DEF 14A of Citizens Community Bancorp Inc., Apr 29, 2024

DEF 14A of Citizens Community Bancorp Inc.

Filed Apr 29, 2024 · FY20230001367859-24-000054

Open on EDGAR

  1. PROPOSAL 1: ELECTION OF DIRECTORS

    PROPOSAL 1: ELECTION OF DIRECTORS It is intended that shares represented by proxies in the enclosed form will be voted FOR the election of Kristina M. Bourget and Timothy L. Olson to serve as directors for a three-year term. Our Board of Directors is divided into three classes, with the term of office of each class ending in successive years. Accordingly, two directors are to be elected at the Annual Meeting to serve as Class III directors for a term of three years expiring at our annual meeting of stockholders in 2027. The continuing directors, the Class I and Class II directors, will serve until the annual meetings of stockholders in 2025 and 2026, respectively, and until their successors are duly elected and qualified. As indicated below, the persons nominated by our Board of Directors are incumbent directors. We anticipate that the nominees for election as directors will be candidates when the election is held. However, if any of the nominees should be unable or unwilling to serve, the proxies, pursuant to the authority granted to them by our Board of Directors, will have discretionary authority to select and vote for substituted nominees (except where the proxy withholds authority with respect to the election of directors). As noted above, our directors are elected by a plurality of the votes cast by holders of our Common Stock, which means the individuals who receive the largest number of votes cast by holders of the Common Stock entitled to vote in the election of directors are elected as directors up to the maximum number of directors (three in the case of the Annual Meeting) to be chosen at the Annual Meeting.

  2. Information with Respect to Nominees and Continuing Directors

    Information with Respect to Nominees and Continuing Directors Below is information as of the date of this Proxy Statement about each nominee for election to our Board of Directors at the Annual Meeting and each director whose term continues after the Annual Meeting. The information presented includes information each nominee or continuing director has given Citizens about his or her age, his or her principal occupation and business experience for the past five years, and the names of other publicly-held companies of which he or she currently serves as a director or has served as a director during the past five years. The information presented also includes a description for each director of the specific experience, qualifications, attributes, and skills that led to the conclusion that he or she should serve as a director. Our Governance and Nomination Committee regularly evaluates the mix of experience, qualifications, attributes, and skills of the Company’s directors using a matrix of areas that the Committee considers important for Citizens’ business. In addition to the information presented below regarding the nominee’s specific experience, qualifications, attributes and skills that led the Governance and Nomination Committee to the conclusion that the nominee should serve or continue to serve as a director, the Governance and Nomination Committee also considered the qualifications and criteria described below under “Corporate Governance Matters - Director Nominations” with the objective of creating a complementary mix of directors. The Board of Directors recommends a vote FOR the election of Kristina M. Bourget and Timothy L. Olson to serve as directors of Citizens for a three-year term.

  3. Information with Respect to Nominees and Continuing Directors

    | Name, Principal Occupation for Past Five Years and Directorships | Age | Director Since (1) | | Nominees for election at the Annual Meeting: Class III Directors | | | | KRISTINA M. BOURGET | 59 | 2018 | | Ms. Bourget has served as a member of our Board since March 2018. She has also served as a director to the board of Citizens Community Federal N.A., our bank subsidiary, Eau Claire, WI, since March 2018, and continues to do so. Ms. Bourget has practiced law for over 25 years in Eau Claire, Wisconsin. From 2015 through 2020, Ms. Bourget served, including as Vice President and General Counsel, at Wisconsin Independent Network (WIN). From 2013 to 2015, Ms. Bourget served as circuit court judge in Eau Claire County, Wisconsin. From 2010 until she was appointed to the bench, she was a stockholder at Bourget Law where she focused on trademark and business matters. From 1998 to 2009, Ms. Bourget served as corporate counsel at Xcel Energy where she was responsible for a wide variety of legal issues. From 1991 to 1997, Ms. Bourget practiced law with Kelly & Ryberg. Ms. Bourget graduated from the University of Wisconsin Law School (cum laude and Order of the Coif) and holds a BBA in Finance and a minor in Accounting from the University of Wisconsin-Eau Claire. Ms. Bourget is the chair of the Compensation Committee of our Board and is a member of the Audit Committee of our Board. Ms. Bourget brings to the Board of Directors professional experience related to corporate law, leadership experience, and a financial background, all of which lead to the conclusion she should serve as a director of Citizens. | | | | TIMOTHY L. OLSON | 64 | 2018 | | Mr. Olson has served as a member of our Board since March 2018. He has also served as a director to the board of Citizens Community Federal N.A., our bank subsidiary, Eau Claire, WI, since March 2018, and continues to do so. Mr. Olson is Developer/Co-owner of Arrowhead Properties, LLC and former Vice President of Finance/Co-owner of Royal Construction, Inc., a commercial general contractor/construction management firm in Eau Claire, from 1999 until 2015. Mr. Olson earned his BA and MBA from UW-Eau Claire and has been licensed as a CPA in Wisconsin since 1983. Over the past 24 years, Mr. Olson has been involved in the development and financial management and ownership of a multitude of commercial & multi-family real estate properties in northwest Wisconsin. He also has served as Board Chair for the Eau Claire Chamber of Commerce. Mr. Olson is the Audit Committee Chair, a member of the Governance and Nomination Committee of our Board and a member of the Credit Committee of the Board of Directors of the Bank (the “Credit Committee”). The Board benefits from Mr. Olson’s leadership and business acumen in the Eau Claire community and his qualification as an “audit committee financial expert” under the rules of the Securities and Exchange Commission (the “SEC”). | | |

  4. Information with Respect to Nominees and Continuing Directors

    | Name, Principal Occupation for Past Five Years and Directorships | Age | Director Since (1) | | Incumbent Directors: Class I Directors - Terms Expiring 2025 | | | | STEPHEN M. BIANCHI | 60 | 2017 | | Mr. Bianchi has served as a member of our Board since May 2017 and was appointed as Chairman of the Board in October 2018. Mr. Bianchi has served as President and Chief Executive Officer of the Company and President and Chief Executive Officer of Citizens Community Federal N.A. since June 2016. He has also served as a director to the board of Citizens Community Federal N.A., our bank subsidiary, Eau Claire, WI, since June 2016, and continues to do so. Mr. Bianchi served as President and Chief Executive Officer of HF Financial Corp. and Home Federal Bank, both based in Sioux Falls, South Dakota from October 2011 through May 2016. Mr. Bianchi was a member of the board of directors of Home Federal Bank. Mr. Bianchi also served in several senior management positions at Wells Fargo Bank and Associated Bank prior to his employment with HF Financial Corp. and Home Federal Bank. Mr. Bianchi holds an MBA from Providence College and a B.S. in Finance from Providence College and has 36 years of banking experience. Among other qualifications, Mr. Bianchi brings to the Board extensive executive leadership. | | | | JAMES D. MOLL | 73 | 2017 | | Mr. Moll has served as a member of our Board since January 2018. He has also served as a director to the board of Citizens Community Federal N.A., our bank subsidiary, Eau Claire, WI, since January 2018, and continues to do so. Mr. Moll served as the Chief Financial Officer of Wells Financial Corp. (Wells) and its subsidiary, Wells Federal Bank from 1995 to 2016 and served as the Chief Executive Officer and President of Wells from 2015 until August of 2017 when the sale of Wells to the Company was completed. Mr. Moll also served on the Board of Directors of Wells from 2013 until the completion of the sale of the company in 2017. Mr. Moll holds a B.A. in Economics from St. John’s University, Collegeville, MN and a B.S. in Accounting from Minnesota State University, Mankato, MN. Mr. Moll is a member of the Compensation Committee of our Board, a member of the Credit Committee of the Board of Directors of the Bank, and the Bank's Asset Liability Committee (the “ALCO Committee”). Mr. Moll brings substantial experience in the banking industry and extensive leadership experience, all of which led to the conclusion that he should serve as a director of Citizens. | | | | KATHLEEN S. SKARVAN | 67 | 2018 (1) | | Ms. Skarvan was elected to our Board in June 2022. She has also served as a director to the board of Citizens Community Federal N.A., our bank subsidiary, Eau Claire, WI, since November 2018, and continues to do so. She is retired from Electromed, Inc., where she served as Chief Executive Officer since 2012, and Chief Executive Officer and President from 2015 until her retirement in July 2023. She also became a director of Electromed, Inc. in 2013, and Chair in July 2023. Ms. Skarvan served as Vice President of Operations at OEM Fabricators, Inc. from November 2011 until October 2012. Prior to her position with OEM Fabricators, Inc., she served in various roles at Hutchinson Technology Incorporated, most recently as the President of the Disk Drive Components Division from April 2007 until March 2011. As President of the Disk Drive Components Division, she managed a public company division with annual revenues in excess of $300 million. She also served as a Senior Vice President of Hutchinson Technology Incorporated from December 2010 to March 2011, and as Vice President of Sales & Marketing of the Disk Drive Components Division from October 2003 until April 2007. Ms. Skarvan has served on the Board of Trustees of the St. Cloud State University Foundation from June 2015 to June 2021. She received her bachelor’s degree from St. Cloud State University. Ms. Skarvan is a member of the Audit Committee and the Risk Oversight Committee Chair of the Board of Directors of the Bank (the "Risk Oversight Committee"). Ms. Skarvan brings to the Board of Directors professional experience in business operations and executive leadership roles, as well as her knowledge of the Bank, all of which led to the conclusion that she should serve as a director of Citizens. | | |

  5. Information with Respect to Nominees and Continuing Directors

    | Name, Principal Occupation for Past Five Years and Directorships | Age | Director Since (1) | | Incumbent Directors: Class II Directors - Terms Expiring 2026 | | | | MICHAEL CONNER | 65 | 2018 (1) | | Mr. Conner was elected to our Board in June 2023. He has also served as a director to the board of Citizens Community Federal N.A., our bank subsidiary, Eau Claire, WI, since November 2018 and continues to do so. He is currently the Executive Director of PESI, Inc., a non-profit continuing education provider, and President of TBG Holdings, LLC, a commercial real estate company. Mr. Conner holds undergraduate and graduate degrees in business from the University of Wisconsin – Eau Claire. His business career spans 40 years and includes marketing/continuing education, retail, and insurance. He also plays active roles in the business programs at the University of Wisconsin – Eau Claire and the Chippewa Valley Technical College. Mr. Conner is a member of the Risk Oversight Committee and Credit Committee of the Board of Directors of the Bank. Mr. Conner brings to the Board of Directors professional experience in business management, product development, marketing, and executive leadership, as well as his knowledge of the Bank, all of which led to the conclusion he should serve as a director of Citizens. | | | | FRANCIS FELBER | 71 | 2017 | | Mr. Felber has served as a member of our Board since September 2017. He has also served as a director to the board of Citizens Community Federal N.A., our bank subsidiary, Eau Claire, WI, since September 2017, and continues to do so. Mr. Felber brings over 40 years of experience in the agricultural industry to the Board. His career includes time at the Minneapolis Grain Exchange as a grain merchant and merchandised grain on the Chicago Board of Trade. In 1975, Mr. Felber joined his family’s feed and grain country elevator in southern Minnesota and worked there until it was sold in 1982. He remained in the grain, feed, and agronomy business until he joined Jerome Foods, Inc. (Jennie-O Turkey Store, Inc.) in 1990 to manage the Feed Ingredient Purchasing Department. In 2007, Mr. Felber founded Ag Risk Managers Insurance Agency LLC, which specializes in the risk management of crops and livestock. Mr. Felber is a member of the Governance and Nomination Committee of our Board and the Credit Committee Chair of the Board of Directors of the Bank. Mr. Felber brings to the Board substantial experience in the agricultural industry and extensive leadership experience, all of which led to the conclusion that he should serve as a director of Citizens. | | | | MICHAEL L. SWENSON | 73 | 2011 | | Mr. Swenson has served as a member of our Board since May 2011 and has served as Lead Director since June 2023. He has also served as a director to the board of Citizens Community Federal N.A., our bank subsidiary, Eau Claire, WI, since May 2011, and continues to do so. Prior to his retirement in 2012, Mr. Swenson was the President and CEO of Northern States Power Company - Wisconsin (an Xcel Energy Company and an electric and natural gas utility holding company) in Eau Claire, Wisconsin and had served as an engineer in various executive roles with Xcel Energy for over a decade. Mr. Swenson is a member of the Compensation Committee and the Governance and Nomination Committee Chair of our Board. The Board benefits from Mr. Swenson’s executive and leadership expertise, all of which led to the conclusion that he should serve as a director of Citizens. | | |

  6. Information with Respect to Nominees and Continuing Directors

    (1)Includes service as a director of Citizens Community Federal National Association (the "Bank").

  7. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION

  8. Director Compensation

    Director Compensation The following table summarizes the director compensation for all of our non-employee directors for fiscal 2023.

  9. Director Compensation

    | Name | Fees Earned or Paid in Cash ($) | | Stock Awards ($) (1) | | All Other Compensation ($) | | Total ($) | | | Kristina M. Bourget | $ | 22,000 | $ | 21,000 | $ | — | $ | 43,000 | | Michael Conner (2) | $ | 28,500 | $ | 15,994 | $ | | $ | 44,494 | | Francis E. Felber | $ | 46,000 | $ | 21,000 | $ | — | $ | 67,000 | | Richard McHugh (3) | $ | 11,500 | $ | 14,993 | $ | — | $ | 26,493 | | James D. Moll | $ | 38,250 | $ | 21,000 | $ | — | $ | 59,250 | | Timothy L. Olson | $ | 33,000 | $ | 21,000 | $ | — | $ | 54,000 | | Kathleen S. Skarvan | $ | 17,000 | $ | 21,000 | $ | — | $ | 38,000 | | Michael L. Swenson | $ | 20,000 | $ | 21,000 | $ | — | $ | 41,000 |

  10. Director Compensation

    (1) The amount in this column reflects the aggregate grant date fair value computed in accordance with FASB ASC Topic 718 of the annual restricted stock awards. Annual restricted stock awards vest in full at the end of the then-current fiscal year, subject to pro-rata vesting for a termination of service on the Board other than for cause. (2) Mr. Conner served on the Board starting on June 20, 2023. (3) Mr. McHugh served on the Board through the expiration of his term on June 20, 2023.

  11. SUMMARY COMPENSATION TABLE

    SUMMARY COMPENSATION TABLE The table below provides information for fiscal 2023 and 2022 regarding compensation paid by the Company to the persons who served as our NEOs.

  12. Summary Compensation Table

    Summary Compensation Table

  13. Summary Compensation Table

    | Name and Principal Position | Period | Salary (1) | Stock Awards (2) | Option Awards (3) | Non-Equity Incentive Plan Compensation (4) | All Other Compensation (5) | Total | | Stephen M. Bianchi | FY 2023 | $381,954 | $134,675 | $— | $118,104 | $28,663 | $663,396 | | CEO and Principal Executive Officer | FY 2022 | $366,598 | $129,500 | $— | $169,417 | $23,860 | $689,375 | | James S. Broucek | FY 2023 | $232,269 | $70,192 | $— | $47,700 | $11,691 | $361,852 | | CFO and Principal Accounting Officer | FY 2022 | $222,494 | $67,494 | $— | $91,397 | $13,040 | $394,425 |

  14. Summary Compensation Table

    Explanatory Notes for Summary Compensation Table: 1.These amounts reflect the aggregate amount actually earned by each executive when aggregating each pay period amount paid between (and including) January 1, 2023, and December 31, 2023, and between January 1, 2022, and December 31, 2022. 2.These amounts reflect the grant date fair value of time-based and performance-based restricted stock awards granted in the applicable fiscal year, computed in accordance with Accounting Standards Codification Topic 718-10 (formerly FAS 123(R)), excluding estimated forfeitures. The assumptions made in valuing stock awards are included under the caption “Note 13 - Stock- Based Compensation” in the Notes to our Consolidated Financial Statements. Information with respect to the awards granted in the fiscal year is set forth below under “Outstanding Equity Awards at Fiscal Year End” and “Stock Awards”. 3.These amounts reflect the grant date fair value of option awards granted in the applicable fiscal year, computed in accordance with Accounting Standards Codification Topic 718-10 (formerly FAS 123(R)). We calculate the grant date fair value of option awards using the Black-Sholes option pricing model. For purposes of this calculation, the impact of forfeitures is excluded until they actually occur. The other assumptions made in valuing option awards are included under the caption “Note 13 - Stock-Based Compensation” in the Notes to our Consolidated Financial Statements. 4.These awards represent cash bonuses awarded under our Short-Term Incentive Plan by our Compensation Committee to each listed officer in connection with our financial performance and each officer’s achievement of certain pre-determined individual performance goals. Awards earned during the period are payable in the next period. 5.The table below shows the components of this column, which include our match for each individual’s 401(k) plan contributions, automobile allowance including commuting mileage, and HSA contribution.

  15. Summary Compensation Table

    | Name and Principal Position | Period | 401(k) Match | Auto | HSA Contribution | Total “All Other Compensation” | | Stephen M. Bianchi | FY 2023 | $15,823 | $12,000 | $840 | $28,663 | | CEO and Principal Executive Officer | FY 2022 | $12,200 | $10,400 | $1,260 | $23,860 | | James S. Broucek | FY 2023 | $10,011 | $— | $1,680 | $11,691 | | CFO and Principal Accounting Officer | FY 2022 | $12,200 | $— | $840 | $13,040 |

  16. Outstanding Equity Awards at Fiscal Year End

    Outstanding Equity Awards at Fiscal Year End The following table sets forth information on outstanding option and restricted stock awards held by the named executive officers at December 31, 2023, including the number of shares underlying fully vested and exercisable portions of each stock option as well as the exercise price and expiration date of each outstanding option and the number of shares of restricted stock held at fiscal year-end that had not yet vested.

  17. Outstanding Equity Awards at Fiscal Year End

    | | Option Awards | | | | Stock Awards | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units That Have Not Vested ($)(1) | | Stephen M. Bianchi (2) | 20,000 | — | $11.00 | 6/24/2026 | — | $— | | Stephen M. Bianchi (3) | — | — | $— | NA | 1,634 | $19,134 | | Stephen M. Bianchi (4) | — | — | $— | NA | 3,083 | $36,102 | | Stephen M. Bianchi (5) | — | — | $— | NA | 4,625 | $54,159 | | Stephen M. Bianchi (6) | — | — | $— | NA | 5,448 | $63,796 | | Stephen M. Bianchi (7) | — | — | $— | NA | 5,448 | $63,796 | | James S. Broucek (8) | 8,000 | — | $13.60 | 10/31/2027 | — | $— | | James S. Broucek (9) | — | — | $— | NA | 819 | $9,590 | | James S. Broucek (10) | — | — | $— | NA | 1,607 | $18,818 | | James S. Broucek (11) | — | — | $— | NA | 2,411 | $28,233 | | James S. Broucek (12) | — | — | $— | NA | 2,839 | $33,245 | | James S. Broucek (13) | — | — | $— | NA | 2,840 | $33,256 |

  18. Outstanding Equity Awards at Fiscal Year End

    | 1. | Market value equals the closing market price of our Common Stock on December 31, 2023, which was $11.71, multiplied by the number of shares of restricted stock that have not vested as of such date. | | 2. | The common stock options vested pro rata over a five-year period on each of June 24, 2017, June 24, 2018, June 24, 2019, June 24, 2020, and June 24, 2021. | | 3. | The restricted shares of Common Stock vest pro rata over a three-year period on each January 28, 2022, January 28, 2023, and January 28, 2024. | | 4. | The restricted shares of Common Stock vest pro rata over a three-year period on each January 27, 2023, January 27, 2024, and January 27, 2025. | | 5. | The Performance-Based target number of restricted shares of Common Stock vest upon achievement of the performance criteria at the end of the three year period ending on December 31, 2024. | | 6. | The restricted shares of Common Stock vest pro rata over a three year period on each January 19, 2024, January 19, 2025, and January 19, 2026. | | 7. | The Performance-Based target number of restricted shares of Common Stock vest upon achievement of the performance criteria at the end of the three year period ending on December 31, 2025. | | 8. | The common stock options vested pro rata over a five-year period on each of October 31, 2018, October 31, 2019, October 31, 2020, October 31, 2021, and October 31, 2022. | | 9. | The restricted shares of Common Stock vest pro rata over a three-year period on each January 28, 2022, January 28, 2023, and January 28, 2024. | | 10. | The restricted shares of Common Stock vest pro rata over a three-year period on each January 27, 2023, January 27, 2024, and January 27, 2025. | | 11. | The Performance-Based target number of restricted shares of Common Stock vest upon achievement of the performance criteria at the end of the three-year period ending on December 31, 2024. | | 12. | The restricted shares of Common Stock vest pro rata over a three-year period on each January 19, 2024, January 19, 2025, and January 19, 2026. | | 13. | The Performance-Based target number of restricted shares of Common Stock vest upon achievement of the performance criteria at the end of the three year period ending on December 31, 2025. |

  19. CEO Pay Ratio

    CEO Pay Ratio The Company is providing the following information, pursuant to Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, regarding the ratio of the total compensation of its median employee for 2023 to the total compensation of Stephen M. Bianchi, the Company’s President and Chief Executive Officer (the “CEO”), for 2023. The Company considers the pay ratio specified below to be a reasonable estimate, calculated in a manner that is intended to be consistent with the requirements in Item 402(u) of Regulation S-K. For the year ended December 31, 2023: •The median of the annual total compensation of all of our employees (other than the CEO) for the year ended December 31, 2023, was $48,048; and •The annual total compensation of the CEO, as reported in the Summary Compensation Table above, was $663,396. Based on this information, for 2023, the annual total compensation of our CEO was approximately 13.8 times the median total compensation of all of our employees (other than the CEO) for the year ended December 31, 2023.

  20. Pay-versus-Performance

    | Year | Summary Compensation Table Total for CEO | Compensation Actually Paid to CEO (1) | Summary Compensation Table Total for Non-CEO NEO (2) | Compensation Actually Paid to Non-CEO NEO (2) | Value of Initial Fixed $100 Investment Based On Total Shareholder Return | Net Income | | 2023 | $663,396 | $660,680 | $349,737 | $348,231 | $89 | $13,059,000 | | 2022 | $689,375 | $658,775 | $394,425 | $378,725 | $115 | $17,761,000 |

  21. Pay-versus-Performance

    | | Summary Compensation Table | | Current Year Stock Awards | | Prior Stock Awards | | | | | Year | Total Compensation | Stock Awards | Year End Fair Value of Awards Outstanding & Unvested | Vest Date Fair Value of Awards Granted & Vested in Current Year | Change In Fair Value of Awards Outstanding & Unvested | Change in Fair Value of Awards Vested in Current Year | Total Dividends Paid on Unvested Awards | Compensation Actually Paid (CAP) | | 2023 | $663,396 | $(134,675) | $127,592 | $0 | $(2,989) | $4,408 | $2,948 | $660,680 | | 2022 | $689,375 | $(129,500) | $111,278 | $0 | $(16,706) | $1,903 | $2,425 | $658,775 |

  22. Pay-versus-Performance

    | | Summary Compensation Table | | Current Year Stock Awards | | Prior Stock Awards | | | | | Year | Total Compensation | Stock Awards | Year End Fair Value of Awards Outstanding & Unvested | Vest Date Fair Value of Awards Granted & Vested in Current Year | Change In Fair Value of Awards Outstanding & Unvested | Change in Fair Value of Awards Vested in Current Year | Total Dividends Paid on Unvested Awards | Compensation Actually Paid (CAP) | | 2023 | $349,737 | $(70,192) | $66,501 | $0 | $(1,548) | $2,206 | $1,527 | $348,231 | | 2022 | $394,425 | $(67,494) | $57,996 | $0 | $(8,350) | $912 | $1,236 | $378,725 |