DEF 14A of Community West Bancshares, Apr 26, 2024

DEF 14A of Community West Bancshares

Filed Apr 26, 2024 · FY20230001628280-24-018692

Open on EDGAR

  1. ELECTION OF DIRECTORS OF THE COMPANY

    ELECTION OF DIRECTORS OF THE COMPANY The Bylaws of the Company provide a nomination procedure for election of members of the Board of Directors, which procedure is included in the Notice of Annual Meeting of Shareholders accompanying this Proxy Statement. Nominations not made in accordance therewith may, in his or her discretion, be disregarded by the Chairman of the Annual Meeting and, upon his or her instruction, the inspector of election shall disregard all votes cast for such nominee(s). The Bylaws of the Company provide that the Board of Directors will consist of not less than nine (9) and not more than fifteen (15) directors. The number of directors is set by the Board of Directors and is currently set at fifteen (15). The authorized number of directors to be elected at the Annual Meeting is fifteen (15). Each director will hold office until the next Annual Meeting of Shareholders and until his or her successor is elected and qualified. All proxies will be voted for the election of the following fifteen (15) nominees recommended by the Board of Directors, all of whom are incumbent directors, unless authority to vote for the election of directors is withheld. If any of the nominees should unexpectedly decline or be unable to act as a director, the proxies may be voted for a substitute nominee to be designated by the Board of Directors. The Board of Directors has no reason to believe that any nominee will become unavailable and has no present intention to nominate persons in addition to or in lieu of those named below. There is no family relationship between any of the directors or principal officers.

  2. NOMINEES FOR THE BOARD OF DIRECTORS

    NOMINEES FOR THE BOARD OF DIRECTORS The following is a brief account of the business experience for at least the past five years of each nominee to the Board of Directors. The Company, formerly named Central Valley Community Bancorp, completed an acquisition of Community West Bancshares (“CWB”) on April 1, 2024. Effective with the merger, the Company changed its corporate name from Central Valley Community Bancorp to Community West Bancshares on April 1, 2024. In accordance with the terms of the merger Robert H. Bartlein, Suzanne M. Chadwick, Tom L. Dobyns, James W. Lokey, Martin E. Plourd and Kirk B. Stovesand, former directors of CWB were appointed to the Board of Directors effective April 1, 2024. Under the terms of the merger the Company agreed that these six new directors would be included on the list of nominees for directors presented by the Board of Directors for the Annual Meeting. ROBERT H. BARTLEIN was appointed as director and Vice Chairman of the Company and Bank on April 1, 2024, following the completion of the acquisition of CWB, where he was a founder and director. He is President and CEO of Bartlein & Company Inc., a property management company founded in 1969 with five California offices as well as offices in other states. Mr. Bartlein is a graduate of the University of Wisconsin-Madison with a degree in Finance, Investments and Banking, and did post-graduate study at the University of Wisconsin-Milwaukee. Mr. Bartlein is past President and a Director of the American Lung Association of Santa Barbara and Ventura Counties. As President of Bartlein & Company, Inc., Mr. Bartlein has substantial real estate experience with broad business exposure. He is knowledgeable in real estate transactions, real estate law, credit analysis, accounting, income tax law and finance. Mr. Bartlein is particularly familiar with the Central Coast real estate market and is active in the community. We believe that Mr. Bartlein’s real estate knowledge and experience, as well as his knowledge of coastal markets qualifies him to serve on our Board. SUZANNE CHADWICK was appointed as director on April 1, 2024, following the completion of the acquisition of CWB, where she was a director since August 2020. She worked for Santa Barbara Bank & Trust for over 20 years as Senior Vice President and Private Client Relationship Manager and was responsible for the bank’s expansion into Ventura County. Ms. Chadwick is a graduate of Pacific Coast Banking School. As a former Regent at California Lutheran University, she continues her involvement there as a member of the Center for Nonprofit Leadership, the School of Management and KCLU Advisory Boards where she has been active since 1995. Ms. Chadwick had an extensive career in banking cultivating business relationships and private client services. Ms. Chadwick is extremely knowledgeable with the Ventura County banking market and the business community. We believe that Ms. Chadwick’s banking experience and knowledge of coastal markets qualifies her to serve on our Board. DANIEL N. CUNNINGHAM is a founding director of the Company and the Bank. He is also a Director Emeritus of Quinn Group, Inc. and previously served as its Chief Financial Officer. He holds BS and MS degrees in accounting from Fresno State University and is a Certified Public Accountant, which qualifies him as a financial expert on the Company’s Audit Committee. Mr. Cunningham has been a director of the Company since 2000, a director of the Bank since 1979, and has served on the boards of large privately held companies. He has farmed in the San Joaquin Valley for many years and has served in local non-profit organizations. We believe that Mr. Cunningham’s 43 years of board experience in the banking industry, including 15 years as Chairman, along with extensive knowledge of banking laws and regulations combined with his finance and accounting background qualifies him to serve on our Board and as one of our “financial experts”. TOM L. DOBYNS was appointed as director on April 1, 2024, following the completion of the acquisition of CWB, where he previously served as a director since June 2017. He has more than 40 years of bank management experience, including most recently as Chief Executive Officer of Mission Community Bank and President and Chief Executive Officer of American Security Bank. He founded Enthusiology, a managerial and leadership consulting firm specializing in strategic planning, executive coaching and energizing the sales process for banks, credit unions and nonprofit organizations. He is a graduate of the University of Southern California, earning Bachelor of Business Administration and Master of Business Administration degrees. Mr. Dobyns is active on several community-based not-for-profit boards. We believe that Mr. Dobyns extensive experience in bank management serving in various executive management capacities including as Chief Executive Officer, his history in leadership and executive coaching qualifies him to serve on our Board. DANIEL J. DOYLE joined the Company in June of 1998, and served as President and CEO until his retirement in January 2015. Since retiring, Mr. Doyle continued with the Company and the Bank as Chairman of the Boards of each. Prior to coming to the Company, Mr. Doyle served as Regional President for US Bank in Washington State and was the first President and CEO of US Bank of California, both greatly successful tenures leading up to his long career at the Company. Under his leadership the Company experienced phenomenal financial success as one of the safest community banks in California’s San Joaquin Valley. Mr. Doyle’s 52 years of banking experience, his educational achievements, including graduate and undergraduate degrees from the University of Washington, and his solid business values, contributed greatly to the Company’s success. Mr. Doyle’s history of service on the many boards and committees of various banking industry groups spans his entire career. He has a reputation throughout the community for his thoughtful leadership, giving nature, and generous community service. We believe Mr. Doyle’s extensive knowledge of the banking regulations and financial markets, including 52 years of banking experience along with a keen understanding of the markets in which the Company serves qualifies him to serve on our Board. F. T. “TOMMY” ELLIOTT, IV became a Director of the Company and Bank in 2013 following the Company’s acquisition of Visalia Community Bank, where Mr. Elliott served as Chairman of the Board. Mr. Elliott is the owner and Chairman of both Wileman Bros. & Elliott, Inc., a grower, packer and shipper of California fresh citrus, and of Kaweah Container, Inc., a premier independent corrugated manufacturer. Mr. Elliott is a member of the Young Presidents Organization and a former director of the Boys and Girls Clubs of Tulare County. We believe Mr. Elliott’s strong business acumen as well as his banking experience in addition to his knowledge of our geographic markets and our client base well qualifies him to serve on our Board. ROBERT J. FLAUTT is the retired former President, CEO and a Director of Folsom Lake Bank, culminating his long career in the banking industry upon the acquisition by the Company in 2017 when he was appointed as a director of the Company and the Bank. He is a respected business leader in the Greater Sacramento Region and has a prominent record of service on the boards of, or in executive positions with, many local community service and non-profit organizations. We believe Mr. Flautt’s 43 years of experience in the banking industry, including his keen understanding of banking laws and regulations, his high level of understanding of the Board’s roles and responsibilities based on his service on other bank boards, and his extensive knowledge of the greater Sacramento communities qualifies him to serve on our Board.

  3. NOMINEES FOR THE BOARD OF DIRECTORS

    JAMES J. KIM has served as Director and Chief Executive Officer of the Company and Bank since November 1, 2021. Mr. Kim had served as Executive Vice President and Chief Operating Officer of the Bank from February 2019 to November 2021. Mr. Kim joined the Bank as Executive Vice President and Chief Administrative Officer in January 2018 with over 20 years of bank leadership expertise, most recently serving in the positions of controller, chief operations officer, chief financial officer and chief executive officer for financial institutions in the Greater Sacramento Region. He began his career working for an international accountancy and business advisory firm in Sacramento. He obtained his BS in Accountancy and MBA from California State University, Sacramento. In addition to his proven leadership of the Company and his extensive experience in banking laws and regulations, we believe Mr. Kim’s extensive knowledge of the financial markets and the markets in which the Company serves qualifies him to serve as President and CEO of our Company and to serve on our Board. JAMES W. LOKEY was appointed as director on April 1, 2024, following the completion of the acquisition of CWB, where he previously served as a director since 2015. Mr. Lokey has more than 50 years of bank management experience, including Chairman of the Board and Chief Executive Officer of Mission Community Bancorp (2010-2014); President of Rabobank, N.A. (2007-2009); President and Chief Executive Officer of Mid-State Bank & Trust (2000-2007); President and Chief Executive Officer of Downey Savings (1997-1998); Executive Vice President of First Interstate Bank/Wells Fargo Bank (1973-1996) and Past Chairman of California Bankers Association. He has significant ties in the communities of the Central Coast, including serving as a member of the President’s Cabinet at Cal Poly State University in San Luis Obispo; a Director of Cal Poly Corporation and Chairman of its investment committee; and Director of French Hospital Medical Center. Since retiring in 2014, Mr. Lokey has been active as a consultant and featured speaker regarding director education, enterprise risk management and mergers and acquisitions. Mr. Lokey has spent virtually his entire career serving the banking industry, including many years as Chairman and Chief Executive Officer. He is extremely knowledgeable with the San Luis Obispo business community and banking market. We believe that Mr. Lokey’s past banking experience and knowledge, his leadership advocating on behalf of California Banks, and his deep knowledge of the central coast communities, qualifies him to serve on our Board. ANDRIANA D. MAJARIAN has served as a director of the Company and Bank since 2020. Ms. Majarian is an Executive Director of Valley Children’s Healthcare Foundation. Prior to her current role at Valley Children’s Healthcare Foundation, she was Global Head of Customer Success of TELUS Agriculture. TELUS is recognized as one of the largest and most-profitable Ag technology companies in the world. Ms. Majarian oversaw all aspects of TELUS Agriculture’s global business operations throughout North America, South America, Australia, and Europe. Her experience and leadership at TELUS was focused in developing and delivering technology-driven business services and solutions, building globally-connected capabilities across the agricultural, food, and packaged goods industries. For nearly 17 years, Ms. Majarian has been driving organizational growth, leading cross-function teams, and developing a software-as-a-service model, earning the trust of her team and clients as a creative and bottom-line motivated leader. An alumna of California State University, Fresno, she believes in giving back to her community and mentoring the next generation of leaders. She is a past president of the Big Fresno Fair and the Friends of the Fair. We believe that Ms. Majarian’s extensive knowledge and leadership experience within the Agricultural industry, combined with her professional expertise, technology-driven business solutions, and sales and agribusiness background qualifies her to serve on our Board. STEVEN D. McDONALD has served as a director for the Company since its inception in 2000, the Bank since 1990 and currently serves as the Secretary of the Boards of Directors of the Company and the Bank. Mr. McDonald is President of McDonald Properties, Inc., with interests in cattle ranching, mobile home park management and other real estate investments. Mr. McDonald is also the owner/broker of SDM Realty, specializing in ranch brokerage. Mr. McDonald serves his industry and community through many non-profit offices and directorships, both locally and state wide. We believe that Mr. McDonald’s extensive management and leadership experience in the cattle ranching and the real estate industries, his expertise and his experience as a non-profit director, as well as his audit committee leadership qualifies him to serve on our Board. MARTIN E. PLOURD was appointed as a director for the Company and Bank and President of the Company on April 1, 2024, following the completion of the acquisition of CWB, where he previously served as a director since 2011. Mr. Plourd has been in banking for 44 years. From July 2009 to 2011, he has worked as a consultant on engagements with bank strategic planning, acquisitions, and compliance. From July 2005 to July 2009, Mr. Plourd served first as Chief Operating Officer and then President and Director of Temecula Valley Bank, Temecula, California. Prior to that, Mr. Plourd spent 18 years with Rabobank/Valley Independent Bank, El Centro, California. Mr. Plourd is a graduate of Stonier Graduate School of Banking and California State Polytechnic University. He has served on several community/non-profit organizations. Currently serving as a Trustee for the Foundation for Cottage Rehabilitation & Goleta Valley Cottage Hospitals, serving on the Finance, Audit, and Investment committees. Mr. Plourd is a board member for the Scholarship Foundation of Santa Barbara and a member of the Rotary Club of Goleta. He is also an executive board member of California Bankers Association and is an advisory board member for the College of Agriculture at California State Polytechnic University, Pomona (Cal Poly). Through his numerous executive positions Mr. Plourd, he has a substantial financial services’ background, including management, lending, marketing and bank operations. We believe that Mr. Plourd’s experiences qualifies him to serve on our Board and to provide the Company with effective leadership in the conduct of its business and strategic initiatives. DOROTHEA D. SILVA has served as a director for the Company and Bank since 2020. Ms. Silva is a partner with BPM LLP and a certified public accountant (CPA) with over 20 years of tax and accounting experience. Prior to her position with BPM LLP, she was a partner with Avaunt and Chavez Silva & Co. She also held positions at Williams & Olds CPA and Arthur Andersen. Her strengths abound in the diverse industry knowledge of the clients she serves, including financial services, construction, real estate, food processing, manufacturing, retail, professional services and an array of nonprofits. We believe that Ms. Silva’s extensive knowledge and leadership experience combined with her finance and accounting background qualifies her to serve on our Board, the Audit Committee, and as one of our “financial experts.”

  4. NOMINEES FOR THE BOARD OF DIRECTORS

    WILLIAM S. SMITTCAMP has served as a director for the Company since its inception in 2000 and the Bank since 1987. Mr. Smittcamp is President and owner of Wawona Frozen Foods and is involved as a principle in other family related businesses. Wawona Frozen Foods, located in the San Joaquin Valley grows, processes and supplies over 125 million pounds of frozen fruit products worldwide. Mr. Smittcamp is a graduate of California State University, Fresno, and has given major grants to the Honors College, CSUF Ag and the Food Sciences Departments. Mr. Smittcamp serves on and was past chair of the Board of Trustees for Children’s Hospital Central California, is a member of the Board of Governors of Fresno State, and is a Board member of the Garfield Water District. He has also been a leader in state and national organizations such as California League of Food Processors and the American Frozen Food Institute. Mr. Smittcamp is a long-standing member of the Board of Directors of our Company and Bank. We believe Mr. Smittcamp’s strong business experience and leadership, his extensive network of business relationships within our market area, his understanding of the agricultural and food service industries, and his high level of understanding of the Board’s roles and responsibilities based on his service on our Board, qualifies him to serve on our Board. KIRK B. STOVESAND was appointed as director on April 1, 2024, following the completion of the acquisition of CWB, where he previously served as a director since 2003. He is a partner of Walpole & Co., a Certified Public Accounting and Consulting firm founded in 1974. Mr. Stovesand received a Bachelors Degree in Business Economics from the University of California Santa Barbara, a Masters Degree in Taxation from Golden Gate University, and a Master Certificate in Global Business Management from George Washington University. He is also a Certified Financial Planner and has been on the boards of many profit and nonprofit organizations. Mr. Stovesand is a member of the American Institute of Certified Public Accountants. Mr. Stovesand has a broad financial background and serves as a partner of an accounting and consulting firm. He has a CPA, a CFP, and a Masters in taxation. Mr. Stovesand is active on boards of for-profit and not-for-profit organizations. We believe that Mr. Stovesand’s background qualifies him to serve on our Board, the Audit Committee, and as one of our “financial experts.” The Board of Directors recommends the election of each nominee. The proxy holders intend to vote all proxies they hold in favor of the election of each of the nominees. If no instruction is given, the proxy holders intend to vote FOR each nominee listed. The following table provides information regarding the members of our Board of Directors, including certain types of knowledge, skills, experiences or attributes possessed by one or more of our directors which our Board of Directors believes are relevant to our business or industry. The table does not encompass all of the knowledge, skills, experiences or attributes of our directors, and the fact that a particular knowledge, skill, experience or attribute is not listed does not mean that a director does not possess it. In addition, that absence of a particular knowledge, skill, experience or attribute with respect to any of our directors does not mean that the director in question is unable to contribute to the decision-making process in that area. The type and degree of knowledge, skill, experience or attribute listed below may vary among the directors.

  5. NOMINEES FOR THE BOARD OF DIRECTORS

    | | | Bartlein | Chadwick | Cunningham | Dobyns | Doyle | Elliott | Flautt | Kim | Lokey | Majarian | McDonald | Plourd | Silva | Smittcamp | Stovesand | | Knowledge, Skills, and Experience | | | | | | | | | | | | | | | | | | | Public Company Board Experience | X | X | X | X | X | X | X | X | X | X | X | X | X | X | X | | | Financial | X | X | X | X | X | X | X | X | X | X | X | X | X | X | X | | | Risk Management | X | | X | X | X | X | X | X | X | | X | X | | X | X | | | Accounting | X | | X | | X | X | | X | X | X | X | X | X | | X | | | Corporate Governance/Ethics | X | | X | X | X | X | X | X | X | X | X | X | X | X | X | | | Legal/Regulatory Compliance | X | | X | X | X | | X | X | X | X | X | X | X | | X | | | HR/Compensation | X | X | X | X | X | X | | X | | X | | X | X | | | | | Executive Experience | X | X | X | X | X | X | X | X | X | X | X | X | | X | | | | Banking Operations | X | X | | X | X | X | X | X | X | | | X | X | | | | | Strategic Planning/Oversight | X | X | X | X | X | X | X | X | X | X | X | X | X | X | X | | | Technology | X | | | X | X | X | | X | | X | | X | X | | | | | Mergers and Acquisitions | X | X | X | X | X | X | X | X | X | X | X | X | X | X | X | | | Board Tenure | | | | | | | | | | | | | | | | | | Years | * | * | 24 | * | 24 | 11 | 6 | 3 | * | 4 | 24 | * | 4 | 24 | * | | | * Directors were appointed on April 1, 2024 | | | | | | | | | | | | | | | | | The following table summarizes the diversity of our Board. | | | | | | | | | | | | | | | | | | Demographics | | | | | | | | | | | | | | | | | | | Race/Ethnicity | | | | | | | | | | | | | | | | | | African American | | | | | | | | | | | | | | | | | | Asian/Pacific Islander | | | | | | | | X | | | | | X | | | | | White/Caucasian | X | X | X | X | X | X | X | | X | X | X | X | | X | X | | | Hispanic/Latino | | | | | | | | | | | | | | | | | | Native American | | | | | | | | | | | | | | | | | | Gender | | | | | | | | | | | | | | | | | | Female | | X | | | | | | | | X | | | X | | | | | Male | X | | X | X | X | X | X | X | X | | X | X | | X | X |

  6. The Principal Elements of Pay

    As discussed later in this CD&A, the Company also provides the NEOs with retirement benefits, limited perquisites and other personal benefits, as well as severance and change-in-control protection.

  7. Our Decision Making Process

    Our Decision Making Process The Compensation Committee oversees the executive compensation program for our NEOs. The Compensation Committee is comprised of independent, non-employee members of the Board of Directors (“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 the Committee’s charter, which is available on the Company’s website at www.cvcb.com. The Role of the Compensation Committee. The Compensation Committee periodically reviews, assesses and monitors the performance, and regularly reviews the design and function, of the Company’s incentive compensation arrangements to ensure that any risk-taking incentives are consistent with regulatory guidance and the safety and soundness of the organization. The Compensation Committee is responsible for assessing and approving the total compensation paid to the CEO, NEOs, and all other executive officers. The Compensation Committee is responsible for determining whether the compensation paid to each of these executives is fair, reasonable, and competitive, and whether the compensation program serves the interests of the Company’s shareholders. The Role of Management. The CEO does not participate in the Compensation Committee’s determination of his own compensation; however, he makes recommendations to the Compensation Committee for each of the other NEOs. The CEO bases these recommendations on his assessment of each executive’s individual performance, as well as the achievement of the overall Company goals for the fiscal year. The Compensation Committee reviews the CEO’s recommendations, makes adjustments as it determines appropriate, and approves compensation at its sole discretion. The Role of the Independent Consultant. The Compensation Committee periodically engages an independent compensation consultant to provide expertise on competitive pay practices and program design. Pursuant to authority granted to it under its charter, the Compensation Committee retained Pearl Meyer & Partners (“Pearl Meyer”) as its independent consultant for 2022 and 2024. Pearl Meyer reports directly to the Compensation Committee and does not provide any additional services to management. The Compensation Committee has conducted an independence assessment of Pearl Meyer in accordance with SEC and Nasdaq requirements. The Role of the Peer Group and Benchmarking. The Compensation Committee strives to set a competitive level of total compensation for each NEO as compared with executives in similar positions at peer companies. In March 2022, the Compensation Committee engaged Pearl Meyer to assist with a comprehensive review of compensation for our executives. The Compensation Committee utilized data and recommendations obtained from Pearl Meyer for establishing 2023 compensation opportunities for our NEOs. In consultation with Pearl Meyer, the Compensation Committee approved a compensation peer group for the market analysis based on the following selection criteria: (1) commercial banks; (2) within 0.5 to 2.5 times the Company’s asset size; and (3) headquartered in California. These criteria resulted in a peer group consisting of the following 12 financial institutions:

  8. Annual Incentive Compensation

    Annual Incentive Compensation The NEOs have the opportunity to earn a performance-based annual incentive award. Actual award payouts depend on the achievement of pre-established performance objectives. Target annual award opportunities are expressed as a percentage of base salary and were established according to the NEO’s level of responsibility and his or her ability to impact overall results. The Compensation Committee also considers market data in setting target award amounts. The 2023 target award opportunities were as follows:

  9. Annual Incentive Compensation

    | NEO | Target Award Opportunity (as a % of Base Salary) | Target Award Opportunity ($) | | James J. Kim (1) | 50% | $262,500 | | Shannon R. Livingston (2) | 50% | 150,000 | | Blaine C. Lauhon (2) | 45% | 121,500 | | Patrick A. Luis (2) | 35% | 92,750 | | Jeffrey M. Martin (2) | 35% | 82,250 |

  10. Annual Incentive Compensation

    (1) As provided in his Employment Agreement (2) As provided in the Senior Management Incentive Plan The annual performance-based incentives are designed to focus the NEOs on the Company’s performance objectives related to asset quality, growth, and profitability. Actual awards are based on the achievement of the predetermined performance objectives and may be delivered as a mix of cash and unrestricted shares of the Company’s common stock.

  11. 2023 Performance Objectives and Results

    | | Level of Performance | | | Actual Results | | | Performance Objectives | Threshold (50% payout) | Target (100% payout) | Maximum (150% payout) | Actual 2023 Performance | % of Payout Achieved | | Net Consolidated Income (1) | $25,686 | $30,219 | $34,752 | $26,429 | 58.20% | | YTD Average Loans Outstanding | $1,163,414 | $1,292,682 | $1,421,951 | $1,263,226 | 88.60% | | YTD Average Total Deposits (2) | $1,938,872 | $2,154,302 | $2,369,732 | $2,063,257 | 78.90% | | Classified/Criticized Loans/Gross Loans | 8.50% | 7.50% | 6.50% | 2.28% | 150.00% | | NIE/Average Assets (1) | 2.59% | 2.39% | 2.19% | 2.21% | 144.66% | | Peer Performance (ROA) Percentile | 50th% | 60th% | 80th% | 61.54% | 103.80% | | Leadership & Shareholder Value | Qualitative Assessment | | | | 150.00% |

  12. Annual Incentive Payout Results

    Annual Incentive Payout Results Based on the performance results described above, the following table lists the actual annual incentive awards paid to the NEOs for 2023:

  13. Annual Incentive Payout Results

    | NEO | Actual Payout (as a % of Target opportunity) | Actual Payout | | | | | | Total Award Value | Cash Payout | Value of Restricted Shares (1) | | James J. Kim | 99.94% | $262,353 | $209,882 | $52,471 | | Shannon R. Livingston | 106.00% | $159,000 | $159,000 | — | | Blaine C. Lauhon | 100.00% | $121,500 | $121,500 | — | | Patrick A. Luis | 106.00% | $98,315 | $98,315 | — | | Jeffrey M. Martin | 100.00% | $82,250 | $82,250 | — |

  14. Annual Incentive Payout Results

    (1) Mr. Kim received 1,485 shares of Restricted Stock based on the closing stock price on January 17, 2024 of $19.80.

  15. Long-Term Equity Incentive Compensation

    Long-Term Equity Incentive Compensation The Company’s compensation philosophy encourages ownership of the Company’s Common Stock to retain and motivate key executives and to provide a direct link with the interests of the shareholders of the Company. In general, stock- based award grants are determined based on (i) the impact the executive may have had on the Bank’s and Company’s earnings and stock price, (ii) the ability of the executive to provide enhanced opportunities for the success of the Bank and Company, (iii) extraordinary deeds performed that warrant extraordinary rewards, (iv) prior award levels for the executive, (v) total awards received to date by the individual executives, (vi) the total stock-based award to be made and the executive’s percentage participation in that award, (vii) the executive’s direct ownership of Company’s Common Stock, (viii) the number of awards vested and non-vested, and (ix) the options outstanding as a percentage of total shares outstanding. Stock-based awards are issued at the discretion of the Board of Directors. Periodically the Board of Directors determines a pool of stock- based awards to be granted and management makes recommendations to the Board of Directors to determine how many are granted to executive officers and others in the Company, and the directors make a final approval of the grants. The CEO and other NEOs were granted restricted stock awards during the year ended December 31, 2023 as follows:

  16. Long-Term Equity Incentive Compensation

    | Name | Grant Date | Number of Shares of Stock Granted (#) | Market Value of Shares of Stock at Grant Date ($) | | James J. Kim | 2/01/2023 | 5,157(1) | $131,250 | | Shannon R. Livingston | 5/17/2023 | 6,331(2) | 88,000 | | Blaine C. Lauhon | 5/17/2023 | 2,159(2) | 30,000 | | Patrick A. Luis | 5/17/2023 | 4,317(2) | 60,000 | | Jeffrey M. Martin | 5/17/2023 | 5,036(2) | 70,000 |

  17. Long-Term Equity Incentive Compensation

    (1) Such shares are subject to forfeiture during the vesting period, which is 20% per year, with vesting dates of February 1, 2024, February 1, 2025, February 1, 2026, February 1, 2027, and February 1, 2028. (2) Such shares are subject to forfeiture during the vesting period, which is 33 1/3% per year, with vesting dates of May 17, 2024, May 17, 2025, and May 17, 2026. Additional information on long-term awards for executive officers is shown in the “Outstanding Equity Awards at Fiscal Year-End Table.”

  18. Salary Continuation Agreements

    Salary Continuation Agreements Messrs. Kim, Lauhon, and Luis are parties to salary continuation agreements that will provide for an annual payment for a period of time following retirement from service as an executive of the Bank. The salary continuation agreements terminate upon the executives’ death prior to retirement, voluntary termination of service prior to retirement, or involuntary termination of service for cause. The salary continuation agreements provide for payment of a lump sum in the event of a change of control of the Company, defined as the cumulative transfer of more than 50% of the voting stock of the Company. Each person’s annual benefit is determined at the time of retirement, on the basis of (i) the individual’s age upon retirement, (ii) the percentage of benefit vested upon retirement, and (iii) the maximum annual benefit assigned in the individual’s Salary Continuation Agreements. Additional information on the details of each participant’s benefit under the agreements is shown in the “Pension Benefits Table” and the “Potential Payments Upon Termination or Change in Control.” The Salary Continuation Agreements and the termination provisions under the CEO’s Employment Agreement are subject to non-competition covenants.

  19. Employment Agreements

    Employment Agreements CEO The Company has an employment agreement with James J. Kim, who was appointed on November 1, 2021 (“Effective Date”) as the Company’s President and CEO. The term of agreement commenced on the Effective Date and continues through October 31, 2024 (“Initial Term”). At the end of the Initial Term, this agreement renews automatically for one-year terms, unless terminated by either party not later than sixty days prior to expiration. Under the employment agreement, the Board of Directors sets Mr. Kim’s salary for each year. Under the agreement, Mr. Kim is eligible to receive incentive compensation, based on the achievement of certain annual performance goals. The goals and the target amount of the incentive opportunity are established at the beginning of each year by the Board of Directors, and the evaluation of the achievement of the goals and the actual amount of annual incentive compensation payable is determined by the Board of Directors following the conclusion of the year. For 2023, Mr. Kim’s incentive compensation was determined as described above under Incentive Compensation. The agreement also provides for three annual grants of restricted stock, one of which was made in 2023 and one in 2022. In each year, Mr. Kim is to receive restricted stock with each such grant having a value of up to twenty-five percent of Mr. Kim’s salary on the date of grant, as reasonably determined by the Board. The employment agreement with Mr. Kim also provides for (i) a Bank-paid membership in a local country club; (ii) an automobile allowance of $1,500 per month; (iii) participation in medical, dental and similar plans offered by the Bank for Mr. Kim and his dependents, and (iv) twenty days of vacation annually. See the “Summary Compensation Table” for details. Under the terms of the agreement, Mr. Kim is entitled to certain benefits for involuntary termination for reasons other than cause. •In the event that, within twelve (12) months following a Change in Control (as defined in the agreement), either (a) Mr. Kim is terminated without cause or (b) Mr. Kim terminates his agreement and his employment with for Good Reason (as defined in the agreement), or (c) his agreement and employment is terminated as a result of a nonrenewal notice, Mr. Kim would be eligible to receive a lump sum termination payment equal to two times the average annual total cash compensation paid to Mr. Kim during the most recent three fiscal years (“average annual cash compensation amount”). •If the Company terminates the employment agreement without cause, Mr. Kim is entitled to receive an amount equal to his average annual cash compensation amount at the time of termination payable in 12 monthly payments, provided that if Mr. Kim obtains other comparable employment within the 12 month period, payments will cease. Mr. Kim also has an Executive Salary Continuation Agreement with the Bank. In the event of involuntary termination for reasons other than cause he is entitled to receive the following: •Change in control lump sum payment equal to the present value of 100% of the normal retirement benefit that he would have received had he been employed by the Bank until March 1, 2038. His change in control benefit as of December 31, 2023 is estimated at $1,028,000. In the event of a termination of Mr. Kim by the Company “for cause”, Mr. Kim would forfeit benefits under the Executive Salary Continuation Agreement. Other NEOs The Company has entered into employment agreements with the other NEOs. Each of these employment agreements contain similar terms. In addition to base salaries each executive officer is eligible to receive an annual incentive bonus under the Company Senior Management Incentive Plan which provides for an annual incentive bonus with a target amount as a percentage of the executive officer’s base salary as set forth in each respective employment agreement. Each executive officer will be provided with a company automobile or an automobile allowance as set forth in each respective employment agreement. Under the executive employment agreements the executive officer’s employment may be terminated for “cause” (as defined in the agreement). In the event of a “change in control” the executive will be entitled to a lump sum payment equal to the average monthly total cash compensation paid to executive during the most recent three previous years of employment or in the case of former employees of CWB three years from the effective date of the agreement (or in either case, a shorter period if less than three years) (“average monthly cash compensation”) multiplied by 18. Under the employment agreements the executive may terminate the agreement for “good reason” (as defined in the agreement). If the employer terminates the employment agreement without cause or the executive terminates the employment agreement for “good reason” (and provided there is not a “change in control”) then the executive will be entitled to monthly payments equal to the average monthly cash compensation for 12 months (or if earlier, until the executive obtains comparable employment as defined in the agreement).

  20. Termination of Employment and Change in Control Provisions

    Termination of Employment and Change in Control Provisions The Compensation Committee believes that a change in control transaction, or potential change in control transaction, would create uncertainty regarding the continued employment of our executives. This is because many change in control transactions result in significant organizational changes, particularly at the senior executive level. In order to encourage our executives to remain employed with us during an important time when their continued employment in connection with or following a transaction is often uncertain and to help keep our executives focused on our business rather than on their personal financial security, we believe that providing certain of our executives with severance benefits upon certain terminations of employment is in the best interests of our Company and our shareholders. The NEOs have specific change of control and severance provisions in their employment agreements and if applicable, their Executive Salary Continuation Agreement with the Bank. We have disclosed the severance and/or change in control payouts that would be payable to each Named Executive Officer if the triggering event occurred on December 31, 2023, in the “Potential Payments Upon Termination or Change in Control” section in this proxy statement.

  21. SUMMARY COMPENSATION TABLE

    SUMMARY COMPENSATION TABLE The following table sets forth information regarding compensation earned by the individuals who served as CEO and CFO, and the other three highest paid executive officers (Named Executive Officers or NEOs) for services rendered to the Company for the fiscal years ended December 31, 2023, 2022, and 2021. Bonuses are paid under the Company’s applicable incentive compensation guidelines and are generally paid in the year following the year in which the bonus is earned.

  22. SUMMARY COMPENSATION TABLE

    | Name and Principal Position | Year | Salary($) | Stock Awards ($) (5) | Non-Equity Incentive Plan Compen-sation (6) | Change in Pension Value($) (7) | All Other Compensation ($) | Total ($) | | James J. Kim, President and Chief Executive Officer (1) | 2023 | 509,615 | $131,246 | $209,882 | $5,779 | $77,464(8) | $933,986 | | | 2022 | 425,000 | 106,243 | 251,696 | — | 79,875 | $862,814 | | | 2021 | 277,365 | 20,000 | 151,247 | — | 79,113 | $527,725 | | Shannon R. Livingston, Executive Vice President and Chief Financial Officer (2) | 2023 | 262,644 | 88,000 | 159,000 | — | 23,870(9) | $533,514 | | | 2022 | — | — | — | — | — | $— | | | 2021 | — | — | — | — | — | $— | | Blaine C. Lauhon, Executive Vice President, Chief Banking Officer (3) | 2023 | 265,692 | 30,000 | 121,500 | 2,051 | 61,872(10) | $481,115 | | | 2022 | 240,923 | 30,000 | 110,558 | — | 62,360 | $443,841 | | | 2021 | 210,539 | 20,000 | 84,699 | — | 56,266 | $371,504 | | Patrick A. Luis, Executive Vice President, Chief Credit Officer | 2023 | 271,351 | 60,000 | 98,315 | 190 | 48,375(11) | $478,231 | | | 2022 | 246,904 | 30,000 | 113,299 | — | 36,995 | $427,198 | | | 2021 | 239,971 | 20,000 | 117,186 | — | 30,240 | $407,397 | | Jeffrey M. Martin, Executive Vice President Market Executive (4) | 2023 | 231,923 | 70,000 | 82,250 | — | 56,473(12) | $440,646 | | | 2022 | 215,000 | 20,000 | 91,803 | — | 60,293 | $387,096 | | | 2021 | — | — | — | — | — | $— |

  23. SUMMARY COMPENSATION TABLE

    (1)Mr. Kim was named as Director, President and Chief Executive Officer of the Company and Bank on November 1, 2021. Prior becoming CEO, he served as Executive Vice President and Chief Operating Officer of the Bank. (2)Ms. Livingston was hired as Executive Vice President and Chief Financial Officer of the Company and Bank on February 14, 2023. (3)Mr. Lauhon was promoted from Chief Banking Officer to Chief Administrative Officer on April 1, 2024. (4)Mr. Martin was hired April 2022 as Executive Vice President, Regional Executive, and promoted to Chief Banking Officer on April 1, 2024. (5)The amounts shown reflect the applicable full grant-date fair values for stock awards in accordance with FASB ASC Topic 718 (excluding the effect of forfeitures), and are reported for the fiscal year during which the stock awards were issued. Additional discussion is set out in Note 14 to the audited consolidated financial statements included in the Company’s Annual Report that accompanies this proxy statement and incorporated by reference. (6)The amounts shown for 2023 reflect payments made under the terms of Mr. Kim’s incentive provisions of his employment agreements, and for the other NEOs the Senior Management Incentive Plan for 2023 performance, and in each case paid in the first quarter of 2024. The incentive awards were paid in cash and shares of the Company’s common stock for the CEO and in cash for all other NEOs. See the “Compensation Discussion and Analysis” section for the allocation of cash and stock. (7)The amounts shown for 2023 represent only the aggregate change in the actuarial present value of the accumulated benefit under the Company’s Salary Continuation Agreements with certain executives from December 31, 2022 to December 31, 2023. The amounts were determined using interest rate and mortality rate assumptions consistent with those used in the Company’s consolidated financial statements and include amounts which the Named Executive Officer may not currently be entitled to receive because such amounts are not vested. Assumptions used in the calculation of these amounts are included in Note 14 to the Company’s consolidated financial statements included in the Company’s Annual Report that accompanies this proxy statement. Due to an increase in the discount rate used to compute the present value factor in 2022 and 2021, there was no increase in pension value during 2022 or 2021. (8)Includes for 2023, $18,000 auto allowance, $25,884 group insurance benefit allowance, $26,500 contributed to the Bank’s 401(k) Plan for Mr. Kim’s account, and $7,080 country club membership dues. (9)Includes for 2023, $10,000 auto allowance, $5,007 group insurance benefit allowance, $8,863 contributed to the Bank’s 401(k) Plan for Ms. Livingston’s account. (10)Includes for 2023, $17,000 auto allowance, $12,478 group insurance benefit allowance, $26,500 contributed to the Bank’s 401(k) Plan for Mr. Lauhon’s account, and $5,894 country club membership dues. (11)Includes for 2023, $11,500 auto allowance, $10,375 group insurance benefit allowance, and $26,500 contributed to the Bank’s 401(k) Plan for Mr. Luis’ account. (12)Includes for 2023, $17,000 auto allowance, $24,114 group insurance benefit allowance, and $15,359 contributed to the Bank’s 401(k) Plan for Mr. Martin’s account.

  24. Grants of Plan-Based Awards Table

    Grants of Plan-Based Awards Table The following table provides information on the potential performance-based awards available if defined performance objectives were achieved in 2023 for each of the Company’s Named Executive Officers, and stock options or other stock awards granted to the Named Executive Officers for the year ended December 31, 2023:

  25. Grants of Plan-Based Awards Table

    | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (1) | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant date Fair Value of Stock and Option Awards ($) | | Name | Threshold ($) | Target ($) | Maximum ($) | Threshold ($) | Target ($) | Maximum ($) | | | | James J. Kim (2) | $105,000 | $210,000 | $315,000 | $26,250 | $52,500 | $78,750 | — | $— | | Shannon R. Livingston (3) | 75,000 | 150,000 | 225,000 | — | — | — | — | — | | Blaine C. Lauhon (3) | 60,750 | 121,500 | 182,250 | — | — | — | — | — | | Patrick A. Luis (3) | 46,375 | 92,750 | 139,125 | — | — | — | — | — | | Jeffrey M. Martin (3) | 41,125 | 82,250 | 123,375 | — | — | — | — | — |

  26. Grants of Plan-Based Awards Table

    (1)These potential performance-based awards were established under the terms of Mr. Kim’s incentive provisions of his employment agreement, and for the other NEOs the 2023 Senior Management Incentive Plan if the target level of performance was achieved in 2023 as described further in the “Compensation Discussion and Analysis.” They do not represent the actual payments made to the Named Executive Officers. The payments made for actual performance in 2023 are reflected in the Summary Compensation Table. (2)The incentive compensation for Mr. Kim was payable 80% in cash and 20% in common stock for 2023. For further information about Mr. Kim’s incentive compensation, see the discussion under “Compensation Discussion and Analysis - Components of Executive Compensation.” (3)Under the 2023 Senior Management Incentive Plan, the non-CEO NEOs were eligible to receive incentive compensation based on the achievement of certain annual performance goals. The performance based awards for 2023 (denominated in dollars) were payable 100% in cash. For further information about their incentive compensation, see the discussion under “Compensation Discussion and Analysis - Components of Executive Compensation.”

  27. Outstanding Equity Awards at Fiscal Year-End

    Outstanding Equity Awards at Fiscal Year-End The following table shows outstanding equity awards for the Named Executive Officers with outstanding options classified as exercisable and unexercisable, and unvested restricted stock, as of December 31, 2023.

  28. Outstanding Equity Awards at Fiscal Year-End

    | Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares of Stock That Have Not Vested (#) | Market Value of Shares of Stock That Have Not Vested ($) (6) | | James J. Kim | | | | | 321(1) | $7,174 | | | | | | | 3,761(2) | 84,058 | | | | | | | 5,157(3) | 115,259 | | Shannon R. Livingston | | | | | 6,331(5) | 141,498 | | Blaine C. Lauhon | | | | | 321(1) | 7,174 | | | | | | | 1,244(4) | 27,803 | | | | | | | 2,159(5) | 48,254 | | Patrick A. Luis | | | | | 321(1) | 7,174 | | | | | | | 1,244(4) | 27,803 | | | | | | | 4,317(5) | 96,485 | | Jeffrey M. Martin | | | | | 1,244(4) | 27,803 | | | | | | | 5,036(5) | 112,555 |

  29. Outstanding Equity Awards at Fiscal Year-End

    (1) Such shares are subject to forfeiture during the vesting period, which is 33 1/3% per year, with a final vesting date of May 19, 2024. (2) Such shares are subject to forfeiture during the vesting period, which is 20% per year, with vesting dates of February 1, 2024, February 1, 2025, February 1, 2026, and February 1, 2027. (3) Such shares are subject to forfeiture during the vesting period, which is 20% per year, with vesting dates of February 1, 2024, February 1, 2025, February 1, 2026, February 1, 2027 and February 1, 2028. (4) Such shares are subject to forfeiture during the vesting period, which is 33 1/3% per year, with vesting dates of June 15, 2024, and June 15, 2025. (5) Such shares are subject to forfeiture during the vesting period, which is 33 1/3% per year, with vesting dates of May 17, 2024, May 17, 2025 and May 17, 2026. (6) Market value of shares that have not vested as of fiscal year end at December 31, 2023 was calculated using the closing price per share of the Company’s Common Stock on the Nasdaq Capital Market on that date of $22.35.

  30. Option Exercises and Stock Vested

    Option Exercises and Stock Vested The following table shows option exercises and stock awards vested for the Named Executive Officers during the year ended December 31, 2023.

  31. Option Exercises and Stock Vested

    | | 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) | | James J. Kim | — | $— | 208 | $5,073 | | | — | $— | 940 | $23,923 | | | — | — | 322 | 4,624 | | Blaine C. Lauhon | — | — | 322 | 4,624 | | | — | — | 622 | 10,058 | | Patrick A. Luis | — | $— | 322 | $4,624 | | | — | — | 622 | 10,058 | | | — | — | 253 | 4,124 | | Jeffrey M. Martin | — | — | 622 | 10,058 |

  32. Option Exercises and Stock Vested

    (1)Value realized on stock awards vested is based on the market value of the underlying shares on the vesting date.

  33. Pension Benefits

    Pension Benefits The following table discloses the estimated present value (based on a discount rate of 4.91%) of total benefits if the participant retires at normal retirement age.

  34. Pension Benefits

    | Name | Plan Name | Number of Years Credited Service (#) | Present Value of Accumulated Benefit ($) | | James J. Kim | Executive Salary Continuation Agreement (2) | N/A | $1,028,000(1) (6) | | | Endorsement Method Split Dollar Plan (2) | N/A | See Note(6) | | Blaine C. Lauhon | Executive Salary Continuation Agreement (3) | N/A | 486,000(1) (7) | | | Endorsement Method Split Dollar Plan (4) | N/A | See Note(7) | | Patrick A. Luis | Executive Salary Continuation Agreement (5) | N/A | 188,000(1) (8) | | | Endorsement Method Split Dollar Plan (5) | N/A | See Note(8) |

  35. Pension Benefits

    (1)The method used to calculate the retirement benefit, based on assumptions used for financial reporting purposes under generally accepted accounting principles, is a present value calculation using a discount rate of 4.91%. See Notes Summary of Significant Accounting Policies and Share-Based Compensation in the Company’s consolidated financial statements included in the Company’s Annual Report that accompanies this proxy statement and is incorporated by reference for further details on Executive Salary Continuation Plans. (2)Effective April 1, 2020. (3)Effective August 10, 2017. (4)Effective July 1, 2012. (5)Effective July 1, 2021. (6)Under the terms of Mr. Kim’s Salary Continuation Agreement for normal retirement, if he retires on or after March 1, 2038, he is eligible to receive an annual benefit equal to $80,000 per year, payable in monthly installments, over a 15 year period which increases for inflation at 3% each year. If Mr. Kim retires on or after March 1, 2033 and prior to March 1, 2038, he is eligible for an early retirement benefit. The amount of early retirement benefit would be based on the present value of the early retirement benefit payments, payable over 15 years in monthly installments, and increased 3% annually for inflation. In the event of death, the Salary Continuation Agreement immediately terminates. Additionally, under the terms of Mr. Kim’s Life Insurance Endorsement Method Split Dollar Plan, his beneficiaries are entitled to receive certain benefits in the event of his death. Should he be employed by the Bank at the time of death, his beneficiaries are entitled to a lump sum payment equal to the present value of the retirement benefit provided for in the Executive Salary Continuation Agreement or 100% of the total insurance policy proceeds, whichever amount is less. Should he be retired from the Bank at the time of death, his beneficiaries are entitled to a lump sum payment equal to the present value of 100% of the sum of all remaining payments that would have been made under his Executive Salary Continuation Agreement or 100% of the total proceeds, whichever amount is less. (7)Under the terms of Mr. Lauhon’s Salary Continuation Agreement for normal retirement, if he retires on or after March 1, 2028, he is eligible to receive an annual benefit equal to $60,000 per year, payable in annual installments, over a 10 year period. If Mr. Lauhon retires on or after January 1, 2015 and prior to February 6, 2028, he is eligible for an early retirement benefit. The amount of early retirement benefit would be based on the present value of the early retirement benefit payments, payable over 10 years in annual installments. In the event of death, the Salary Continuation Agreement immediately terminates. Additionally, under the terms of Mr. Lauhon’s Life Insurance Endorsement Method Split Dollar Plan, his beneficiaries are entitled to receive certain benefits in the event of his death. Should he be employed by the Bank at the time of death, his beneficiaries are entitled to a lump sum payment equal to the present value of the retirement benefit provided for in the Executive Salary Continuation Agreement or 100% of the total insurance policy proceeds, whichever amount is less. Should he be retired from the Bank at the time of death, his beneficiaries are entitled to a lump sum payment equal to the present value of 100% of the sum of all remaining payments that would have been made under her Executive Salary Continuation Agreement or 100% of the total proceeds, whichever amount is less. (8)Under the terms of Mr. Luis’ Salary Continuation Agreement for normal retirement, if he retires on or after October 5, 2025, he is eligible to receive an annual benefit equal to $40,000 per year, payable in monthly installments, over a 5 year period which increases for inflation at 3% each year. In the event of death, the Salary Continuation Agreement immediately terminates. Additionally, under the terms of Mr. Luis’ Life Insurance Endorsement Method Split Dollar Plan, his beneficiaries are entitled to receive certain benefits in the event of his death. Should he be employed by the Bank at the time of death, his beneficiaries are entitled to a lump sum payment equal to the present value of the retirement benefit provided for in the Executive Salary Continuation Agreement or 100% of the total insurance policy proceeds, whichever amount is less. Should he be retired from the Bank at the time of death, his beneficiaries are entitled to a lump sum payment equal to the present value of 100% of the sum of all remaining payments that would have been made under his Executive Salary Continuation Agreement or 100% of the total proceeds, whichever amount is less.

  36. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control The NEO’s employment agreements and those NEOs that have Salary Continuation Agreement require the Company to provide compensation to the NEOs in the event of a termination of employment or a change in control of the Company. Under the Executive Salary Continuation Agreement for Mr. Luis, there is no benefit if the executive terminates employment for any reason or is disabled prior to retirement. The CEO has a Salary Continuation Agreement that is eligible for early termination benefits beginning on or after March 1, 2033, payable at normal retirement age. Mr. Lauhon has a Salary Continuation agreement that is eligible for early termination benefits beginning on or after January 1, 2015. Involuntary termination means the executive’s employment terminates by action of the Bank prior to retirement, and such termination of employment is not for cause. In the event the executive’s employment terminates for cause prior to retirement, their Executive Salary Continuation Agreement immediately terminates and the executive forfeits all benefits under the agreement. Upon a change in control, the Bank shall pay the executive a lump sum payment equal to the present value of 100% of the benefit that the executive would have received had the executive been employed until normal retirement. The employment agreements for the Executive Vice Presidents provides for a lump sum payment equal to the average monthly total cash compensation paid to the Executive during the most recent three previous years multiplied by 18 in the event of a change in control. In the event the Executive has been employed less than three years from the effective date of the agreement, the monthly cash compensation amount shall be determined by using the Executive’s compensation history from the effective date. In the event of termination of the employment agreement by the Executive for good reason or by the Company without cause, the Executive shall be entitled to received monthly severance payments equal to 12 months. In the event of dissolution or liquidation of the Company or a merger or change in control, unexercised stock options and unvested restricted stock vest immediately. Set out below in tabular form are estimated payments that would have been made to each NEO had a termination event or change in control event occurred at December 31, 2023. The discount factor used for all net present value calculations was 4.91%.

  37. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control

  38. Potential Payments Upon Termination or Change in Control

    | Name/Event | | Employment Agreement | Accelerate Restricted Stock | Life Insurance | Salary Continuation | Total | | James J. Kim | | | | | | | | | Voluntary termination for good reason | $625,758 | $— | $— | $— | $625,758 | | | Involuntary termination for cause | — | — | — | — | — | | | Involuntary termination without cause | 625,758 | — | — | — | 625,758 | | | Change of control | 1,251,517 | 206,491 | — | 1,028,000 | 2,486,008 | | | Death | — | — | 205,481 | — | 205,481 | | | Disability | — | — | — | — | — | | | Retirement | — | — | — | — | — | | Shannon R. Livingston | | | | | | | | | Voluntary termination for good reason | 481,879 | — | — | — | 481,879 | | | Involuntary termination for cause | — | — | — | — | — | | | Involuntary termination without cause | 481,879 | — | — | — | 481,879 | | | Change of control | 722,818 | 141,498 | — | — | 864,316 | | | Death | — | — | — | — | — | | | Disability | — | — | — | — | — | | | Retirement | — | — | — | — | — | | Blaine C. Lauhon | | | | | | | | | Voluntary termination for good reason | 344,637 | — | — | — | 344,637 | | | Involuntary termination for cause | — | — | — | — | — | | | Involuntary termination without cause | 344,637 | — | — | — | 344,637 | | | Change of control | 516,956 | 83,231 | — | 486,000 | 1,086,187 | | | Death | — | — | 391,432 | — | 391,432 | | | Disability | — | — | — | — | — | | | Retirement | — | — | — | 486,000 | 486,000 | | Patrick A. Luis | | | | | | | | | Voluntary termination for good reason | 362,342 | — | — | — | 362,342 | | | Involuntary termination for cause | — | — | — | — | — | | | Involuntary termination without cause | 362,342 | — | — | — | 362,342 | | | Change of control | 543,513 | 131,462 | — | 188,000 | 862,975 | | | Death | — | — | 106,100 | — | 106,100 | | | Disability | — | — | — | — | — | | | Retirement | — | — | — | — | — | | Jeffrey M. Martin | | | | | | | | | Voluntary termination for good reason | 284,339 | — | — | — | 284,339 | | | Involuntary termination for cause | — | — | — | — | — | | | Involuntary termination without cause | 284,339 | — | — | — | 284,339 | | | Change of control | 426,509 | 140,358 | — | — | 566,867 | | | Death | — | — | — | — | — | | | Disability | — | — | — | — | — | | | Retirement | — | — | — | — | — |

  39. Pay Versus Performance

    Pay Versus Performance

  40. Pay Versus Performance

    | Fiscal Year | Summary Compensation Table Total for PEO (1) ($) | “Compensation Actually Paid” to PEO (1) (4) ($) | Summary Compensation Table Total for PEOII (2) ($) | “Compensation Actually Paid” to PEOII (2) (4) ($) | Average Summary Compensation Table Total for Non-PEO NEOs (3) ($) | Average “Compensation Actually Paid” to Non-PEO NEOs (3) ($) | Value of Initial $100 Fixed Investment Based on: Company Total Shareholder Return ($) | Net Income (in millions) ($) | | 2023 | $933,986 | $931,654 | $— | $— | $483,377 | $521,801 | $162 | $25.536 | | 2022 | 862,814 | 857,239 | — | — | $419,515 | $423,467 | 149 | $26.645 | | 2021 | $527,725 | $535,829 | $764,492 | $764,514 | $403,759 | $407,839 | $143 | $28.401 |

  41. Pay Versus Performance

    (1)The Company’s principal executive officer (“PEO”) reported above for 2021, 2022 and 2023 is James J. Kim (2)The Company’s principal executive officer II (“PEOII”) reported above for 2021 is James M. Ford (3)The Company’s non-PEO named executive officers (“NEOs”) represent the following individuals:

  42. Pay Versus Performance

    | 2023: Shannon R. Livingston, Blaine C. Lauhon, Patrick A. Luis and Jeffrey M. Martin | | 2022: Dawn P. Crusinberry, Blaine C. Lauhon, Patrick A. Luis, A. Kenneth Ramos and Dave A. Kinross | | 2021: Blaine C. Lauhon, Patrick A. Luis, A. Kenneth Ramos and Dave A. Kinross |

  43. Pay Versus Performance

    (4)To calculate Compensation Actually Paid (“CAP”) for the PEOs and Non-PEO NEOs, the following adjustments were made to SCT total compensation, calculated in accordance with the SEC methodology for determining CAP for 2023:

  44. COMPENSATION OF DIRECTORS

    COMPENSATION OF DIRECTORS The members of the Board of Directors do not receive fees for attendance at Board of Directors or Board Committee meetings. The Vice Chairman and Chairman of the Board of Directors of the Company each receive a $44,400 annual fee and all other directors (excluding employee directors) of the Company receive an annual fee of $34,800. The committee chairs receive an additional $200 for each meeting they chair. The fees paid to directors are based on comparable amounts paid by other financial institutions in the Company’s geographic market area. Aggregate Company directors’ fees in the sum of $411,600 were paid (including amounts deferred under Deferred Compensation Agreements between the Company and certain of its directors) during the year ended December 31, 2023. On May 17, 2023, an award of 2,159 shares of restricted stock were granted to each of the non-employee members of the Board of Directors pursuant to the 2015 Plan. Such shares are subject to forfeiture to the Company during the one-year vesting period from the grant date.

  45. DIRECTOR COMPENSATION TABLE

    DIRECTOR COMPENSATION TABLE The information on non-employee Directors’ compensation in the table below is for the fiscal year ended December 31, 2023.

  46. DIRECTOR COMPENSATION TABLE

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) (2) | All Other Compensation ($) (3) | Total ($) | | Daniel N. Cunningham | $46,000 | $30,000 | $16,623 | $92,623 | | Daniel J. Doyle | 48,200 | 30,000 | 8,365 | 86,565 | | F.T. “Tommy” Elliott, IV | 35,400 | 30,000 | — | 65,400 | | Robert J. Flautt | 35,800 | 30,000 | 5,479 | 71,279 | | Gary D. Gall (4) | 34,800 | 30,000 | — | 64,800 | | Adriana Majarian | 34,800 | 30,000 | — | 64,800 | | Steven D. McDonald | 36,400 | 30,000 | 3,481 | 69,881 | | Louis McMurray (1) (4) | 34,800 | 30,000 | 12,193 | 76,993 | | Karen Musson (4) | 34,800 | 30,000 | — | 64,800 | | Dorothea D. Silva | 34,800 | 30,000 | — | 64,800 | | William S. Smittcamp | 35,800 | 30,000 | 2,545 | 68,345 |

  47. DIRECTOR COMPENSATION TABLE

    (1)In 2023, 100% of fees earned were deferred under the Directors’ deferred compensation agreements as discussed above. (2)The amounts shown reflect the applicable full grant-date fair values for stock awards in accordance with FASB ASC Topic 718 (excluding effect of forfeitures), and are reported for the fiscal year during which the stock awards were issued. Additional discussion is set out in Note 13 to the audited consolidated financial statements included in the Company’s Annual Report that accompanies this proxy statement, and is incorporated herein by reference. (3)Represents the imputed dollar values for insurance coverage under the Split Dollar Agreement and Endorsement plan discussed above. (4)Retired from the board effective April 1, 2024.