DEF 14A of Coastal Financial Corp, Apr 5, 2024

DEF 14A of Coastal Financial Corp

Filed Apr 5, 2024 · FY20230001437958-24-000061

Open on EDGAR

  1. ITEM 1. ELECTION OF DIRECTORS

    ITEM 1. ELECTION OF DIRECTORS The Board of Directors currently consists of eleven members. Under our second amended and restated articles of incorporation, as amended, the Board of Directors is divided into three classes with three-year staggered terms, with approximately one-third of the directors elected each year. Four directors have terms that expire at the annual meeting. At the annual meeting, shareholders will vote to elect Eric M. Sprink, Pamela R. Unger, Brian T. Hamilton and Sadhana Akella-Mishra, whose terms expire at this annual meeting, to each serve for a three-year term. All nominees currently serve on the Board of Directors. Mr. Hamilton was appointed by the Board of Directors and placed in this class effective January 2024. With the appointment of Mr. Hamilton the size of the Board of Directors increased to eleven members. The Board of Directors has nominated Eric M. Sprink, Pamela R. Unger, Brian T. Hamilton and Sadhana Akella-Mishra to serve until the 2027 annual meeting of shareholders or until their successors are elected, or until their earlier resignation or death. Each of the nominees was recommended for election by the Governance & Nominating Committee, and each such recommendation was approved unanimously by the Board of Directors. Pamela R. Unger, Brian T. Hamilton and Sadhana Akella-Mishra are independent directors within the meaning of the applicable Nasdaq listing rules. Unless you indicate on the proxy card that your shares should not be voted for the nominees, the Board of Directors intends that the proxies solicited by it and returned will be voted for the election of each of the Board of Directors’ nominees. If any nominee is unable to serve, the persons named in the proxy card will vote your shares to approve the election of any substitute proposed by the Board of Directors. Alternatively, the Board of Directors may adopt a resolution to reduce the size of the Board of Directors. At this time, the Board of Directors knows of no reason why any nominees might be unable to serve. The Board of Directors unanimously recommends a vote “FOR” the election of Eric M. Sprink, Pamela R. Unger, Brian T. Hamilton and Sadhana Akella-Mishra. The election of each nominee requires a plurality of the votes properly cast for each nominee. Abstentions and broker non-votes are treated as present for quorum purposes only and will have no effect on the outcome of the proposal. Certain information about each of the nominees is furnished below, including their experience, qualifications, attributes or skills that caused the Governance & Nominating Committee and the Board of Directors to determine that the nominees should continue to serve as directors. The age indicated for each individual is as of December 31, 2023. There are no family relationships among the directors, director nominees or executive officers and none of the director nominees were previously selected or nominated for election as a director pursuant to any agreement or arrangement. The indicated period of service as a director includes service as a director of the Bank.

  2. ITEM 1. ELECTION OF DIRECTORS

    | Nominees for Election of Directors: | | | Eric M. Sprink Age: 51 Director since: 2006 Current term expires: 2024 | Biographical Information: Eric M. Sprink serves as our Chief Executive Officer. Mr. Sprink joined the Company in late 2006 as President and Chief Operating Officer and became Chief Executive Officer in 2010. Mr. Sprink began his banking career working for Security Pacific Bank while enrolled at Arizona State University. He assumed increasing levels of responsibility in the areas of retail operations, consumer and commercial lending and wealth management with Security Pacific Bank and its successor, Bank of America. He then moved to Centura Bank, where he held management positions in retail operations and corporate finance. After Centura Bank was acquired, he held senior management positions at Washington Trust Bank and Global Credit Union. Mr. Sprink is active in industry trade groups and is a director and past Chair of the Community Bankers of Washington. Qualifications: The Company believes that Mr. Sprink brings to our Board of Directors leadership experience, significant experience in many facets of the financial services business, familiarity with our market area, and is well qualified to continue serving on the Board of Directors. | | Sadhana Akella-Mishra Age: 47 Director since: 2019 Current term expires: 2024 | Biographical Information: Sadhana Akella-Mishra is currently the Chief Risk Officer for Fiserv (previously Finxact, Inc.), a core banking software company. Ms. Akella-Mishra is responsible for the company’s compliance, information security, testing/examinations and legal and human resources. Prior to that time, Ms. Akella-Mishra served as the Chief Information Security and Compliance Officer for Finxact, Inc. from July 2018 to March 2021, Chief Compliance Officer (Global) of Geoswift Ltd. from June 2017 to April 2018 and as the U.S. Head of Compliance for Geoswift US Inc. from November 2016 to June 2017. From April 2016 to November 2016, Ms. Akella-Mishra served as the Senior Manager, General Compliance of Ripple, Inc. Prior to that time, she served as the Chief Compliance Officer of Zenbanx Holding Ltd. from March 2014 to April 2016 and as a Senior Compliance Manager for Zenbanx Holding Ltd. from August 2013 to February 2014. From July 2007 to July 2013, Ms. Akella-Mishra served in various positions with Deutsche Bank, including as Americas Regional Head, Anti Financial Crime-Fraud from September 2012 to July 2013. Qualifications: The Company believes that Ms. Akella-Mishra brings to the Board of Directors compliance and information security expertise, familiarity with the financial services industry, and is well qualified to continue serving on the Board of Directors. | | Brian T. Hamilton Age: 46 Director since: 2024 Current term expires: 2024 | Biographical Information: Brian T. Hamilton is a seasoned financial technology executive and business leader, with more than 25 years of experience in the banking, lending, payments and digital product development industries. A serial entrepreneur, with deep expertise in domestic and international settlement systems and digital platforms, Mr. Hamilton has held senior leadership roles at Capital One, serving as President of their Merchant Services division from January 2013 until February 2015, Wells Fargo from July 1998 until March 2006 and Verifone from January 2012 until January 2013, in addition to founding and operating multiple companies in the fintech space. Most recently Mr. Hamilton was co-founder and CEO of ONE (One Finance Inc.) from January 2019 until August 2023, which was acquired by a Walmart led joint venture in 2022. Prior to co-founding ONE, he was the founder of Azlo, a digital bank for small businesses, and helped to build out the BBVA Open Platform for sponsor banking services. Mr. Hamilton is an honors graduate of Oregon State University, with technical certifications from Wells Fargo’s commercial banking school and various industry groups. Qualifications: The Company believes that Mr. Hamilton brings to our Board of Directors extensive experience across multiple aspects of the finance and technology industries, thought leadership, public speaking and merger and acquisitions, and is well qualified to continue serving on the Board of Directors. |

  3. ITEM 1. ELECTION OF DIRECTORS

    | Nominees for Election of Directors: | | | Pamela R. Unger Age: 39 Director since: 2021 Current term expires: 2024 | Biographical Information: Pamela Unger is a Certified Public Accountant who supports venture capital funds with tax planning, compliance, and related investor issues and inquiries. She is currently the Chief Operating Officer at Julien Unger & Associates, PLLC, a Bellevue-based public accounting firm, specializing in tax compliance and planning. She joined Julien Unger & Associates in January 2024. For the previous five years, she served as the Managing Director at Tax Director at Belltower Fund Group, Ltd., which is the Seattle-based fund administrator for over 20,000 venture capital funds launched on the AngelList Venture platform. From September 2007 to January 2019, Ms. Unger held various positions, most recently she was a Tax Manager, at PwC, a network of accounting firms. While at PwC she worked in the broader asset management sector handling taxes for a variety of clients within the industry, with a focus on venture capital, private equity and heavy experience related to foreign investing inbound and outbound compliance. Ms. Unger graduated from the University of Washington with a bachelor’s degree in business and a masters in tax. Qualifications: The Company believes that Ms. Unger provides the Board of Directors significant experience in the accounting industry, and is well qualified to serve on the Board of Directors. |

  4. Directors Continuing in Office

    Directors Continuing in Office

  5. Directors Continuing in Office

    | Directors Continuing in Office: | | | Christopher D. Adams Age: 44 Director since: 2016 Current term expires: 2025 | Biographical Information: Christopher D. Adams is a partner in the law firm of Adams & Duncan, Inc., P.S. in Everett, Washington since 2006. Mr. Adams practices in the areas of corporate law, commercial real estate and tax matters. Qualifications: The Company believes that Mr. Adams brings to the Board of Directors legal expertise and familiarity with our market area, and is well qualified to continue serving on the Board of Directors. | | Steven D. Hovde Age: 69 Director since: 2011 Current term expires: 2025 | Biographical Information: Steven D. Hovde is the Chair and Chief Executive Officer at Hovde Group, LLC, an investment banking and advisory firm that serves bank and thrift clients across the United States, since January 1988, where he is responsible for managing its investment banking activities, the strategic development of mergers and acquisitions of bank and thrift institutions, and its private equity activities. He serves as a director of Republic Bank of Chicago and as a trustee of several charitable foundations. Qualifications: The Company believes that Mr. Hovde provides the Board of Directors with important experience and insight into the financial services industry, and is well qualified to continue serving on the Board of Directors. | | Stephan Klee Age: 50 Director since: 2018 Current term expires: 2025 | Biographical Information: Stephan Klee has served as the Chief Financial Officer at Sagard Holdings Inc., which makes investments in innovative financial services companies, since February 2018. Prior to joining Sagard Holdings Inc., Mr. Klee served as Chief Financial Officer of Zenbanx Holding, Inc. from February 2015 to September 2017 and remained in an executive capacity after its merger with SoFi, Inc., one of the largest U.S. fintech companies. Previously, Mr. Klee served as a Senior Vice President at Bank of Nova Scotia, at ING Direct Canada, where he was CFO and Treasurer from 2011 to 2014, and at ING Direct USA, where he served as Chief of Staff from 2002 to 2011. Qualifications: The Company believes that Mr. Klee brings to the Board of Directors experience in private equity and finance, and is well qualified to continue serving on the Board of Directors. | | Thomas D. Lane Age: 54 Director since: 1997 Current term expires: 2025 | Biographical Information: Thomas D. Lane is the owner and president and chief executive officer of Dwayne Lane’s Auto Family, which operates five automobile dealerships, since March 1992. He is active in community organizations and previously served on the Economic Alliance Snohomish County board of trustees. Mr. Lane is a founding director of the Company. Qualifications: The Company believes that Mr. Lane brings to the Board of Directors leadership experience, familiarity with our market area, and is well qualified to continue serving on the Board of Directors. |

  6. Directors Continuing in Office

    | Directors Continuing in Office: | | | Rilla R. Delorier Age: 56 Director since: 2020 Current term expires: 2026 | Biographical Information: Rilla R. Delorier is a retired banking professional with over 30 years executive experience. Most recently, Ms. Delorier was the Chief Strategy and Digital Transformation Officer at Umpqua Bank from April 2017 to August 2020 where she was responsible for shifting from physical to digital service and sales models, developing new products, and automating operations. Ms. Delorier was at SunTrust Bank from February 2006 to February 2016, where she held multiple positions. As the leader of SunTrust’s Retail Bank, she was responsible for managing the profit and loss of a $2.7 billion retail banking business. Ms. Delorier serves as a director for WisdomTree, Inc., Atlantic Union Bankshares, Nymbus and Central City Concern. Throughout her career she has led innovation initiatives and been instrumental in business transformation. Qualifications: The Company believes that Ms. Delorier brings to the Board of Directors experience in developing new products, automating operations, implementing enhanced cyber-security practices, establishing strategic partnerships, using modernized analytics, and is well qualified to continue serving on the Board of Directors. | | Michael R. Patterson Age: 63 Director since: 2021 Current term expires: 2026 | Biographical Information: Michael R. Patterson is a Certified Public Accountant, registered in the State of New York with over 40 years of cross-sector experience. From May 2022 through January 2024, Mr. Patterson was employed as Chief Compliance Officer of Genesis Global Trading and Genesis Global Holding Company and its subsidiaries, which filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in January 2023. Prior to that, he led Ernst & Young LLP’s Compliance Risk Management business in the firms Financial Services Office from January 2009 until June 2021. Mr. Patterson was an independent consultant and was with Ernst & Young from July 2021 through April 2022. Michael Patterson is experienced in risk management, compliance, risk governance, financial accounting, and control matters based upon his experience at EY, LLP, Merrill Lynch & Co., BearingPoint and Arthur Andersen, LLP. He is most experienced in the banking and capital markets industries. Qualifications: The Company believes that Mr. Patterson brings to the Board of Directors experience in risk management, compliance, risk governance, financial accounting, control matters, and is well qualified to continue serving on the Board of Directors. | | Gregory S. Tisdel Age: 69 Director since: 2002 Current term expires: 2026 | Biographical Information: Gregory A. Tisdel has served as managing member of RKLG since 2008, was the owner of Tiz’s Door Sales, Inc., from July 1996 to July 2011, and a member of the City of Everett Planning Commission since January 2014. He serves on the Advisory Board of the Puget Sound Clean Air Agency since February 1985 and previously served as Special Advisor to the Economic Alliance Snohomish County from November 2011 to 2015. Mr. Tisdel has been active in community organizations, including the YMCA, American Red Cross Snohomish County Chapter and Volunteers of America. Qualifications: The Company believes that Mr. Tisdel brings to the Board of Directors leadership experience, familiarity with our market area and is well qualified to continue serving on the Board of Directors. |

  7. Directors Continuing in Office

    | ADVISORY VOTE ON EXECUTIVE COMPENSATION |

  8. Overview of Compensation Programs

    | What we do: | | What we don’t do: | | | • | Provide a combination of base salary and both short-term and long-term incentive awards which serve as financial incentives to increase retention and align the interests of our executive officers with those of our shareholders | • | No automatic or guaranteed annual salary increases | | • | Emphasis on delivering incentive compensation to our executive officers that is tied to actual Company performance compared to its peers and internal benchmarks | • | No guaranteed bonuses or guaranteed long-term incentive awards | | • | Independent compensation consultant regularly advises the Compensation Committee | • | No excessive perquisites | | • | Provide time-based share awards that vest ratably over several years to incentivize and tie executive officer pay to long-term performance of Company | • | Encourage unnecessary or excessive risk-taking by executives by not using multiple metrics in short and long-term incentive plans for executive officers | | • | Use of peer company data to help set executive compensation | • | Enter into employment of other contracts with executive containing single-trigger golden parachutes | | • | Maintain a formal clawback policy applicable to all incentive-based compensation | | |

  9. Independent Compensation Consultant – Pearl Meyer & Partners LLC (“Pearl Meyer”)

    Independent Compensation Consultant – Pearl Meyer & Partners LLC (“Pearl Meyer”) During the past fiscal year, the Compensation Committee again engaged Pearl Meyer, an independent compensation consulting firm. Specifically, the Compensation Committee engaged Pearl Meyer to: •review the Company’s compensation philosophy and strategy; •advise and aid in the design of the CEO compensation package; •advise and aid in the design of executive officer compensation; •evaluate and make recommendations on incentive compensation plans; •review and advise on Board of Directors compensation; and •perform peer analysis. Under its charter, the Compensation Committee may select, or receive advice from, a compensation consultant, legal counsel or other advisor to the Compensation Committee, only after assessing the independence of such person in accordance with SEC and Nasdaq requirements that bear upon the adviser’s independence; however, there is no requirement that any adviser be independent. The Compensation Committee has assessed Pearl Meyer’s independence and determined that Pearl Meyer is independent and there was no conflict of interest resulting from retaining Pearl Meyer for this engagement.

  10. Peer Group Selection

    Peer Group Selection The Company used two peer groups for comparison purposes in evaluating and determining executive compensation for 2023 provided in consultation with Pearl Meyer. The Company’s compensation programs are more closely aligned with the first group, bank-only peers (“Bank Peers”). The performance-based equity components of the Company’s compensation programs are more closely aligned with the second group, composed only of BaaS peers (“BaaS Peers”). These groups were identified based primarily on lines of business and/or asset size. Recognizing that comparative pay assessments have inherent limitations, due to the lack of precise comparability of executive positions between companies, as well as the companies themselves, the comparative data are used only as a guide and the Compensation Committee does not set or target the compensation of our executives at specific levels or within specified percentile ranges relative to peer company pay levels. While the Compensation Committee considers peer data to be a helpful reference to assess the competitiveness and appropriateness of our executive compensation program, the Compensation Committee applies its own business judgment and experience to determine individual compensation. Our Compensation Committee will continue to work with our CEO and our compensation consultants to position pay based on a variety of factors, including market data for executive compensation drawn from our peer group. The Compensation Committee supplements the peer group analysis with references, as a touchstone and without specifically benchmarking to any given level, compensation data of broader technology and consumer companies to better understand our broader competitive positioning. The peer groups are updated annually by the Compensation Committee, based on a process that includes recommendations from internal sources, including the Company’s human resources department, and external sources such as the Compensation Committee’s independent compensation consultant, to reflect the companies against which we compete for executive talent or for shareholder investment. The specific characteristics of the financial institutions comprising the peer groups vary from year to year, but our Bank Peers are chosen based on a combination of factors that include lines of business and asset size and our BaaS Peers are selected based on lines of business and asset size. All of the Bank Peers and BaaS Peers are publicly-traded companies. Below is the list of peers used for analysis:

  11. Peer Group Selection

    | Institution Name | Ticker | Total Assets | | Bank Peers | | ($000s) | | Nicolet Bankshares, Inc. | NIC | 8,482,628 | | German American Bancorp, Inc. | GABC | 6,053,269 | | Great Southern Bancorp, Inc. | GSBC | 5,719,630 | | Community Trust Bancorp, Inc. | CTBI | 5,520,798 | | Independent Bank Corporation | IBCP | 5,135,564 | | Mid Penn Bancorp, Inc. | MPB | 5,088,813 | | Farmers National Banc Corp. | FMNB | 5,073,454 | | Bridgewater Bancshares, Inc. | BWB | 4,603,185 | | Bank First Corporation | BFC | 4,092,071 | | Southern First Bancshares, Inc. | SFST | 4,002,107 | | MVB Financial Corp. | MVBF | 3,351,847 | | Blue Ridge Bankshares, Inc. | BRBS | 3,214,424 | | CapStar Financial Holdings, Inc. | CSTR | 3,179,016 | | American National Bankshares Inc. | AMNB | 3,113,163 | | First Western Financial, Inc. | MYFW | 3,005,646 | | Greene County Bancorp, Inc. | GCBC | 2,698,283 | | BaaS Peers | | | | The Bancorp, Inc. | TBBK | 7,542,906 | | Pathward Financial, Inc. | CASH | 7,458,625 | | Metropolitan Bank Holding Corp. | MCB | 6,522,150 | | Triumph Financial, Inc. | TFIN | 5,652,721 | | Green Dot Corporation | GDOT | 4,572,905 | | VersaBank | VBNK | 3,729,393 | | MVB Financial Corp. | MVBF | 3,351,847 | | Cass Information Systems, Inc. | CASS | 2,470,796 | | Esquire Financial Holdings, Inc. | ESQ | 1,450,554 |

  12. Compensation Mix

    | Named Executive Officer | Base Salary % | Cash Bonus % | Equity Award % | Other % | | Eric M. Sprink | 45.3% | 22.9% | 28.5% | 3.4% | | Curt T. Queyrouze | 42.8% | 26.9% | 26.9% | 3.5% | | Joel G. Edwards | 51.5% | 22.4% | 22.4% | 3.8% | | Russell A. Keithley | 58.8% | 18.0% | 18.1% | 5.1% | | Andrew G. Stines | 57.4% | 19.6% | 19.6% | 3.4% |

  13. Base Salaries

    Base Salaries The Compensation Committee engages Pearl Meyer annually to evaluate the compensation paid to the NEOs, and the Company’s other executive officers, compared to that of the identified peer groups. The analysis conducted in 2022 was used in the decision-making process for determining the compensation program design for 2023. The analysis focuses on base salaries, short and long-term incentives compared to our peers. The Company strives to provide NEOs with a base salary that is competitive with other bank and BaaS organizations identified in our peer groups. Base salaries set the foundation for direct compensation, since the opportunity levels for our incentive plans are defined as a percentage of base salaries. In establishing base salaries of the Company’s other NEOs, the Compensation Committee typically considers the recommendations of the CEO, which are based on company performance, individual responsibility level, and individual contribution to strategic goals, financial management and leadership. Total compensation histories for each NEO, peer group data and a general understanding of executive compensation in the financial services industry are also considered. The Compensation Committee reviewed and approved base salaries for all NEOs and reported the decisions to the Board of Directors. The base salaries paid to the NEOs in 2023 and increases in such salaries from 2022 to 2023 are shown below:

  14. Executive Incentive Plan

    Executive Incentive Plan The Company maintains an Executive Management Incentive Plan (the “Plan”) for certain key officers, including the NEOs, to align executive compensation practices with the Company’s performance, strategic plan and long-term goals. Under the Plan, the Company provides for incentive compensation to NEOs in the form of cash and equity that are contingent upon the achievement of certain performance objectives. The long-term equity incentives paid in 2023 consisted only of time-based restricted stock units (“RSUs”). Time-based RSUs are critical to our compensation program. Time-based RSUs tie our NEOs to future Company performance through the stock value and reinforce actions that build long-term shareholder value. Performance-based RSUs were awarded to the CEO and President in 2021 and 2022, respectively. These performance-based awards cliff vest based on stock price and performing in the top 10% of a comparator group comprised of a subset of publicly-traded commercial banks and are designed to reward the executive for creating shareholder value. Details of those performance-based RSU grants are provided in the “Summary Compensation Table” below. The Compensation Committee sets specific goals for each executive officer based on peer performance, weightings for each goals, and thresholds for payment based on actual results compared to each goal. The compensation paid out as a result of achieving these goals is paid out 50% in cash and 50% in RSUs that vest over a four-year period. The CEO has the option to recommend an adjustment to the payout for all NEOs other than himself. In 2023, the Compensation Committee selected goals were (i) Return on Average Assets, (ii) Return on Average Equity, (iii) Core Deposit Growth, (iv) Gross Loan Growth, (v) Net Charge Offs and (vi) Strategic Objectives. Each of these goals were selected to support the strategic goals on the Company in its effort to increase shareholder value. The weighting of the goals was set by the Compensation Committee to maintain a balance of the different objectives. Strategic objectives include a variety of Company-specific goals related to Leadership, Team Development, Compensation Strategy and Framework, and Long-Term Capital Framework. The Compensation Committee, in consultation with management, was responsible for setting the appropriate targets for each of these strategic objectives based on internal projections and targets. The table below describes the goals, category weightings and payout thresholds for each NEO in 2023:

  15. Executive Incentive Plan

    | | | Sprink | | Queyrouze | | Edwards | | Keithley | | Stines | | | Goal | Thresholds | Payout % | Weight % | Payout % | Weight % | Payout % | Weight % | Payout % | Weight % | Payout % | Weight % | | Return on Average Assets | 123.31% of 1.33% | 200.0% | 20.0% | 200.0% | 20.0% | 105.0% | 20.0% | 82.5% | 20.0% | 82.5% | 20.0% | | | 100% of 1.33% | 100.0% | | 100.0% | | 70.0% | | 55.0% | | 55.0% | | | | 70.68% of 1.33% | 50.0% | | 50.0% | | 35.0% | | 27.5% | | 27.5% | | | Return on Average Equity | 123.12% of 17.00% | 200.0% | 20.0% | 200.0% | 20.0% | 105.0% | 20.0% | 82.5% | 20.0% | 82.5% | 20.0% | | | 100% of 17.00% | 100.0% | | 100.0% | | 70.0% | | 55.0% | | 55.0% | | | | 70.59% of 17.00% | 50.0% | | 50.0% | | 35.0% | | 27.5% | | 27.5% | | | Core Deposit Growth | 437% of 5.00% | 200.0% | 12.5% | 200.0% | 12.5% | 105.0% | 12.5% | 82.5% | 12.5% | 82.5% | 12.5% | | | 100% of 5.00% | 100.0% | | 100.0% | | 70.0% | | 55.0% | | 55.0% | | | | 50% of 5.00% | 50.0% | | 50.0% | | 35.0% | | 27.5% | | 27.5% | | | Gross Loan Growth | 216% of 10.00% | 200.0% | 12.5% | 200.0% | 12.5% | 105.0% | 12.5% | 82.5% | 12.5% | 82.5% | 12.5% | | | 100% of 10.00% | 100.0% | | 100.0% | | 70.0% | | 55.0% | | 55.0% | | | | 60% of 10.00% | 50.0% | | 50.0% | | 35.0% | | 27.5% | | 27.5% | | | Net Charge Offs | 16% of 0.50% | 200.0% | 10.0% | 200.0% | 10.0% | 105.0% | 10.0% | 82.5% | 10.0% | 82.5% | 10.0% | | | 100% of 0.50% | 100.0% | | 100.0% | | 70.0% | | 55.0% | | 55.0% | | | | 200% of 0.50% | 50.0% | | 50.0% | | 35.0% | | 27.5% | | 27.5% | | | Company Strategic Objectives | 120% of Target | 200.0% | 25.0% | 200.0% | 25.0% | | | | | | | | | 100% of Target | 100.0% | | 100.0% | | | | | | | | | | 80% of Target | 50.0% | | 50.0% | | | | | | | | | CEO Discretionary | | | | | | | 25.0% | | 25.0% | | 25.0% | | Total | | | 100.0% | | 100.0% | | 100.0% | | 100.0% | | 100.0% |

  16. Executive Incentive Plan

    A proportional approach is used for calculating payments in the event performance results fall between the three threshold levels. No payout is made if the lowest threshold is not met and the payout will not exceed the amount associated with the top threshold in the table above. Those percentage payouts are shown in the table above.

  17. RISK CONSIDERATIONS IN OUR COMPENSATION PROGRAMS

    RISK CONSIDERATIONS IN OUR COMPENSATION PROGRAMS Each year, the Compensation Committee, together with the Company’s risk officers, conduct an in-depth risk assessment of the Company’s compensation policies and practices. This assessment reviews the key enterprise risks to which the Company is subject, including credit, liquidity, market/interest rate, compliance, operational, technology, strategic, reputational and other risks, and focuses on the compensation arrangements most likely to implicate those risks. We believe that our compensation policies and practices for our employees are reasonable and properly align our employees’ interests with those of our shareholders. We believe that risks arising from our compensation policies and practices for our employees are not reasonably likely to have a material adverse effect on the Company. Although certain of our employees who are not NEOs are compensated by the number or dollar volume of transactions they complete, our extensive underwriting process is designed to prevent us from entering into transactions that deviate from our underwriting standards. We believe our compensation programs are designed to encourage appropriate risk management while discouraging behavior that may result in excessive risk. In this regard, the following elements have been incorporated in our compensation programs for executive officers: •Compensation mix of cash and equity awards to increase retention and align the incentives of our executive officers and shareholders; •Use of multiple metrics in short and long-term incentive plans for executive officers; •Application of caps on incentives; •Providing time-based share awards that vest ratably over four years and performance-based awards that cliff vest after a specific performance period; •No automatic or guaranteed annual salary increases, bonuses or guaranteed long-term incentive awards; •No excessive perquisites; •Emphasizing long-term and performance-based compensation; and •Instituting a formal clawback policy applicable to all incentive based compensation.

  18. Summary Compensation Table

    Summary Compensation Table The following information is furnished for our NEOs:

  19. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($)(1) | Stock Awards ($)(2) | Non-equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total | | Eric M. Sprink | 2023 | $810,000 | $— | $508,823 | $408,808 | $60,360 | $1,787,991 | | Chief Executive Officer | 2022 | 700,000 | 83,088 | 726,125 | 443,018 | 54,418 | 2,006,649 | | | 2021 | 700,000 | — | 3,333,518(7) | 700,000 | 40,398 | 4,773,916 | | Curt T. Queyrouze (5) | 2023 | $428,000 | $— | $268,867 | $268,851 | $35,213 | $1,000,931 | | President | 2022 | 233,333 | 299,761 | 2,115,343(8) | 169,254 | 17,078 | 2,834,769 | | | 2021 | — | — | — | — | — | — | | Joel G. Edwards | 2023 | $374,000 | $— | $162,431 | $162,427 | $27,660 | $726,518 | | Executive Vice President, Chief Financial Officer | 2022 | 340,000 | 82,586 | 178,504 | 135,914 | 25,852 | 762,857 | | | 2021 | 300,000 | 70,000 | 157,358 | 157,500 | 23,789 | 708,647 | | Russell A. Keithley(6) | 2023 | $324,017 | $— | $99,437 | $99,427 | $27,965 | $550,846 | | Executive Vice President, Chief Banking Officer | 2022 | — | — | — | — | — | — | | | 2021 | — | — | — | — | — | — | | Andrew G. Stines(6) | 2023 | $310,321 | $— | $105,903 | $105,892 | $18,510 | $540,626 | | Executive Vice President, Chief Risk Officer | 2022 | — | — | — | — | — | — | | | 2021 | — | — | — | — | — | — |

  20. Summary Compensation Table

    (1)The amounts reported in this column represent the annual discretionary cash bonuses earned by our NEOs for fiscal year 2023, 2022 and 2021 performance except for Mr. Queyrouze which 2022 amount includes $66,761 prorated annual discretionary bonus, $146,000 signing bonus, and $87,000 moving bonus. (2)The amounts reported in this column represent the grant date fair value of the award of RSUs computed in accordance with FASB ASC Topic 718 using the methodology set forth in Note 15, "Stock Based Compensation" to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. (3)The amounts reported in this column represent the value of incentive awards earned in 2023, 2022 and 2021, respectively, based on the Company’s performance against pre-established performance goals for each NEO approved by the Compensation Committee. (4)Includes the items specified in the All Other Compensation table below for 2023. (5)Mr. Queyrouze was hired on June 1, 2022, therefore there is no compensation to report for 2021. (6)Mr. Keithley and Mr. Stines qualified as NEOs for the first time in 2023, therefore there is no compensation to report for 2022 or 2021. (7)Includes 100,000 performance-based RSUs (“PSUs”) granted to Mr. Sprink in 2021 to further align his performance with shareholder returns and to retain his services for an extended period. The price of Company common stock at the time of grant was $31.00. The PSUs cliff vest after six years of continuous service only if certain specified performance conditions are met. Fifty percent of the units (50,000 PSUs) are contingent on achieving stock price hurdles, which will be measured for achievement during the 24-months preceding the 6th anniversary of the grants (years five and six). A sustained stock price of at least $50.00 per share for no less than 60 continuous trading days during the measurement period is required to vest 25,000 shares and a sustained stock price of at least $60.00 per share for no less than 60 continuous trading days during the measurement period is required to vest 50,000 shares. The vesting of an additional 50,000 shares is contingent on relative return on average equity compared to a comparator group, with the Company’s performance needing to be at least in the 90th percentile, or top 10%, of the group over the six-year period. We believe the achievement of these performance conditions will benefit the shareholders of the Company by incentivizing increased shareholder value through higher stock prices and increased earnings. (8)Includes 53,000 PSUs to Mr. Queyrouze upon his hiring in 2022 to align his performance with shareholder returns and to retain his services for an extended period. The price of Company common stock at the time of grant was $38.51. The PSUs cliff vest after six years of continuous service only if certain specified performance conditions are met. 33,000 PSUs are contingent on achieving stock price hurdles, which will be measured for achievement during the 24-months preceding the 6th anniversary of the grants (years five and six). A sustained stock price of at least $68.51 per share for no less than 60 continuous trading days during the measurement period is required to vest 10,000 shares and a sustained stock price of at least $83.51 per share for no less than 60 continuous trading days during the measurement period is required to vest 20,000 shares and a sustained stock price of at least $98.51 per share for no less than 60 continuous trading days during the measurement period is required to vest the remainder, up to 33,000 shares. The vesting of an additional 20,000 shares is contingent on relative return on average equity compared to a comparator group, with the Company’s performance needing to be at least in the 90th percentile, or top 10%, of the group over the six-year period. We believe the achievement of these performance conditions will benefit the shareholders of the Company by incentivizing increased shareholder value through higher stock prices and increased earnings.

  21. Grants of Plan Based Awards in 2023

    Grants of Plan Based Awards in 2023 The following table provides supplemental information relating to all grants of plan-based equity and non-equity awards made during 2023 to help explain information provided above in the Summary Compensation Table.

  22. Grants of Plan Based Awards in 2023

    | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards ($)(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (# of shares)(2) | | | | | Name | Grant Date | Threshold ($)(3) | Target ($) | Maximum ($) | Threshold (#)(3) | Target (#) | Maximum (#) | Grant Date Fair Value of Stock Awards(4) | | Eric M. Sprink | 1/25/2023 | $175,000 | $350,000 | 740,000 | 4,032 | 8,065 | 17,051 | $726,125 | | Curt T. Queyrouze | 1/25/2023 | 100,000 | 200,000 | 400,000 | 2,304 | 4,608 | 9,217 | $236,053 | | Joel G. Edwards | 1/25/2023 | 59,500 | 119,000 | 178,500 | 1,371 | 2,742 | 4,113 | $178,504 |

  23. Grants of Plan Based Awards in 2023

    (1)Represents incentive awards awarded in 2023 tied to pre-established performance goals for each NEO approved by the Compensation Committee. (2)Represents RSUs granted in 2023 for service/performance in 2022 and are included in the total compensation table for 2023. The RSUs vest over a four-year period from the grant date, with approximately one-fourth of the RSUs under the grant vesting on each of the first four anniversaries of the grant date. (3)Represents the award payout if minimum performance targets are achieved. (4)The amounts reported in this column represent the grant date fair value of the award of RSUs computed in accordance with the FASB ASC Topic 718 using the methodology set forth in Note 15, “Stock Based Compensation” to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023.

  24. Outstanding Equity Awards at 2023 Fiscal Year End

    Outstanding Equity Awards at 2023 Fiscal Year End The following table provides information regarding outstanding stock option awards held by our NEOs as of December 31, 2023.

  25. Outstanding Equity Awards at 2023 Fiscal Year End

    | | | Option Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price($) | Option Expiration Date | | Eric M. Sprink | 01/22/19 | 10,694(1) | 16,043 | 14.91 | 01/22/29 | | | 01/22/18 | 14,273(1) | 14,273 | 7.10 | 01/22/28 | | | 01/26/17 | 20,295(1) | 13,530 | 6.50 | 01/26/27 | | | 02/24/16 | 13,167(1) | 5,644 | 6.25 | 02/24/26 | | | 07/01/15 | 15,036(1) | 3,759 | 7.20 | 07/01/25 | | Curt T. Queyrouze | — | | | | | | Joel G. Edwards | 01/22/19 | 4,000(1) | 6,000 | 14.91 | 01/22/29 | | | 01/22/18 | 3,000(1) | 3,000 | 7.10 | 01/22/28 | | | 01/26/17 | 3,600(1) | 2,400 | 6.50 | 01/26/27 | | | 02/24/16 | 0(1) | 1,800 | 6.25 | 02/24/26 | | | 07/01/15 | 600(1) | 1,200 | 7.20 | 07/01/25 | | | 03/18/14 | 800(1) | — | 5.50 | 03/18/24 | | Russell A. Keithley | 01/22/19 | 2,600(1) | 3,900 | 14.91 | 01/22/29 | | | 01/22/18 | 2,000(1) | 2,000 | 7.10 | 01/22/28 | | | 01/26/17 | 2,400(1) | 1,600 | 6.50 | 01/26/27 | | | 02/24/16 | 2,800(1) | 1,200 | 6.25 | 02/24/26 | | | 07/01/15 | 3,200(1) | 800 | 7.20 | 07/01/25 | | | 03/18/14 | 2,600(1) | — | 5.50 | 03/18/24 | | Andrew G. Stines | — | | | | |

  26. Outstanding Equity Awards at 2023 Fiscal Year End

    (1)These option awards vest over a ten-year period from the grant date, with one-tenth of the options under the grant becoming exercisable on each of the first nine anniversaries of the grant date and the final one-tenth of the options under the grant becoming exercisable 90 days prior to the tenth anniversary of the grant date. The following table provides information regarding outstanding restricted stock and RSUs held by our NEOs as of December 31, 2023.

  27. Outstanding Equity Awards at 2023 Fiscal Year End

    | | | Stock Awards | | | | | Name | Grant Date | Number of Shares or Units of Stock That Have not Vested (#) | Market Value of Shares or Units of Stock That Have not Vested(1) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(1) ($) | | Eric M. Sprink | 2/3/2020 | 13,046(2) | $579,373 | — | $— | | | 1/25/2021 | 9,048(3) | 401,822 | — | — | | | 10/4/2021 | — | — | 100,000(4) | 4,441,000 | | | 1/25/2022 | 10,671(5) | 473,899 | — | — | | | 1/25/2023 | 16,731(5) | 743,024 | — | — | | Curt T. Queyrouze | 6/1/2022 | 4,667(6) | 207,261 | — | — | | | 6/1/2022 | — | — | 53,000(7) | 2,353,730 | | | 1/25/2023 | 5,439(5) | 241,546 | — | — | | Joel G. Edwards | 2/3/2020 | 3,137(2) | 139,314 | — | — | | | 1/25/2021 | 3,707(3) | 164,628 | — | — | | | 1/25/2022 | 2,402(5) | 106,673 | — | — | | | 1/25/2023 | 4,113(5) | 182,658 | — | — | | Russell A. Keithley | 2/3/2020 | 2,429(2) | 107,872 | — | — | | | 1/25/2021 | 2,435(3) | 108,138 | — | — | | | 1/25/2022 | 1,633(5) | 72,522 | — | — | | | 1/25/2023 | 2,591(5) | 115,066 | — | — | | Andrew G. Stines | 2/3/2020 | 2,500(8) | 111,025 | — | — | | | 1/25/2021 | 2,274(3) | 100,988 | — | — | | | 1/25/2022 | 1,633(5) | 72,522 | — | — | | | 1/25/2023 | 2,481(5) | 110,181 | — | — |

  28. Outstanding Equity Awards at 2023 Fiscal Year End

    (1)The amounts in this column are based on the closing stock price of $44.41 of the Company's common stock on December 31, 2023. (2)These RSUs vest over a ten-year period from the grant date, with approximately one-tenth of the RSUs under the grant vesting on each of the first ten anniversaries of the grant date. (3)These RSUs vest over a five-year period from the grant date, with approximately one-fifth of the RSUs under the grant vesting on each of the first five anniversaries of the grant date. (4)These PSUs are eligible to vest on October 4, 2027, the quantity of which is dependent upon achievement of specified performance goals. Each PSU represents the right to receive one share of common stock upon vesting. (5)These RSUs vest over a four-year period from the grant date, with approximately one-fourth of the RSUs under the grant vesting on each of the first four anniversaries of the grant date. (6)These RSUs vest over a three-year period from the grant date, with approximately one-third of the RSUs under the grant vesting on each of the first three anniversaries of the grant date. (7)These PSUs are eligible to vest on June 1, 2028, the quantity of which is dependent upon achievement of specified performance goals. Each PSU represents the right to receive one share of common stock upon vesting. (8)These restricted stock awards vest over an eight-year period from the grant date, with approximately one-eighth of the restricted stock award under the grant vesting on each of the first eight anniversaries of the grant date. The Company granted 100,000 PSUs to Mr. Sprink in 2021 to further align his performance with shareholder returns and to retain his services for an extended period. The price of a share at the time of the grant was $31.00. The PSUs cliff vest after six years of continuous service only if certain specified performance conditions are met. Fifty percent of the units (50,000 PSUs) are contingent on achieving stock price hurdles, which will be measured for achievement during the 24-months preceding the 6th anniversary of the grants (years five and six). A sustained stock price of at least $50.00 per share for no less than 60 continuous trading days during the measurement period is required to vest 25,000 shares and a sustained stock price of at least $60.00 per share for no less than 60 continuous trading days during the measurement period is required to vest 50,000 shares. The vesting of an additional 50,000 shares is contingent on relative return on average equity compared to a comparator group, with the Company’s performance needing to be at least in the 90th percentile, or top 10%, of the group over the six-year period. We believe the achievement of these performance conditions will benefit shareholders of the Company by incentivizing increased shareholder value through higher stock prices and increased earnings. The Company granted 53,000 PSUs to Mr. Queyrouze upon his hiring in 2022 to align his performance with shareholder returns and to retain his services for an extended period. The price of a share at the time of the grant was $38.51. The PSUs cliff vest after six years of continuous service only if certain specified performance conditions are met. 33,000 PSUs are contingent on achieving stock price hurdles, which will be measured for achievement during the 24-months preceding the 6th anniversary of the grants (years five and six). A sustained stock price of at least $68.51 per share for no less than 60 continuous trading days during the measurement period is required to vest 10,000 shares and a sustained stock price of at least $83.51 per share for no less than 60 continuous trading days during the measurement period is required to vest up to 20,000 shares and a sustained stock price of at least $98.51 per share for no less than 60 continuous trading days during the measurement period is required to vest the remainder, up to 33,000 shares. The vesting of an additional 20,000 shares is contingent on relative return on average equity compared to a comparator group, with the Company’s performance needing to be at least in the 90th percentile, or top 10%, of the group over the six-year period. We believe the achievement of these performance conditions will benefit shareholders of the Company by incentivizing increased shareholder value through higher stock prices and increased earnings.

  29. Option Exercises and Stock Vested for 2023

    Option Exercises and Stock Vested for 2023 The following table summarizes the stock awards that vested for, and stock options that were exercised by, NEOs during the fiscal year ended December 31, 2023. The amounts reflected below show the number of shares acquired at the time of exercise or vesting, as applicable. The amounts reported as value realized on vesting are shown on a before-tax basis.

  30. Option Exercises and Stock Vested for 2023

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Eric M. Sprink | 39,794 | $1,053,745 | 8,436 | $374,841 | | Curt T. Queyrouze | — | — | 2,333 | 82,145 | | Joel G. Edwards | 2,800 | 73,304 | 2,483 | 109,859 | | Russell A. Keithley | — | — | 1,703 | 75,534 | | Andrew G. Stines | — | — | 1,802 | 80,547 |

  31. Option Exercises and Stock Vested for 2023

    (1) Reflects the closing price of the Company’s common stock on the vesting date multiplied by the number of shares vested.

  32. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control The table below sets forth the estimated payments to be made to each NEO in the event of a qualifying change in control as of the last business day of the year ended December 31, 2023. See the section titled “Employment and Change in Control Agreements with Named Executive Officers” for a description of the agreements pursuant to which these payments would be made.

  33. Potential Payments Upon Termination or Change in Control

    | Name | Benefit | Termination Without Cause or Departing for Good Reason | Qualifying Termination in Connection with a Change in Control | Death | Disability | | Eric M. Sprink | Severance pay | $2,028,808 | $2,956,106 | $— | $1,620,000 | | | Equity award vesting | 2,031,524 | 4,072,081 | — | 910,660 | | | Health benefits | 9,180 | 27,540 | — | 18,360 | | | Total Value | $4,069,512 | $7,055,727 | $— | $2,549,020 | | Curt T. Queyrouze | Severance pay | $696,851 | $1,092,015 | $— | $428,000 | | | Equity award vesting | 163,962 | 448,807 | — | 163,962 | | | Health benefits | 9,180 | 18,360 | — | 9,180 | | | Total Value | $869,993 | $1,559,183 | $— | $601,142 | | Joel G. Edwards | Severance pay | $— | $1,145,005 | $— | $— | | | Equity award vesting | — | 1,086,527 | — | — | | | Health benefits | — | — | — | — | | | Total Value | $— | $2,231,532 | $— | $— | | Russell A. Keithley | Severance pay | $— | $491,422 | $— | $— | | | Equity award vesting | — | 729,484 | — | — | | | Health benefits | — | — | — | — | | | Total Value | $— | $1,220,906 | $— | $— | | Andrew G. Stines | Severance pay | $— | $481,918 | $— | $— | | | Equity award vesting | — | 284,535 | — | — | | | Health benefits | — | — | — | — | | | Total Value | $— | $766,453 | $— | $— |

  34. Pay Ratio Disclosure

    Pay Ratio Disclosure Pursuant to a mandate of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the SEC adopted a rule requiring annual disclosure of the ratio of the annual total compensation of the principal executive officer to the annual total compensation of its median employee, other than the principal executive officer. The purpose of the pay ratio disclosure is to provide a quantitative measure of the equitability of pay within an organization. The pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. We believe our compensation philosophy and process yield an equitable result:

  35. Pay Ratio Disclosure

    | Median employee total annual compensation (other than the CEO) | $98,561 | | Total annual compensation of Eric M. Sprink, our CEO | $1,787,991 | | Ratio of CEO to median employee compensation | 18:1 |

  36. Pay Ratio Disclosure

    The pay ratio above represents the Company’s reasonable estimate. Applicable rules and guidance provide flexibility in how companies identify the median employee and other companies may use different methodologies or make different assumptions. In determining the median employee, a list of all employees as of December 31, 2023 of both the Company and the Bank was prepared, including all full-time, part-time, or temporary employees. As of December 31, 2023, the Company employed 506 persons, 504 of whom are in the United States and 2 of whom are in Canada. Wages and salaries were then annualized for any full-time and part-time employees that were not employed for the full calendar year. All other cash compensation received by our employees in 2023 (including 401(k) Plan employer contributions, medical/dental/vision premiums paid by the employer and any applicable cash perquisites) was added to the annualized wages and salaries to determine total cash compensation for purposes of this analysis. In order to determine the median employee, we then reviewed the employee list based upon a ranking of the total cash compensation of all employees other than our CEO. Upon identifying our median employee, we then calculated the median employee’s total annual compensation figure by aggregating the value of all wages, cash incentives, equity incentives, 401(k) Plan employer contributions, medical/dental/vision premiums paid by the employer and any applicable perquisites earned or paid in 2023 in the same manner as we calculated the total annual compensation of our CEO for purposes of the Summary Compensation Table.

  37. Omnibus Incentive Plan

    | DIRECTOR COMPENSATION |

  38. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION The Board of Directors determines the compensation of our non-employee directors in conjunction with recommendations made by the Compensation Committee. We use a combination of cash and share-based compensation to attract and retain qualified candidates to serve on the Board of Directors. Eric M. Sprink did not receive fees or other compensation for his service as a director of the Company or the Bank during the fiscal year ended December 31, 2023 and is not included in the director compensation table below. All compensation paid to Mr. Sprink is included in the Summary Compensation Table. Our non-employee directors received compensation for service and attendance as follows during the year ended December 31, 2023: •The Chair of the Board of Directors received annual cash compensation of $60,000; •Other directors received annual cash compensation of $40,000; and •Committee chairs received additional cash compensation of $5,000 per committee chaired (pro-rated based on period of time a committee chair) In addition to the cash compensation outlined above, non-employee directors, excluding the Chair of the Board of Directors , also received approximately $45,000 in restricted stock. The Chair of the Audit Committee receives an additional approximately $10,000 in restricted stock; Chairs of the Compensation and Non-Financial Risk Committees receive an additional approximately $7,500 in restricted stock; all other Committee Chairs will receive an additional approximately $5,000 in restricted stock; and the Chair of the Board of Directors receives approximately $55,000 in restricted stock. Restricted stock awards are granted in May of each year. Partial shares are not issued, therefore shares are rounded up to the nearest whole number. The following table sets forth information regarding compensation paid for the year ended December 31, 2023 to our non-employee directors:

  39. DIRECTOR COMPENSATION

    | Name | Fees Earned or Paid in Cash ($) | | Stock Awards ($)(1) | | Total ($) | | | Christopher D. Adams | | 60,000 | | 75,009 | | 135,009 | | Andrew P. Skotdal(2) | 18,750 | | — | | 18,750 | | | Sadhana Akella-Mishra | 45,000 | | 52,510 | | 97,510 | | | Rilla R. Delorier | 40,000 | | 45,033 | | 85,033 | | | Brian T. Hamilton(3) | — | | — | | — | | | Steven D. Hovde | 45,000 | | 50,018 | | 95,018 | | | Stephan Klee | 45,000 | | 52,510 | | 97,510 | | | Thomas D. Lane | 47,917 | | 50,018 | | 97,934 | | | Michael R. Patterson | 45,000 | | 55,002 | | 100,002 | | | Gregory A. Tisdel | 40,000 | | 45,033 | | 85,033 | | | Pamela R. Unger | 40,000 | | 45,033 | | 85,033 | |

  40. DIRECTOR COMPENSATION

    (1)Amounts represent the aggregate grant date fair value of restricted stock awards granted during the respective fiscal year calculated in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. See Note 15, “Stock-Based Compensation,” to the Company's consolidated financial statements included in the Annual Report for a discussion of the assumptions we made in determining the grant date fair value of our equity awards. Restricted stock awards vest 100% one day prior to the Company's next Annual Meeting of Shareholders. As of December 31, 2023, each non-employee director held unvested shares of restricted stock as follows: Mr. Adams, 2,137 shares; Ms. Akella-Mishra, 1,496 shares; Ms. Delorier, 1,283 shares; Mr. Hovde, 1,425 shares; Mr. Klee, 1,496 shares; Mr. Lane, 1,568 shares; Mr. Patterson, 1,567 shares; Mr. Tisdel, 1,283 shares; Ms. Unger 1,283 shares. (2)Andrew Skotdal did not stand for re-election at our 2023 shareholder meeting. (3)Brian T. Hamilton became a director effective January 2024, so no director compensation was paid in 2023.

  41. Pay Versus Performance

    Pay Versus Performance The information below describes the relationship between compensation actually paid to our CEO and other NEOs, and certain measures of financial performance, for the three years ended December 31, 2023, in accordance with Item 402(v) of Regulation S-K. Compensation actually paid, as determined under SEC requirements, does not necessarily reflect the actual amount of compensation earned by or paid to our Named Executive Officers during a covered year. For further information concerning our pay-for-performance philosophy and how we align executive compensation with our performance, refer to the Compensation Discussion and Analysis.

  42. Pay Versus Performance

    | | | | | | Value of Initial Fixed $100 Investment Based on December 31, 2020 | | | | | Year | Summary Compensation Table Total for CEO (1) | Compensation Actually Paid to CEO (1)(2) | Average Summary Compensation Table Total for non-CEO Named Executive Officers (3) | Average Compensation Actually Paid to non-CEO Named Executive Officers (3) | Total Shareholder Return | Peer Group Total Shareholder Return(4) | Net Income (dollars in thousands) | Return on Average Assets | | 2023 | $1,787,991 | $1,517,124 | $704,730 | $613,239 | $211.48 | $123.48 | $44,579 | 1.28% | | 2022 | $2,006,649 | $1,454,819 | $1,798,813 | $2,092,317 | $226.29 | $106.40 | $40,625 | 1.38% | | 2021 | $4,773,916 | $10,882,059 | $672,425 | $1,529,305 | $241.05 | $126.82 | $27,005 | 1.24% |

  43. Pay Versus Performance

    (1)Eric M. Sprink served as our CEO in each of the years 2021, 2022 and 2023. (2)The dollar amounts reported represent “Compensation Actually Paid”, as calculated in accordance with SEC rules for the CEO and the average for Non-CEO NEOs for each reported year. These dollar amounts do not reflect actual amounts of compensation paid during the covered year, but reflect adjustments for (i) the year-end fair values of unvested equity awards granted in the current year, (ii) the year-over-year difference of year-end fair values for unvested awards granted in prior years, (iii) the fair values at vest date for awards granted and vested in the current year and (iv) the difference between prior year-end fair values and vest date fair values for awards granted in prior years. A reconciliation for the compensation actually paid is provided below. (3)Our non-CEO NEOs in each of the years 2021, 2022 and 2023 are as follows: •2023: Curt T. Queyrouze, Joel G. Edwards, Russell A. Keithley and Andrew G. Stines. •2022: Curt T. Queyrouze and Joel G. Edwards. •2021: John J. Dickson and Joel G. Edwards. (4) Peer group is S&P 600 Small Cap which is the index included in the Performance Graph in the Company’s Annual Report on Form 10-K for the Fiscal Year ended December 31, 2023. The following table reconciles the Summary Compensation Table compensation to the Compensation Actually Paid disclosed in the above table for the periods indicated:

  44. Pay Versus Performance

    | | | 2023 | | | | | CEO | Non CEO NEOs | | Summary Compensation Table Total Compensation | | $1,787,991 | $704,730 | | - | Grant date fair value of stock awards granted in fiscal year | (508,823) | (159,160) | | + | Fair value at fiscal year-end of outstanding and unvested awards granted in fiscal year | 743,024 | 162,363 | | +/- | Change in fair value of outstanding and unvested stock awards granted in prior fiscal years | (412,899) | (73,254) | | +/- | Change in fair value as of vesting date of stock awards granted in prior fiscal years for which applicable vesting conditions were satisfied during the fiscal year | (92,168) | (21,441) | | Compensation Actually Paid | | $1,517,124 | $613,239 |

  45. Pay Versus Performance

    | | | 2022 | | | | | CEO | Non CEO NEOs | | Summary Compensation Table Total Compensation | | $2,006,649 | $1,798,813 | | - | Grant date fair value of stock awards granted in fiscal year | (726,125) | (1,146,923) | | + | Fair value at fiscal year-end of outstanding and unvested awards granted in fiscal year | 676,115 | 1,501,680 | | +/- | Change in fair value of outstanding and unvested stock awards granted in prior fiscal years | (287,971) | (42,047) | | +/- | Change in fair value as of vesting date of stock awards granted in prior fiscal years for which applicable vesting conditions were satisfied during the fiscal year | (213,849) | (19,205) | | Compensation Actually Paid | | $1,454,819 | $2,092,317 |

  46. Pay Versus Performance

    | | | 2021 | | | | | CEO | Non CEO NEOs | | Summary Compensation Table Total Compensation | | $4,773,916 | $672,425 | | - | Grant date fair value of stock awards granted in fiscal year | (3,333,518) | (132,233) | | + | Fair value at fiscal year-end of outstanding and unvested awards granted in fiscal year | 5,825,299 | 259,048 | | +/- | Change in fair value of outstanding and unvested stock awards granted in prior fiscal years | 3,450,049 | 695,774 | | +/- | Change in fair value as of vesting date of stock awards granted in prior fiscal years for which applicable vesting conditions were satisfied during the fiscal year | 166,314 | 34,292 | | Compensation Actually Paid | | $10,882,059 | $1,529,305 |

  47. Pay Versus Performance

    Changes in the Company’s stock price from period to period can have a material impact on the fair value amounts shown in the table above and, as a result, the Compensation Actually Paid from year to year may differ more dramatically. The following chart shows the Company’s stock price as of the dates indicated:

  48. Pay Versus Performance

    | 12/31/2023 | | 12/31/2022 | | 12/31/2021 | | 12/31/2020 | | | | 44.41 | | 47.52 | | 50.62 | | 21.00 |

  49. Pay Versus Performance

    Compensation Actually Paid to our CEO in 2021 was significantly impacted by the grant of 100,000 PSUs to further align his performance and to retain his services. These PSUs cliff vest after 6 years from grant date if certain specified performance conditions are met. Similarly, Average Compensation Actually Paid to Non-CEO NEOs in 2022 was significantly impacted by the grant of 53,000 PSUs to the President to further align his performance and to retain his services. These PSUs cliff vest after 6 years from grant date if certain specified performance conditions are met. More information on these PSUs can be found in the “Executive Compensation” section of this proxy statement.

  50. OTHER INFORMATION RELATED TO DIRECTORS AND EXECUTIVE OFFICERS

    OTHER INFORMATION RELATED TO DIRECTORS AND EXECUTIVE OFFICERS