DEF 14A of Midland States Bancorp, Inc., Mar 25, 2024

DEF 14A of Midland States Bancorp, Inc.

Filed Mar 25, 2024 · FY20230001104659-24-038083

Open on EDGAR

  1. NOTICE OF ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 6, 2024

    | Other Compensation Programs | 39 | | CEO Pay Ratio | 40 | | PAY VERSUS PERFORMANCE DISCLOSURE | 41 | | PROPOSAL 2 — ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION | 45 | | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS | 46 | | CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS | 49 | | AUDIT COMMITTEE REPORT | 50 | | PROPOSAL 3 — RATIFICATION OF THE APPOINTMENT OF CROWE LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 51 | | General | 51 | | Accountant Fees | 51 | | Audit Committee Pre-Approval Policy | 51 |

  2. Director Compensation

    Director Compensation The following table sets forth information regarding 2023 compensation for each of our nonemployee directors. None of the directors receive any compensation or other payment in connection with his or her service as a director other than compensation received from the Company as set forth below.

  3. Director Compensation

    | Name (a) | Fees Earned or Paid in Cash ($) (b) | Stock Awards(1) ($) (c) | Total ($) (h) | | R. Dean Bingham | 48,000 | 40,000 | 88,000 | | Gerald J. Carlson(2) | — | — | — | | Jennifer L. DiMotta | 38,000 | 40,000 | 78,000 | | Sherina M. Edwards | 38,000 | 40,000 | 78,000 | | Deborah A. Golden | 45,000 | 40,000 | 85,000 | | Jerry L. McDaniel | 46,000 | 40,000 | 86,000 | | Jeffrey M. McDonnell | 36,000 | 40,000 | 76,000 | | Dwight A. Miller(3) | 38,000 | — | 38,000 | | Richard T. Ramos | 56,000 | 40,000 | 96,000 | | Robert F. Schultz | 58,000 | 40,000 | 98,000 | | Jeffrey C. Smith | 89,000 | 40,000 | 129,000 |

  4. Director Compensation

    (1) The amounts set forth in the “Stock Awards” column reflect the aggregate grant date fair value of restricted stock units granted in 2023 in accordance with FASB ASC Topic 718. The amounts shown are based on a fair market value of $19.91 for awards granted on June 30, 2023. Each of our directors, aside from Mr. Ludwig, received a grant of restricted stock units on June 30, 2023, which will vest on March 31, 2024 subject to continued service on the board. The aggregate number of restricted stock units held by each nonemployee director as of December 31, 2023 was as follows: R. Dean Bingham — 2,009 restricted stock units Jennifer L. DiMotta — 2,009 restricted stock units Sherina M. Edwards — 2,009 restricted stock units Deborah A. Golden — 2,009 restricted stock units Jerry L. McDaniel — 2,009 restricted stock units Jeffrey M. McDonnell — 2,009 restricted stock units Richard T. Ramos — 2,009 restricted stock units Robert F. Schultz — 2,009 restricted stock units Jeffrey C. Smith — 2,009 restricted stock units (2) Mr. Carlson was appointed to the Company’s board of directors on February 6, 2024. (3) Mr. Miller retired from the Company’s board of directors on May 1, 2023. Under our director compensation policy, nonemployee directors are provided with cash compensation and an annual equity award. Cash Compensation. Each nonemployee director receives a $30,000 annual retainer, except that the Chairman of the board is entitled to an annual retainer of $60,000. Company board committee chairs and members are also entitled to a fee for such service as follows (respectively): • Audit Committee: $15,000/$6,000 • Risk Policy & Compliance Committee: $10,000/$5,000 • Nominating and Governance Committee: $10,000/$5,000 Compensation Committee: $10,000/$6,000 In addition to the foregoing, any nonemployee director serving on the Director Credit Risk Committee is entitled to an additional annual fee of $18,000, and any such director serving on the trust committee of the Bank board is entitled to an additional annual fee of $3,000. Equity Compensation. Each nonemployee director is also entitled to an annual equity award with a grant date value of $40,000. The equity award is granted on June 30 of each year and is scheduled to vest on March 31 of the following year.

  5. PROPOSAL 1 — ELECTION OF DIRECTORS

    PROPOSAL 1 — ELECTION OF DIRECTORS At the annual meeting, our shareholders will elect three Class II directors for a term expiring at the 2027 annual meeting of shareholders. The Company’s directors are divided into three classes having staggered terms of three years. As described further below, each of the three nominees for election as Class II directors is an incumbent director. Each nominee has consented to being a nominee and serving on the board, if elected, but if any of the nominees becomes unavailable for election, the holders of the proxies may vote for another nominee when voting at the meeting. Shareholders of the Company have no cumulative voting rights with respect to the election of directors. Set forth below is information concerning the nominees for election and for the other directors whose terms of office will continue after the meeting. The board of directors unanimously recommends that you vote “FOR” each of the nominees for director.

  6. Nominees for Election

    Nominees for Election

  7. Nominees for Election

    | | Name | Age | Position with the Company | Director Since | | Class II Term expires 2027 | Gerald J. Carlson | 65 | Director | 2024 | | | Sherina M. Edwards | 40 | Director | 2022 | | | Robert F. Schultz | 59 | Director | 2002 |

  8. Continuing Directors

    Continuing Directors

  9. Continuing Directors

    | | Name | Age | Position with the Company | Director Since | | Class I Term expires 2026 | Jennifer L. DiMotta | 50 | Director | 2018 | | | Jeffrey G. Ludwig | 52 | President, Chief Executive Officer and Director | 2019 | | | Richard T. Ramos | 61 | Director | 2012 | | | Jeffrey C. Smith | 62 | Chairman of the Board | 2005 | | Class III Term expires 2025 | R. Dean Bingham | 59 | Director | 2020 | | | Jerry L. McDaniel | 59 | Director | 2012 | | | Jeffrey M. McDonnell | 60 | Director | 2015 |

  10. Continuing Directors

    Each of our continuing directors listed above and, if elected, each of the nominees listed above, will hold office until the annual meeting of shareholders in the year indicated, or until their earlier resignation or removal. There are no arrangements or understandings with any of the nominees pursuant to which they have been selected as nominees or directors. The business experience of each nominee and continuing director, as well as their qualifications to serve on the board, is set forth below. Unless otherwise noted, nominees for director have been employed in their principal occupation with the same organization for at least the last five years. Other than as described below, no nominee, continuing director or executive officer has any family relationship, as defined in Item 401 of Regulation S-K, with any other director or with any of our executive officers.

  11. Continuing Directors

    | Jeffrey C. Smith | Background. Mr. Smith serves as the Chairman of the Company, a position he has held since 2020, and as Chair of our Nominating and Corporate Governance Committee. He is a Principal and Managing Partner of Walters Golf Management, a golf club management company headquartered in St. Louis, Missouri, which manages a number of properties and offers turnkey management, construction management, acquisition, consulting, agronomics and remodeling/redecorating services. The company also has a revenue management business assisting facilities to improve annual green fee income through innovative software systems and methodologies. He has been with Walters Golf Management Group since 1996 and also serves on two not-for-profit philanthropic boards, The Greater St. Louis Golf Charities, and the Metropolitan Gold Foundation. Mr. Smith received his B.S. in Education from the University of Missouri. Skills and Qualifications. Our board considered Mr. Smith’s business experience, his management experience as the managing partner of a business and his knowledge of the business community in our St. Louis market area in determining that he should be a member of our board. |

  12. Continuing Directors

    | Jeffrey G. Ludwig | Background. Mr. Ludwig serves as President and Chief Executive Officer of the Company, positions he has held since March 2018 and January 2019, respectively, and as Chief Executive Officer of the Bank since March 2018. Prior to those appointments, Mr. Ludwig served as Executive Vice President of the Company and the Bank since 2010, and also as Chief Financial Officer of the Company and the Bank from November 2006, when he joined the Company and the Bank, through November 2016 and from October 2017 until March 2018. Mr. Ludwig also previously served as President of the Bank from November 2016 until he was promoted to Chief Executive Officer of the Bank in March 2018. He serves on the Company’s Executive Committee. Prior to joining the Company, Mr. Ludwig held the positions of Associate Director, Corporate Reporting, for Zimmer Holdings, Inc., an NYSE-listed company in Warsaw, Indiana, from 2005 to 2006; Director of Corporate Accounting for Novellus Systems, Inc., a Nasdaq-listed company in San Jose, California, from 2002 to 2005; and various positions, including Senior Manager — Audit & Advisory Services, for KPMG LLP in its banking practice in St. Louis, Missouri, from 1993 to 2000 and in its technology practice in Mountain View, California, from 2000 to 2002. In addition to his positions at the Company, Mr. Ludwig serves as a member of the Federal Advisory Council of the Board of Governors of the Federal Reserve System. Mr. Ludwig received his B.S. in Accounting from Eastern Illinois University. Skills and Qualifications. Our board considered Mr. Ludwig’s positions as President and Chief Executive Officer of the Company, his experience in executive officer roles within the Bank, and his long-standing relationships within the business community in determining that he should be a member of our board. |

  13. Continuing Directors

    | R. Dean Bingham | Background. Mr. Bingham has served on the board of directors of the Bank since 2018 and joined the board of directors of the Company in 2020. Since 1994, Mr. Bingham has served as President, and then Chief Executive Officer of Agracel, Inc., an industrial developer of facilities for manufacturing and high-tech entities in small to midsized communities. Throughout his career, Mr. Bingham has been directly involved with the development of over 25 million square feet of industrial projects on long term leases, focused primarily in tertiary markets with an emphasis on manufacturing. Mr. Bingham received his B.S. in Industrial Engineering from the University of Illinois. Skills and Qualifications. Our board considered Mr. Bingham’s business experience, his management experience as the President of a business and his knowledge of the business communities in determining that he should be a member of our board. |

  14. Continuing Directors

    | Gerald J. Carlson | Background. Mr. Carlson joined the Company’s board of directors in February 2024. He previously served as Managing Partner of KPMG for the firm’s Washington, D.C. metropolitan and Chesapeake regions, a position he held from 2013 until his retirement in 2019. Prior to that, Mr. Carlson served as Managing Partner of KPMG’s St. Louis office, which position he held since 2008. Throughout his career, Mr. Carlson served as an audit partner and advisor to private and publicly held clients, including a number of Fortune 500 companies. As a Managing Partner of KPMG, Mr. Carlson was responsible for leading a culture of ethics and integrity, developing marketplace strategies for growth, overseeing high-quality client service, attracting and retaining key resources and representing KPMG in the marketplace. Mr. Carlson has served on the boards of many organizations, including currently serving on the boards of two private equity backed companies, the Greater Rivers Greenway Foundation, Connected DMV, and the Dean’s Advisory Board of the Robert S. Trulaske School of Business at the University of Missouri — Columbia. He previously served on the boards of the Greater Washington Board of Trade, the Regional Business Council, and Catholic Charities of the Archdiocese of St. Louis, among others. Mr. Carlson holds a B.A. in Accounting and a Master’s Degree in Accounting from University of Missouri — Columbia. Skills and Qualifications. Our board considered Mr. Carlson’s business and leadership experience as a managing partner of a professional services and audit firm, his experience with both public and private sectors, his knowledge of corporate governance and his accounting experience in determining that he should be a member of our board. |

  15. Continuing Directors

    | Jennifer L. DiMotta | Background. Mrs. DiMotta serves as the Chief Digital Officer at Rush Recommerce, LLC. In addition, she is President of DiMotta International LLC (DI), an international consulting firm focusing on digital transformation, leadership training and building aggressive sales growth, a position she has held since 2020. Prior to DI, she served as Executive Vice President and Chief Marketing Digital Officer of MediaMarktSaturn, Europe’s largest consumer electronics retailer, from 2019 to 2020. Prior to joining MediaMarkt in 2019, she was President of DiMotta Consulting LLC, a strategic eCommerce and digital marketing consulting firm, which she founded in 2017. Prior to launching her consulting business, Mrs. DiMotta served as Vice President Digital and Omnichannel of Bluemercury Inc., a cosmetics retailer, beginning in 2015, as Vice President eCommerce of Sports Authority, Inc., a sporting goods retailer, beginning in 2013, and as Senior Director of eCommerce of Office Depot, beginning in 2012, where she was responsible for developing those companies’ eCommerce and digital marketing efforts. Mrs. DiMotta holds a B.A. in Criminal Justice from the University of Nebraska, and a Master’s Degree in Leadership from Bellevue University. Skills and Qualifications. Our board considered Mrs. DiMotta’s more than 20 years’ experience in leadership and management, business development, and information technology, including omnichannel strategies, in determining that she should be a member of our board. |

  16. Continuing Directors

    | Sherina M. Edwards | Background. Ms. Edwards served as the Chief Strategy Officer of MasTec, Inc., a NYSE-listed infrastructure construction company. Previously, Ms. Edwards served as Chief Executive Officer of INTREN, LLC, a subsidiary of MasTec, from 2020 to 2022, and as a partner at the law firm of Quarles & Brady LLP, from 2018 to 2020. Ms. Edwards is a director of NorthWestern Energy Group, Inc., a Nasdaq-listed electric and natural gas utility company, and of the South West Water Company, and previously served as a director of INTREN from 2017 to 2020. She served as a Commissioner of the Illinois Commerce Commission from 2013 to 2017, and as Co-Chair of the U.S. Department of Transportation’s Voluntary Information-sharing System Working Group from 2016 to 2017. Ms. Edwards received a B.A. in Psychology from Spelman College and a J.D. from Howard University School of Law. Skills and Qualifications. Our board considered Ms. Edwards’s business and leadership experience as an executive of a publicly-traded company, her experience with both public and private sectors, and her knowledge of operational strategy in determining that she should be a member of our board. |

  17. Continuing Directors

    | Jerry L. McDaniel | Background. Mr. McDaniel is President of Superior Fuels, Inc., whose principal business was the wholesale supply of propane and petroleum products prior to the sale of these business lines and which now holds various real estate investments, a position he has held since 2007, and President of Dirtbuster Carwash LLC, which operates carwashes in Southern Illinois and Indiana. In addition to his ownership of these businesses, Mr. McDaniel is a principal in other businesses, including real estate development. Mr. McDaniel is a licensed pilot and previously served on the board of the Southeastern Illinois Community Foundation from 2013 to 2020. Prior to joining our board, Mr. McDaniel served as a director of another local community bank. Skills and Qualifications. Our board considered Mr. McDaniel’s experience in starting and running several local businesses, his broad investment experience and his prior service as a director of a community bank in determining that he should be a member of our board. |

  18. Continuing Directors

    | Jeffrey M. McDonnell | Background. Mr. McDonnell is Chief Executive Officer of J&J Management Services, Inc., a private management company, a position he has held since 2012, and prior to that as President and Chief Compliance Officer since 1997. He also serves on the board of The Center for Emerging Technologies, a non-profit technology incubator. Prior to Midland’s acquisition of Heartland Bank in December 2014, Mr. McDonnell was a director of Heartland Bank and its parent company, Love Savings Holding Company. Mr. McDonnell holds a B.A. in Economics from Princeton University, an M.B.A. from the University of Michigan and a certification as a Chartered Financial Analyst. Skills and Qualifications. Our board considered Mr. McDonnell’s service on the boards of Love Savings Holding Company and Heartland Bank and his other business experience in determining that he should be a member of our board. |

  19. Continuing Directors

    | Richard T. Ramos | Background. Mr. Ramos, who serves as Chair of our Audit Committee, is Executive Vice President, Chief Financial Officer and board member for Maritz Holdings, Inc., headquartered in St. Louis, Missouri. Maritz specializes in the design and development of incentive, reward and loyalty programs focused on improving workforce quality and customer satisfaction. He has been with Maritz since 2000. Prior to joining Maritz, Mr. Ramos served as Chief Financial Officer for Purcell Tire and Rubber Company, practiced corporate law at the firm of Blumenfeld, Kaplan and Sandweiss in St. Louis, and was a senior manager at KPMG LLP. He received his B.S. in Business Administration from the University of Missouri in St. Louis and his J.D. from St. Louis University School of Law. Mr. Ramos is a Certified Public Accountant (inactive) and a member of the Missouri Bar. Skills and Qualifications. Our board considered Mr. Ramos’s experience as a chief financial officer and board member and his accounting acumen in determining that he should be a member of our board. |

  20. Continuing Directors

    | Robert F. Schultz | Background. Mr. Schultz serves as Managing Partner of the J.M. Schultz Investment, L.L.C., a private family office. He has been with this organization since 1989. Since 1996, he also has served as Chairman of the Board of Directors of AKRA Builders Inc., a multi-state construction, design-build and project management firm headquartered in Teutopolis, Illinois. Prior to joining the Company’s board of directors, he served on the board of directors of Prime Banc Corp. and First National Bank of Dieterich. He also serves as a founding board member of national, state and regional non-profit organizations focused on social services and student education. Mr. Schultz received his B.S. in Finance from the University of Illinois and a J.D. from the University of Notre Dame Law School. Skills and Qualifications. Our board considered Mr. Schultz’s business and investment experience, his experience as a director of other community banks, and his knowledge of the business community in our central Illinois market area in determining that he should be a member of our board. |

  21. Continuing Directors

    The business experience for each of our executive officers not discussed above is as follows: Jeffrey S. Mefford. Mr. Mefford, age 58, serves as Executive Vice President of the Company and President of the Bank, positions he has held since March 2018. He has been with the Bank since 2003, and prior to his appointment as Executive Vice President of the Company and President of the Bank, he served as the Bank’s Executive Vice President — Banking since October 2010. Prior to serving as Executive Vice President — Banking, Mr. Mefford served as the Bank’s Illinois Region Market President, responsible for the banking offices in our central Illinois market. Prior to joining the Bank, Mr. Mefford held the position of President and Chief Executive Officer of Farmers State Bank of Camp Point in Camp Point, Illinois, from 2000 to 2003. Mr. Mefford received his B.S. in Business Administration from Illinois College and his M.B.A. from William Woods University. Eric T. Lemke. Mr. Lemke, age 55, CPA (inactive), serves as Chief Financial Officer of the Company and the Bank, having been promoted to those positions in November 2019. Prior to his appointment as Chief Financial Officer, Mr. Lemke, who has been with the Company since 2018, served as Director of Assurance and Audit. Immediately prior to joining the Company, he was the Chief Financial Officer of Metropolitan Capital Bancorp, Inc. and Metropolitan Capital Bank & Trust, its banking subsidiary, since July 2017. Prior to that he was a partner in the Financial Services Practice of RSM US LLP, having first joined RSM in 1993. Mr. Lemke holds a B.S. in Accounting from Olivet Nazarene University in Bourbonnais, Illinois, and is a member of the American Institute of Certified Public Accountants. Douglas J. Tucker. Mr. Tucker, age 65, serves as Senior Vice President and Corporate Counsel of the Company and the Bank, positions to which he was appointed in October 2010. Mr. Tucker also serves on the Company’s Executive Committee. Prior to joining the Company, Mr. Tucker was a Partner in the Corporate Services Group of Quarles & Brady LLP, having joined that firm in 2004. Mr. Tucker also served as Chair of Quarles & Brady’s Chicago Securities Practice, as one of the firm’s National Growth Partners, as Chair of the China Law Group and as Managing Partner of the firm’s office in Shanghai, China. Mr. Tucker, who has worked with financial institutions for more than 30 years, has been a licensed attorney since 1993 and an Adjunct Professor at the Chicago-Kent Law School from 2002 to 2016. He holds a B.A. in International Relations from Michigan State University and a J.D. from Northwestern University School of Law. Daniel E. Casey. Mr. Casey, age 52, serves as the Bank’s Chief Risk Officer, a position he has held since May 2023. Prior to joining the Bank, Mr. Casey was the Managing Director, Global Head of Credit Portfolio Management (Integrated Supply and Trading) at BP plc from 2009 to 2023. He also held positions at ABN AMRO Bank N.V./ LaSalle Bank, N.A., as Managing Director, Portfolio Strategist and Global Head of Markets (Group Treasury) from 2004 to 2009, and Bank One, N.A. as Director, Credit Portfolio Group from 2002 to 2004. Mr. Casey received his B.S. in Finance from Eastern Illinois University and his M.B.A. from St. Xavier University, Graham School of Management.

  22. Compensation Best Practices

    | What We Do | What We Do Not Do | | • Use performance-based incentives as a significant portion of our NEOs’ total compensation • Use peer group benchmarking to inform compensation decisions • Condition short-term incentive-based compensation on key performance metrics (revenue, income and earnings per share) • Condition annual long-term incentives on four-year equal tranche vesting • Have a clawback policy for incentive compensation • Have stock ownership guidelines for executives and directors • Provide for severance payments only upon an involuntary termination of employment where the termination was without cause or for “good reason” (whether or not such termination is in connection with a change in control) • Conduct an annual risk-based assessment of our compensation program | • Provide tax gross-ups • Include walk-away severance payments or single-trigger cash payments upon a change in control • Provide single-trigger vesting of equity awards in change of control transactions for awards granted during 2020 and thereafter under our 2019 Long-Term Incentive Plan • Reprice equity awards without prior shareholder approval • Allow hedging of Company stock |

  23. The Decision-Making Process

    The Decision-Making Process The Role of the Compensation Committee. The Compensation Committee oversees the executive compensation program for our NEOs. The Compensation Committee is comprised of independent, non-employee members of the Board. The Compensation Committee works very closely with its independent consultant and management to examine the effectiveness of the Company’s executive compensation program throughout the year. Details of the Compensation Committee’s authority and responsibilities are specified in its charter, which may be accessed at www.midlandsb.com under “Investors — Corporate Governance — Governance Highlights.” Role of Executive Officers. None of our NEOs participates in or makes recommendations with respect to the determination of their own compensation. The Compensation Committee is responsible for all compensation decisions affecting our Chief Executive Officer, and for performance-driven and other determinations of incentive bonuses and equity awards for all our NEOs. Our Chief Executive Officer recommends salary adjustments for the other NEOs, which the Compensation Committee reviews prior to adjustments becoming effective. Use of Independent Consultants. The Compensation Committee has authority to retain, at the Company’s expense, outside counsel, experts, compensation consultants and other advisors, as needed. For 2023, the Compensation Committee retained Pearl Meyer & Partners, LLC as an independent compensation consultant to advise it on compensation matters. Pearl Meyer’s specific services to the Compensation Committee have included support in the Compensation Committee’s effort to develop an appropriate peer group; review and update, as appropriate, our compensation philosophy; review potential risks associated with our compensation programs; analyze our NEO and director compensation levels, including based on our peer group; and analyze our equity utilization. Pearl Meyer also provides reports to the Compensation Committee on market compensation trends and developments. In its engagement of Pearl Meyer, the Compensation Committee considered the independence of its compensation advisor under applicable SEC and Nasdaq listing rules and concluded there was no conflict of interest with respect to their engagement. The Role of Peer Group Companies. The Compensation Committee strives to set a competitive level of total compensation for each NEO as compared with executive officers in similar positions at peer companies. For the purposes of setting 2023 compensation, the Compensation Committee conducted an in-depth assessment of potential comparators to evaluate the degree to which the current peer group companies appropriately reflect the Bank’s current size and scope. The Compensation Committee also took into consideration the broader marketplace to identify appropriate and relevant additions and removals from the current peer group companies. As a result of this review, and with the support of Pearl Meyer, the following changes were made to the peer group companies:

  24. Annual Incentive Bonus — Corporate Bonus Plan

    Annual Incentive Bonus — Corporate Bonus Plan The Compensation Committee believes that performance-based compensation can and should incentivize our NEOs to drive the Company’s growth, balanced with the assumption of reasonable risk. Accordingly, we account for several performance and risk-based metrics in their annual incentive bonuses. Annual cash incentive bonuses may be earned in accordance with the terms of the Company’s Corporate Bonus Plan (the “Bonus Plan”). Actual payouts depend on the achievement of pre-determined financial performance objectives and can range from 0% to a cap of 150% of target award amounts. Target annual award opportunities are expressed as a percentage of base salary and were established based on the NEO’s level of responsibility and their ability to impact overall results. To emphasize corporate performance, 100% of the bonus opportunities available to our NEOs are conditioned on Company performance. On a year-by-year basis, the Compensation Committee structures the Bonus Plan by selecting and weighting annual financial goals under which bonuses may be earned. In accordance with the weighting assigned by the Compensation Committee, our NEOs are eligible to earn a portion of their target bonuses if the Company attains a sufficient level of performance for a particular metric. If we fail to attain more than 90% of the target performance goal, our NEOs earn no amount of their target bonuses subject to the metric. If we achieve greater than 90% but less than 100% of the target performance goal, our NEOs earn between 50% and 100% of the amount of their target bonuses subject to the metric, with actual payouts determined based on a sliding scale. If we achieve above 100% of a performance goal, the NEOs will earn an increased percentage of the amount of their target bonuses. In addition, annual bonuses are subject to partial reduction or forfeiture if certain risk-based capital and asset quality metrics are not maintained, including specified levels for the Bank’s Tier 1 leverage ratio and the Company’s ratio of nonperforming assets to total assets. The NEOs may later earn restoration bonuses following a reduction or forfeiture if the Compensation Committee determines that the deficiencies in the risk-based metrics have been timely cured. Annual incentive bonuses are based on the level of achievement of financial metrics selected by the Compensation Committee for the respective year. The annual incentive bonuses for our NEOs in 2023 were based upon the following aspects of Company performance: • Earnings Per Share — 35% of the annual incentive bonus was based upon achieving a specified earnings per share goal for the year, as adjusted for certain events, including gain on the termination of forward starting swaps and valuation adjustments of MSRs. • Pre-Tax, Pre-Provision (PTPP) Income — 35% of the annual incentive bonus was based upon achieving a specified pre-tax, pre-provision income goal for the year, as adjusted for certain events, including gain on the termination of forward starting swaps and valuation adjustments of MSRs. • Revenue — 30% of the annual incentive bonus was based upon achieving a specified revenue goal for the year, as adjusted for certain events, including gain on the termination of forward starting swaps and valuation adjustments of MSRs. The table below summarizes the components and results of the Bonus Plan for our NEOs for the 2023 fiscal year.

  25. Annual Incentive Bonus — Corporate Bonus Plan

    | 2023 Metric | Metric Weight | Threshold Goal | Target Goal | Actual Result | Percent Attained | Payout Percentage | | Earnings Per Share | 35% | $3.48 | $3.87 | $3.42 | 88.4% | 0% | | PTPP Income | 35% | $132,953 | $147,726 | $136,182 | 92.2% | 21% | | Revenue | 30% | $289,572 | $321,747 | $310,084 | 96.4% | 24% | | Total Payout | | | | | | 45% |

  26. Annual Incentive Bonus — Corporate Bonus Plan

    The Compensation Committee oversees performance throughout the fiscal year, evaluating progress against set objectives, and has the discretion to consider adjustments for exceptional items that may distort the assessment of normal operating performance, such as costs related to restructuring, acquisitions, legal matters, and pandemic-related impacts. These adjustments aim to maintain fairness to both participants and shareholders, while also fostering actions that promote the long-term health of the business and align with predetermined performance goals. In light of the challenging macroeconomic landscape faced by regional financial institutions in 2023 — including rising interest rates, fallout from bank failures and compressed net interest margins — the Company undertook strategic restructuring efforts. This included the reconfiguration of certain assets, notably consumer credit and equipment financing portfolios. While these actions temporarily impacted earnings per share, PTPP income, and revenue, they are anticipated to enhance franchise value over the long term. Recognizing the challenging economic conditions and strategic restructuring, the Compensation Committee approved bonus payouts at 75% of the target for the fiscal year. The table below summarizes the annual incentive bonus targets and actual payouts for each NEO for the 2023 fiscal year.

  27. Annual Incentive Bonus — Corporate Bonus Plan

    | Name | 2023 Target % of Salary | Actual Bonus (% of Salary) | Actual Bonus ($) | | Jeffrey G. Ludwig | 65% | 48% | 348,731 | | Jeffrey S. Mefford | 60% | 45% | 206,939 | | Douglas J. Tucker | 40% | 30% | 116,499 | | Eric T. Lemke | 40% | 30% | 119,889 | | Daniel E. Casey | 40% | 30% | 61,875 |

  28. Long-Term Equity Incentive Awards

    Long-Term Equity Incentive Awards The Compensation Committee believes that equity awards serve to align each officer’s interests with those of our shareholders. The equity awards held by our NEOs and reflected in the compensation tables below all relate to awards made under our 2019 Long-Term Incentive Plan (the “2019 LTIP”) or its predecessor plans. The Compensation Committee typically grants equity awards to each NEO at the time the individual is hired and, thereafter, on an annual basis as part of our overall executive compensation program. The Compensation Committee grants equity awards to encourage our NEOs to stay with, and maximize the performance of, the Company over the long term and to discourage excessive focus on short term metrics at the expense of the long-term health of the organization. In light of the challenging macroeconomic factors impacting regional financial institutions in early 2023 and continued overall economic uncertainty, the Compensation Committee returned to its historic practice of granting equity awards using 100% restricted stock as follows:

  29. Long-Term Equity Incentive Awards

    | | Shares of Restricted Stock | Per Share Fair Value | Actual Grant Date Fair Value | | Jeffrey G. Ludwig | 23,370 | $23.14 | $540,782 | | Jeffrey S. Mefford | 17,340 | $23.14 | $401,248 | | Douglas J. Tucker | 8,460 | $23.14 | $195,764 | | Eric T. Lemke | 8,750 | $23.14 | $202,475 | | Daniel E. Casey | 2,500 | $20.00 | $50,000 | | Daniel E. Casey | 6,320 | $23.14 | $146,245 |

  30. Long-Term Equity Incentive Awards

    Each grant of restricted stock awards vests annually in equal portions on the first four anniversaries of the grant date, assuming the executive’s employment has not previously terminated. Each grant also vests in full upon an involuntary termination in connection with a change in control of the Company or the NEO’s termination of employment due to death or disability. Except for Mr. Casey’s new-hire restricted stock grant, which has a grant date fair value determined based on a share price of $20.00, the closing price of the Company’s common stock as of the trading day immediately prior to the grant date, the grant date fair value of the restricted stock awards in 2023 was determined based on a share price of $23.14, the closing share price of the Company’s common stock as of the trading day immediately prior to the date of grant.

  31. Regulatory Impact on Compensation

    Regulatory Impact on Compensation As a publicly traded financial institution, the Company is subject to additional regulatory requirements, most notably, the Interagency Guidelines Establishing Standards for Safety and Soundness (the “Safety and Soundness Standards”). The Federal Deposit Insurance Corporation (the “FDIC”) has long held that excessive compensation is prohibited as an unsafe and unsound practice under the Safety and Soundness Standards. In describing a framework to determine whether compensation is excessive, the FDIC has indicated that financial institutions should consider whether aggregate cash amounts paid, or non-cash benefits provided, to employees are unreasonable or disproportionate to the services performed by an employee. The FDIC encourages financial institutions to review an employee’s compensation history and to consider internal pay equity, and, as appropriate, to consider benchmarking compensation to peer groups. Finally, the FDIC provides that, in order to give proper context, such an assessment must be made in light of the institution’s overall financial condition. Additionally, the Compensation Committee must also take into account the joint agency Guidance on Sound Incentive Compensation Policies (the “Guidance”), which is intended to complement the Safety and Soundness Standards. The Guidance sets forth a framework for assessing and mitigating risk associated with incentive compensation plans, programs and arrangements maintained by financial institutions. Other matters, such as accounting, tax and SEC requirements regarding risk assessment are also considered by the Compensation Committee as part of its compensation design and annual decisions.

  32. Summary Compensation Table

    Summary Compensation Table The following table sets forth information regarding the compensation paid, awarded to, or earned for our fiscal years ended December 31, 2023, 2022 and 2021 by each of our NEOs.

  33. Summary Compensation Table

    Summary Compensation Table

  34. Summary Compensation Table

    | Name and principal position (a) | Year (b) | Salary(1) ($) (c) | Stock Awards(2) ($) (e) | Option Awards(3) ($) (f) | Non-equity Incentive Plan Compensation(4) ($) (g) | All Other Compensation(5) ($) (i) | Total ($) (j) | | Jeffrey G. Ludwig President and Chief Executive Officer | 2023 | 721,000 | 540,782 | — | 348,731 | 23,272 | 1,633,785 | | | 2022 | 700,000 | 262,494 | 257,050 | 535,816 | 22,373 | 1,777,733 | | | 2021 | 572,000 | 372,512 | — | 615,143 | 21,519 | 1,581,174 | | Jeffrey S. Mefford President of the Bank | 2023 | 463,500 | 401,248 | — | 206,939 | 21,540 | 1,093,227 | | | 2022 | 450,000 | 146,244 | 143,211 | 318,147 | 20,687 | 1,078,289 | | | 2021 | 400,000 | 220,438 | — | 397,080 | 19,430 | 1,036,948 | | Douglas J. Tucker Senior Vice President and Corporate Counsel | 2023 | 391,400 | 195,764 | — | 116,499 | 9,900 | 713,563 | | | 2022 | 380,000 | 95,013 | 93,026 | 181,430 | 9,150 | 758,619 | | | 2021 | 354,320 | 159,762 | — | 234,489 | 8,700 | 757,271 | | Eric T. Lemke Chief Financial Officer | 2023 | 405,020 | 202,475 | — | 119,889 | 14,815 | 742,199 | | | 2022 | 385,000 | 96,264 | 94,250 | 183,319 | 13,582 | 772,415 | | | 2021 | 350,000 | 140,274 | — | 223,613 | 21,635 | 735,522 | | Daniel E. Casey(6) Chief Risk Officer of the Bank | 2023 | 206,250 | 196,245 | — | 61,875 | 6,312 | 470,682 |

  35. Summary Compensation Table

    (1) The amounts set forth in the “Salary” column reflects base salary earned in each fiscal year, including amounts deferred at the election of the NEO under the Deferred Compensation Plan. (2) The amounts set forth in the “Stock Awards” column reflect the aggregate grant date fair value of stock awards for the years ended December 31, 2023, 2022 and 2021 in accordance with FASB ASC Topic 718. The restricted stock award amounts are based on fair market values of $23.14, which is the fair market value as of the trading day immediately prior to the grant date, for awards granted on November 6, 2023 and $28.43 and $25.71 for awards granted on October 31, 2022 and November 1, 2021, respectively; provided, that for Mr. Casey, with respect to his award granted on May 1, 2023, as described further in the “Grants of Plan-Based Awards Table,” such amount is based on a fair market value of $20.00, which is the fair market value as of the trading day immediately prior to the grant date. (3) The amounts set forth in the “Options Awards” column reflect aggregate grant date fair value of option awards in accordance with FASB ASC Topic 718. The assumptions used in calculating the option award amounts are set forth in Note 15 to our consolidated financial statements as of December 31, 2023. The amounts set forth in the “Non-equity Incentive Plan Compensation” column reflect annual cash incentive awards earned pursuant to the Bonus Plan, including amounts deferred at the election of the NEO under the Deferred Compensation Plan. The amounts set forth in the “All Other Compensation” column for the NEOs during the 2023 fiscal year is summarized below. (6) Mr. Casey was hired as Chief Risk Officer of the Bank on May 1, 2023.

  36. Summary Compensation Table

    | Name | Year | Perquisites(i) ($) | Company 401(k) Match(ii) ($) | Total “All Other Compensation” ($) | | Jeffrey G. Ludwig | 2023 | 13,372 | 9,900 | 23,272 | | Jeffrey S. Mefford | 2023 | 11,640 | 9,900 | 21,540 | | Douglas J. Tucker | 2023 | — | 9,900 | 9,900 | | Eric T. Lemke | 2023 | 4,915 | 9,900 | 14,815 | | Daniel E. Casey | 2023 | — | 6,312 | 6,312 |

  37. Summary Compensation Table

    (i) The amounts set forth in the “Perquisites” column for Messrs. Ludwig and Mefford reflect club dues and the use of a Company-owned vehicle. Such amount for Mr. Lemke reflects club dues. (ii) The amounts set forth in the “Company 401(k) Match” column reflect Company matching contributions under the 401(k) Plan.

  38. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The following table provides information on incentive compensation and equity grants awarded to our NEOs during 2023. All such grants were made under our 2019 LTIP, which is described in more detail below.

  39. Grants of Plan-Based Awards Table

    Grants of Plan-Based Awards Table

  40. Grants of Plan-Based Awards Table

    | Name (a) | Grant Date (b) | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | All Other Stock Awards: Number of Shares of Stock or Units(2) (#) (i) | Grant Date Fair Value of Stock and Option Awards(3) ($) (l) | | | | Threshold ($) (c) | Target ($) (d) | Maximum ($) (e) | | | | Jeffrey G. Ludwig | — | 234,325 | 468,650 | 702,975 | — | — | | | 11/06/23 | — | — | — | 23,370 | 540,782 | | Jeffrey S. Mefford | — | 139,050 | 278,100 | 417,150 | — | — | | | 11/06/23 | — | — | — | 13,020 | 301,283 | | | 11/06/23 | — | — | — | 4,320 | 99,965 | | Douglas J. Tucker | — | 78,280 | 156,560 | 234,840 | — | — | | | 11/06/23 | — | — | — | 8,460 | 195,764 | | Eric T. Lemke | — | 81,004 | 162,008 | 243,012 | — | — | | | 11/06/23 | — | — | — | 8,750 | 202,475 | | Daniel E. Casey | — | 65,000 | 130,000 | 195,000 | — | — | | | 05/01/23(4) | — | — | — | 2,500 | 50,000 | | | 11/06/23 | — | — | — | 6,320 | 146,245 |

  41. Grants of Plan-Based Awards Table

    The amounts set forth in the “Estimated Future Payouts Under Non-Equity Incentive Plan Awards” columns reflect the threshold, target, and maximum payouts for performance under the Bonus Plan, assuming that the respective level of performance is attained for all applicable metrics, and are determined based on base salary, as described in “Compensation Discussion and Analysis — Annual Incentive Bonus — Corporate Bonus Plan.” The amount earned by each NEO for 2023 performance is included in the Summary Compensation Table in the column titled “Non-Equity Incentive Plan Compensation” and, in the case of Mr. Casey, reflects that his employment commenced on May 1, 2023. The amounts set forth in the “All Other Stock Awards: Number of Shares of Stock or Units” column reflect restricted stock awards which, except as noted, vest in 25% increments on the first, second, third and fourth anniversary of the date of grant. These restricted stock awards are accelerated and vest in full upon an involuntary termination or cancellation of the awards in connection with a change in control of the Company or upon the participant’s death or disability. (3) The amounts set forth in the “Grant Date Fair Value of Stock and Option Awards” column reflect the aggregate grant date fair value of restricted stock and option awards in accordance with FASB ASC Topic 718. (4) This award is a new-hire award made to Mr. Casey when Mr. Casey was hired as Chief Risk Officer of the Bank on May 1, 2023.

  42. Outstanding Equity Awards

    Outstanding Equity Awards The following table provides information for each of our NEOs regarding outstanding stock options and unvested stock awards held by the officers as of December 31, 2023. Market values are presented as of the end of 2023 (based on the market value of our common stock of $27.56 on December 29, 2023 (the last trading day of the year)) for outstanding stock awards, which include 2023 grants and prior-year grants.

  43. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End

  44. Outstanding Equity Awards at Fiscal Year-End

    | Name | Option Awards | | | | Stock Awards | | | | Number of Securities Underlying Unexercised Options | | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested(1) (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | | | Exercisable (#) | Unexercisable (#) | | | | | | Jeffrey G. Ludwig | 12,753 | — | 21.00 | 12/02/24 | — | — | | | 16,800 | — | 23.00 | 11/03/25 | — | — | | | 8,383 | — | 28.59 | 11/16/26 | — | — | | | 13,073 | 39,218 | 28.43 | 10/31/32 | — | — | | | — | — | — | — | 40,814 | 1,124,834 | | Jeffrey S. Mefford | 2.961 | — | 18.00 | 08/05/24 | — | — | | | 7,885 | — | 21.00 | 12/02/24 | — | — | | | 10,702 | — | 23.00 | 11/03/25 | — | — | | | 5,341 | — | 28.59 | 11/16/26 | — | — | | | 7,283 | 21,850 | 28.43 | 10/31/32 | — | — | | | — | — | — | — | 27,423 | 755,778 | | Douglas J. Tucker | 3,577 | — | 21.00 | 12/02/24 | — | — | | | 11,566 | — | 23.00 | 11/03/25 | — | — | | | 5,405 | — | 28.59 | 11/16/26 | — | — | | | 4,731 | 14,193 | 28.43 | 10/31/32 | — | — | | | — | — | — | — | 15,477 | 426,546 | | Eric T. Lemke | 4,793 | 14,380 | 28.43 | 10/31/32 | — | — | | | — | — | — | — | 15,092 | 415,936 | | Daniel E. Casey | — | — | — | — | 8,820 | 243,079 |

  45. Outstanding Equity Awards at Fiscal Year-End

    All awards in this column that remain subject to vesting vest in 25% increments on the first, second, third and fourth anniversary of the date of grant with the exception of 13,020 shares granted to Mr. Mefford in 2023, which 100% cliff vest on the fourth anniversary of the date of grant. Stock options and restricted stock awards granted under our 2019 LTIP are accelerated and vest in full upon an involuntary termination or cancellation of the awards in connection with a change in control of the Company or upon the participant’s death or disability. All of the outstanding stock options and restricted stock awards shown above granted before May 3, 2019 were granted under our 2010 Long-Term Incentive Plan (the “2010 LTIP”). All of the outstanding stock options and restricted stock awards above granted on or after May 3, 2019 were granted under our 2019 LTIP.

  46. Option Exercises and Stock Vested in 2023

    Option Exercises and Stock Vested in 2023 The following table sets forth information concerning the exercise of options and vesting of stock awards with respect to each NEO in 2023.

  47. Option Exercises and Stock Vested Table

    Option Exercises and Stock Vested Table

  48. Option Exercises and Stock Vested Table

    | Name (a) | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise (#) (b) | Value Realized on Exercise(1) ($) (c) | Number of Shares Acquired on Vesting (#) (d) | Value Realized on Vesting ($) (e) | | Jeffrey G. Ludwig | 9,482 | 56,702 | 12,557 | 280,878 | | Jeffrey S. Mefford | 6,400 | 33,440 | 7,350 | 164,451 | | Douglas J. Tucker | — | — | 5,231 | 117,093 | | Eric T. Lemke | — | — | 4,384 | 97,904 | | Daniel E. Casey | — | — | — | — |

  49. Option Exercises and Stock Vested Table

    (1) Computed by determining the difference between the market value per share of our common stock on the date of exercise and the exercise price.

  50. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation The following table sets forth information concerning the benefits under the Company’s Executive Deferred Compensation Plan as of December 31, 2023.

  51. Nonqualified Deferred Compensation Table

    Nonqualified Deferred Compensation Table

  52. Nonqualified Deferred Compensation Table

    | Name (a) | Executive Contributions in Last FY ($) (b) | Registrant Contributions in Last FY ($) (c) | Aggregate Earnings in Last FY(1) ($) (d) | Aggregate Withdrawals/ Distributions ($) (e) | Aggregate Balance at Last FYE(2) ($) (f) | | Jeffrey G. Ludwig | — | — | — | — | — | | Jeffrey S. Mefford | — | — | — | — | — | | Douglas J. Tucker | — | — | 39,774 | — | 793,977 | | Eric T. Lemke | — | — | — | — | — | | Daniel E. Casey | — | — | — | — | — |

  53. Nonqualified Deferred Compensation Table

    (1) The “Aggregate Earnings in Last FY” column does not include any amounts that are also reported in the Summary Compensation Table as the Executive Deferred Compensation Plan does not provide for above-market interest. (2) The “Aggregate Balance at Last FYE” column includes $657,142 reported as compensation in the Summary Compensation Table for Mr. Tucker in prior years.

  54. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control The following table sets forth information concerning potential payments and benefits under our compensation programs and benefit plans, including individual employment agreements for Messrs. Ludwig, Mefford, Tucker and Lemke and the change of control agreement for Mr. Casey, pursuant to which the NEOs would be entitled upon various terminations of employment or a change in control as of the last business day of the fiscal year ended December 31, 2023. Except for payments and benefits provided to any NEO by an employment agreement or change of control agreement, all payments and benefits provided to any NEO upon termination of employment are the same as the payments and benefits provided to other eligible employees of the Company. For purposes of estimating the value of accelerated vesting of equity awards we have assumed a price per share of our common stock of $27.56 based on the market value of our common stock on December 29, 2023 (the last trading day of the year).

  55. Potential Payments Upon Termination or Change in Control Table

    Potential Payments Upon Termination or Change in Control Table

  56. Potential Payments Upon Termination or Change in Control Table

    | Name | Cash Severance Payments(1) ($) | COBRA Continuation(2) ($) | Accelerated Vesting of Equity Awards(3) ($) | Total Payments ($) | | Jeffrey G. Ludwig | | | | | | Involuntary Termination (not in connection with a change in control)(4) | 1,177,876 | 28,761 | — | 1,206,637 | | Involuntary Termination (in connection with a change in control)(5) | 3,533,629 | 86,282 | 1,124,834 | 4,744,745 | | Death or Disability | — | — | 1,124,834 | 1,124,834 | | Jeffrey S. Mefford | | | | | | Involuntary Termination (not in connection with a change in control)(4) | 231,750 | — | — | 231,750 | | Involuntary Termination (in connection with a change in control)(5) | 1,506,618 | — | 755,778 | 2,262,396 | | Death or Disability | — | — | 755,778 | 755,778 | | Douglas J. Tucker | | | | | | Involuntary Termination (not in connection with a change in control)(4) | 280,374 | 17,512 | — | 297,886 | | Involuntary Termination (in connection with a change in control)(5) | 1,121,495 | 35,024 | 426,546 | 1,583,065 | | Death or Disability | — | — | 426,546 | 426,546 | | Eric T. Lemke | | | | | | Involuntary Termination (not in connection with a change in control)(4) | 124,622 | 28,718 | — | 153,340 | | Involuntary Termination (in connection with a change in control)(5) | 1,134,195 | 57,436 | 415,936 | 1,607,567 | | Death or Disability | — | — | 415,936 | 415,936 | | Daniel E. Casey | | | | | | Involuntary Termination (not in connection with a change in control)(6) | — | — | — | — | | Involuntary Termination (in connection with a change in control)(7) | 487,500 | — | 243,079 | 730,579 | | Death or Disability | — | — | 243,079 | 243,079 |

  57. Potential Payments Upon Termination or Change in Control Table

    (1) The amounts set forth in the “Cash Severance Payments” column reflect the sum of cash severance payments to be made pursuant to Messrs. Ludwig’s, Mefford’s, Tucker’s and Lemke’s employment agreements and Mr. Casey’s change of control agreement exclusive of any pro rata bonus payable on a termination of employment as annual incentive bonuses are earned as of December 31 and no additional amount would be payable to a NEO for a termination occurring on the last business day of the year. Please see the “Non-equity Incentive Plan Compensation” column of the Summary Compensation Table for 2023 annual incentive compensation amounts. The amounts set forth in the “COBRA Continuation” column reflect the employer-paid portion of COBRA premiums to be made pursuant to each NEO’s employment agreement or change of control agreement, as applicable, assuming each NEO was eligible for, and elected, COBRA coverage for the maximum period allowed by law. No value is reflected for Messrs. Mefford and Casey as they did not participate in our medical and dental plans as of December 31, 2023. The amounts set forth in the “Accelerated Vesting of Equity Awards” column reflect the value of accelerated vesting of unvested restricted stock awards pursuant to our 2019 LTIP based on the market value of our common stock of $27.56 on December 29, 2023 (the last trading day of the year). In certain instances, the NEOs will also be entitled to accelerated vesting of the NEOs’ unvested options. As of December 29, 2023 (the last trading day of the year), the value of the Company’s stock was below the NEOs’ option exercise price and therefore no value is reflected on this table with respect to the acceleration of the NEOs’ options. (4) Involuntary Termination (not in connection with a change in control) means, pursuant to the terms of the NEO’s employment agreement, a termination by (i) the employer other than for cause, death or disability, or (ii) the NEO for good reason, in either case that does not occur within six months prior to, or 24 months following, a change in control. (5) Involuntary Termination (in connection with a change in control) means, pursuant to the terms of the NEO’s employment agreement, a termination by (i) the employer other than for cause, death or disability, or (ii) the NEO for good reason, in either case that occurs within six months prior to, or 24 months following, a change in control. (6) Involuntary Termination (not in connection with a change in control) means, pursuant to the terms of Mr. Casey’s change of control agreement, a termination by (i) the employer other than for cause, death or disability, or (ii) Mr. Casey for good reason, in either case that does not occur within six months prior to, or 24 months following, a change in control. (7) Involuntary Termination (in connection with a change in control) means, pursuant to the terms of the Mr. Casey’s change of control agreement, a termination by (i) the employer other than for cause, death or disability, or (ii) Mr. Casey for good reason, in either case that occurs within six months prior to, or 24 months following, a change in control.

  58. CEO Pay Ratio

    CEO Pay Ratio Pursuant to SEC rules, we are providing information about the relationship of the annual total compensation of Mr. Jeffrey G. Ludwig, our Chief Executive Officer, to the annual total compensation of our median employee. To determine the median employee, a list of all active full and part-time employees as of December 31, 2023, excluding Mr. Ludwig, was prepared with the corresponding annual total W-2 compensation as reflected in our payroll records. A total of 910 employees were included. Compensation was annualized for any individual not employed for the full calendar year of 2023. Annual total W-2 compensation was ranked from lowest to highest, and the median employee was selected from the list. Mr. Ludwig had 2023 total compensation of $1,633,785, as reflected in the Summary Compensation Table included in this Proxy Statement. The median employee annual total compensation for 2023, using the methodology that was used to calculate Mr. Ludwig’s compensation in the Summary Compensation Table, was $60,106. As a result, the CEO pay ratio is 27.2. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. Because the SEC rules for identifying the median employee and calculating the pay ratio allow companies to adopt a variety of methodologies, apply certain exclusions, and make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above.

  59. PAY VERSUS PERFORMANCE DISCLOSURE

    PAY VERSUS PERFORMANCE DISCLOSURE In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive “compensation actually paid” (“CAP”) and certain Company performance for the fiscal years listed below. You should refer to our CD&A disclosure, elsewhere in this proxy statement, for a complete description of how executive compensation relates to Company performance and how the Compensation Committee makes its decisions. The Pay versus Performance table below summarizes the compensation values both previously reported in our Summary Compensation Table, as well as the adjusted values required in this section for the 2020, 2021, 2022 and 2023 calendar years.

  60. PAY VERSUS PERFORMANCE DISCLOSURE

    | Year | Summary Compensation Table Total for CEO(1) | Compensation Actually Paid to CEO(2) | Average Summary Compensation Table Total for Non-CEO NEOs(1) | Average Compensation Actually Paid to Non-CEO NEOs(2) | Value of Initial Fixed $100 Invested on 12/31/19: | | Company Net Income (in millions) | Selected Measure | | | | | | | Company Total Shareholder Return(3) | Peer Group Total Shareholder Return(4) | | Company Adjusted Earnings Per Share (EPS)(5) | | 2023 | $1,633,785 | $1,733,495 | $754,918 | $803,689 | $116.50 | $107.99 | $75.46 | $3.42 | | 2022 | $1,777,733 | $1,851,719 | $825,247 | $857,590 | $106.74 | $107.95 | $99.03 | $3.79 | | 2021 | $1,581,174 | $1,806,916 | $805,976 | $903,099 | $95.30 | $119.79 | $81.32 | $3.65 | | 2020 | $1,027,328 | $756,598 | $547,076 | $431,468 | $65.66 | $89.23 | $22.54 | $1.70 |

  61. PAY VERSUS PERFORMANCE DISCLOSURE

    (1) Mr. Jeff Ludwig has served as the Company’s CEO; Mr. Mefford, Mr. Tucker, Mr. Lemke served as Non-CEO NEOs for 2020 through 2023. Mr. Stewart was an NEO for 2020 through 2022. Mr. Casey was an NEO in 2023. The dollar amounts reported are total compensation in the Summary Compensation Table for the CEO and the average for Non-CEO NEOs for each reported fiscal year. (2) The dollar amounts reported represent “Compensation Actually Paid”, as calculated in accordance with SEC rules. (3) The Company’s 2023 total shareholder return as of December 31, 2023, as provided by S&P Cap IQ. (4) Reflects the cumulative total shareholder return of the S&P Small Cap 600 Banks Index. This is the peer group used by the Company as reflected in its Annual Report on Form 10-K for the year ended December 31, 2023. Adjusted earnings per share (or “EPS”) is the Company-Selected Measure. For further detail, see the “Compensation Discussion and Analysis” section in the proxy statement.

  62. Calculation of Compensation Actually Paid (CAP)

    Calculation of Compensation Actually Paid (CAP) To calculate the amounts of “Compensation Actually Paid” (CAP) to our CEO and Non-CEO NEOs in the table above according to SEC reporting rules, the following adjustments were made to Total Compensation as reported in the Summary Compensation Table for 2023.

  63. Calculation of Compensation Actually Paid (CAP)

    | | 2023 | | | | CEO | Average Non-CEO NEOs | | Total Compensation from Summary Compensation Table | $1,633,785 | $754,918 | | Adjustments for Pension | | | | Adjustment Summary Compensation Table Pension | $— | $— | | Amount added for current year service cost | $— | $— | | Amount added for prior service cost impacting current year | $— | $— | | Total Adjustments for Pension | $— | $— | | Adjustments for Equity Awards | | | | Adjustment for grant date values in the Summary Compensation Table | $(540,782) | $(248,933) | | Year-end fair value of unvested awards granted in the current year | $644,077 | $298,819 | | Year-over-year difference of year-end fair values for unvested awards granted in prior years | $100,761 | $32,626 | | Fair values at vest date for awards granted and vested in current year | $— | $— | | Difference in fair values between prior year-end fair values and vest date fair values for awards granted in prior years | $(143,594) | $(48,222) | | Forfeitures during current year equal to prior year-end fair value | $— | $— | | Dividends or dividend equivalents not otherwise included in total compensation | $39,248 | $14,480 | | Total Adjustments for Equity Awards | $99,710 | $48,771 | | Compensation Actually Paid (as calculated) | $1,733,495 | $803,689 |

  64. Pay Versus Performance: Graphical Description

    Pay Versus Performance: Graphical Description The following graphs present the relationship during 2023, 2022, 2021 and 2020 between (1) executive compensation “actually paid” (as defined by SEC rule and shown above) for the CEO and our other NEOs on an average basis. • the Company’s cumulative TSR and the Peer Group’s cumulative TSR; • the Company’s Net Income; and • the Company-Selected Measure, which for the Company is Adjusted Earnings Per Share.