipline. Savoy magazine recognized Dr. Jones as one of the top influential Corporate Directors in business today, and Texas A&M University honored him with the Aggie Impact Award for making a global impact in his community and profession. AMA and the Academy of Marketing Science each awarded Dr. Jones the Distinguished Marketing Educator Award for distinguished service and outstanding contributions in marketing education. Qualifications & Experience Dr. Jones brings public company experience, marketing, and sales experience, strategic planning, and other skills for the oversight of our operations, including prior bank board experience. | | Lubbock, Texas Director Since: 2013 Board Committees: • Audit • Compensation • Executive • Nominating/Corporate Governance | I. Tim Lancaster Biographical Information Tim Lancaster, Lubbock, Texas, has served as a director of the Company since 2013. He serves as chairman of the Compensation Committee and is a member of the Audit, Executive, and Nominating/Corporate Governance Committees. He is also a director of the Bank, serving on the Directors’ Loan Committee. He retired in 2019 as President and CEO of Hendrick Health System, a 525-bed regional hospital based in Abilene, Texas, having served in this capacity since 2004. From 1998 to 2004, he was CEO of Brownwood Regional Medical Center, Brownwood, Texas. He has a Bachelor of Finance degree from Texas Tech University and a master's in health care administration from Texas Woman’s University. He is a past Chair of the Board of Trustees of the Texas Hospital Association and was honored in February 2018 with the Earl M. Collier Award for Distinguished Health Care Administration in Texas. He has served on numerous healthcare-related boards on a national and state level. He is past Chairman of the Board of Regents of Texas Tech University System and currently serves on the Texas Tech University Foundation Board as Vice Chairman. He also serves on the Buckner International Board of Directors, serving as Chair of the Finance Committee, Chair of Retirement Living and Vice-Chairman of the Board. He was selected as Abilene’s Outstanding Citizen of the Year in 2018. Qualifications & Experience Mr. Lancaster adds significant operational, risk management, strategic planning, and administrative experiences, as well as corporate governance expertise that is important to the Company. His past leadership as the chief executive officer of a large hospital system brings strong accounting, management skills, and medical industry expertise to the oversight of our financial reporting and operational risk management. Mr. Lancaster had ten years in the banking industry prior to going into hospital administration. |

  14. Nominees

    | Clarendon, Texas Director Since: 1998 Board Committees: • Compensation • Risk | Kade L. Matthews Biographical Information Kade L. Matthews, Clarendon, Texas, has served as a director of the Company since 1998. He serves on the Compensation and Risk Committees. He also is a director of the Bank. He is President of the Legett Foundation, a private charitable foundation in Texas; President of the Dodge Jones Legacy Foundation, a private charitable foundation in Abilene; President of Kickapoo Springs Foundation, a private charitable foundation in Abilene; a former member of the Amarillo Area Foundation, and an Emeritus Trustee of Texas Christian University, where he is a graduate. He also is on the board of visitors of the MD Anderson Cancer Center in Houston. Mr. Matthews is also a former regent of Clarendon College and former president of the Clarendon College Foundation. He is a rancher and manages investments. Qualifications & Experience Mr. Matthews provides excellent agriculture and wealth management experience, local knowledge of economic trends in the communities that we serve, as well as compensation and benefits experience and corporate governance experience garnered through his leadership position and board service with other entities. | | Houston, Texas Director Since: 2019 Board Committees: • Executive • Nominating/Corporate Governance • Risk | Robert C. Nickles, Jr. Biographical Information Robert C. Nickles, Jr., Houston, Texas, has served as a director of the Company since 2019. He currently serves as Chairman of the Risk Committee and also serves on the Executive and Nominating & Corporate Governance Committees. He also serves as Chairman of the advisory board of the Bank’s Kingwood Region. He is the founder and executive chairman of Alegacy Group, LLC, one of the largest gas compressor packagers in the world, with over $2 billion in revenue since its inception. He is also managing director of 3MCB Investments, LLC, and Nickles Investments, LLC. Mr. Nickles previously served in management roles, including CEO of Nickles Industries, senior vice president of operations and senior vice president of sales for Cooper Cameron, and COO of Valerus Compression Services. He is a graduate of Oklahoma State University. In 2010, he was elected to the Commercial State Bank, Kingwood, Texas, board of directors and served on that board until the Company’s acquisition of that bank on January 1, 2018. Mr. Nickles serves as Chairman of the Finance Council for St. Matthias Catholic Church in Magnolia, TX. Qualifications & Experience His experience and qualifications provide sound leadership to the Board of Directors. Mr. Nickles brings strong financial, oil and gas expertise and investment and lending skills important to the oversight of our financial reporting, enterprise, and operational risk management. |

  15. Nominees

    | Hereford, Texas Director Since: 2003 Board Committees: • Compensation • Executive • Nominating/Corporate Governance | Johnny E. Trotter Biographical Information Johnny E. Trotter, Hereford, Texas, has served as a director of the Company since 2003. He serves on the Compensation, Executive and Nominating/Corporate Governance Committees. He also is a director of the Bank and serves as an advisory director of the Bank’s Hereford Region. He is president of Livestock Investors, LTD., one of the largest cattle feeders in the United States, as well as an officer in Deaf Smith Enterprises LLC, a privately owned real estate company. He has also been appointed by Governor Abbott to serve on the Texas Animal Health Commission. Mr. Trotter received the Chester A. Reynolds Memorial Award at the National Cowboy & Western Heritage Museum in Oklahoma City, Oklahoma, in 2017, was inducted into the Cattle Feeder Hall of Fame in 2021, inducted into the Texas Cowboy Hall of Fame, the Texas Horse Racing Hall of Fame and the American Quarter Horse Hall of Fame and is the recipient of the 2023 West Texas Rehab Center Harry Holt Award. He is also the president of Whiteface Ford dealership in Hereford, Texas, officer/co-owner of Panhandle Express Transportation of Hereford, and owns and manages ranches/farms in Texas, New Mexico, Oklahoma, and Mississippi. He also is a director of First United Bank, Dimmitt, Texas, an unaffiliated bank. He is also a director and became president of the American Quarter Horse Association in March 2014. He is active in numerous other cattle/horse associations and philanthropic/community involvement. He was named 2004 Citizen of the Year in Hereford/Deaf Smith County, Texas. He received an honorary doctorate from West Texas A&M University in December 2015. Qualifications & Experience Mr. Trotter brings key leadership, risk management, operations, strategic planning, and auto industry/agricultural expertise that assist the Board of Directors in overseeing the Company’s operations. |

  16. Nominees

    The Board of Directors recommends that you vote "FOR" the election of all eleven director nominees.

  17. Director Compensation

    Director Compensation For 2023, we had ten non-employee directors who received fees for attendance at Board of Director meetings and committee meetings. Directors who are also our executive officers or employees receive no compensation for service as members of either the Board of Directors or committees thereof. Director fees were paid as follows:

  18. Director Compensation

    | Description | Annual ($) | | Annual Cash Retainer fee (paid quarterly) | 50,000 | | Annual Restricted Share grant | 70,000 | | Board Meeting fee | 3,000 | | Committee Meeting fee | 1,500 | | Lead Director fee | 20,000 | | Chair Fee: | | | Audit Committee | 20,000 | | Compensation Committee | 15,000 | | Nominating/Corporate Governance Committee | 15,000 | | Risk Committee | 15,000 |

  19. Director Compensation

    Director fees are paid in cash, but a director may elect to defer receipt of fees into a non-qualified “Rabbi Trust” wherein the funds are used to purchase Company common shares on the open market. Because these shares are held in a “Rabbi Trust,” shares under this plan are not included in the director’s shares beneficially owned as disclosed on pages 18-19. As of December 31, 2023, the Rabbi trust held 444,366 shares in trust for the Company’s directors. On April 25, 2023, each non-employee director received 2,519 shares of Company common shares with respect to their annual $70,000 restricted share grant under the 2021 Omnibus Plan approved by shareholders on April 27, 2021. The closing Company stock price on issuance date was $27.79 and vests from issuance date to the 2024 shareholder meeting on April 23, 2024. Non-employee directors do not participate in the Company’s profit sharing or other benefits. Directors are reimbursed for actual travel costs to attend the respective meetings. In addition, a director serving on the board of a subsidiary or a regional advisory board receives director and committee fees per meeting, which are included in the table below. Director compensation for the year ended December 31, 2023, was as follows:

  20. Director Compensation

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Total ($) (1) | | April Anthony | 77,000 | 70,000 | 147,000 | | Vianei Braun | 81,000 | 70,000 | 151,000 | | David Copeland | 123,250 | 70,000 | 193,250 | | Mike Denny | 89,000 | 70,000 | 159,000 | | Murray Edwards | 166,900 | 70,000 | 236,900 | | Eli Jones, PhD | 74,250 | 70,000 | 144,250 | | Tim Lancaster | 121,500 | 70,000 | 191,500 | | Kade L. Matthews | 75,500 | 70,000 | 145,500 | | Robert Nickles | 96,700 | 70,000 | 166,700 | | Johnny E. Trotter | 84,800 | 70,000 | 154,800 |

  21. Director Compensation

    During 2023, the directors did not receive option awards, non-equity incentive plan compensation, pension or deferred compensation earnings, or other compensation.

  22. Overall Summary of Key Compensation Governance Features

    | What We Do | | | | | ✓ | Pay for performance | ✓ | Conduct an annual “say on pay” vote | | ✓ | Establish maximum short-term and long-term performance-based incentive payouts | ✓ | Conduct ongoing shareholder outreach and communications | | ✓ | Grant one-third of our long-term incentives in performance-based awards, starting in 2021 | ✓ | Conduct a periodic risk assessment of our compensation programs | | ✓ ✓ | Grant one-third of our long-term incentives in stock options Grant one-third of our long-term incentives in restricted stock units with a three-year vesting period | ✓ ✓ ✓ | Engage an independent compensation consultant that provides no other services to the Company– Pearl Meyer Have an independent compensation committee Compensation clawback and recoupment policy | | ✓ | Require our executive officers to own a meaningful amount of stock through established stock ownership guidelines | ✓ | Noncompetition and non-solicitation terms required with equity grants |

  23. Overall Summary of Key Compensation Governance Features

    | What We Don’t Do | | | | | ✗ | Hedging of Company stock by executive officers | ✗ | Repricing of stock options | | ✗ | Issue employment agreements with tax gross-up features | ✗ | We do not provide excessive perquisites |

  24. Compensation Philosophy & Objectives

    Compensation Philosophy & Objectives The Compensation Committee’s philosophy is to provide a compensation package that attracts and retains executive talent, provides rewards for superior performance, and discourages underperformance. It is also the Compensation Committee’s practice to provide a balanced mix of short- and long-term compensation and cash and equity-based compensation that the committee believes appropriate to mitigate excessive risk-taking and align the short- and long-term interests of the Company’s executives with that of its shareholders and encourage executives to participate and perform as equity owners of the Company. We believe that to attract and retain the quality of executive talent necessary to achieve our long-term strategic business goals; we must offer a competitive compensation package to our executives. The Compensation Committee seeks to attract executive talent by offering competitive base salaries, annual performance incentive opportunities, and long-term awards under the Company’s long-term incentive programs (including profit sharing, employee stock ownership plan, restricted stock units (“RSUs”) and performance stock units (“PSUs”), and stock options. The Compensation Committee reviews the range of total compensation in the market for various positions. Executive compensation is based on factors including the competitive market for talent, responsibilities, skills, experience, and performance. We consider the executive’s scope of responsibilities, skills and experience, overall Company performance, and the Board of Directors’ evaluation of the executive’s individual performance. Based on our business strategy and the results we expect from our executives, we attempt to blend their compensation pay between short- and long-term pay as well as the mix of cash and equity compensation to promote our short- and long-term business objectives. We believe the design of our compensation programs and the amounts paid have been and continue to be appropriate and reasonable. We continually review our programs to ensure they are aligned with our business objectives and shareholder interests. It is the Compensation Committee’s practice to provide incentives that promote both the short- and long-term financial objectives of the Company. To motivate our executives to achieve our strategic business goals, we offer the opportunity to earn the targeted level of pay through incentive compensation that correlates to the Company’s short- and long-term performance. These incentives are based on financial and investment metrics underlying Company performance, including earnings growth, return on assets, return on equity, net interest margin, credit quality metrics, and efficiency ratio. Annual bonuses reward achievement of short-term objectives based on the Company’s operational business plan that are established to encourage our executives to make decisions currently that promote shareholder value. Long-term incentive programs encourage executives to focus on the Company’s long-term strategic goals, which are catalysts to drive sustainable long-term shareholder value while accomplishing a high level of retention of our executives. Our compensation program also accounts for individual performance, which enables the Compensation Committee to differentiate among executives and emphasize the link between personal performance and compensation.

  25. Key Elements of Executive Compensation

    | Compensation Element | How Paid | Purpose | | Base Salary | Cash (fixed payments) | Provides a competitive base salary relative to similar positions in the market to attract and retain highly skilled executive talent | | Short-term Incentives | Cash (variable/performance) | Focus on achieving predetermined annual financial performance and other strategic objectives supporting growth, profitability, and returns for our shareholders | | Long-term Incentives | Equity Grants - Options - RSUs - PSUs | Focus on incentives for executives to reach financial goals and align their long-term economic interests with those of stockholders through meaningful use of a mix of equity incentives; including stock price appreciation in the case of stock options | | Other Benefits | SERP (deferred) 401(k) Profit Sharing Plan ESOP | Provide retirement security and wealth accumulation through employer contributions and employee deferrals of compensation as well as retirement benefits and additional stock ownership |

  26. Compensation Decision-Making Process

    Compensation Decision-Making Process Role of Compensation Committee. Our Compensation Committee has the primary responsibility for approving our compensation philosophy and programs as they relate to our executive officers, including the named executive officers (“NEOs”). The Compensation Committee is comprised of independent, non-employee members of the Board of Directors. The Compensation Committee works very closely with the independent consultant and management to examine the effectiveness of the Company’s executive compensation program throughout the year. Details of the Committee’s authority and responsibilities are specified in the Compensation Committee’s Charter, which is available on our website at www.ffin.com in the “Investor Relations/Shareholder Information/Governance Documents.” The Compensation Committee makes all final recommendations to the full Board of Directors for all compensation and equity award decisions regarding our executive officers, including the Chief Executive Officer (“CEO”). Compensation for the named executive officers is approved by the independent board members. Role of Senior Management. Members of our management team attend regular meetings where executive compensation, Company, and individual performance, and competitive compensation levels and practices are discussed and evaluated. The Committee and subsequently the independent members of the Board of Directors review the CEO’s performance and make all final determinations regarding the CEO's compensation after conducting their review; for other executive officers, the Committee reviews the CEO’s assessment of their performance and proposed pay decisions. Only the Committee members are allowed to vote on decisions regarding executive officer compensation. Role of the Independent Consultant. The Compensation Committee has the sole authority to retain, terminate, obtain advice from, oversee, and compensate its outside advisors, including its compensation consultant. The Compensation Committee has the funding it needs for these purposes. The Compensation Committee retained Pearl Meyer in 2023 to serve as its independent executive compensation consultant. The services provided by Pearl Meyer include advising the Compensation Committee on the principal aspects of the executive compensation program and evolving best practices, and providing market information and analysis regarding the competitiveness of our program design and awards in relation to our performance. None of the Company’s management team participated in the Compensation Committee’s decision to retain Pearl Meyer. Pearl Meyer reports directly to the Compensation Committee, and the Compensation Committee may replace Pearl Meyer or hire additional consultants at any time. The Compensation Committee regularly reviews the services provided by its outside consultants and believes that Pearl Meyer is independent in providing executive compensation consulting services. The Compensation Committee conducted a specific review of its relationship with Peal Meyer in 2023 and determined that Pearl Meyer’s work for the Compensation Committee did not raise any conflicts of interest, taking into account the “independence factors” identified by the SEC and Nasdaq. The Compensation Committee continues to monitor the independence of its compensation consultant on a periodic basis. In 2023, Pearl Meyer prepared an executive compensation report with regard to the named executive officers and provided information on market practices for executive and outside director compensation. Role of Competitive Benchmarking. The Compensation Committee measures the Company’s senior management compensation levels with comparable compensation levels in industry benchmark studies and peer group data. We use survey data to benchmark our executive positions to those at other banking institutions with total asset sizes similar to ours. The Compensation Committee evaluates the Company's named executive officer compensation levels with comparable compensation levels for a peer group of comparable banks based on asset size, geography and operations. The peer group companies considered by the Compensation Committee are:

  27. Short-term Incentives (Cash Bonus)

    Short-term Incentives (Cash Bonus) For the fiscal year 2023, the annual and actual incentive targets in dollars and percentages for the named executive officers were as follows:

  28. Short-term Incentives (Cash Bonus)

    | Named Executive Officer | Target Incentive of Base Salary (%) | Target Incentive ($) | Actual Incentive to Base Salary (%) | Actual Incentive ($) | Actual to Target (%) | | Dueser (1) | — | — | — | — | — | | Hickox (2) | 60 | 372,000 | 5.00 | 31,000 | 8.33 | | Butler | 60 | 378,000 | 5.00 | 31,500 | 8.33 | | Longhofer | 50 | 202,500 | 20.00 | 81,000 | 40.00 | | Thaxton | 60 | 280,200 | 18.00 | 84,060 | 30.00 |

  29. Short-term Incentives (Cash Bonus)

    (1) Mr. Dueser declined to receive his short-term incentive for 2023. (2) Mr. Gordon resigned from the Company on January 9, 2023 and was replaced by Mrs. Hickox. Mr. Gordon did not have any incentive targets set for 2023. We offer a short-term incentive plan that provides senior management with an opportunity to receive a cash bonus based on a sliding scale upon accomplishment of pre-determined performance goals. For 2023, the range of target awards for the named executive officers of the Company was 30 percent of the executive’s base salary, up to a maximum of 110 percent, representing an increase from 25 percent and 110 percent, respectively, in the prior year. In 2023, the metrics set for the named executive officers were those believed to be generally controllable by the respective named executive officer and which the Compensation Committee believed would result in increased shareholder value if achieved. For 2023, the metrics for Mr. Dueser’s, Mrs. Hickox's, and Mr. Butler’s bonus goals and amounts earned were as follows:

  30. Short-term Incentives (Cash Bonus)

    | | | Sliding Scale | | | | | | | | | | | % of Bonus | Threshold | Lower | Target | Upper | Maximum | 2023 Actual | Dueser Bonus * | Hickox Bonus | Butler Bonus | | Earnings Growth | 40% | 6.00% | 7.00% | 8.00% | 9.00% | 10.00% | (12.84)% | $— | $— | $— | | Return on Assets | 30% | 1.83% | 1.85% | 1.87% | 1.88% | 1.90% | 1.55% | — | — | — | | Total Loan Growth | 10% | 8.00% | 10.00% | 12.00% | 14.00% | 16.00% | 11.00% | — | 31,000 | 31,500 | | Total Deposit Growth | 10% | 6.00% | 8.00% | 10.00% | 12.00% | 14.00% | 1.21% | — | — | — | | Efficiency Ratio | 10% | 44.50% | 44.00% | 43.50% | 43.00% | 42.50% | 47.26% | — | — | — | | Total | | | | | | | | $— | $31,000 | $31,500 | | % of Base Salary | | | | | | | | — | 5.0% | 5.0% |

  31. Short-term Incentives (Cash Bonus)

    * Mr. Dueser declined to receive his short-term incentive for 2023. For 2023, the metrics for Mr. Longhofer's bonus goals and amounts earned were as follows:

  32. Short-term Incentives (Cash Bonus)

    | | | Sliding Scale | | | | | | | | | % of Bonus | Threshold | Lower | Target | Upper | Maximum | 2023 Actual | Longhofer Bonus | | Earnings Growth | 40% | 6.00% | 7.00% | 8.00% | 9.00% | 10.00% | (12.84)% | $— | | Return on Assets | 30% | 1.83% | 1.85% | 1.87% | 1.88% | 1.90% | 1.55% | — | | Net Charge-offs | 20% | 0.08% | 0.07% | 0.06% | 0.05% | 0.04% | 0.03% | 56,700 | | Nonperforming Assets | 10% | 0.85% | 0.75% | 0.65% | 0.55% | 0.45% | 0.49% | 24,300 | | Total | | | | | | | | $81,000 | | % of Base Salary | | | | | | | | 20.0% |

  33. Short-term Incentives (Cash Bonus)

    For 2023, the metrics for Mr. Thaxton’s bonus goals and amount earned were as follows:

  34. Short-term Incentives (Cash Bonus)

    | | | Sliding Scale | | | | | | | | | % of Bonus | Threshold | Lower | Target | Upper | Maximum | 2023 Actual | Thaxton Bonus | | Trust Net Income Growth | 40% | 8.00% | 9.00% | 10.00% | 11.00% | 12.00% | 3.68% | $— | | Trust Revenue Growth | 30% | 6.50% | 7.00% | 7.50% | 8.00% | 9.00% | 1.07% | — | | Assets Managed Growth at Book | 20% | 8.00% | 9.00% | 10.00% | 11.00% | 12.00% | 9.00% | 46,700 | | Trust Noninterest Expense Growth | 10% | 6.00% | 5.00% | 4.00% | 3.00% | 2.50% | (0.88)% | 37,360 | | Total | | | | | | | | $84,060 | | % of Base Salary | | | | | | | | 18.0% |

  35. Short-term Incentives (Cash Bonus)

    The Company’s other Regional Bank Chief Executive Officers and Presidents are also included in this bonus program, and their goals are structured to specific situations for their respective region. While the performance goals drive the bonus plan and executive awards, the Compensation Committee retains discretion, both positive and negative, to adjust payouts of the awards based on the performance of the Company, including audit, compliance, and asset quality issues, and the individual officer performance, as deemed appropriate. The Compensation Committee met in January 2024 to establish the specific goals for 2024 bonus plans for the named executive officers. Such 2024 goals were based on similar criteria as 2023 and the target and maximum levels remained unchanged from the prior year.

  36. Long-term Incentives (Equity Grants)

    Long-term Incentives (Equity Grants) Stock Options. We presently offer stock options under the 2021 Omnibus Plan approved by shareholders in 2021. We believe that stock options are an appropriate long-term incentive to link executives’ performance with stock price appreciation. Prior to 2023, grants made under the 2021 Omnibus Plan vest 20% annually over five years, commencing on the first anniversary of the grant and expiring ten (10) years from the grant date. Stock options granted under the 2021 Omnibus Plan in 2023 vest 33.3% per year over 3 years, commencing on the first anniversary of the grant and expiring ten (10) years from the grant date. Unvested options granted under the 2021 Omnibus Plan vest immediately upon the occurrence of a change of control event, as defined in the 2021 Omnibus Plan. Unexercised options (whether vested or unvested) granted under the 2021 Omnibus Plan are cancelled if the officer is terminated for cause, as defined in the 2021 Omnibus Plan. We encourage the grantee not to dispose of the shares obtained through the exercise of the options but rather to keep and build an equity interest in the Company. Incentive stock options further encourage our executives to exercise their options and hold the resulting shares by giving them the opportunity for favorable tax treatment for the exercise gain if certain holding requirements are met. Historically, the Compensation Committee, based in part on discussions with the Company’s Chief Executive Officer, granted options every two years, subject to the Board of Directors’ approval. However, starting in 2021, the Company changed the cadence of option awards and is expected to make grants to its executive officers and other key employees on an annual basis. In August 2023, the Company granted key employees, including the named executive officers disclosed herein, an aggregate of 253,228 stock options. Allocation of options is based on competitive market considerations, past and expected performance of the executive, affordability, and retention considerations. Grantees are required to sign confidentiality, non-solicitation, and non-competition agreements in connection with the receipt of the option grants to preclude actions detrimental to the Company. The Compensation Committee does not grant options during any black-out period under our Insider Trading Policy. We do not release material, non-public information for the purpose of affecting the value of executive compensation, nor do we grant options to executives in coordination with the release of material, non-public information. All awards of the Company’s common shares under the 2021 Omnibus Stock Incentive Plan were made at the closing market price on the day of the award. Beginning with stock options granted in 2017, the Compensation Committee established compensation recoupment, or clawback provisions, in all stock option award agreements. Pursuant to the clawback provisions, a grantee may, based on the decision of the Board of Directors, forfeit the right to receive and/or retain the benefit of the resulting equity compensation awarded if, during the grantee’s employment or thereafter, a determination is made by the Board of Directors that the grantee has breached his or her duties to the Company, including, by way of example, a breach of the Company’s Code of Business Conduct and Ethics Policy, engaged in serious misconduct, improper dissemination of Company confidential information or has disparaged the Company or others. Restricted Stock Units (“RSUs”) and Performance Stock Units (“PSUs”). Historically, the Company had issued restricted shares to executives and others under the 2015 Restricted Stock Plan previously approved by our shareholders. With the approval of the 2021 Omnibus Stock and Incentive Plan by our shareholders in April 2021, we now have the flexibility to offer other forms of equity grants. In consultation with our compensation consultant regarding market practices and a desire by our Compensation Committee to shift our historical equity grant practices, we issued 13,092 RSUs and 13,092 PSUs to our named executive officers (excluding Mr. Dueser) and 31,601 RSUs and 31,601 PSUs in the aggregate to selected executives and others during 2023. Mr. Dueser declined to receive his long-term incentives in 2023. Both the RSUs and PSUs generally vest in a change in control, death, and other events as defined in the award agreement. The award agreements also require the grantee to agree to defined noncompetition restrictions with respect to the Company and non-solicitation of the Company’s employees and customers, as well as agreeing that the awards are subject to the Company’s claw back and recoupment policies described above. Upon vesting as described, each unit is converted into one share of the Company’s stock. The RSUs include time-based vesting equally over a three-year period following the date of grants; the RSUs include dividend equivalent rights, which are distributable with the vesting of the shares but do not include voting rights. The Company's current outstanding PSUs vest at the end of a three-year period ending December 31, 2023, 2024 and 2025, respectively, to be settled no later than March 15, 2024, 2025 and 2026, respectively, with the number of earned PSUs determined based on the Company's relative performance to a peer group comprised of all U.S. banks with assets between $10 and $50 billion. The performance measures are weighted as follows: 50% relative to adjusted earnings per share growth; and 50% relative to the adjusted return on average assets over the three-year period. The number of earned PSUs is determined as the product of (A) the target number of PSUs and (B) the sum of the applicable adjusted earnings per share growth vesting percentage and the applicable adjusted return on average assets vesting percentage. The applicable earnings per share growth vesting percentage and the adjusted return on average assets vesting percentage are determined as follows:

  37. Long-term Incentives (Equity Grants)

    | Company Percentile Performance Relative to Peer Group | Adjusted Earnings Per Share Growth Vesting Percentage(1) | Adjusted Return on Average Assets Vesting Percentage(1) | | Below 25th | 0% | 0% | | Equal to or above 25th, but below 50th | 25% | 25% | | Equal to or above 50th, but below 75th | 50% | 50% | | 75th or over | 100% | 100% |

  38. Long-term Incentives (Equity Grants)

    The applicable vesting percentage for performance between the 25th and 50th percentiles and between the 50th and 75th percentiles is determined by straight-line linear interpolation.

  39. Retirement Plans

    As used in the executive recognition agreements, a “change in control” is defined as one or more of the following: • a person or entity directly or indirectly acquires securities of the Company representing more than 50% of the combined voting power of the Company's then outstanding voting securities; • the consummation of a reorganization, merger, consolidation, recapitalization, exchange offer, purchase of assets or other transaction, in each case, with respect to which the persons who were the beneficial owners of the Company immediately prior to such a transaction do not immediately after such transaction, own more than 50% of the combined voting power of the reorganized, merged, recapitalized or resulting company’s then outstanding voting securities; • the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company and such complete liquidation or dissolution is consummated; • in any two-year period, individuals who are members of the Board of Directors at the beginning of such period plus each new director whose election or nomination for election was approved by at least two-thirds of the directors in office immediately prior to such election or nomination, cease for any reason to constitute at least a majority of the Board; or • the sale or disposition by the Company of all or substantially all of the Company’s assets other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity at least 50% of the combined voting power of the voting securities of which is owned by persons in substantially the same proportions as their ownership of the Company immediately prior to such sale. As used in the executive recognition agreements, “cause” means termination of an employee due to the: • willful and continued failure by the employee to substantially perform his or her duties with the Company (other than any such failure resulting from the employee’s physical or mental incapacity due to injury or illness) after written demand for substantial performance is delivered to the employee by the Company; or • willful engaging by the employee in conduct, which is demonstrably injurious to the Company, monetarily or otherwise. As used in the executive recognition agreements, “good reason” means termination by an employee due to: a determination by the employee, made in good faith and based on the employee’s reasonable belief, that there has been a materially adverse change in his or her status or position as an executive officer of the Company as in effect immediately prior to the change in control, including, without limitation, any material change in the employee’s status or position as a result of a diminution in the employee’s duties or responsibilities or the assignment to the employee of any duties or responsibilities which are inconsistent with his or her status or position, or any removal of the employee from or failure to reappoint or reelect the employee to such position; a material reduction by the Company in the employee’s annual base salary in effect immediately prior to the change in control; the relocation of the employee’s principal office outside of the city or metropolitan area in which the employee is residing at the time of any change in control; • a material reduction by the Company in the budget over which the employee retained authority immediately prior to a change of control; • the failure by the Company to provide and credit the employee with the number of paid vacation days to which the employee is then entitled in accordance with the Company’s normal vacation policy as in effect immediately prior to a change in control; • any action or inaction by the Company following a change in control that constitutes a material breach of the agreement under which the employee provides services to the Company; • the failure by any successor corporation to the Company to assume the executive recognition agreement; or • any purported termination of the employee not effected pursuant to a notice of termination as required by the executive recognition agreement. Such severance benefits under the executive recognition agreements provide that the executive officer will receive a payment equal to a certain percentage (as set forth in his or her executive recognition agreement) of his or her annual base salary immediately preceding the date of termination along with the targeted amount of the employee's bonus prorated through the date of termination and payment of the employee's unused paid time-off. The percentage of annual base salary to be received upon a change in control pursuant to his or her executive recognition agreement is 200% (except for the CEO where this percentage is 300%). The total severance payment for the executive officer cannot, however, exceed the amount that would cause such payment to be deemed a “parachute payment” under Section 280G of the Internal Revenue Code. The executive recognition agreements were renewed on July 1, 2022, with a term to expire on June 30, 2024. However, if a change in control occurs during the original term of the executive recognition agreements, then the executive recognition agreements will continue in effect for an additional period of two years following the change in control. Similarly, if a second change in control occurs within two years from the date of the first change in control, then the executive recognition agreements will continue in effect for a period of two years from the date of the second change in control. The agreements include confidentiality obligations but do not bind the executives to non-competition, non-disparagement, or non-solicitation clauses. The executive recognition agreements provide that if any payments or benefits to the employee would constitute a “parachute payment” (as defined in Internal Revenue Code Section 280G(b)(2)) and would be subject to excise tax, then a calculation shall be made comparing (i) the net benefit to the employee after payment of such excise tax to (ii) the net benefit to the employee if payments are limited to the extent necessary to avoid being subject to the excise tax. Only if the amount calculated under (i) above is less than the amount under (ii) above will the payments be reduced to the minimum extent necessary to ensure that no portion of the payment to the employee is subject to the excise tax. Amounts that would be paid under these agreements upon a change in control and a qualifying termination for good reason using base salary information as of December 31, 2023, for the named executive officers would be as follows:

  40. Retirement Plans

    | Name | Amount | Value of Stock Options and Restricted Stock | | F. Scott Dueser, Chairman, President, and Chief Executive Officer | $3,543,750 | $921,362 | | Michelle S. Hickox, Executive Vice President & CFO | $1,240,000 | $257,220 | | Ronald D. Butler, II, Executive Vice President & CAO | $1,260,000 | $414,059 | | T. Luke Longhofer, Executive Vice President & CCO | $810,000 | $224,852 | | Kirk W. Thaxton, President & CEO, First Financial Trust and Asset Management Company, N.A. | $934,000 | $294,103 |

  41. Summary Compensation Table

    Summary Compensation Table The following table summarizes the total compensation for our named executive officers in 2023, 2022, and 2021:

  42. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) (6) | Stock Awards ($) (1) | Option Awards ($) (2) | Non-Equity Incentive Plan Compensation ($) (3) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) (4) | All Other Compensation ($) (5) | Total ($) | | F. Scott Dueser, * | 2023 | 1,171,875 | - | - | - | - | 45,583 | 22,350 | 1,239,808 | | Chairman, President/CEO | 2022 | 1,121,392 | - | 980,986 | 283,636 | 573,750 | 97,288 | 32,535 | 3,089,587 | | | 2021 | 1,096,958 | - | 960,006 | 240,003 | 617,876 | 472,589 | 54,709 | 3,442,141 | | Michelle S. Hickox, (7) | 2023 | 597,545 | 62,677 | 239,960 | 120,028 | 31,000 | 16,576 | 22,350 | 1,090,136 | | EVP/CFO | | | | | | | | | | | Ronald D. Butler, II, | 2023 | 625,000 | - | 239,960 | 120,028 | 31,500 | 22,416 | 22,350 | 1,061,254 | | EVP/CAO | 2022 | 595,000 | - | 159,974 | 92,541 | 162,000 | 39,883 | 32,535 | 1,081,933 | | | 2021 | 566,667 | - | 166,686 | 83,331 | 180,619 | 70,905 | 51,818 | 1,120,026 | | T. Luke Longhofer, | 2023 | 401,667 | - | 126,625 | 63,344 | 81,000 | 8,655 | 22,350 | 703,641 | | EVP/Chief Credit Officer | 2022 | 375,833 | - | 102,686 | 59,385 | 92,400 | 16,678 | 32,535 | 679,517 | | Kirk W. Thaxton, | 2023 | 464,667 | - | 166,668 | 83,353 | 84,060 | 38,039 | 33,900 | 870,687 | | CEO & President Trust | 2022 | 450,833 | - | 120,806 | 69,865 | 317,100 | 59,336 | 62,150 | 1,080,090 | | Company | 2021 | 438,333 | - | 117,286 | 58,663 | 171,600 | 38,158 | 59,300 | 883,341 | | James R. Gordon, (7) | 2023 | 77,500 | - | - | - | - | - | 15,393 | 92,893 | | Former EVP/CFO | 2022 | 620,000 | - | 165,354 | 95,627 | 167,400 | 45,183 | 32,535 | 1,126,099 | | | 2021 | 616,667 | - | 166,686 | 83,331 | 223,200 | 91,599 | 54,167 | 1,235,650 |

  43. Summary Compensation Table

    * Mr. Dueser declined to receive his long-term equity and short-term non-equity incentives for 2023. (1) Amount represents the value of restricted stock, RSUs, and/or PSUs granted on August 16, 2023, August 16, 2022 and August 16, 2021, under the 2021 Omnibus Stock and Incentive Plan approved by shareholders on April 27, 2021. The shares vest over three years. (2) See note 17 to the financial statements included with the Annual Report on Form 10-K for the assumptions made in the valuation of these option awards. (3) Amount represents cash bonus earned in the respective year related to the achievement of pre-determined performance goals. (4) Amount represents the amount contributed to our supplemental executive retirement plan on behalf of each named executive officer for 2023, 2022, and 2021. (5) Amount represents the amount contributed to the profit sharing plan, and the 401(k) match on behalf of each named executive officer as well as country club dues paid for each named executive officer. For the year ended December 31, 2023, profit share contributions and 401(k) match contributions totaled $4,950 and $13,200 for Mr. Dueser; $4,950 and $13,200 for Mrs. Hickox; $4,950 and $13,200 for Mr. Butler; $4,950 and $13,200 for Mr. Longhofer; and $16,500 and $13,200 for Mr. Thaxton, respectively. Mr. Gordon received a lump sum payment of $15,393 which is equal to the cost of continuation coverage under the Consolidated Omnibus Reconciliation Act of 1985 for Mr. Gordon and his dependents for six months (6) In connection with hiring Mrs. Hickox in 2023, the Company paid her a signing bonus of $50,000. Additionally, she received a relocation bonus of $12,677. Mr. Gordon is our former Chief Financial Officer, who resigned on January 9, 2023. The Company appointed Mrs. Hickox as Executive Vice President and Chief Financial Officer on January 9th, 2023.

  44. Grants of Plan-Based Awards

    Grants of Plan-Based Awards During 2023, the Compensation Committee, and approved by the Board of Directors, granted incentive stock options, restricted stock units, and performance stock units under the 2021 Omnibus Stock and Incentive Plan approved by shareholders on April 27, 2021. The following table discloses information related to the grants made during 2023:

  45. Grants of Plan-Based Awards

    | | | Estimated future payouts under non-equity incentive plan awards (1) | | | Estimated future payouts under equity incentive plan awards (2) | | | All other stock awards: Number of shares of stock | All other option awards: Number of securities underlying | Exercise or base price of option | Grant date fair value of stock and option | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | or units (#)(3) | options (#) | awards ($/sh) | awards ($)(4) | | F. Scott | 1-1-23 | - | - | - | - | - | - | - | - | - | - | | Dueser * | 8-16-23 | - | - | - | - | - | - | - | - | - | | | Michelle S. | 1-1-23 | 24,800 | 372,000 | 496,000 | - | - | - | - | - | - | - | | Hickox | 8-16-23 | - | - | - | 1,016 | 4,063 | 8,126 | 4,063 | 14,289 | 29.53 | 359,988 | | Ronald D. | 1-1-23 | 25,200 | 378,000 | 504,000 | - | - | - | - | - | - | - | | Butler, II | 8-16-23 | - | - | - | 1,016 | 4,063 | 8,126 | 4,063 | 14,289 | 29.53 | 359,988 | | T. Luke | 1-1-23 | 12,150 | 202,500 | 283,500 | - | - | - | - | - | - | - | | Longhofer | 8-16-23 | - | - | - | 536 | 2,144 | 4,288 | 2,144 | 7,541 | 29.53 | 189,969 | | Kirk W. | 1-1-23 | 18,680 | 280,200 | 373,600 | - | - | - | - | - | - | - | | Thaxton | 8-16-23 | - | - | - | 706 | 2,822 | 5,644 | 2,822 | 9,923 | 29.53 | 250,021 |

  46. Grants of Plan-Based Awards

    * Mr. Dueser declined to receive his long-term equity incentives for 2023. (1) Represents annual cash incentive opportunity for 2023; see “Short-term Incentive (Cash Bonus)” section beginning on page 38 above. (2) Represents performance stock unit (PSU) awards granted under the 2021 Omnibus Stock and Incentive Plan. The threshold, target, and maximum number of shares shown based on the number of PSUs at 25% vesting, 100% vesting, and amount granted, and 200% vesting, respectively, based on each award vesting as described on pages 40-41. (3) Represents restricted stock unit (RSU) awards granted under the 2021 Omnibus Stock and Incentive Plan. Each award vests one-third at the end of one year, two-thirds at the end of two years, and in full at the end of three years. Amounts reflect the grant date fair value of the respective award, computed in accordance with the ASC topic 718. Regardless of the value on the grant date, the actual value that may be realized from an award is contingent on the satisfaction of the applicable condition to vesting of that award, and for stock options, also upon the excess of the Company’s stock price over the exercise price. For a discussion of the assumptions used in the valuation of these awards, see note 17 of the notes to consolidated financial statements in our Annual Report on Form 10-K.

  47. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End On December 31, 2023, the following stock options and restricted stock were outstanding for the respective named executive officers under the 2012 Stock Option Plan or the 2021 Omnibus Stock and Incentive Plan:

  48. Outstanding Equity Awards at Fiscal Year-End

    | | | Option Awards (1) | | | | | Stock Awards (2)(3)(4)(5)(6) | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Option (#) Unexercisable | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) | Option Exercise Price ($)(1) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(6) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | F. Scott Dueser | 06-12-17 | 20,000 | - | - | 21.18 | 06-12-27 | - | - | - | - | | | 08-16-21 | - | - | - | - | - | 3,271(2) | 99,111 | - | - | | | 08-16-21 | - | - | - | - | - | 19,628(3) | 594,728 | - | - | | | 08-16-21 | 7,390 | 11,086 | - | 48.91 | 08-16-31 | - | - | - | - | | | 08-16-22 | - | - | - | - | - | 6,929(2) | 209,949 | - | - | | | 08-16-22 | - | - | - | - | - | 20,788(4) | 629,876 | - | - | | | 08-16-22 | 4,266 | 17,060 | - | 47.19 | 08-16-32 | - | - | - | - | | Michelle S. Hickox | 08-16-23 | - | - | - | - | - | 4,063(2) | 123,109 | - | - | | | 08-16-23 | - | - | - | - | - | 8,126(5) | 246,218 | - | - | | | 08-16-23 | - | 14,289 | - | 29.53 | 08-16-33 | - | - | - | - | | Ronald D. Butler, II | 10-27-15 | 20,000 | - | - | 16.95 | 10-27-25 | - | - | - | - | | | 06-12-17 | 20,000 | - | - | 21.18 | 06-12-27 | - | - | - | - | | | 06-26-19 | 6,000 | 4,000 | - | 29.70 | 06-26-29 | - | - | - | - | | | 08-16-21 | - | - | - | - | - | 568(2) | 17,210 | - | - | | | 08-16-21 | - | - | - | - | - | 3,408(3) | 103,262 | - | - | | | 08-16-21 | 2,566 | 3,849 | - | 48.91 | 08-16-31 | - | - | - | - | | | 08-16-22 | - | - | - | - | - | 565(2) | 17,120 | - | - | | | 08-16-22 | - | - | - | - | - | 3,390(4) | 102,717 | - | - | | | 08-16-22 | 1,392 | 5,566 | - | 47.19 | 08-16-32 | - | - | - | - | | | 08-16-23 | - | - | - | - | - | 4,063(2) | 123,109 | - | - | | | 08-16-23 | - | - | - | - | - | 8,126(5) | 246,218 | - | - | | | 08-16-23 | - | 14,289 | - | 29.53 | 08-16-33 | - | - | - | - | | T. Luke Longhofer | 06-12-17 | 8,900 | - | - | 21.18 | 06-12-27 | - | - | - | - | | | 06-26-19 | 6,000 | 4,000 | - | 29.70 | 06-26-29 | - | - | - | - | | | 08-16-21 | - | - | - | - | - | 262(2) | 7,939 | - | - | | | 08-16-21 | - | - | - | - | - | 1,574(3) | 47,692 | - | - | | | 08-16-21 | 1,186 | 1,778 | - | 48.91 | 08-16-31 | - | - | - | - | | | 08-16-22 | - | - | - | - | - | 725(2) | 21,968 | - | - | | | 08-16-22 | - | - | - | - | - | 2,176(4) | 65,933 | - | - | | | 08-16-22 | 893 | 3,572 | - | 47.19 | 08-16-32 | - | - | - | - | | | 08-16-23 | - | - | - | - | - | 2,144(2) | 64,963 | - | - | | | 08-16-23 | - | - | - | - | - | 4,288(5) | 129,926 | - | - | | | 08-16-23 | - | 7,541 | - | 29.53 | 08-16-33 | - | - | - | - | | Kirk W. Thaxton | 10-27-15 | 20,000 | - | - | 16.95 | 10-27-25 | - | - | - | - | | | 06-12-17 | 20,000 | - | - | 21.18 | 06-12-27 | - | - | - | - | | | 06-26-19 | 6,000 | 4,000 | - | 29.70 | 06-26-29 | - | - | - | - | | | 08-16-21 | - | - | - | - | - | 399(2) | 12,090 | - | - | | | 08-16-21 | - | - | - | - | - | 2,398(3) | 72,659 | - | - | | | 08-16-21 | 1,806 | 2,710 | - | 48.91 | 08-16-31 | - | - | - | - | | | 08-16-22 | - | - | - | - | - | 853(2) | 25,846 | - | - | | | 08-16-22 | - | - | - | - | - | 2,560(4) | 77,568 | - | - | | | 08-16-22 | 1,051 | 4,202 | - | 47.19 | 08-16-32 | - | - | - | - | | | 08-16-23 | - | - | - | - | - | 2,822(2) | 85,507 | - | - | | | 08-16-23 | - | - | - | - | - | 5,644(5) | 171,013 | - | - | | | 08-16-23 | - | 9,923 | - | 29.53 | 08-16-33 | - | - | - | - |

  49. Outstanding Equity Awards at Fiscal Year-End

    (1) Represents awards under (i) the 2012 Incentive Stock Option Plan with awards (prior to April 26, 2021) vesting 20% at the end of two years), 40% at the end of three years, 60% at the end of four years, 80% at the end of five years and in full at the end of six years; and (ii) the 2021 Omnibus Stock and Incentive Plan (after April 26, 2021) with vesting ratable over five or three years from the date of grant. (2) Represents awards of restricted stock units under the 2021 Omnibus Stock and Incentive Plan. Each award vests one-third at the end of one year, two-thirds at the end of two years, and in full at the end of three years. (3) Represents awards of performance stock units under the 2021 Omnibus Stock and Incentive Plan, which vest at the end of the three-year period ending December 31, 2023, based on the earnings growth (50%) and return on assets (50%) of the Company relative to all U.S. banks with $10 and $50 billion in assets, up to 200% of the units granted. At December 31, 2023, the vesting period for the PSUs that were granted in 2021 had been satisfied. These shares will not be reflected in the shares vested until the outcome of the peer performance condition is determined and the vesting is settled in the first quarter of 2024. The number of shares indicated in the table represents the maximum number of shares that may be received under the award. Represents awards of performance stock units under the 2021 Omnibus Stock and Incentive Plan, which vest at the end of the three-year period ending December 31, 2024, based on the earnings growth (50%) and return on assets (50%) of the Company relative to all U.S. banks with $10 and $50 billion in assets, up to 200% of the units granted. The number of shares indicated in the table represents the maximum number of shares that may be received under the award. Represents awards of performance stock units under the 2021 Omnibus Stock and Incentive Plan, which vest at the end of the three-year period ending December 31, 2025, based on the earnings growth (50%) and return on assets (50%) of the Company relative to all U.S. banks with $10 and $50 billion in assets, up to 200% of the units granted. The number of shares indicated in the table represents the maximum number of shares that may be received under the award. Calculated using the closing price of our common shares of $30.30 on December 31, 2023.

  50. Option Exercises and Stock Vested

    Option Exercises and Stock Vested During 2023, the following options and restricted stock awards were exercised by or vested for the named executive officers:

  51. Option Exercises and Stock Vested

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | | F. Scott Dueser | 20,000 | 324,800 | 8,395 | 238,166 | | Michelle S. Hickox | - | - | - | - | | Ronald D. Butler, II | 7,000 | 155,540 | 1,963 | 53,095 | | T. Luke Longhofer | 3,100 | 35,867 | 1,177 | 31,517 | | Kirk W. Thaxton | 10,000 | 132,450 | 1,657 | 44,059 | | James R. Gordon | - | - | 2,392 | 81,567 |

  52. Option Exercises and Stock Vested

    (1) Amount represents the difference between the aggregate option exercise price and the actual aggregate stock price on the date exercised. (2) Amount represents the aggregate restricted stock value on the date vested.

  53. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation The following amounts represent the 2023 activity in the Make Whole Plan described above and contributions made to the Supplemental Executive Retirement Plan (“SERP”), both being non-qualified deferred compensation plans. The SERP effectively replaced the Make Whole Plan effective January 1, 2019:

  54. Nonqualified Deferred Compensation

    | Name | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($)(1)(2) | Aggregate Earnings (Loss) in Last FY ($) | Aggregate Withdrawals/Distributions ($) | Aggregate Balance at Last FYE ($) | | F. Scott Dueser | | | | | | | Make Whole Plan | - | - | (253,961) | - | 2,325,022 | | SERP | 493,684 | 45,583 | 196,956 | - | 1,686,320 | | Michelle S. Hickox | | | | | | | SERP | - | 16,576 | - | - | 16,576 | | Ronald D. Butler, II | | | | | | | Make Whole Plan | - | - | (73,623) | - | 674,013 | | SERP | 17,074 | 22,416 | 24,132 | - | 271,520 | | T. Luke Longhofer | | | | | | | SERP | 10,970 | 8,655 | 6,592 | - | 83,958 | | Kirk W. Thaxton | | | | | | | Make Whole Plan | - | - | (21,151) | - | 193,642 | | SERP | 12,904 | 38,039 | 13,384 | | 195,564 |

  55. Nonqualified Deferred Compensation

    (1) Contributions to the SERP were made effective December 31, 2023, for the year then ended for each named executive officer. These amounts are included in the Summary Compensation Table in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column.

  56. CEO Pay Ratio

    CEO Pay Ratio As required by Item 402(u) of Regulation S-K, we are providing the following information for 2023: The median of annual total compensation of all employees of our Company (other than Mr. Dueser, our Chairman, President, and Chief Executive Officer) was $49,500; • The annual total compensation of Mr. Dueser, our Chairman, President, and Chief Executive Officer, was $1,239,808 (see “Summary Compensation Table” on page 47); and • Based on this information, the ratio of the annual total compensation of our Chairman, President, and Chief Executive Officer to the median of the annual total compensation of all employees is 25 to 1. To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of our median employee and our Chairman, President, and Chief Executive Officer, we note the following: • For 2023, our employee population totaled approximately 1,500 individuals. This population consisted of our full-time and part-time employees, as we do not have temporary or seasonal workers. We selected December 31, 2023, as our identification date for determining our median employee because it enabled us to make such identification in a reasonably efficient and economic manner. • To find the median of the annual compensation of all our employees, we used the salary and wages, including overtime and incentive compensation, from our payroll records for 2023. • We identified our median employee using this compensation measure, which was consistently applied to all our employees included in this calculation.

  57. Pay Versus Performance

    Pay Versus Performance The following tables summarize compensation information for the principal executive officer and average compensation for the other named executive officers required by the SEC rules regarding Pay Versus Performance. The Company uses Annualized Net Income growth as its Company Selected Measure (CSM).

  58. Pay Versus Performance

    | Year | SCT Total Compensation for CEO | Compensation Actually Paid to CEO | Average SCT Total Compensation for Other NEOs | Average Compensation Actually Paid to Other NEOs | Value of Initial Fixed $100 Investment Based on: | | Net Income | Annualized Net Income Growth | | | | | | | FFIN TSR | Peer Group TSR * | | | | 2023 | $1,239,808 | $798,730 | $931,430 | $850,609 | $86.32 | $84.70 | $198,977 | -15% | | 2022 | $3,089,587 | $448,226 | $991,910 | $548,081 | $98.01 | $88.96 | $234,475 | 3% | | 2021 | $3,442,141 | $5,876,530 | $981,457 | $1,448,906 | $144.84 | $116.73 | $227,562 | 13% | | 2020 | $1,800,963 | $1,358,758 | $847,069 | $800,991 | $103.05 | $86.37 | $202,034 | 23% |

  59. Pay Versus Performance

    * Peer Group TSR is based on the KBW Nasdaq Bank Index The non-principal executive officer (PEO) named executive officers (NEOs) reflected in the table were the following individuals for 2023: Mr. Butler, Mrs. Hickox, Mr. Thaxton, and Mr. Longhofer. For 2022 it reflects the following individuals: Mr. Butler, Mr. James Gordon, Mr. Thaxton, Mr. Longhofer. For 2021 and 2020 it reflects the following individuals: Mr. Butler, Mr. Gordon, Mr. Thaxton and Mr. Gary Gragg. To calculate the Compensation Actually Paid (CAP), the following amounts were deducted from and added to Summary Compensation Table (SCT) total compensation:

  60. Pay Versus Performance

    | Year | SCT Total Compensation for CEO | Deductions from SCT Total | Additions to SCT Total | CAP | | | | i | ii | | | 2023 | $1,239,808 | $(45,583) | $(395,495) | $798,730 | | 2022 | $3,089,587 | $(1,361,910) | $(1,279,451) | $448,226 | | 2021 | $3,442,141 | $(1,672,598) | $4,106,987 | $5,876,530 | | 2020 | $1,800,963 | $(302,123) | $(140,082) | $1,358,758 |

  61. Pay Versus Performance

    | Year | SCT Total Compensation for other NEOs | Deductions from SCT Total | Additions to SCT Total | CAP | | | | i | ii | | | 2023 | $931,430 | $(311,413) | $230,592 | $850,609 | | 2022 | $991,910 | $(256,830) | $(186,999) | $548,081 | | 2021 | $981,457 | $(231,433) | $698,882 | $1,448,906 | | 2020 | $847,069 | $(170,745) | $124,667 | $800,991 |

  62. Pay Versus Performance

    (i) Represents grant date fair value of equity based awards granted for each year shown and change in pension value and non-qualified deferred compensation for each year. (ii) Reflects the value of equity calculated in accordance with the SEC methodology for determining CAP and the change in value of non-qualified compensation plans for each year shown. The equity component of CAP for the year ended December 31, 2023 is further detailed below.

  63. Pay Versus Performance

    | CEO Equity Component of CAP for FY 2023: | | | | | | Equity Type | Fair Value of Current Year Equity Awards at 12/31/2023 | Change in Value of Prior Years' Awards Unvested at 12/31/2023 | Change in Value of Prior Years' Awards That Vested in FY 2023 | Equity Value Included in CAP | | | (a) * | (b) | (c) | (d) = (a) + (b) + (c) | | ISOs | $— | $(84,869) | $(123,909) | $(208,778) | | RSAs | — | — | (17,818) | (17,818) | | RSUs | — | (41,820) | (32,804) | (74,624) | | PSUs | — | (82,853) | — | (82,853) | | Total | $— | $(209,542) | $(174,531) | $(384,073) |

  64. Pay Versus Performance

    * Mr. Dueser declined to receive his long-term equity incentives for 2023.

  65. Pay Versus Performance

    | Average Non-CEO NEOs Equity Component of CAP for FY 2023: | | | | | | Equity Type | Fair Value of Current Year Equity Awards at 12/31/2023 | Change in Value of Prior Years' Awards Unvested at 12/31/2023 | Change in Value of Prior Years' Awards That Vested in FY 2023 | Equity Value Included in CAP | | | (a) | (b) | (c) | (d) = (a) + (b) + (c) | | ISOs | $94,356 | $(25,903) | $(23,891) | $44,562 | | RSAs | — | — | (5,939) | (5,939) | | RSUs | 99,172 | (4,035) | (3,147) | 91,989 | | PSUs | 99,172 | (7,947) | — | 91,225 | | Total | $292,700 | $(37,885) | $(32,977) | $221,837 |

  66. Pay Versus Performance

    The four items listed below represent the most important metrics we used to determine CAP for the year ended December 31, 2023 as further described in our Compensation Discussion and Analysis within the Short Term Incentives and Long Term Incentives sections.

  67. Pay Versus Performance

    | Most Important Performance Measures | | Efficiency Ratio | | Return on Assets | | Return on Equity | | Annual Net Income Growth |

  68. Pay Versus Performance

    The table below shows the relationship between our cumulative TSR and our peer group TSR over the four most recently completed fiscal years. Total Shareholder Return: Company vs. Peer Group The chart below shows the relationship between compensation actually paid to our CEO and the average of the compensation actually paid to our Other NEOs and our cumulative TSR over the most recently completed fiscal years. CAP vs. Total Shareholder Return The chart below shows the relationship between compensation actually paid to our CEO and the average of the compensation actually paid to our Other NEOs and our net income over the most recently completed fiscal years. CAP vs. Net Income Annualized Net Income Growth (CSM) is a primary driver of short term incentives and relative annualized net income growth is a key component of long term incentives. It is a key driver in both cash incentive bonuses as well as profit sharing amounts. The CEO and the other NEO's net income growth goals are set by the Compensation committee each year. In 2023, the earnings growth goal was not met for the consolidated Company. The CEO elected not to receive his incentives and this significantly reduced cash incentive bonuses for the NEOs for the year ended December 31, 2023.