Pursuant to Section 953(a) of the Dodd-Frank Act and Item 402(v) of SEC Regulation S-K, we are providing the following information about the relationship between “compensation actually paid” (“CAP”) to the Company’s principal executive officer (“PEO”) and the Company's non-PEO named executive officers (the “Non-PEO NEOs”) and certain aspects of the financial performance of the Company. The Compensation Committee does not utilize CAP as a basis for making compensation decisions. For further information concerning our compensation philosophy and how we align executive compensation with our performance, please see the Compensation Discussion & Analysis section of this Proxy Statement.
PAY VERSUS PERFORMANCE TABLE
| VALUE OF INITIAL FIXED $100 INVESTMENT BASED ON: |
|---|
| FISCAL YEAR(1) | SUMMARY COMPENSATION TABLE TOTAL FOR PEO(2) | COMPENSATION ACTUALLY PAID TO PEO(3) | AVERAGE SUMMARY COMPENSATION TABLE TOTAL FOR NON-PEO NEOs(2) | AVERAGE COMPENSATION ACTUALLY PAID TO NON-PEO NEOs(3) | COMPANY TOTAL STOCKHOLDER RETURN(4) | PEER GROUP TOTAL STOCKHOLDER RETURN(5) | GAAP NET INCOME ($mil.)(6) | COMPANY SELECTED MEASURE: RETURN ON EQUITY(7) |
|---|
| 2025 | $1,630,180 | $2,105,676 | $850,267 | $1,040,344 | $89 | $120 | $17.4 | 13.59% |
| 2024 | $1,339,540 | $1,456,837 | $793,567 | $815,184 | $73 | $107 | $17.8 | 7.03% |
| 2023 | $1,093,405 | $924,797 | $676,702 | $600,014 | $82 | $88 | $11.7 | 9.33% |
| 2022 | $1,101,275 | $861,859 | $600,941 | $479,218 | $82 | $86 | $40.0 | 12.74% |
| (1) | Ms. Lorenson has served as the PEO for the entirety of fiscal years 2022, 2023, 2024, and 2025. Our Non-PEO NEOs for the applicable fiscal years were as follows: |
| ● | Fiscal year 2025: Alan A. Villalon, Jim R. Collins, Karin M. Taylor, and Forrest R. Wilson |
| ● | Fiscal year 2024: Alan A. Villalon, Jim R. Collins, Karin M. Taylor, and Forrest R. Wilson |
| ● | Fiscal year 2023: Jim R. Collins and Karin M. Taylor |
| ● | Fiscal year 2022: Ann McConn and Karin Taylor |
| (2) | Amounts reported in these columns represent (i) the total compensation reported in the SCT for the applicable fiscal year in the case of our PEO, Ms. Lorenson, and (ii) the average of the total compensation reported in the SCT for the applicable fiscal year for our Non-PEO NEOs. |
| (3) | Amounts reported in these columns represent (i) CAP for the applicable fiscal year in the case of our PEO, Ms. Lorenson and (ii) the average CAP for the applicable fiscal year for our Non-PEO NEOs, which reflect certain adjustments that were made to the amounts reported in the SCT for the applicable fiscal year. A reconciliation of the adjustments made to the SCT amounts to calculate CAP for our PEO, Ms. Lorenson, and for the average CAP for the Non-PEO NEOs in accordance with the requirements of Item 402(v) of Regulation S-K is set forth in the following table: |
| Fiscal Year 2025 | Fiscal Year 2024 | Fiscal Year 2023 | Fiscal Year 2022 |
|---|
| Ms. Lorenson PEO | Average Non-PEO NEOs | Ms. Lorenson PEO | Average Non-PEO NEOs | Ms. Lorenson PEO | Average Non-PEO NEOs | Ms. Lorenson PEO | Average Non-PEO NEOs |
|---|
| Summary Compensation Table Total | $1,630,180 | $850,267 | $1,339,540 | $793,567 | $1,093,405 | $676,702 | $1,101,275 | $600,941 |
|---|
| Minus Change in Pension Value Reported in SCT for the Fiscal Year | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
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| Plus Pension Value Service Cost for the Fiscal Year | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
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| Minus Equity Award Value Reported in SCT for the Fiscal Year | $437,500 | $166,500 | $360,000 | $198,050 | $275,000 | $119,250 | $275,000 | $102,400 |
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| Plus Year End Fair Value of Equity Awards Granted During the Covered Year that Remain Outstanding and Unvested as of Last Day of the Fiscal Year | $643,433 | $244,871 | $361,870 | $194,902 | $128,936 | $53,812 | $92,785 | $34,535 |
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| Plus Year over Year Change in Fair Value as of the Last Day of the Fiscal Year of Outstanding and Unvested Equity Awards Granted in Prior Fiscal Years | $261,538 | $99,803 | $113,231 | $27,364 | $(1,791) | $(1,791) | $(59,442) | $(56,005) |
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| Plus Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Fiscal Year | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
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| Plus Year over Year Change in Fair Value as of the Vesting Date of Equity Awards Granted in Prior Fiscal Years that Vested During the Fiscal Year | $8,025 | $11,903 | $2,195 | $(2,600) | $(20,753) | $(9,459) | $2,241 | $2,148 |
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| Minus Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Fiscal Year | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
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| Plus Value of Dividends or other Earnings Paid on Equity Awards Not Otherwise Reflected in Fair Value or Total Compensation for the Fiscal Year | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
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| Compensation Actually Paid | $2,105,676 | $1,040,344 | $1,456,837 | $815,184 | $924,797 | $600,014 | $861,859 | $479,218 |
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In the table above, the unvested equity fair values were calculated on each of the required measurement dates using assumptions based on criteria consistent with those used for grant date fair value calculations and in accordance with the methodology used for financial reporting purposes. For time-based restricted stock units/awards, the fair value used to calculate CAP was based on the Company’s closing stock price on each valuation date and includes the cash value of accrued dividends. For performance-based units/stock, the fair value used to calculate CAP assumes performance results as of the end of each reporting year based on the probable outcome and includes the cash value of accrued dividends.
| (4) | Total Stockholder Return (“TSR”) is cumulative for the measurement periods beginning on December 31, 2021 and ending on December 31 of each of 2022, 2023, 2024, and 2025, respectively. TSR is calculated by dividing the difference between the price of the Company’s common stock at the end and the beginning of the measurement period by the price of the Company’s common stock at the beginning of the measurement period, adjusted for dividends. |
| (5) | Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. Our peer group for these purposes is the S&P U.S. Banks – Midwest Region Index, which is the industry index used by the Company for purposes of compliance with Item 201(e) of Regulation S-K for all four fiscal years. |
| (6) | Reflects the Company’s net income (loss) reflected in the audited financial statements published in our Annual Report on Form 10-K for the applicable fiscal year. |
| (7) | ROE is the company-selected measure and a non-GAAP financial performance measure, as described in more detail in the "Annual Bonus -- Short-Term Incentive Plan" section above. |
Performance Measures Used to Link Company Performance and CAP. The following is a list of financial performance measures, which in our assessment represent the most important financial performance measures used by the Company to link CAP to the named executive officers for fiscal year 2025 to Company performance. Each metric below is used for purposes of determining payouts under either our annual incentive program or vesting of our performance stock units. Please see the Compensation Discussion & Analysis for a further description of these metrics and how they are used in the Company’s executive compensation program.
■ Return on Equity (non-GAAP)
■ Adjusted Net Income (non-GAAP)
■ Earnings per Share
Relationship between CAP and TSR. The graph below illustrates the relationship between our TSR and the Peer Group TSR, as well as the relationship between our TSR and CAP for the PEO and average CAP for the Average Non-PEO NEOs.
Relationship between CAP and GAAP Net Income. The graph below reflects the relationship between the PEO and Average Non-PEO NEOs CAP and our GAAP Net Income. The Company does not use GAAP net income as a performance measure in its executive compensation program.
**Relationship between CAP and ROE (our Company-Selected Measure).**The graph below reflects the relationship between the PEO and Average Non-PEO NEOs CAP and ROE.
