nrim-20240408

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. __)


Filed by the Registrant			ý			Filed by a Party other than the Registrant			¨

Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

NORTHRIM BANCORP, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

No fee required.

Fee paid previously with preliminary materials.

Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

3111 C Street

Anchorage, AK 99503

April 16, 2024

Dear Shareholder:

I am pleased to invite you to attend the Northrim BanCorp, Inc. (the "Company") Annual Shareholders’ Meeting (the "Annual Meeting") where you will have the opportunity to hear about our 2023 operations and our plans for 2024. The Annual Meeting will be on Thursday, May 23, 2024, at 9 A.M. Alaska Daylight Time. The Annual Meeting will be a completely “virtual meeting" of shareholders. You will be able to attend the Annual Meeting online, vote your shares electronically and submit your questions during the live webcast of the Annual Meeting by visiting www.virtualshareholdermeeting.com/NRIM2024. You will need to have your 16-Digit Control Number included on your Notice or proxy card (if you received a printed copy of the proxy materials) to join the Annual Meeting. Please keep your 16-Digit Control Number in a safe place so it is available to you for the Annual Meeting.

You will find additional information concerning the Company and our operations in the enclosed 2023 Annual Report and Form 10-K, which includes our audited financial statements for the year ended December 31, 2023.

Your opinion and your vote are very important to us. Please sign and return your proxy card, which is included with this document, as soon as possible. If you choose to attend the Annual Meeting online, voting by proxy will not prevent you from voting electronically; however, if you are unable to attend online, voting by proxy will ensure that your vote is counted.

Thank you for your continued support of the Company. If you have any questions, please feel free to contact the Corporate Secretary at (907) 562-0062.

Sincerely,

Joseph M. Schierhorn

Chairman

NOTICE OF ANNUAL SHAREHOLDERS’ MEETING

To Be Held Online at www.virtualshareholdermeeting.com/NRIM2024 on May 23, 2024

Notice is hereby given that Northrim BanCorp, Inc. (the "Company") will hold its 2024 Annual Shareholders’ Meeting (the "Annual Meeting") at 9 A.M. Alaska Daylight Time, on Thursday, May 23, 2024 at www.virtualshareholdermeeting.com/NRIM2024. The Annual Meeting will be a completely “virtual meeting" of shareholders. You will be able to attend the Annual Meeting online, vote your shares electronically and submit your questions during the live webcast of the Annual Meeting by visiting www.virtualshareholdermeeting.com/NRIM2024. You will need to have your 16-Digit Control Number included on your Notice or proxy card (if you received a printed copy of the proxy materials) to participate in the Annual Meeting. The Annual Meeting will be held for the following purposes, as more fully described in the accompanying proxy statement:

1) To elect twelve directors nominated by the Company's Board of Directors (the "Board") for a term ending at the 2025 Annual Meeting or such other date as their successors may be elected and qualified;

2) To approve, by nonbinding vote, the compensation of the named executive officers as disclosed in these materials;

3) To ratify the selection of Moss Adams LLP as the Company’s independent registered public accounting firm for fiscal year 2024; and

4) To transact any other business that may properly come before the Annual Meeting or any adjournment or postponement of the Annual Meeting.

Shareholders owning the Company's shares of common stock at the close of business on March 28, 2024 are entitled to receive notice of and to vote online during the Annual Meeting or any adjournment or postponement of that meeting.

The Board recommends that shareholders vote "FOR" the slate of nominees to the Board outlined in this proxy statement; "FOR" the approval of the compensation of the Company's named executive officers as disclosed in the Compensation Discussion and Analysis, the accompanying compensation tables, and the related narrative disclosure in this proxy statement; and "FOR" the ratification of Moss Adams LLP as the Company’s independent registered public accounting firm for the fiscal year 2024.

By order of the Board of Directors,

/s/ Stefan Saldanha

Stefan Saldanha

Corporate Secretary

April 16, 2024

Whether or not you plan to attend the Annual Meeting online, please complete, sign and date the enclosed form of proxy and mail it promptly in the enclosed return envelope, which requires no postage if mailed in the United States. Alternatively, you may vote using the Internet by following the instructions described in the enclosed proxy statement. Your vote is important to us. If you participate in the Annual Meeting online, you may vote your shares online if you wish to do so even if you have previously sent in your proxy.

TABLE OF CONTENTS



Solicitation, Voting, and Revocability of Proxies			1

Q & A about Voting and the Annual Shareholder’s Meeting			2

Proposal 1: Election of Directors			6

Executive Officers			19

Compensation Discussion and Analysis			20

Executive Compensation			27

Director Compensation			46



Interest of Management in Certain Transactions			47

Security Ownership of Certain Beneficial Owners and Management			49

Relationship with the Independent Registered Public Accounting Firm			50

Committee Reports			51



Proposal 2: Advisory Vote on Executive Compensation			53



Proposal 3: Ratification of the Independent Registered Public Accounting Firm			53

Information Concerning Shareholder Proposals			53

Householding			54

2023 Report to Shareholders and Annual Report on Form 10-K			54

Other Matters			54

Exhibit A: Audit Committee Charter			55

Exhibit B: Compensation Committee Charter			58

Exhibit C: Governance and Nominating Committee Charter			60

NORTHRIM BANCORP, INC.

3111 C Street

Anchorage, Alaska 99503

PROXY STATEMENT

The Board is soliciting proxies for this year’s Annual Meeting. This proxy statement contains important information for you to consider when deciding how to vote on the matters brought before the Annual Meeting. Please read it carefully.

The Board set March 28, 2024, as the record date for the Annual Meeting. Shareholders who owned the Company’s common stock on that date are entitled to vote online during the Annual Meeting, with each share entitled to one vote. There were 5,499,578 shares of the Company's common stock outstanding as of the record date.

Voting materials, which include this proxy statement dated April 16, 2024, a proxy card, the 2023 Annual Report and the Company’s Annual Report on Form 10-K, are first being mailed to shareholders on or about April 16, 2024, unless the shareholder has elected electronic delivery. If the shareholder has elected electronic delivery, we have provided a notice of Internet availability of proxy materials which contains instructions on how to access proxy materials via the Internet or how to request a printed set of proxy materials. Additionally, this Proxy Statement, the 2023 Annual Report and the Company's Annual Report on Form 10-K are available at www.northrim.com by clicking the "Investor Relations" link. In accordance with Securities and Exchange Commission rules, our proxy materials posted on both our website and the website described below do not contain any cookies or other tracking features.

INTERNET AVAILABILITY OF PROXY MATERIALS

*****IMPORTANT NOTICE*****

Regarding the Availability of Proxy Materials for the Annual Shareholders’ Meeting

To be Held Online at www.virtualshareholdermeeting.com/NRIM2024 on May 23, 2024

Securities and Exchange Commission rules allow us to furnish proxy materials to our shareholders over the internet.

The Proxy Statement and Annual Report to Shareholders are available at

www.proxyvote.com

QUESTIONS AND ANSWERS ABOUT VOTING AND THE ANNUAL SHAREHOLDERS’ MEETING

______________________________________________________________________________________________________

Why is the Annual Meeting being held online?

As permitted by the Company’s Bylaws, as amended (the "Bylaws"), we will utilize the virtual meeting format for the Annual Meeting in order to facilitate and increase shareholder attendance and participation by enabling shareholders to participate fully and equally from any location around the world, at no cost. We believe that the use of the virtual annual meeting format is the right choice for the Company under the circumstances, as it not only brings cost savings to the Company and our shareholders, but also increases our ability to engage with all shareholders, regardless of their size, resources, or physical location. We view the virtual meeting format as consistent with our commitment to shareholder engagement as one of our tools by which to further reach our shareholder base. A virtual meeting is also environmentally friendly and in line with our commitment to sustainable business practices.

We remain sensitive to concerns regarding virtual meetings generally from investor advisory groups and other shareholder rights advocates who have voiced concerns that virtual meetings may diminish shareholder voice or reduce accountability. Our Bylaws provide that our annual meetings may be held virtually, by means of remote communication, and our virtual shareholder meeting guidelines provide that (i) we implement reasonable measures to verify that each person deemed present and permitted to vote at the meeting is a shareholder or proxy holder, (ii) we implement reasonable measures to provide shareholders and proxy holders a reasonable opportunity to participate in the meeting and to vote on matters submitted to shareholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (iii) we maintain a record of any votes or other action taken by shareholders or proxy holders at the meeting. Accordingly, the procedures for our virtual meeting format comply with these requirements, and in fact, we believe that our format enhances, rather than constrains, shareholder access, participation and communication. For example, the online format allows shareholders to communicate with us during the meeting so they can ask appropriate questions of our Board or management in accordance with the rules of conduct for the meeting. A further description regarding this process can be found under “Questions and Answers About Voting and the Annual Shareholders’ Meeting - How Do I Attend and Participate in the Annual Meeting.” During the live Q&A session of the meeting, we will answer questions as they come in, as time permits.

See “Questions and Answers About Voting and the Annual Shareholders’ Meeting - How Do I Attend and Participate in the Annual Meeting” in this proxy statement for more information regarding this year’s virtual Annual Meeting. In addition, information regarding the ability of shareholders to ask questions during the Annual Meeting, related rules of conduct at the Annual Meeting, and procedures for posting appropriate questions received during the Annual Meeting, will be available on our website at www.northrim.com under "Investor Relations." Similarly, matters addressing technical and logistical issues, including technical support during the Annual Meeting and related to accessing the Annual Meeting’s virtual meeting platform, will be available at www.virtualshareholdermeeting.com/NRIM2024.

Why am I receiving this proxy statement and proxy card?

You are receiving this proxy statement and proxy card because you own shares of the Company’s common stock. This proxy statement describes matters on which we would like you to vote at the Annual Meeting.

When you sign the proxy card, you appoint the persons named in the proxy, Messrs. Michael G. Huston and Jed W. Ballard, as your representatives at the Annual Meeting, and those persons will vote your shares at the Annual Meeting as you have instructed on the proxy card. This way, your shares will be voted even if you cannot attend the Annual Meeting online.

Who is soliciting my proxy, and who is paying the cost of solicitation?

The enclosed proxy is solicited by and on behalf of the Board, and the Company will bear the costs of solicitation. Certain directors, officers, and employees of the Company and/or its subsidiary, Northrim Bank (the "Bank"), may solicit proxies by telephone, facsimile, the Internet, and personal contact.

The Company does not expect to pay any compensation to employees, officers, or directors for soliciting proxies, but will reimburse brokers, nominees, and similar record holders for reasonable expenses in mailing proxy materials to beneficial owners of the Company’s common stock.

How do I attend and participate in the Annual Meeting?

Our completely virtual Annual Meeting will be conducted on the internet via live audio webcast. You will be able to attend the Annual Meeting online and submit your questions during the meeting by visiting www.virtualshareholdermeeting.com/NRIM2024. You also will be able to vote your shares online during the Annual Meeting.

All shareholders of record as of March 28, 2024, or their duly appointed proxies, may participate in the Annual Meeting. To participate in the Annual Meeting, you will need the 16-Digit Control Number included on your Notice, on your proxy card or on the instructions that accompanied your proxy materials. The Annual Meeting webcast will begin promptly at 9:00 A.M. Alaska Daylight Time. We encourage you to access the meeting prior to the start time. Online access will begin at 8:45 A.M. Alaska Daylight Time.

The virtual meeting platform is fully supported across browsers and devices running the most updated version of applicable software and plugins. Participants should ensure that they have a robust internet connection wherever they intend to participate in the Annual Meeting. Participants should also give themselves plenty of time to log in and ensure that they can hear streaming audio prior to the start of the Annual Meeting.

If you choose to vote your shares online during the Annual Meeting, please follow the instructions provided on the Notice to log in to www.virtualshareholdermeeting.com/NRIM2024. You will need the 16-Digit Control Number included on your Notice, on your proxy card, or on the instructions that accompanied your proxy materials.

Even if you plan to participate in the Annual Meeting, the Company strongly recommends that you vote your shares in advance as described below so that your vote will be counted if you later decide not to attend the Annual Meeting. Voting promptly will save us the expense of further requests for proxies in order to ensure a quorum at the Annual Meeting.

Shareholders may submit questions during the Annual Meeting. If you wish to submit a question, you may do so by logging into the virtual meeting platform at www.virtualshareholdermeeting.com/NRIM2024, type your question into the “Ask a Question” field, and click “Submit.”

Questions pertinent to meeting matters will be answered during the Annual Meeting, subject to time constraints. Questions regarding matters irrelevant to the Company’s business, material non-public information, related to threatened or ongoing litigation, repetitious statements, or personal matters, are not pertinent to meeting matters and therefore will not be answered.

What if I experience technical difficulties with attending the virtual Annual Meeting?

We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual Annual Meeting. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the Virtual Shareholder Meeting login page.

What am I voting on, and what vote is required for approval?

At the Annual Meeting, you will be asked to vote on:

● the election of twelve directors to serve on the Board until the 2025 Annual Meeting or until their successors have been elected and have qualified ("Proposal 1");

● a non-binding advisory vote on the compensation of the named executive officers as disclosed in the Compensation Discussion and Analysis, the accompanying compensation tables, and the related narrative disclosure in this proxy statement ("Proposal 2"); and,

● the ratification of Moss Adams LLP as the Company’s independent registered public accounting firm for fiscal year 2024 ("Proposal 3").

All proposals will require the affirmative vote of a majority of the Company's shareholders online or represented by a duly executed proxy at the Annual Meeting.

Who is entitled to vote?

Only shareholders who owned the Company’s common stock as of the close of business on the record date, March 28, 2024, are entitled to receive notice of the Annual Meeting and to vote the shares that they held on that date at the Annual Meeting, or any postponement or adjournment of the Annual Meeting. Shares may be voted online or by submitting an executed proxy card to the Company.

How do I vote, and how are the votes counted?

Registered shareholders may vote online during the Annual Meeting, on the Internet, or by mail.

● Voting Online during the Annual Meeting. If you attend the Annual Meeting online, you may vote as instructed at the Annual Meeting. However, if you hold your shares in street name (that is, through a broker/dealer or other nominee), you will need to have with you during the Annual Meeting a proxy delivered to you by such nominee reflecting your share ownership as of the record date and your 16-Digit Control Number.

● Voting on the Internet. Go to www.proxyvote.com and follow the instructions. You will need your proxy when you access the website.

● Voting by Mail. Complete, date, sign, and mail the proxy in the enclosed postage pre-paid envelope. If you mark your voting instructions on the proxy, your shares will be voted at the Annual Meeting as you instruct. Please see the proxy for voting instructions.

If you own your shares through a brokerage account or in other nominee form, you should follow the instructions you receive from the record holder to see which voting methods are available. If your shares are registered in your own name and you attend the Annual Meeting online, you may vote online during the Annual Meeting, prior to the vote being closed. "Street name" shareholders, that is, those shareholders whose shares are held in the name of and through a broker or other nominee, who wish to vote online during the Annual Meeting will need to obtain a proxy from the broker or nominee that holds their shares. Your broker or nominee will generally provide you with the appropriate forms at the time you receive this proxy statement, including your 16-Digit Control Number. If you own your shares through a broker or other nominee, you cannot vote online during the Annual Meeting unless you receive a proxy card, including a 16-Digit Control Number, from the broker or nominee.

Each shareholder will be entitled to one vote for each share of common stock held of record by the shareholder on the record date, March 28, 2024. With regard to the election of directors, you may cast your vote in favor of some or all of the nominees, or you may withhold your vote for any nominee in the election of directors. Withheld votes will be excluded entirely from the vote and will have no effect on the outcome. On other proposals, you can "abstain." If you abstain, your shares will be counted as present at the Annual Meeting for purposes of that proposal and your abstention will have the effect of a vote against the proposal. Shareholders may not cumulate their votes for the election of directors, i.e. it is not permitted to vote your shares twelve times for a single director.

If your shares are held in street name, the broker or nominee is permitted to exercise voting discretion under certain circumstances. At the Annual Meeting, if the broker or nominee is not given specific voting instructions, the shares may not be voted on Proposal 1 or Proposal 2 by the broker or nominee in their own discretion, and the votes will be "broker non-votes," which will have the effect of excluding your vote from the tallies. However, in these cases, and in cases where the shareholder abstains from voting on a matter, those shares will be counted for determining whether a quorum is present. We expect that brokers or nominees will be allowed to exercise discretionary authority for beneficial owners who have not provided voting instructions with respect to Proposal 3 to ratify the Company’s selected independent registered public accounting firm, but abstentions will have the effect of a vote against the Proposal 3.

If your shares are held of record in your own name and you do not vote, your shares will not be voted.

What does it mean if I receive more than one proxy card?

It means that you hold shares in multiple accounts. Please complete and return all proxies (either by mail or over the Internet) to ensure that your shares are all voted in accordance with your instructions.

Can I change my vote after I return my proxy card?

Yes. If the enclosed proxy is duly executed and received in time for the Annual Meeting, the persons named in the proxy will vote the shares represented by the proxy "FOR" the twelve nominees listed in the proxy statement, "FOR" the approval of the compensation of the named executive officers, and "FOR" the ratification of the Company’s independent registered public accounting firm. If you grant a proxy, you may revoke it at any time before its exercise by submitting a second proxy with a subsequent date either over the Internet or by mail to the attention of the Corporate Secretary at P.O. Box 241489, Anchorage, AK 99524-1489 or by announcing your revocation to the Corporate Secretary online during the Annual Meeting prior to the taking of a shareholder vote. The shares represented by properly executed proxies that are not revoked will be voted in accordance with the specifications in such proxies.

Can I vote on other matters or submit a proposal to be considered at the Annual Meeting?

The Company has not received timely notice of any shareholder proposals to be considered at the Annual Meeting, and shareholders may submit matters for a vote only in accordance with the Bylaws. The Board does not presently know of any other matters to be brought before the Annual Meeting.

For shareholders seeking to include proposals in the proxy materials for the 2025 Annual Meeting, including nominations for director candidates, the proposing shareholder or shareholders must comply with our Bylaws, all applicable regulations, including Rule 14a-8 and Rule 14a-19 under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and the proposals must be received by the Corporate Secretary of the Company on or before January 24, 2025. Upon receipt of such proposal, the Company will determine whether to include the proposal in its proxy materials for the 2025 Annual Meeting in accordance with the Bylaws and applicable law. Shareholders who intend to solicit proxies in support of director nominees other than the Company's nominees under Rule 14a-19 of the 1934 Act must comply with the requirements of the Company's Bylaws, including providing the notice required under Rule 14a-19 by January 24, 2025 and complying with the requirements of Rule 14a-19 and Section 2.2 of the Company's Bylaws. The Company will disregard any proxies solicited for a shareholder's director nominees if such shareholder fails to comply with such requirements. Shareholder proposals should be sent to the attention of the Corporate Secretary, Northrim BanCorp, Inc., P.O. Box 241489, Anchorage, AK 99524-1489. A further description regarding this process can be found under "Information Concerning Shareholder Proposals and Director Nominations."

How many votes are needed to hold the Annual Meeting?

A majority of the Company’s outstanding shares as of the record date (a quorum) must be present at the Annual Meeting in order to hold the Annual Meeting and conduct business. Shares are counted as present at the Annual Meeting if a shareholder is online and votes online during the Annual Meeting or has properly submitted an executed proxy card either over the Internet or by mail. Broker non-votes will be counted for purposes of determining the presence or absence of a quorum for the transaction of business at the Annual Meeting. As of March 28, 2024, the record date for the Annual Meeting, 5,499,578 shares of the Company’s common stock were outstanding and eligible to vote.

How many shares are owned by the Directors and Executive Officers?

All directors and named executive officers of the Company as a group (comprised of 15 individuals) beneficially held 228,463 shares of the Company's common stock as of March 28, 2024, representing approximately 4.1% of the outstanding common stock of the Company.

Where and when will I be able to find the results of the voting?

The results of the voting will be announced at the Annual Meeting. Final results will be disclosed in the Company’s Current Report on Form 8-K to be filed with the Securities and Exchange Commission within four business days after the conclusion of the Annual Meeting.

How do I communicate with Directors?

The Board provides a process for shareholders to send communications to the Board or any of the individual directors. Shareholders may send communications to the Board or any of the directors at c/o Corporate Secretary, Northrim BanCorp, Inc., P.O. Box 241489, Anchorage, AK 99524-1489. All communications will be compiled by the Corporate Secretary of the Company and submitted to the Board or the individual directors on a periodic basis.

PROPOSAL 1: ELECTION OF DIRECTORS

______________________________________________________________________________________________________

General Information

How many directors are nominated?

The Company’s Articles of Incorporation provide that the Board will consist of not less than five nor more than twenty-five directors. Currently, the Board consists of twelve directors, and the Board has set the number of directors to be elected at the Annual Meeting at twelve.

Who are the nominees?

The Board has nominated the individuals listed on the following pages for election as directors for a one year term expiring at the 2025 Annual Meeting or until their successors have been elected and qualified. If any nominee declines or becomes unable to serve as a director before the Annual Meeting, the Board will select a replacement nominee, and your proxies will be voted for that replacement nominee. The Board presently has no knowledge that any nominee will decline or be unable to serve.

It is the Company’s policy to encourage director nominees up for election at the Annual Meeting to attend the Annual Meeting. All directors up for election at the 2024 Annual Meeting attended the 2023 Annual Meeting.

Information about the Nominees

The following table provides certain information about the nominees for director, including age, principal occupation(s), and public company directorships held during the past five years, and year first elected a director of the Company. All of the nominees are presently directors of the Company and the Bank, except for Mr. Huston. There are no family relationships among any of our current directors, director nominees, or executive officers. All of the nominees, with the exception of Messrs. Schierhorn, Huston, and Schutt, are deemed by the Board to be independent within the meaning of currently applicable rules of the Securities and Exchange Commission and the Nasdaq Global Select Market listing requirements.


Name/Age	Occupation of Nominee During Past Five Years
Anthony J. Drabek, 76 Director Since: 1991	Since 2019	Director, Koniag, Inc., an Alaska Native Corporation
	1989 to 2010	President and Chief Executive Officer, Natives of Kodiak, Inc., an Alaska Native Corporation
	2001 to 2010	President, Koncor Forest Products Co.
	1986 to 2010	Chairman, Koncor Forest Products Co.

Karl L. Hanneman, 66 Director Since: 2014	Since 2020	Director, Gatos Silver, Inc.
	Since 2018	Director, International Tower Hill Mines, Ltd. (A development stage mining company.)
	Since 2017	Chief Executive Officer, International Tower Hill Mines, Ltd.(1)
	2018 to 2020	Director, Sunshine Silver Mining & Refining Corp.
	2015 to 2017	Alaska Chief Operating Officer, International Tower Hill Mines, Ltd.
	2010 to 2015	Alaska General Manager, International Tower Hill Mines, Ltd.
	2010 to 2020	Director, Fairbanks Chamber of Commerce
	2008 to 2010	Director of Corporate Affairs, Teck Resources, Ltd. (A mining and mineral development company.)
	Since 2011	Director, Usibelli Coal Mine, Inc.
	Since 1997	Director, Alaska Mining Hall of Fame
	Since 1998	Director, Resource Development Council


Name/Age	Occupation of Nominee During Past Five Years
Michael G. Huston, 56	Since April 2024	President, Chief Executive Officer and Chief Operating Officer of the Company and President and Chief Executive Officer of the Bank.
	2023 to April 2024	President of the Bank
	Since 2023	Vice Chair of Board, Housing Alaskans, A Public Private Partnership (HAPPP)
	2022 to 2023	President, Chief Lending Officer of the Bank
	2017 to 2023	Board Member, Anchorage Economic Development Corporation
	2017 to 2022	Executive Vice President, Chief Lending Officer of the Bank
	2012 to 2015	Executive Vice President, Chief Banking Officer, First Interstate Banc System

David W. Karp, 57 Director Since: 2015	Since 2022	Chairman, Community Advisory Board, Alaska Communications Systems Group, Inc.
	Since 2020	Director, Resource Development Council
	Since 2020	Board Member, KEEP Alaska Competitive
	Since 2020	Board Member, Anchorage Economic Development Corp.
	Since 2019	Senior Vice President & Managing Director, Alaska, Saltchuk
	Since 2019	Board Member, Alaska Resource Education
	2018 to 2021	Chairman, Alaska Communications Systems Group, Inc.
	2011 to 2021	Board Member, Alaska Communications Systems Group, Inc. (A publicly traded company during some of that period.) Member, Nominating and Corporate Governance Committee
	2011 to 2018	President and Chief Executive Officer, Northern Aviation Services, Inc.
	2007 to 2018	President and Chief Executive Officer, Northern Air Cargo, Inc.

Joseph P. Marushack, 65 Director Since: 2021	2023 to Present	Director, McDermott International, LTD
	2015 to 2022	Board Member, Yellowstone Forever
	2015 to 2021	President, ConocoPhillips Alaska
	2012 to 2015	President, ConocoPhillips Asia, Pacific and Middle East
	2010 to 2012	President, ConocoPhillips Canada
	2007 to 2010	President, ConocoPhillips Australia

David J. McCambridge, 68 Director Since: 2011	1999 to 2020	President and Director, Alaska Kidney Foundation
	1978 to 2010	Audit Partner, KPMG LLP
	1985 to 2015	Treasurer and Director, The Tanaka Foundation
	1993 to 2012	Director, Great Alaska Council, Boy Scouts of America

Krystal M. Nelson, 51 Director Since: 2015	Since 2014	Chief Operating Officer, and Executive Vice President, Bering Straits Native Corporation, an Alaska Native Corporation
	Since 2022	Board Member, Resource Development Council
	Since 2020	Co-Chair, Trinity College Parents Leadership Council
	2014 to 2017	Trustee, Pacific Northern Academy Board
	2007 to 2014	Vice President and Chief Operating Officer, Ahtna Engineering Services

Marilyn F. Romano, 63 Director Since: 2023	Since 2011	Regional Vice President, Alaska Airlines
	2000-2011	Vice President/Publisher, Fairbanks Daily News-Miner
	Since 2015	Board Member, Governor's Aviation Advisory Board
	Since 2011	Vice President, Alaska Airlines Foundation
	2012-2021	Trustee, University of Alaska


Name/Age	Occupation of Nominee During Past Five Years
	2012-2021	Board Member, Anchorage Economic Development Corporation (Chairperson 2017)


Joseph M. Schierhorn, 66 Director Since: 2016	Since 2018	Chair, the Company and the Bank Board
	Since 2017	Lead Director and Audit Committee Chair, Pacific Wealth Advisors, LLC and Director, Pacific Portfolio Trust Co.
	Since 2017	Member, Board of Directors of the Pacific Bankers Management Institute Representing the Pacific Coast Banking School
	Since 2020	Co-Chair, KEEP Alaska Competitive
	2017 to April 2024	President and Chief Executive Officer, the Company
	2016 to April 2024	Chief Executive Officer, the Bank
	2013 to April 2024	Chief Operating Officer, the Company
	2015 to 2022	President, the Bank
	2016 to 2019	Member, Federal Reserve Bank of San Francisco's Twelfth District Community Depository Institutions Advisory Council
	2013 to 2015	Corporate Secretary, the Company and the Bank
	2013 to 2014	Chief Operating Officer, the Bank
	2005 to 2017	Executive Vice President, the Company
	2005 to 2014	Executive Vice President, the Bank
	2001 to 2014	Chief Financial Officer, the Company and the Bank

Aaron M. Schutt, 51 Director Since: 2018	Since 2011	President and Chief Executive Officer, Doyon Limited, an Alaska Native Corporation
	Since 2018	Chair, Akeela, Inc.
	Since 2018	Chair, ANCSA Regional Association
	Since 2021	Member, University of Alaska Fairbanks Advisory Board
	2012 to 2019	Director and Vice President, Alaska Native Heritage Center
	Since 2011	Director, ANCSA Regional Association
	2008 to 2011	Chief Operating Officer, Doyon Limited
	Since 2007	Board of Managers, Doyon Utilities, LLC
	2006 to 2011	Senior Vice President, Doyon Limited
	Since 2001	Director, Akeela, Inc.

John C. Swalling, 74 Director Since: 2002	Since 2018	Director and Treasurer, Ted Stevens Foundation
	Since 2006	President and Director, Civic Ventures
	Since 2001	Director, Alaska Pacific University Foundation
	Since 1990	President and Director, Anchorage Museum Foundation
	Since 1986	Board Member, Visit Anchorage
	1991 to 2019	President and Director, Swalling & Associates PC
	1975 to 2018	Director, Swalling Construction Co., Inc.
	Since 1974	Member, American Institute of CPAs
	Since 1974	Member and past-President, Alaska Society of CPAs
	1994 to 2017	Director, DFK International
	1985 to 2020	Board Member (and former Chair), Providence St. Joseph Health Alaska Community Ministry Board


Name/Age	Occupation of Nominee During Past Five Years
Linda C. Thomas, 70 Director Since: 2014	Since 2016	Chief Executive Officer, Alaskan Brewing & Bottling Co.
	Since 2021	Board Member, League of Women Voters
	1996 to 2016	Chief Operations Officer, Alaskan Brewing & Bottling Co.
	1994 to 1996	Chief Financial Officer, Alaskan Brewing & Bottling Co.
	2013 to 2019	Director, Juneau Chamber of Commerce
	2007 to 2019	Director, Bartlett Regional Hospital

(1) Effective March 12, 2018, Karl Hanneman entered into a new employment agreement with International Tower Hill Mines Ltd. that states that Mr. Hanneman continues to be responsible for all duties normally incidental to the position of CEO. However, it reduces his salary by 50% due to a 50% reduction in the amount of time required to perform those duties as the scope of work for International Tower Hill Mines, Ltd. Mr. Hanneman is performing is reduced.

Board Composition: The following Diversity Matrix provides a high-level overview of certain personal characteristics and backgrounds of the director nominees.


Board Diversity Matrix
Number of Directors	12
	Female	Male	Non-Binary	Did Not Disclose Gender
Part I: Gender Identity
Directors	3	9	—	—
Part II: Demographic Background
African American or Black	—	—	—	—
Alaskan Native or Native American	—	2	—	—
Asian	—	—	—	—
Hispanic or Latinx	—	—	—	—
Native Hawaiian or Pacific Islander	—	—	—	—
White	3	7	—	—
Two or More Races or Ethnicities	—	—	—	—
LGBTQ+	—	—	—	—
Did Not Disclose Demographic Background	—	—	—	—

Director Qualifications and Experience: The following table identifies the experience, qualifications, attributes, and skills that the Board considered in making its decision to appoint and nominate directors to our Board. The nominees' breadth and diversity of experience, mix of qualifications, attributes and skills strengthen our Board's effective oversight of the Company's business. While our longer tenured directors bring a wealth of experience and deep understanding of the business and local community in which we operate, we recognize the need for fresh perspectives, have consistently added new directors, and are committed to continued board and committee diversity and refreshment. This information supplements the biographical information provided above.

Specific skills/knowledge:

Professional standing in chosen field

Expertise in financial services or related industry

Community involvement

Other Board experience

Other public company experience

Accounting

Legal

Business management

Anthony J. Drabek

Karl L. Hanneman

Michael G. Huston

David W. Karp

David J. McCambridge

Joseph P. Marushack

Krystal M. Nelson

Marilyn F. Romano

Joseph M. Schierhorn

Aaron M. Schutt

John C. Swalling

Linda C. Thomas

THE BOARD RECOMMENDS THAT YOU VOTE "FOR" THESE NOMINEES.

Shareholder Nominations for 2024 Annual Shareholders’ Meeting

In accordance with the Bylaws, shareholder nominations for the 2024 Annual Meeting may be made (i) by, or at the direction of, a majority of the Board or (ii) by any shareholder entitled to vote online during the Annual Meeting, provided that such shareholder has complied with the notice procedures set forth in the Bylaws and with the requirements of the 1934 Act

(including Rule 14a-19 and any Securities and Exchange Commission staff interpretations thereunder). Only persons nominated in accordance with the procedures set forth in the Bylaws shall be eligible for election as directors at the Annual Meeting. Nominations, other than those made by or at the direction of the Board, shall be made pursuant to timely notice in writing to the Corporate Secretary of the Company as set forth in the Bylaws. To be timely, a shareholder's notice shall be delivered to, or mailed and received at, the principal office of the Company not later than one-hundred-twenty days prior to the anniversary date of the immediately preceding annual meeting of shareholders of the Company.

Such shareholder’s notice shall set forth the information required in Section 2.2 of the Bylaws (a copy of which will be provided to any shareholder upon written request to the Corporate Secretary), including, but not limited to: (i) the proposing shareholder's timely written notice; (ii) such other information regarding the proposing shareholder, each nominee proposed by such shareholder and any other person as would be required to be included in a proxy statement filed pursuant to the proxy rules of the Securities and Exchange Commission, or is otherwise required under Regulation 14A; (iii) the consent of each nominee to serve as a director of the Company if so elected; and (iv) a written questionnaire with respect to the background and qualifications of the nominee, completed and executed by the nominee, in the form required by the Company (which form the proposing shareholder shall request in writing from the Corporate Secretary prior to submitting notice and which the Corporate Secretary shall provide to the proposing shareholder within ten days after receiving such request). The Company may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as an independent director of the Company or that could be material to a reasonable shareholder’s understanding of the independence, or lack thereof, of such nominee. With respect to solicitations under Rule 14a-19, reasonable evidence, including shareholder’s certification, that it has met the requirements of Rule 14a-19(a)(2) and Rule 14a-19(a)(3). If any proposing shareholder making a solicitation under Rule 14a-19 subsequently fails to comply with the requirements of Rule 14a-19(a)(2) or Rule 14a-19(a)(3) the nomination of each such proposed nominee shall be disregarded, notwithstanding that proxies or votes in respect of the election of such proposed nominees may have been received by the Company (which proxies and votes shall be disregarded).

The Board may reject any nomination by a shareholder not timely made in accordance with the requirements of the Bylaws and the requirements of the federal securities laws, regulations and rules, including Rule 14a-19, and each nominee must also meet all additional qualifications for directors which may be adopted from time to time by the Board or the shareholders or as set forth in the Governance and Nominating Committee Charter.

Information Regarding the Board of Directors and Its Committees

The Board has determined that all nominees other than Messrs. Schierhorn, Huston, and Schutt are independent within the meaning of currently applicable rules of the Securities and Exchange Commission and the Nasdaq Global Select Market listing requirements. The Company Board of Directors met seven times during 2023 and the Bank Board of Directors also met seven times during 2023, including a special meeting for Board specific training. The Board has adopted certain standing committees, including an Audit Committee, a Compensation Committee, and a Governance and Nominating Committee. During 2023, all directors attended at least seventy-five percent (75%) of the total meetings of the Board and committee meetings that they were each required to attend.

The Board has designated one of its independent members as an independent lead director. Mr. John C. Swalling currently serves as the Company’s independent lead director. The independent lead director’s primary responsibilities are to preside over executive sessions of non-management directors; to conduct annual interviews with all directors regarding each director’s own self-assessment of their contribution to the Board prior to nominations for election at the Annual Meeting; and, to recommend to the Governance and Nominating Committee, in consultation with the Chair of the Board, proposed committee assignments and chairmanships. The Board believes that our leadership structure in 2023 of combining the Chair and Chief Executive Officer roles as part of a governance structure that includes an independent lead director, plus the exercise of key board oversight responsibilities by independent directors, is appropriate for the Company at this time. The structure of separating the Chair and the Chief Executive Officer roles in 2024 is anticipated to continue during the transition of Mr. Schierhorn's and Mr. Huston's roles.

Risk Oversight

The Company and the Bank have in place policies and procedures to manage risks that could affect their operational and strategic position as a profitable, safe and sound financial institution. The Bank’s Internal Audit Department provides written results of internal and out-sourced audits, including review of the credit quality of the loan portfolio, directly to the Audit Committee and management. The Audit Committee, which is made up entirely of directors deemed independent of the Company by the Board, reviews, and reports to the Board on the results of these audits. The Audit Committee also reports to the Board on any deficiencies identified, as well as any steps deemed necessary to resolve and mitigate risk. An officer, appointed by the Board, serves as the Bank’s risk manager and is responsible for monitoring and maintaining the Bank’s

company-wide contingency plan. This contingency plan addresses and provides guidelines for the restoration of business in the event of man-made and natural disruptive events.

The Company monitors its interest rate risk through a review of its sensitivity to upward and downward movements of interest rates and their impact on the Company’s interest-earning assets, interest-bearing liabilities, and the net interest margin. The Company monitors concentrations and economic trends in the communities it serves and in the global economy in order to respond to issues that could affect the economic climate in which it operates. The Company's management reports its analysis of these areas to the Bank’s Board of Directors on a periodic basis.

It is management’s policy to discuss a detailed analysis of any proposed major project with the Board. This analysis generally includes management’s reasons for the proposal, results of due diligence analysis, potential risks, costs, and the estimated period for implementation of the project, and the Bank's Compliance Department and Operations and Technology Committee's recommendations prior to seeking the Board’s approval.

From time to time, the Company provides director education and discussion as to bank directorship issues, the management of risk, miscellaneous timely topics affecting the Company, as well as future corporate governance matters by receiving periodic briefings from senior management of the Company, legal counsel, auditors and other consultants. In addition, the Company periodically engages the services of experienced consultants to facilitate more formal director education matters, strategic planning, and other topics affecting the Company.

Cybersecurity and Information Security Risk Oversight

Management of cybersecurity risk is the responsibility of the full Board, with additional assistance from the Audit Committee. The Board also devotes significant time and attention to the oversight of cybersecurity and information security risk and receives an operational risk update that includes a review of cybersecurity and information security risk. As part of its oversight of cybersecurity and informational security risk, on an annual basis, our Board reviews its Information Security Policy with its appointed Information Security Officer and frequently receives presentations on and discusses cybersecurity and information security risks, industry trends and best practices from our Chief Information Officer and our Information Security Officer..

The Company continuously monitors its information systems to proactively assess, identify, and manage risks from vulnerabilities and assess cybersecurity threats. The Company’s process for identifying and assessing material risks from cybersecurity threats operates alongside the Company’s broader overall risk assessment process. Senior management meets regularly with the Company’s risk-management team and internal and external auditors to evaluate the effectiveness of the Company’s systems, controls, and management processes with respect to cybersecurity risks. The results of key assessments are reported in summary to the Board periodically. To minimize the risks and vulnerabilities from the use of third-party service providers, a vendor management policy is in place, which is approved by the Board annually. The vendor management policy calls for the evaluation of risk for each vendor based upon an assessment of the degree to which their relationship could expose the Company to risk in relation to the Company’s reliance on the vendor’s promise to perform and to protect customer privacy and based on the vendor’s fiscal strength.

The Company provides mandatory initial and annual training thereafter for personnel regarding security awareness as a means to equip the Company’s personnel with the understanding of how to properly use and protect the computing resources entrusted to them, and to communicate the Company’s information security policies, standards, processes and practices. We also work to educate our customers about the importance and understanding of their role in protecting their identities and the privacy of their information. We consider customer education regarding the use of electronic convenience products to be especially important due to the Bank’s increased exposure to loss related to these products if procedures are not followed.

Audit Committee

The primary functions of the Audit Committee, which met five times in 2023, include reviewing and approving the services of the independent registered public accounting firm; reviewing the Company’s financial statements; review of the Company's processes and procedures in place for maintaining the Company’s compliance with Section 404 of the Sarbanes-Oxley Act of 2002 ("SOX") as evaluated by the Company’s internal audit manager, internal SOX Committee, and the Company's independent registered public accounting firm, reviewing the plan, scope, and audit results of the internal and external auditors; reviewing the reports of regulatory authorities; reviewing controls related to cybersecurity risk disclosures; and, reviewing and overseeing the Company's external reporting on environmental, social and governance related matters. The Board has adopted a written charter for the Audit Committee. A copy of the Audit Committee charter is attached to this proxy statement as Exhibit A. Members of the Audit Committee in 2023 were Mr. David J. McCambridge, Ms. Linda C. Thomas, and Mr. David G. Wight. Mr. McCambridge was appointed to the Committee in 2011, Ms. Thomas was appointed in 2016, and Mr. Wight was appointed in 2007 and left the Audit Committee in January 2024 concurrent with his resignation from the Board. Mr. John C.

Swalling was appointed to the Audit Committee in March of 2024. Mr. McCambridge has been the Chair of the Audit Committee since 2017. The Board has determined that each of the members of the Audit Committee are independent directors within the meaning of the Securities and Exchange Commission rules applying to Audit Committee members and the Nasdaq Global Select Market listing standards. The Audit Committee and the Board have also determined that Mr. McCambridge qualifies as an Audit Committee financial expert within the meaning of such rules.

Compensation Committee

The primary functions of the Compensation Committee, which met three times in 2023, are: to review and approve Executive and all Senior Vice President compensation; to select and approve employee benefits and retirement plans; to review and approve the Company’s compensation recovery policy and stock incentive and profit sharing plans; and, to oversee environmental, social and governance matters related to human resource management including review of the effectiveness and continuous improvement of the Company's strategies and practices regarding its human resources management function including total rewards, corporate culture, human capital and talent management, management succession, and diversity and inclusion practices. The Board has adopted a written charter for the Compensation Committee. A copy of the Compensation Committee charter is attached to this proxy statement as Exhibit B. Compensation Committee members in 2023 were Mr. Karl L. Hanneman, Mr. David J. McCambridge, Mr. Anthony J. Drabek, Ms. Krystal M. Nelson, and Mr. John C. Swalling. Mr. Hanneman was appointed to the Compensation Committee in 2014, Mr. McCambridge was appointed in 2011 and served on the Compensation Committee through May of 2023, Ms. Nelson was appointed in 2015, Mr. Swalling was appointed in 2005, and Mr. Drabek was appointed in May of 2023. Ms. Nelson has been the Chair of the Compensation Committee since 2017. In March of 2024, Mr. John C. Swalling left the Compensation Committee incident to his appointment to the Audit Committee and Ms. Marilyn F. Romano was appointed to the Compensation Committee. All members of the Compensation Committee have been determined by the Board to be independent directors within the meaning of currently applicable rules of the Securities and Exchange Commission and the Nasdaq Global Select Market listing requirements.

Governance and Nominating Committee

The primary functions of the Governance and Nominating Committee, which met four times in 2023, are to evaluate the size, compensation, and composition of the Board; to develop criteria for Board membership; to identify, recruit, interview, and evaluate individuals qualified to become Board members; to evaluate the independence of existing and prospective directors; to review the ethics report from the Internal Audit Department; and, to review the Company's practices that relate to matters of environmental, social and governance framework initiatives. A copy of the Governance and Nominating Committee charter is attached to this proxy statement as Exhibit C. With respect to nomination of director candidates, the Governance and Nominating Committee will consider nominations from the Company’s shareholders using the same criteria as for all other nominations. Shareholder nominations must be made in writing and delivered or mailed to the Corporate Secretary no later than one-hundred-twenty days prior to the anniversary date of the immediately preceding annual meeting of shareholders of the Company. Any nomination not made in accordance with the Bylaws and the requirements of Rule 14a-19 of the 1934 Act may be disregarded at the discretion of the Chair of the Annual Meeting.

Additionally, the Governance and Nominating Committee recommends appointments of directors to the Board’s Committees, reviews and approves the related party nature of all related party transactions, and reviews the adequacy of the Company’s Corporate Governance Guidelines, and the Company’s Code of Business Conduct and Ethics and recommends any proposed changes to the Board for approval. Current members of the Governance and Nominating Committee are Mr. David W. Karp, Mr. Joseph P. Marushack, Mr. John C. Swalling, and Ms. Linda C. Thomas. Mr. Karp was appointed to the Governance and Nominating Committee in 2015, Mr. Marushack was appointed in 2022, Mr. Swalling was appointed in 2011, and Ms. Thomas was appointed in 2014. Mr. Swalling is the Chair of the Governance and Nominating Committee. All of the members of the Governance and Nominating Committee are considered by the Board to be independent directors within the meaning of currently applicable rules of the Securities and Exchange Commission and the Nasdaq Global Select Market listing requirements.

Director Nomination Criteria

The Governance and Nominating Committee believes that certain criteria should be met by director nominees to ensure effective corporate governance of the Company. Qualified candidates are those who, in the judgment of the Governance and Nominating Committee, possess certain personal attributes, a diversity of ideas and viewpoints, and a sufficient mix of experience and related attributes to assure effective service on the Board. The personal attributes of director nominees that the Governance and Nominating Committee considers include:

● Integrity. Each candidate shall be an individual who has demonstrated integrity, honesty, fairness, responsibility, good judgment, and ethics in his or her personal and professional life and has established a record of professional accomplishment in his or her chosen field.

● Leadership. Each candidate should be or have been in a generally recognized position of leadership in the candidate’s field of endeavors.

● Independence. No candidate, or family member (as defined in Nasdaq Global Select Market listing rules) or affiliate or associate (as defined in federal securities laws) of a candidate, shall have any material personal, financial or professional interest in any present or potential competitor of the Company.

● Active Participation. Each candidate must be prepared to participate fully in Board activities, attendance at, and active participation in, meetings of the Board and the committee(s) of which they are a member, and not have other personal or professional commitments that would, in the Governance and Nominating Committee's sole judgment, interfere with or limit their ability to do so.

● Best Interests of All Shareholders. Each candidate must be prepared to represent the best interests of all the Company’s shareholders and be willing to state their independent opinions in a constructive manner.

● Collegiality. Each candidate should be able to work well with other directors and executives of the Company.

● Diversity. Each candidate's background, qualifications and personal characteristics and the candidate's impact on the diversity of the Board's composition in terms of age, skills, gender, race and other factors relevant to the Company's business.

The Governance and Nominating Committee will consider and evaluate all candidates identified through the processes described above, including incumbents and candidates proposed by the Company’s shareholders. After consideration, the Governance and Nominating Committee will finalize its list of recommended candidates for the Board's consideration. Candidates who are then approved by the Board are included in the recommended slate of director nominees in the Company's proxy statement.

Director Experience, Tenure, Diversity and Refreshment

The Board maintains a unique balance of experience, tenure, diversity, cultural and local market knowledge and broad subject matter expertise. While our longer-tenured directors carry a wealth of experience and deep understanding of the Company and our industry, the Board embraces the need for fresh perspectives and is committed to continued director refreshment.

The Board's refreshment activities are ongoing. Since 2014, the Board added eight new directors including one in 2023, one in 2021, one in 2018 and Mr. Huston is nominated as a new director at the Annual Meeting. One long-serving director resigned from the Board in January 2024 and another long-serving director will not be nominated for re-election at the Annual Meeting.

The Board employs a balanced approach to appointing Board committees. We believe this refreshment strategy results in a membership that maintains new and contemporary perspectives, ideas and approaches.

Board and Committee Evaluations

The Governance and Nominating Committee leads and oversees the annual evaluation of the Board and Board committees, including an annual individual director self-assessment. Additionally, there is a biannual independent third party hosted survey to determine whether the Board and its committees are functioning effectively. The Governance and Nominating Committee establishes the evaluation criteria, oversees the evaluation process, discusses the results with the Board, and implements any changes that emerge from the evaluations that the Board deems appropriate to enhance Board effectiveness.

An independent consultant provides assistance with the design of the online survey instrument and administers the survey on behalf of the Governance and Nominating Committee, thereby assuring anonymity of participant responses through a secure, encrypted website. A written report of total Board data, as well as data for the Board committees, is prepared by the consultant, analyzing the closed-end questions and including the verbatim comments offered by directors at the close of each section of the survey that may provide recommendations for improvement. The report also tracks current data against results from previous surveys, where comparable.

Director Compensation

In 2023, all non-officer directors who did not serve as a committee chair received a $30,000 annual cash retainer. Annual cash retainers of $42,500, $36,000, and $35,000 were paid to the independent lead director and Chair of the Governance and Nominating Committee, the non-officer Chair of the Audit Committee, and the non-officer Chair of the Compensation Committee, respectively, in 2023. All non-officer directors received an additional $25,000 in cash to be used for the purchase of the Company’s common stock on the open market following the 2023 Annual Meeting. Members of the Audit Committee receive $1,000 for each Audit Committee meeting attended and members of the Governance and Nominating, and Compensation Committees receive $850 for each committee meeting attended. For information as to specific amounts paid to each of our directors in 2023, see "Director Compensation" in this proxy statement.

Compensation Committee Interlocks and Insider Participation

The following directors served as members of the Compensation Committee during 2023: Mr. Hanneman, Mr. McCambridge, Ms. Nelson, Mr. Swalling, and Mr. Drabek. No member of the Compensation Committee was, during the year ended December 31, 2023, an officer, former officer, or employee of the Company or any of its subsidiaries, or had any relationship requiring disclosure by the Company under the Securities and Exchange Commission rules requiring disclosure of certain relationships and related party transactions. No executive officer of the Company served as a member of the compensation committee of another entity in which one of the executive officers of such entity served on the Company's Compensation Committee, the board of directors of another entity in which one of the executive officers of such entity served on the Company’s Compensation Committee, or the compensation committee of another entity in which one of the executive officers of such entity served as a member of the Board during the year ended December 31, 2023.

Code of Conduct

The Company has adopted a Code of Conduct, which includes a Code of Ethics for all employees, including executive officers, and all of our non-employee directors. We will furnish a copy of the Code of Conduct to shareholders, at no charge, upon written request to the Corporate Secretary at P.O. Box 241489, Anchorage, AK 99524-1489.

The Code of Conduct addresses the professional, honest and ethical conduct required of each employee and director, conflicts of interest, disclosure process, compliance with laws, rules and regulations (including securities trading), corporate opportunities, confidentiality, fair dealing, protection and proper use of Company assets, and encourages the reporting of any illegal or unethical behavior through robust reporting protocols and whistleblower protections. A waiver of any provision of the Code of Conduct may be made only by the Company's Governance and Nominating Committee of the Board and must be promptly disclosed as required by currently applicable rules of the Securities and Exchange Commission and the Nasdaq Global Select Market listing requirements. The Company will disclose any such waivers.

The Company’s management team develops the Company’s strategic direction and oversees its execution, while the Board is charged with providing guidance, insight and oversight as to the strategy, initiatives and management’s performance. As discussed elsewhere in this proxy statement, the Board and management also remain committed to fostering an effective and efficient risk and control environment that includes an emphasis on an ethically driven culture and an ongoing investment in our employees and community.

Prohibition against Hedging and Insider Trading Policy

Under the terms of the Company’s Insider Trading Policy, all Directors, officers (including, but not limited to, all our named executive officers) employees, and consultants, are prohibited from engaging in any hedging transaction involving shares of the Company’s securities, such as a put, call, other derivative securities, short sale or short-term trading. Our Directors, officers (including, but not limited to, all our named executive officers), employees, and consultants are also strongly discouraged from pledging any Company securities. The Insider Trading Policy also prohibits all Directors, officers (including, but not limited to, all our named executive officers) employees, and consultants from trading on the basis of material non-public information.

Compensation Recovery Policy

In 2023, the Company adopted a Compensation Recovery Policy. The Compensation Recovery Policy provides that if the Company is required to prepare a qualifying accounting restatement, the Company will, unless an exception applies, recover reasonably promptly the excess amount of erroneously awarded incentive-based compensation, whether cash or equity, provided to a covered executive over the amount that otherwise would have been received by the covered executive had such compensation been determined based on the restated financials, computed without regard to any taxes paid. This policy applies incentive-based compensation received by a covered executive on or after December 1, 2023.

The Compensation Recovery Policy was filed as Exhibit 97 to our Annual Report on Form 10-K for the year ended December 31, 2023.

Environmental, Social, Governance and Leadership Highlights

The Company is committed to promoting sound environmental, social, governance ("ESG") and effective leadership through strong Board leadership and management oversight of the Company’s processes. Broadly speaking, our senior management team develops the Company’s ESG strategic direction and oversees its execution while the Board, primarily through the Governance and Nominating Committee is charged with providing guidance, insight and oversight as to the strategy, initiatives and management’s performance. In addition, the Company’s Audit Committee and Compensation Committee also play significant oversight roles with respect to the external communications and human resources implementation elements, respectively, of the Company’s overall ESG initiatives.

Environment

Lending in compliance with all applicable environmental laws and regulations: When property is involved in a lending transaction, whether used for a real estate business or as collateral for commercial and industrial lending, the Bank is committed to complying with all applicable environmental laws and regulations. For example, before a lending transaction takes place, the bank receives a property questionnaire regarding current and historical compliance with environmental laws, including groundwater and/or soil contamination, the presence of asbestos, etc. Other inspections or tests may also be performed. The final lending documentation includes an environmental agreement obligating the borrower to comply with all applicable environmental laws and regulations, committing the borrower to cure any violations and notifying the Bank should there be a breach.

Sustainability Master Plan Project: In 2023, the Bank received a building recommendation report on its main headquarters building in Anchorage, Alaska that encompassed Solar Power and other Green Building Modifications. The Bank is currently reviewing and assessing the recommendations to determine next steps of this project. The goal of the Sustainability Master Plan is to address revitalizing the aging infrastructure of our 52-year-old headquarters building. Some of these projects encompass equipment replacement due to age, implementing energy efficiencies and renewable resources, and sustainability in the event of a catastrophic natural disaster.

Financing the Clean Energy Transition: The Bank recognizes the risks created by climate change and we are working to be part of the solution. To accelerate the transition to clean energy, we have been actively engaged with the C-PACER program (Commercial Property Assessed Clean Energy & Resilience) in Alaskan communities to drive energy improvements in local communities. By facilitating the financing of energy improvements and renewable energy in Alaska, we are doing our part in accelerating the clean energy transition while building a greener, stronger community.

Social

Diversity, Equity, and Inclusion ("DEI"): The Bank values all of our 472 employees. We strive to ensure a respectful, diverse, and inclusive environment and experience for all our employees. We support and cultivate an open and respectful environment where everyone can actively contribute, have equal access to opportunities and resources, be themselves, and realize their potential. This is reflected in our policies, which encourage individual values, strengths, and protections to provide gender diversity and equality in the workplace and reinforced through our annual anti-harassment training. We believe that through these efforts, our relations with our employees are highly satisfactory. The following table details information about employee diversity as of December 31, 2023:


Employee Category	Women	Men	Racial Minority	Disability	Veteran
Full-Time Equivalent	66%	34%	34%	3%	1%
Executive and Senior Management	37%	63%	9%	6%	6%
Board of Directors	23%	77%	15%	8%	8%

We also emphasize inclusion through our hiring and compensation practices. As an Equal Opportunity Employer, we consider a pool of diverse candidates for open positions and internal advancement opportunities and treat all our applicants with the same high level of respect regardless of their gender, ethnicity, religion, national origin, age, marital status, political affiliation, sexual orientation, gender identity, disability or protected veteran status. The Bank participates in the Federal Deposit Insurance Corporation ("FDIC") Financial Institutions Diversity program designed to assess the diversity policies and practices of FDIC regulated financial institutions. In 2023, The Bank completed the Federal Reserve Bank’s diversity self-assessment.

We do not ask potential candidates about their current or previous compensation during the hiring process, and we incorporate equal and fair pay reviews into every employment compensation decision to address issues related to pay discrimination. Our annual Affirmative Action Plan continues to focus our DEI efforts on increasing the number of veterans and persons with disabilities in our workforce.

Employee Benefits: The Bank provides for a strong work /life balance, including generous paid time off and paid parental leave for all Northrim Bank and Residential Mortgage employees. Benefit offerings include education reimbursements that match the maximum amount allowed under the IRS limit to encourage our employees’ ongoing education. For those employees who have additional leave needs, Northrim offers an additional voluntary short-term disability plan. Diversification of some of our benefit options now allows employees more choice in the benefits that best meet their needs.

Training: The Bank believes that well-trained and highly motivated employees are better able to understand and fulfill customer needs and preferences, which are key to providing our “Superior Customer First Service”. Our current company-wide employee training program focuses on the Bank’s culture, Superior Customer First Service, general sales skills, and various technical areas related to job function. We also ensure that our employees complete all necessary consumer compliance trainings. Employees are required to read the Employee Handbook, the Code of Business Conduct and Ethics, as well as our Information Technology policies annually. We continue to enhance our employee training annually and ran another successful Management Training Academy in 2023.

Employee Health and Wellness: We understand the importance of prioritizing our employees’ health. We offer a comprehensive benefits plan for our employees that includes medical, dental, vision and prescription drug insurance, preventive healthcare benefits, and employee assistance programs for mental health, among others. Additionally, we assist our employees with setting up ergonomic offices upon request, such as providing a standing desk, to promote employee health and wellness.

We also have developed a robust Wellness Program that includes access to Noom, a platform that helps employees achieve their personal mental and physical health goals. The Bank also sponsors wellness events such as 5K walks/runs, as well as team sporting events to encourage wellness and team building. Additionally, the Bank provides annual State of Alaska Park parking passes to all employees to encourage them to get outside, be healthy and explore nature.

Volunteering and Employee Giving: We actively support employees taking part in a variety of community activities, and we provide community volunteer opportunities during work hours. Employees are encouraged to serve in leadership roles with nonprofit organizations and to share their expertise in the community.

In 2023, Bank employees volunteered over 2,300 hours in their local communities. Some of the areas where our employees have supported their community can be found below:

◦Teach Children to Save. Teams of employees help students learn the importance of saving for the future through the American Bankers Association (ABA) Teach Children to Save program.

◦School-Business Partnership. Employees work closely with neighborhood schools to encourage students to become engaged in their community and school.

◦Financial Literacy Classes. Our financial literacy classes at local nonprofits provide an underserved community with critical lessons in establishing credit, saving, and budgeting.

◦Paint the Town. Employees volunteer to paint the home of an individual or family through the popular annual NeighborWorks' Paint the Town event.

◦United Way. Since the Bank was founded, the Bank and our employees have contributed over $2 million to support United Way. In 2023, employees participated in the annual United Way Campaign and pledged

$150,000 in support of local communities throughout Alaska and in Washington State. This total includes direct donations from employees and the Bank’s 50% match for employee gifts to United Way.

Community Reinvestment Act ("CRA"): We are committed to serving the needs of our entire community, including small businesses and low- and moderate-income areas. This is reflected in our most recent rating completed by the FDIC in May 2023, where we received a Satisfactory CRA rating.

To meet the credit needs of Alaskan communities, in 2023 we opened a branch in Kodiak, a permanent branch in Nome (to replace the temporary branch established in December 2022 to support the community after Typhoon Merbok), and a loan production office in Homer, with the ability to serve the surrounding areas as well. When combined, our 19 branches and our wholly-owned mortgage brokerage company, Residential Mortgage, LLC, the Bank is able to serve approximately 90% of Alaska’s population.

Affordable, Low Income and Workforce Housing: Accessible housing continues to be a critical need throughout Alaska. The Bank works with nonprofit organizations statewide to support affordable, low income and workforce housing initiatives. In 2023, the Bank financed the construction of three low income housing projects with Cook Inlet Housing Authority resulting in 77 new units in Anchorage and Wasilla. Additionally, the Bank financed the construction of 48 units for families and seniors in Valdez. The Bank also provided financial support to HAPPP (Housing Alaskans, a Public Private Partnership), a nonprofit housing trust formed in 2022 to produce, preserve, and protect housing. Its mission is to address Alaska’s housing crisis by using creative funding solutions to bridge the gap to bring housing projects online, incentivizing housing developers and providers with operational and capital funding to help projects cross the finish line.

SBA Loan Programs: Small businesses are at the heart of our community and the Bank is committed to serving the needs of Alaska. Access to capital is critical for the recovery and growth of many small businesses, especially during challenging times such as this past year. In 2023, the Bank approved 14 SBA loans totaling over $11 million and was recognized for 2022 production as both Alaska’s SBA Community Lender of the Year and the SBA Alaska 504 Third Party Lender of the Year.

The Bank was the largest participant in the 2023 State Small Business Credit Initiative in Alaska that empowered small businesses to access capital needed to invest in job-creating opportunities as the country emerges from the pandemic. Alaska is allocated to receive roughly $59 million over the course of the 10-year program. The Alaska Small Business Development Center is the administrative lead for the program for the State and deploys the funding to lenders and investment funds. Northrim accounted for 13 loans totaling over $16 million in this program in 2023.

Community Giving: As a local, community bank, the Bank takes its commitments to Alaska very seriously and we pride ourselves in taking an active role in building the communities we serve. Improving the economic vitality and quality of life where we do business is in the best interest of our customers, our employees, our company, and our industry. We are committed to sharing our time, talents, and other resources to meet community needs.

We focus our giving so we can make meaningful contributions, measure the results of our contributions, and work more closely with the organizations we support. Our focus areas are:

◦Community and economic development

◦Programs to strengthen low-income families

◦Health and wellness programs that support healthy communities

◦Higher education through the State of Alaska Education Tax Credit Program

In 2023, the Bank contributed over $1.2 million to organizations throughout Alaska. Some of these key organizations include United Way, University of Alaska Foundation, Camp Fire Alaska, Alaska Native Heritage Center, Anchorage Economic Development Corporation and Housing Alaskans, a Private Public Partnership.

Governance

Compliance and Code of Conduct: We are deeply committed to complying with all laws and regulations while operating and maintaining a high standard of business and personal ethics. We do so by ensuring we operate with integrity, abiding by all applicable federal, state and local laws, and completing annual compliance trainings.

The Company maintains a Code of Business Conduct and Ethics. The Code of Business Conduct and Ethics addresses the professional, honest and ethical conduct required of each employee and director. It provides guidance on topics including conflicts of interest, disclosure process, compliance with laws, rules and regulations (including securities trading), corporate opportunities, confidentiality, fair dealing, protection and proper use of Company assets, and the importance of reporting of any suspected illegal or unethical behavior through a variety of methods, including a confidential hotline, and whistleblower

protections. Every director, executive, manager, officer, and employee is expected to comply with the Bank’s Code of Business Conduct and Ethics.

Management: We are committed to promoting sound ESG practices and effective leadership through strong Board leadership and management oversight of the Bank’s processes. Broadly speaking, our senior management team develops our ESG strategic direction and oversees its execution. The Board is charged with providing guidance, insight and oversight to the strategy, initiatives, and management’s performance, which is expressly included in the Bank’s Corporate Governance Guidelines. This is done primarily through the Governance and Nominating Committee, who reviews and reassesses management’s ESG framework and initiatives. However, the Audit and Compensation Committees have ESG-related responsibilities as well. The Audit Committee oversees external communications, and the Compensation Committee oversees human resource management matters that intersect with ESG. Both committees conduct their ESG responsibilities in conjunction with the Governance and Nominating Committee.

Together with our Board of Directors, the Bank has adopted an ESG policy to reflect our commitment to environmental, social and governance factors in the development of our business strategies. Our commitment to good corporate citizenship and the achievement of ESG policy goals enhances our ability to pursue business opportunities and manage risks across our business, and it supports our values in addressing the environmental and social challenges faced by the communities we serve.

Marketing: It is our practice to design and offer loan products, advertisements and marketing pieces that are clear and easy for individuals and businesses to understand and do not discriminate on a prohibited basis. It is also our practice to be transparent, clear, and conspicuous, and state information with equal prominence and close proximity when required. All advertising complies with the regulatory requirements to include Equal Credit Opportunity Act, rules against unfair, deceptive, or abusive acts or practices, Truth in Lending Act and the Fair Housing Act. Our Compliance Department ensures that all regulatory and disclosure requirements have been met.

EXECUTIVE OFFICERS

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The following table sets forth certain information about the Company’s executive officers:


Name/Age	Position	Has Served as an Executive Officer Since
Jed W. Ballard, 45 (1)	Executive Vice President, Chief Financial Officer of the Company and the Bank	2018
Benjamin D. Craig, 49(2)	Executive Vice President, Chief Information Officer of the Bank	2015
Michael G. Huston, 56 (3)	President, Chief Executive Officer and Chief Operating Officer of the Company. President and Chief Executive Officer of the Bank	2017
Joseph M. Schierhorn, 66(4)	Chairman of the Company and of the Bank	2001
Amber Zins, 42(5)	Executive Vice President, Chief Operating Officer of the Bank	2020

(1) Mr. Ballard joined the Company at the beginning of 2018 as Executive Vice President, Chief Financial officer for both the Company and the Bank. Prior to joining the Company, Mr. Ballard was with KPMG, an international public accounting firm, for over sixteen years, with his last role being Senior Audit Manager for KPMG. Mr. Ballard holds a Bachelors of Business Administration, with a major in Accounting from the University of Alaska Fairbanks and is a Certified Public Accountant. Mr. Ballard is a lifelong Alaskan and a shareholder of Bering Straits Native Corporation. He is a past mentor for the University of Alaska Anchorage Leadership Fellows program. Mr. Ballard is currently a Board Member of Junior Achievement of Alaska and is a Board Member and President of the Bering Straits Foundation. Mr. Ballard is also currently a Board Member and Vice-Chair of the Audit and Finance Committee of the Alaska Native Heritage Center. Mr. Ballard is also a graduate of the Pacific Coast Banking School.

(2) Mr. Craig joined the Bank in 2009 as Vice President, Information Technology Manager. He was promoted to Senior Vice President, Chief Technology Officer in 2010 and to his current position as Executive Vice President, Chief Information Officer in 2015. Mr. Craig began his technology career in the United States Air Force in 1995, where he honorably served until 2000 as a Computer and Communications Systems Manager. From 2000 to 2001, Mr. Craig

was Director of Network Operations at 3NF Corporation. Immediately prior to joining the Bank, from 2001 until 2009, Mr. Craig served as the Vice President, Information Technology Manager for River City Bank in California. Mr. Craig also formed the Anchorage Technology Forum in 2017, which he continues to lead, and from 2018 until 2020 was a Board member of the Alaska Association for Career and Technical Education.

(3) Mr. Huston joined the Bank in May of 2017 as Executive Vice President, Chief Lending Officer. Mr. Huston was promoted to President of the Bank on March 26, 2022 and was promoted to President, Chief Executive Officer and Chief Operating Officer of the Company and President and Chief Executive Officer of the Bank on April 6, 2024. Prior to joining the Bank, Mr. Huston was Executive Vice President and Chief Banking Officer at First Interstate BancSystem, where he worked for twenty-five years. He graduated Magna Cum Laude from Arizona State University with a Bachelor of Science degree in Finance. Mr. Huston is also a graduate of the Pacific Coast Banking School. Mr. Huston has been Vice Chairman for Housing Alaskan, a Public Private Partnership, since 2023.

(4) Mr. Schierhorn previously served as Assistant Vice President, Commercial Loan Officer, with Key Bank Alaska from 1988 until 1990. He joined the Bank in 1990 as Vice President and Commercial Loan Officer, was appointed Senior Vice President, Commercial Loan, and Compliance Manager in 2000, and in 2001 was named an executive officer as Senior Vice President, Chief Financial Officer, and Compliance Manager of the Company and the Bank. He was named Executive Vice President, Chief Financial Officer in 2005, and Corporate Secretary in 2013. In 2013, Mr. Schierhorn was appointed Chief Operating Officer of the Company and the Bank while continuing to serve as the Executive Vice President, Chief Financial Officer, and Corporate Secretary of the Company and the Bank until May 2014. In March of 2015, Mr. Schierhorn was promoted to President of the Bank and in January 2016, was named Chief Executive Officer of the Bank, and retained his title of Executive Vice President, Chief Operating Officer of the Company. In June 2017, Mr. Schierhorn was named President and Chief Executive Officer of the Company, while retaining the title of Chief Operating Officer. At the beginning of 2018, he was named Chairman of both the Company's and the Bank's Board of Directors while retaining his titles of President and Chief Executive Officer of the Bank, and President, Chief Executive Officer and Chief Operating Officer of the Company. On March 26, 2022, Mr. Schierhorn ceased serving as the President of the Bank, while continuing to serve as the Chairman, President & Chief Executive Officer and Chief Operating Officer of the Company and Chairman and Chief Executive Officer of the Bank. On April 6, 2024, Mr. Schierhorn ceased serving as President, Chief Executive Officer and Chief Operating Officer of the Company and Chief Executive Officer of the Bank while continuing to serve as Chairman of the Company and the Bank. Mr. Schierhorn earned his Juris Doctorate and Masters in Management from Willamette University in 1985, is a Certified Public Accountant, and member of the Alaska Bar Association. Mr. Schierhorn is a past-President of the Alaska Bankers Association and has been on the Board of Directors of the Pacific Bankers Management Institute representing the Pacific Coast Banking School since 2017. Mr. Schierhorn has been a Director of Pacific Wealth Advisors, LLC, and Pacific Portfolio Trust Company since 2017.

(5) Ms. Zins joined the Bank in 2008 when she was hired as the Internal Audit Manager until 2017 when she transitioned to Senior Vice President, Human Resources Director. In 2020 she was named Executive Vice President, Chief Administrative Officer. Ms. Zins was promoted to Executive Vice President, Chief Operating Officer of the Bank in 2022. She holds a Bachelor of Business Administration with a major in Accounting from the University of Alaska Fairbanks and is a Certified Public Accountant. Ms. Zins is a 2023 graduate of the Pacific Coast Banking School. She volunteers with United Way of Anchorage and was an adjunct professor at the University of Alaska Anchorage for 10 years.

Each of our named executive officers have employment agreements with the Company.

COMPENSATION DISCUSSION AND ANALYSIS

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This section provides information regarding the compensation program in place for those who served as Chief Executive Officer, Chief Financial Officer, and the three other most highly compensated executive officers who were serving as executive officers of the Company or the Bank at the end of 2023, outside of those who served as Chief Executive Officer and Chief Financial Officer (collectively, the "named executive officers"). This section includes information regarding the overall objectives of our compensation program and each element of compensation.

The Compensation Committee believes that the Company’s current annual and long-term incentive compensation programs for its executives, including the named executive officers, senior managers and key employees serve to appropriately focus these individuals on the Company's current and future business needs. The Company’s compensation program is designed to mitigate risk by capping performance-based payments and defining performance criteria focused not only on profitability and growth,

but also on managing risk and expenses and improving credit quality. The Compensation Committee continually assesses the Company’s compensation objectives, philosophy, forms of compensation for the Company’s executives, and has determined that the Company’s current compensation practices and policies do not create risks that are reasonably likely to have a material adverse effect on the Company.

The Company has included Proposal 2, a non-binding advisory vote on executive compensation, in this proxy statement in accordance with the provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") and regulations of the Securities and Exchange Commission. Proposal 2 provides the shareholders of the Company with a non-binding advisory vote on compensation programs for our named executive officers (sometimes referred to as "say on pay") as described in this section of this proxy statement. Although the vote is non-binding, the Board and the Compensation Committee value the opinions of our shareholders and will consider the outcome of the vote when making future compensation decisions for our named executive officers. At the annual meeting of our shareholders that was held on May 25, 2023, the Company’s shareholders expressed a preference that an advisory vote on executive compensation of the Company’s named officers should occur every year. Accordingly, we are holding the non-binding advisory vote outlined in Proposal 2 at the Annual Meeting.

Overview of Compensation Program

The Compensation Committee bases its compensation strategy on maintaining the Company’s primary strategic goal: to maintain, over the next several years, a well-capitalized, superior customer first service-focused financial institution headquartered in Anchorage and serving the greater Anchorage, Matanuska Valley, Fairbanks, Kenai Peninsula, Kodiak, Northwest, and Southeast Alaska areas, as well as various other markets in and outside Alaska. We believe that achieving the Company’s business and growth strategies will create long-term value for shareholders and will protect the interests of our customers.

Compensation Philosophy and Objectives

The Compensation Committee believes that compensation packages for the Company’s named executive officers, key personnel, and other employees should be based, to a substantial extent, on achievement of the goals and strategies the Board has established. When establishing salaries, performance based payments, and stock-based awards for named executive officers, the Compensation Committee considers: (i) the Company’s financial performance during the past year; (ii) the individual officer’s performance during the past year based upon the officer’s scope and level of responsibility and how well that officer managed and carried out those responsibilities to achieve the Company’s goals, as well as how well that officer dealt with unexpected challenges and opportunities that were not anticipated in the Company’s annual goal setting process; and (iii) market data related to the salaries of executive officers and key personnel in similar positions with companies of comparable size, as well as other companies within the financial institutions industry. For named executive officers other than the Chief Executive Officer, the Compensation Committee considers recommendations made by the Chief Executive Officer.

The Company has developed and implemented policies for determining salary structure, annual performance based payments, and employee stock option, performance shares and other stock-based awards based on recommendations of independent, nationally recognized compensation consultants. These consultants periodically evaluate the Company’s executive compensation programs at the request of the Compensation Committee.

Role of Executive Officers in Compensation Decisions

The Compensation Committee makes all decisions related to the compensation of the Company’s Chief Executive Officer, subject to the Board’s further approval. The Compensation Committee approves recommendations made by the Chief Executive Officer for all compensation for other executive officers of the Company. All compensation for the Company’s Chief Executive Officer and Chief Financial Officer, and the Bank's President, and Chief Operating Officer is further approved by the Board.

The Chief Executive Officer annually reviews the individual performance of the Company’s key employees. The Chief Executive Officer's recommendations for all compensation, based upon individual officer performance evaluations, are presented to and discussed with the Compensation Committee. The Compensation Committee can modify any recommended adjustments or awards as deemed to be appropriate.

Independent Consultants

The Compensation Committee has the authority to engage independent compensation consultants. The Compensation Committee, from time-to-time as deemed appropriate, has engaged the services of Frederic W. Cook and Co., Inc. ("FWCC") to analyze and evaluate the Company’s overall compensation program and practices as compared to a selected group of publicly traded peer group banks of similar size within the Pacific Northwest region, California and Hawaii. The Governance and

Nominating Committee engaged FWCC to assist it with a review of compensation for non-officer members of the Board in 2019, 2021 and 2023. In 2020 and 2022, the Compensation Committee engaged FWCC to assist the Compensation Committee with a compensation survey in connection with the review of compensation for the named executive officers and other senior officers. Additionally, in 2017, FWCC advised the Compensation Committee regarding the creation of the 2017 Stock Incentive Plan, in 2019 regarding changes to the Company's Profit Sharing Plan, in 2020 regarding the creation of the 2020 Stock Incentive Plan, and in 2023 regarding the creation of the Company's 2023 Stock Incentive Plan ("2023 Plan").

In connection with its engagements with FWCC, the Compensation Committee considered various factors bearing upon FWCC’s independence, including, but not limited to, FWCC’s policies and procedures designed to prevent conflicts of interest and the existence of any business or personal relationship that could affect FWCC’s independence. After reviewing these and other factors, the Compensation Committee determined that FWCC was independent and that FWCC's engagements with the Compensation Committee did not present any conflicts of interest.

Executive Compensation

The Company’s executive compensation program currently consists of four key elements: (i) base salary; (ii) a performance-based annual payment; (iii) periodic stock-based compensation awards; and, (iv) retirement and other deferred compensation benefits. The Compensation Committee engages the services of a qualified compensation consultant as appropriate, and it considers the Company’s executive compensation package as a whole. Each component of the executive’s package is in large part provided for under the terms of the executive’s employment agreement including base salary, which can change from time-to-time, as well as a performance based payment opportunity for certain named executive officers under the Company’s Profit Sharing Plan and retirement benefits according to the prescribed terms of the executive’s employment agreement. The Compensation Committee’s and the Company’s philosophy is to be consistent in the timing of its review of the executive's performance and opportunities for compensatory recognition. The Compensation Committee and the Company believe that this practice facilitates the retention of the executive over the short and long-term and appropriately rewards performance based upon each executive’s level of responsibility, accountability, leadership, and measured contributions to the organization.

The Compensation Committee believes that this four-part approach best serves the interests of the Bank, the Company, and its shareholders. This approach enables the Company to meet the requirements of the highly competitive banking and lending environment in which it currently operates while ensuring that executive officers are compensated in a way that advances both the short and long-term interests of shareholders. The performance based annual payment opportunity, which is provided for named executive officers under the Company’s Profit Sharing Plan, rewards and motivates individual performance, and is based in large part on the contribution made by the officer to the Company’s overall performance. Stock-based awards, including stock options granted in the past, relate a significant portion of long-term remuneration directly to stock price appreciation and retention with the Company. The Compensation Committee believes that these awards also closely align the interests of the executive and the Company’s shareholders.

The Compensation Committee annually evaluates both executive performance and the structure of executive compensation to ensure that the Company maintains its ability to attract and retain customer focused employees in key positions. From time-to-time, the Compensation Committee engages an independent consultant to analyze executive compensation. The last evaluation of executive compensation that included an analysis by FWCC was done in 2022. This evaluation ensures that compensation for executives is reasonable and competitive with similar positions held in peer group organizations in the local Alaska market, the Pacific Northwest, California, and Hawaii. The peer group that the Compensation Committee used for this evaluation in 2022 consisted of 16 Pacific Northwest, California and Hawaii commercial banks similar in size to Northrim: HomeStreet, Heritage Financial, Central Pacific Financial, F&M Bancorp, Heritage Commerce, Bank of Marin, Sierra Bancorp, Five Star Bancorp, FS Bancorp, Central Valley Bancorp, Territorial Bancorp, First Northwest Bancorp, Oak Valley Bancorp, Timberland Bancorp, First Northern Bancorp, and Riverview Bancorp. The Compensation Committee objectively evaluates the performance of the Company’s compensation program by periodically comparing the weight and values of its components to the Company’s peer group of Pacific Northwest, California and Hawaii financial institutions as surveyed by independent compensation consultants who gather pertinent salary, benefit, and equity compensation data from their current proxy statement disclosures.

The Compensation Committee’s approach for giving consideration to each element of the Company’s executive compensation package during a given year is intended to bring consistency to the overall program, and to support the Company’s philosophy to provide opportunity during a given year to measure and recognize the performance and contributions of individual executive officers and officers in key positions. For example, in the first quarter, the Compensation Committee considers and approves awards to participants under the Company’s Profit Sharing Plan, selects criteria for the Company’s Profit Sharing Plan’s plan year, considers and approves stock-based compensation awards, and conducts the annual officer and executive officer salary review.

The Compensation Committee takes an approach based on both quantitative and qualitative factors when considering the compensation of the Company’s Chief Executive Officer. The Compensation Committee considers the Company’s financial results for a given year compared to the Company’s plan and actual results for the previous year. The Compensation Committee also considers certain qualitative accomplishments of the Chief Executive Officer in terms of the Company’s realization of its corporate objectives, their foresight, their extensive community involvement, as well as their leadership in strategically positioning the Company for future significant developments in the banking industry and the Company’s market and developing long-term strategies for the future direction and growth of the organization.

Elements of Executive Compensation

Each year, the Compensation Committee determines whether or not the employment agreements of the named executive officers should be renewed, and whether or not a change in terms is appropriate. See further discussion of the employment agreements under Executive Compensation - Employment Agreements.

The Company and the Bank do not have any arrangements in place for or with the named executive officers whereby their compensation may be comprised of proportionate amounts of base salary, performance based annual payments, options and other stock-based compensation, or retirement and other deferred benefits. Instead, compensation is comprised of such components in amounts as determined by the Compensation Committee at its discretion and with respect to the components of compensation for the Company's Chief Executive Officer and Chief Financial Officer, and the Bank's President and Chief Operating Officer, approved by the Board.

Base Salary. Based on its consideration of competitive industry salaries and general economic conditions within the Company’s market area and the financial institution industry, the Company’s Human Resources Department has established a graded salary structure for all of the Company’s employees. Every salary grade is structured to allow for personal growth ranging from the grade’s entry-level benchmark through the mid-point range and to the upper-most level of annual salary for each grade. The matrix used to calculate annual merit increases applies factors related to the position of the individual’s current salary within the established ranges for her or his salary grade, predetermined rates of increase based on an annual survey of market data, and an evaluation of the employee’s performance. The Company's Human Resources Department reviews the schedule of matrix driven changes to individual officer annual base salaries and can make recommendations for any additional adjustments. Additionally, individual base salaries for named executive officers and other officers in key positions, other than the Chief Executive Officer, are reviewed and may be adjusted by the Chief Executive Officer. The Compensation Committee makes all decisions related to the compensation of the Company’s Chief Executive Officer. Officer base salary levels are reviewed annually in the first quarter of the Company’s fiscal year and any increases to base annual salaries are recommended to the Compensation Committee by the Chief Executive Officer for approval based on an assessment of an officer’s scope of responsibilities, experience, the officer’s individual performance, and contributions to the success of the organization. Additionally, the salaries of the Company's Chief Executive Officer and the Chief Financial Officer, and the Bank's President, and the Chief Operating Officer are reviewed and approved by the Compensation Committee and the Board.

Performance Based Annual Payment. In November of 2011, the Board approved the Company’s Profit Sharing Plan. Executive officers, in addition to all current employees of the Company and Bank who commenced employment payments calculated during the performance period, are eligible to participate in profit sharing in accordance with the provisions of the Company's Profit Sharing Plan. The selection of the Company's Profit Sharing Plan criteria occurs within one-hundred-twenty days of the beginning of the Company’s fiscal year. The selection of the criteria for 2023 occurred in March of 2023. Incentive-based compensation paid under the Company's Profit Sharing Plan may be subject to the clawback provisions of the Company's Compensation Recovery Policy for covered executives, including the named executive officers.

The Company's Profit Sharing Plan also provides that the Compensation Committee may designate any employee, including an executive officer, as ineligible to receive a profit sharing payment at its complete discretion. Additionally, the Compensation Committee may adjust any employee’s profit sharing payment at its discretion. However, no individual profit sharing payment can exceed ten percent (10%) of the entire profit sharing pool for any performance period. Unless otherwise approved by the Compensation Committee, no individual profit sharing allocation can exceed 150% of target. Total profit sharing allocations made to the Chief Executive Officer and Chief Financial Officer of the Company, and the President and Chief Operating Officer of the Bank, cannot exceed 25% of the profit sharing pool in any performance period. The profit sharing awards to the Company's Chief Executive Officer and the Chief Financial Officer, and the Bank's President and Chief Operating Officer, are reviewed and approved by the Compensation Committee and the Board.

In March of 2019, the Board amended the Company’s Profit Sharing Plan to fund the plan based on a target percentage of employees’ base salary as opposed to creating a pool based on a percentage of the Company’s pre-tax income. This target is based on the financial results of the Company. Specifically, 60% of the profit sharing is based on a comparison of annual budget to actual pre-tax income for the Community Banking segment and 40% is based on the Company’s consolidated return

on average assets rank in a peer comparison of U.S. banks with assets between one and five billion dollars. A tiered approach is taken for both criteria. In general, funding between 50% and 150% of the target occurs for the portion of the profit sharing that is based on budget to actual performance at the Community Banking segment. Funding of 50% of the target occurs when actual pre-tax income is equal to or less than 85% of budgeted pre-tax income. The maximum funding of 150% of the target occurs when actual pre-tax income is equal to or greater than 125% of budgeted pre-tax income. Funding between 50% and 150% of the target occurs using a tiered scale for budget to actual pre-tax income results. Funding between 50% and 150% of the target for the portion of the profit sharing that is based on the Company’s return on average assets as compared to peers occurs when the Company’s return on average assets is ranked in the top 71% to the top 10% of peer banks. Zero percent is applied for the Company's return on average assets if ranked 70% or below. A weighted average based on this funding criteria determines the total funding percentage of the target which can range from 30% to 150%. The funding percentage, which may be adjusted by the Compensation Committee at its discretion, is then applied to an individual’s targeted percent of base salary based on their grade to establish the total profit sharing amount. Once this amount is determined, 10% of the total profit share is reserved for allocation at the Chief Executive Officer's discretion.

The performance goals established by the Compensation Committee for the Company's Profit Sharing Plan for 2023 include measures based on the Company’s strategic goals for 2023. The Compensation Committee reviewed and approved management’s recommended thresholds for each criterion. In 2023, the Company had to meet the following minimum criteria in order for the approval of the profit sharing:

● A ratio of total regulatory capital to risk-weighted assets of at least ten percent (10%) for both the Bank and the Company;

● A ratio of tier one regulatory capital to risk-weighted assets of at least eight percent (8%) for both the Bank and the Company;

● A ratio of tier one regulatory capital to total average assets of at least five percent (5%) for both the Bank and the Company;

● A ratio of classified assets to total risk-based regulatory capital for the Company of no more than thirty percent (30%). (Classified assets include loans classified as substandard, doubtful or loss assets within the Bank’s internal risk rating system, plus other real estate owned and other repossessed assets.); and,

● Regulatory examination results must be acceptable.

Once the Company determined that the above criteria were met for 2023, the Compensation Committee approved management’s recommendation based upon the calculated payout under the Profit Sharing Plan’s matrix methodology resulting in an aggregate payout of $2.6 million for 2023, $587,051 of which was paid, in aggregate, to the named executive officers.

Stock-Based Compensation. The Compensation Committee is of the philosophy that offering stock-based incentives to executives and key employees: (i) attracts and retains the best available personnel for the long-term; (ii) enhances long-term profitability and shareholder value; and (iii) encourages employees to acquire and maintain stock ownership in the Company, thereby more closely aligning the interests of employees and shareholders. The Compensation Committee follows this philosophy, and subject to the Company’s employee stock incentive plans, the Compensation Committee may determine the employees eligible to receive stock options and other equity awards and to assess the amount of each such stock option or other equity award. Stock based incentive awards granted under the 2023 Plan may be subject to the clawback provisions of the Company’s Compensation Recovery Policy for covered executives, including the named executive officers.

The 2023 Plan, an omnibus plan approved by the Company's shareholders, authorizes the Board or the Compensation Committee to administer the 2023 Plan and to grant to eligible key employees restricted stock, restricted units, performance shares, performance units, stock appreciation rights, nonqualified stock options, or dividend equivalent rights. The Compensation Committee has not delegated any aspect of the administration of any of the Company’s stock incentive plans, including the 2023 Plan, to any other persons.

The 2023 Plan is designed to afford the Compensation Committee flexibility, consistency, and balance in determining and governing the terms and mix of the annual grant of equity based compensation awards to the Company’s executive officers and other employees key to the safe and profitable operation of the Bank. The participants in the 2023 Plan are members of the Company's and the Bank’s senior management team and other key employees. Participants, including certain of the Company’s named executive officers, are awarded stock-based compensation based on the value of equity compensation awards, and overall compensation, for comparable positions at peer institutions. Peer data was obtained from data received from FWCC, an independent, nationally recognized compensation-consulting firm, in 2022. The banks that were used to obtain this peer group

median were 16 Pacific Northwest, California and Hawaii commercial banks similar in size to Northrim: HomeStreet, Heritage Financial, Central Pacific Financial, F&M Bancorp, Heritage Commerce, Bank of Marin, Sierra Bancorp, Five Star Bancorp, FS Bancorp, Central Valley Bancorp, Territorial Bancorp, First Northwest Bancorp, Oak Valley Bancorp, Timberland Bancorp, First Northern Bancorp, and Riverview Bancorp.

The Compensation Committee believes that the awards of stock-based compensation serve to tie the executives’ interests to those of the Company’s shareholders. These awards also provide an incentive for the executives’ long-term retention given the competitive climate in the Bank’s marketplace for experienced and seasoned bankers. The methodology for calculating the maximum total value of equity awards that will be awarded to employees, including certain of the named executive officers, is calculated by taking the Company’s market capitalization times point five percent (0.50%). The Chief Executive Officer recommends proposed grantees and proposed award levels based on performance. The Compensation Committee has full discretion to approve, deny, or change any recommendations from the Chief Executive Officer. Additionally, awards of stock-based compensation made to the Company's Chief Executive Officer and the Chief Financial Officer, and the Bank's President and Chief Operating Officer, are reviewed and approved by the Board. The Compensation Committee also analyzes the financial impact of the grant on the Company’s income statement and the potential dilution of the grant to existing shareholders compared to prior grants and the Company’s peer group.

The Company has not established any program whereby executives or key personnel are required to own and purchase within any specific schedule a defined number of shares of the Company’s common stock.

Retirement and Other Deferred Benefits

Deferred Compensation Plan. The Bank established a Deferred Compensation Plan ("DCP") dated January 1, 1995, as amended October 3, 1996 and January 1, 2005, for the purpose of providing benefit planning to key employees of the Bank by permitting them to defer the receipt of compensation. All officers of the Bank and the Company, including the named executive officers, are eligible to participate and other key employees may become eligible to participate if so notified by the Compensation Committee.

The DCP provides that on or prior to December 31 of each year the DCP is in effect, any eligible employee may elect in writing to defer receipt of at least five percent (5%) to a maximum of one hundred percent (100%) of their salary to be paid in the calendar year following the year of election. Any election is irrevocable as to any salary payable in the next year and effective with respect to future years unless revoked by the participant prior to December 31 of the year preceding the year in which the deferral is to take effect. Under the DCP, eligible employees, including certain of the named executive officers, may elect to defer receipt of all or a portion of their remaining salary to be paid in the current calendar year if such written election is made within thirty days after they are first notified by the Compensation Committee of their eligibility to become a participant. The DCP provides that any eligible employee may elect to defer receipt of at least five percent (5%) to a maximum of one hundred percent (100%) of their performance-based payments for services to be performed in a succeeding plan year under the same conditions described above. All amounts deferred are credited to participant accounts with interest compounded annually. According to the DCP, interest while an eligible employee is not eligible for distributions is based on the Bank’s average yield on its total assets calculated on January 1, based on the prior year’s performance, less one percentage point. Interest after an employee starts taking distributions from the DCP is based on the market yield on U.S. Treasury securities for a term equal to two-thirds of the installment period of payments to the employee. None of the named executive officers elected to defer receipt of compensation in 2023.

The Company established a new Deferred Compensation Plan in November 2023 ("2023 DCP") that replaced the DCP. The 2023 DCP provides that on or prior to December 31 of each year the DCP is in effect, any eligible employee may elect in writing to defer receipt of at least one percent (1%) to a maximum of ninety percent (90%) of their salary to be paid in the calendar year following the year of election. Any election is irrevocable as to any salary payable in the next year and effective with respect to future years unless revoked by the participant prior to December 31 of the year preceding the year in which the deferral is to take effect. Under the 2023 DCP, eligible employees, including certain of the named executive officers, may elect to defer receipt of all or a portion of their remaining salary to be paid in the current calendar year if such written election is made within thirty days after they are first notified by the Compensation Committee of their eligibility to become a participant. The 2023 DCP also provides that any eligible employee may elect to defer receipt of at least one percent (1%) to a maximum of ninety percent (90%) of their performance-based payments for services to be performed in a succeeding plan year under the same conditions described above. All amounts deferred are credited to participant accounts with various investment options similar to the Bank’s Savings Incentive Plan 401k.

Northrim Bank Savings Incentive Plan 401k. Named executive officers participate in the Company’s qualified retirement plan originally established on July 1, 1992, the Northrim Bank Savings Incentive Plan ("401k Plan"), to the same extent and subject to the same rules and limitations as the Company’s and the Bank’s other employees. The 401k Plan provides a $1.00 match for

each $1.00 contributed by an employee up to five point five percent (5.5%) of the employee’s salary. Residential Mortgage participates in the plan as a separate division with a $1.00 match for each $1.00 contributed by an employee up to three point zero percent (3.0%) of the employee's salary.

Supplemental Executive Retirement Plan. The Bank adopted the Northrim Bank Supplemental Executive Retirement Plan ("SERP") effective July 1, 1994, as amended January 6, 2000, January 8, 2004, January 1, 2005, and January 1, 2015, for the benefit of its executive officers, including the named executive officers. As provided by the SERP, the Company makes annual contributions to participant accounts on January 1 at a percentage rate of annual base salary determined and approved by the Compensation Committee. The Compensation Committee can exercise its authority to determine and approve changes to this percentage, as well as approve new participants under the SERP. The Compensation Committee generally makes these determinations based upon recommendations of the Chief Executive Officer and upon consideration of the percentage rates of annual base salary contributed by the Company for each SERP participant and relative levels of each participant’s current responsibility. Additionally, contributions made to the Company's Chief Executive Officer and the Chief Financial Officer, and the Bank's President and Chief Operating Officer, under the SERP Plan are reviewed and approved by the Board.

Earnings under the SERP are credited for the year on January 1 and based on the Bank’s average yield on its total assets, less a three year rolling average of net loan charge-offs as a percentage of average loans outstanding for the respective periods. The SERP provides for payment of a specified amount to plan participants upon retirement, with early retirement permitted after the participant’s fifty-fifth birthday, if she or he has completed at least five years of vesting service under the terms of the Company’s Savings Incentive Plan prior to early retirement. Benefits are payable in lump sum or in monthly installments beginning ninety-one days after retirement, with the amount payable being equal to the total plan account balance for that participant (including interest at a specified fixed rate) divided by twelve months, divided by the number of years over which the participant elects to receive payments, with fifteen years being the maximum period over which payout is permitted. If the participant dies prior to commencement of benefits, benefits are paid to the participant’s survivors in equal installments over fifteen years unless the Compensation Committee elects to accelerate payment. Additionally, the SERP was amended in August 2015 to provide for a distribution of benefits upon termination of employment resulting from disability. Under the terms of the SERP a participant will receive such participant’s account in the most recent form of payment properly elected prior to his or her disability in accordance with the terms of this SERP, with payments commencing as soon as reasonably practicable after such participant’s disability. If the SERP participant made no form of payment election, the participant’s account will be paid to the participant in ten annual installments, beginning as soon as reasonably practicable after the participant’s disability. Certain payments under the SERP may be subject to the clawback provisions of the Company’s Compensation Recovery Policy for covered executives, including the named executive officers.

Supplemental Executive Retirement Deferred Compensation Plan. The Compensation Committee, the Board and management have deemed it prudent for the Bank to have life insurance protection on certain of the Company's executive officers, including the named executive officers, considering the out-of-pocket costs related to replacing an executive officer, as well as the intangible but real loss due to disruptions in management and loss of existing or new business because of the death of a key individual. For these reasons, the Compensation Committee and the Board authorized the Bank to establish the Supplemental Executive Retirement Deferred Compensation Plan ("SERDCP"), a non-qualified deferred compensation plan. Certain executive officers, as identified by the Compensation Committee, are eligible to participate in the SERDCP. The SERDCP is intended to provide a source of funds for participants’ retirement through the Bank’s purchase and ownership of key man insurance coverage in the form of a variable adjustable life policy in an amount approved by the Compensation Committee and the Board for each participant. The annual premium payment covers the cost of providing the Bank with a full death benefit for the face amount of the policy, and the cost of providing the executive officer the deferred compensation retirement benefit or a death benefit to the executive officer’s beneficiaries in the event of the executive officer’s death before retirement. Earnings are based upon the participant’s discretionary selection of investment opportunities available through the insurance provider to develop the cash surrender value of the portion of the premiums paid and allocated for that purpose.

In the event of the participant’s retirement, the cash surrender value of the policy can be paid out in a lump sum or in installments not to exceed ten years. The participant can also elect to receive the insurance policy net of a distribution of cash value sufficient to pay taxes upon receipt of the policy. In the event of the participant’s death, an amount equal to the greater of the cash surrender value or a stated death benefit, as described in the SERDCP, would be paid to the participant’s beneficiaries. Additionally, the SERDCP was amended in August 2015 to provide for a distribution of benefits upon termination of employment resulting from disability. Under the terms of the SERDCP a participant will receive such participant’s account in the most recent form of payment properly elected prior to his or her disability in accordance with the terms of this SERDCP, with payments commencing as soon as reasonably practicable after such participant’s disability.

Tax and Accounting Treatment of Executive Compensation

Nonqualified Deferred Compensation. Section 409A of the Internal Revenue Code of 1986, as amended (the "Code") imposes election, payment, and funding requirements on "nonqualified deferred compensation" plans. If a nonqualified deferred compensation arrangement subject to Section 409A of the Code fails to meet, or is not operated in accordance with, the requirements of Section 409A, then compensation deferred under the arrangement may become immediately taxable and subject to a twenty percent (20%) additional tax. Certain awards that may be issued under the plan may constitute a "deferral of compensation" subject to the requirements of Section 409A of the Code.

2023 Advisory Vote on Executive Compensation

The Company provided shareholders a non-binding advisory vote on executive compensation in 2023. At the Company’s 2023 Annual Meeting, shareholders expressed substantial support for the compensation of the Company’s named executive officers, with approximately ninety-eight percent (98%) of the votes cast for approval of the "say-on-pay" vote on executive compensation. The Compensation Committee considered the results of the 2023 advisory vote. The Compensation Committee also considered many other factors in evaluating the interaction of the Company’s compensation programs with its business objectives. While all of these factors bore on the Compensation Committee’s decisions regarding named executive officer compensation, the Compensation Committee did not make any changes to the Company’s executive compensation program and policies as a result of the shareholders’ 2023 "say-on-pay" advisory vote.

EXECUTIVE COMPENSATION

_____________________________________________________________________________________________________

Summary Compensation Table

The following table sets forth information regarding compensation earned by our named executive officers for 2023, which includes our Chief Executive Officer, our Chief Financial Officer, and our three other most highly compensated officers who were serving as executive officers at the end of 2023. The information in the following table is provided for the fiscal years ended December 31, 2023, 2022, and 2021, and includes all compensation awarded to, earned by, or paid to our named executive officers during the years indicated:


SUMMARY COMPENSATION TABLE
Name and Principal Position	Year	Salary	Bonus	Stock Awards (1)	Option Awards (2)	Non-Equity Incentive Plan Compensation (3)	Change in Pension Value and Nonqualified Deferred Compensation Earnings (4)	All Other Compensation (5)	Total
Joseph M. Schierhorn, Chairman of the Company and the Bank(6):
	2023	$554,585	N/A	$233,328	$—	$209,633	$148	$181,283	$1,178,977
	2022	$478,855	N/A	$—	$—	$237,512	$368	$164,701	$881,436
	2021	$458,838	N/A	$60,677	$60,675	$229,419	$52,596	$157,228	$1,019,434
Jed W. Ballard, Executive Vice President, Chief Financial Officer of the Company and the Bank:
	2023	$340,993	N/A	$121,389	$—	$100,252	$22	$61,759	$624,415
	2022	$303,745	N/A	$—	$—	$112,993	$48	$53,718	$470,504
	2021	$292,598	N/A	$42,356	$14,111	$128,158	$1,251	$50,868	$529,342
Michael G. Huston, President, Chief Executive Officer and Chief Operating Officer of the Company. President and Chief Executive Officer of the Bank(7):
	2023	$356,468	N/A	$138,652	$—	$119,773	$23	$80,672	$695,588
	2022	$322,738	N/A	$—	$—	$140,068	$52	$52,792	$515,650
	2021	$293,368	N/A	$35,549	$11,841	$128,495	$1,697	$49,718	$520,668
Benjamin D. Craig, Executive Vice President, Chief Information Officer of the Bank:
	2023	$277,958	N/A	$68,054	$—	$70,045	$11	$38,063	$454,131
	2022	$257,061	N/A	$—	$—	$95,627	$36	$33,365	$386,089
	2021	$247,426	N/A	$22,859	$7,620	$111,342	$916	$32,046	$422,209
Amber Zins, Executive Vice President, Chief Operating Officer of the Bank(8):
	2023	$298,293	N/A	$109,395	$—	$87,348	$11	$54,275	$549,322

(1) The amounts listed for each named executive officer’s stock award represent the aggregate grant date fair value of the awards determined in accordance with FASB ASC Topic 718 and are based on the price of the Company’s stock at the close of business on the date of each grant.

(2) The amount listed for each named executive officer’s option award represents the aggregate grant date fair value of the awards determined in accordance with FASB ASC Topic 718. See further discussion about the assumptions used in the pricing model at Note 21 in Part II. Item 8 of the Company’s Form 10-K for the year ended December 31, 2023.

(3) The amount listed for each named executive officer represents the individual’s performance based payment earned in such fiscal year, but paid in the following fiscal year, as calculated according to the provisions of the Company’s Profit Sharing Plan in 2023, 2022 and 2021 as approved by the Compensation Committee. See Non-Equity Incentive Plan Awards and Employment Agreements contained in this proxy statement.

(4) The amount listed for each named executive officer under this category is the excess earnings on the named executive officer’s account over one-hundred-twenty percent (120%) of the federal rate for each applicable year.

(5) The amount listed for each named executive officer represents items of compensation not reflected elsewhere in this Summary Compensation Table:

The aggregate total of all other compensation disclosed for Mr. Schierhorn for 2023 is equal to the amounts of $18,150 representing contributions to the Company’s 401k Plan for Mr. Schierhorn, the Company’s contributions to the SERP and SERDCP for Mr. Schierhorn in the amounts of $96,773 and $44,992, respectively, and dividend equivalents earned but not yet paid on restricted stock units of $21,368. The amounts contributed to the SERP and SERDCP for Mr. Schierhorn are disclosed in the footnotes to the Nonqualified Deferred Compensation table.

The aggregate total of all other compensation disclosed for Mr. Ballard for 2023 is equal to the amounts of $18,150, $30,731, and $12,878 representing contributions to the Company’s 401k Plan for Mr. Ballard, the Company’s contribution to the SERP for Mr. Ballard, and dividend equivalents earned but not yet paid on restricted stock units, respectively. The amount contributed to the SERP for Mr. Ballard is disclosed in the footnotes to the Nonqualified Deferred Compensation table.

The aggregate total of all other compensation disclosed for Mr. Huston for 2023 is equal to the amounts of $18,150, $49,931, and $12,591 representing contributions to the Company’s 401k Plan for Mr. Huston, the Company’s contribution to the SERP for Mr. Huston, and dividend equivalents earned but not yet paid on restricted stock units, respectively. The amount contributed to the SERP for Mr. Huston is disclosed in the footnotes to the Nonqualified Deferred Compensation table.

The aggregate total of all other compensation disclosed for Mr. Craig for 2023 is equal to the amounts of $18,150, $12,996, and $6,917 representing contributions to the Company’s 401k Plan for Mr. Craig, the Company’s contribution to the SERP for Mr. Craig, and dividend equivalents earned but not yet paid on restricted stock units, respectively. The amount contributed to the SERP for Mr. Craig is disclosed in the footnotes to the Nonqualified Deferred Compensation table.

The aggregate total of all other compensation disclosed for Ms. Zins for 2023 is equal to the amounts of $18,150, $26,707, and $9,418 representing contributions to the Company’s 401k Plan for Ms. Zins, the Company’s contribution to the SERP for Ms. Zins, and dividend equivalents earned but not yet paid on restricted stock units, respectively. The amount contributed to the SERP for Ms. Zins is disclosed in the footnotes to the Nonqualified Deferred Compensation table.

(6) Mr. Schierhorn served as President, Chief Executive Officer and Chief Operating Officer of the Company and Chief Executive Officer of the Bank until his resignation, effective April 6, 2024. He remains Chairman of the Company and the Bank.

(7) Mr. Huston served as President of the Bank from 2022 to 2024 until his appointment as President, Chief Executive Officer and Chief Operating Officer of the Company and President and Chief Executive Officer of the Bank on April 6, 2024.

(8) Ms. Zins's compensation for 2022 and 2021 is not presented because she was not a named executive officer for those fiscal years.

Employment Agreements

The Company and the Compensation Committee share the philosophy that employment agreements serve to further strengthen the relationships between the Company, its key executives, and its shareholders, particularly in light of the highly competitive climate in which the Bank and the Company currently operate.

The employment agreements at December 31, 2023 for Messrs. Schierhorn, Ballard, Huston, Craig and Ms. Zins included the following entitlements: reasonable health insurance, disability and other employee benefits, as well as allowance for adjustments to annual base salary as deemed appropriate by the Compensation Committee. Each of the employment agreements in effect at December 31, 2023 also provides that in the event of termination of employment by the Company or the Bank without cause or by the employee for good reason, health and insurance benefits for such employee will be continued for a period of one year from the termination date, with the exception of Mr. Craig, who's benefits will be continued for a period of nine months from the termination date.

The named executive officers entered into new employment agreements effective January 1, 2024, and the contracts of Messrs. Schierhorn, Ballard, Huston, Craig, and Ms. Zins included nearly identical terms and provisions as their previous employment agreements. Additionally, Messrs. Schierhorn and Huston entered into new employment agreements effective April 6, 2024 in connection with the changes in their respective positions with the Company. These April 6, 2024 contracts included nearly identical terms and provisions as their previous employment agreements except for a base salary increase for Mr. Huston, a base salary decrease for Mr. Schierhorn and Mr. Schierhorn is no longer eligible to participate in the Company's Profit Sharing Plan, the 2023 Plan, the SERP, the SERDCP or the DCP.

Each of the new employment agreements has an initial term ending on December 31, 2024, which will be automatically extended for an additional one year term unless at least ninety days prior to any January 1, either party gives notice of its intent not to extend such term or the employment agreement is terminated in accordance with its termination provisions.

All of the employment agreements in effect at December 31, 2023 and the new employment agreements reflect the named executive officer’s eligibility to participate in the Company’s Profit Sharing Plan. The employment agreements with the named executive officers also contain a covenant not to compete, which stipulates that for a period of one year following termination of the agreement (or in the case of Mr. Craig, nine months following the termination of his employment agreement), or one year following the close of a transaction constituting a change of control agreement (or in the case of Mr. Craig, nine months following the close of such a change in control transaction), the named executive officer will not be directly or indirectly employed by or own any business activity that is competitive with the Company or the Bank. As defined in each of their employment agreements, each of the named executive officers is also entitled to the severance benefits discussed herein under the heading Potential Payments upon Termination or Change of Control.

Joseph M. Schierhorn

The employment agreement in effect at December 31, 2023, by and among the Company, the Bank, and Mr. Schierhorn, as Chairman, President, Chief Executive Officer, and Chief Operating Officer of the Company, and Chairman and Chief Executive Officer of the Bank, established Mr. Schierhorn’s annual salary at $483,866, as adjusted from time to time. Mr. Schierhorn received $554,585 in salary in 2023, which reflected the annual salary specified in his employment agreement combined with a salary increase approved by the Compensation Committee in 2023 and distributed in accordance with the Company’s biweekly payroll cycle. A profit sharing allocation of $209,633 was earned by Mr. Schierhorn in 2023 under the provisions of the Company's Profit Sharing Plan. Mr. Schierhorn is entitled to receive an annual contribution equal to twenty percent (20%) of annual base salary in accordance with the Company’s SERP, which may be adjusted at the Compensation Committee’s and the Board’s discretion. Interest on the accruing contributions is credited based on the average yield of the Bank’s assets less a three year moving average rate of loan charge-offs. Mr. Schierhorn’s agreement also provides for his participation in the Company’s SERDCP which is designed to provide the Bank with key man insurance protection for $1 million and a future retirement benefit for Mr. Schierhorn.

Jed W. Ballard

The employment agreement in effect at December 31, 2023, by and among the Company, the Bank and Mr. Ballard, as Executive Vice President and Chief Financial Officer of both the Company and the Bank, established Mr. Ballard's annual salary at $307,308, as adjusted from time to time. Mr. Ballard received $340,993 in salary in 2023, which reflected the annual salary specified in his employment agreement combined with a salary increase approved by the Compensation Committee in 2023 and distributed in accordance with the Bank's biweekly payroll cycle. A profit sharing allocation of $100,252 was earned by Mr. Ballard in 2023, under the provisions of the Company's Profit Sharing Plan. Mr. Ballard is entitled to receive an annual contribution equal to ten percent (10%) of annual base salary in accordance with the Company’s SERP, which may be adjusted

at the Compensation Committee’s and the Board’s discretion. Interest on the accruing contributions is credited based on the average yield of the Bank’s assets less a three year moving average rate of loan charge-offs.

Michael G. Huston

The employment agreement in effect at December 31, 2023 between the Bank and Mr. Huston, as President and Chief Lending Officer of the Bank, established Mr. Huston's annual base salary at $332,872, as adjusted from time to time. Mr. Huston received $356,468 in salary in 2023, which reflected the annual salary specified in his employment agreement combined with a salary increase approved by the Compensation Committee in 2023 and distributed in accordance with the Bank's biweekly payroll cycle. A profit sharing allocation of $119,773 was earned by Mr. Huston in 2023 under the provisions of the Company's Profit Sharing Plan. Mr. Huston is entitled to receive an annual contribution equal to fifteen percent (15%) of annual base salary in accordance with the Company's SERP, which may be adjusted at the Compensation Committee's and the Board's discretion. Interest on the accruing contributions is credited based on the average yield of the Bank's assets less a three year moving average rate of loan charge-offs.

Benjamin D. Craig

The employment agreement in effect at December 31, 2023 between the Bank and Mr. Craig, as Executive Vice President, Chief Information Officer, establishes Mr. Craig’s annual salary at $259,914, as adjusted from time to time. Mr. Craig received $277,958 in salary in 2023, which reflected the annual salary specified in his employment agreement combined with a salary increase approved by the Compensation Committee in 2023 and distributed in accordance with the Bank's biweekly payroll cycle. A profit sharing allocation of $70,045 was earned by Mr. Craig in 2023 under the provisions of the Company's Profit Sharing Plan. Mr. Craig is entitled to receive an annual contribution equal to five percent (5%) of annual base salary in accordance with the Company’s SERP, which may be adjusted at the Compensation Committee’s and the Board’s discretion. Interest on the accruing contributions is credited based on the average yield of the Bank’s assets less a three year moving average rate of loan charge-offs.

Amber Zins

The employment agreement in effect at December 31, 2023 between the Bank and Ms. Zins, as Executive Vice President and Chief Operating Officer, establishes Ms. Zins' annual base salary at $267,067, as adjusted from time to time. Ms. Zins received $298,293 in salary in 2023, which reflected the annual salary specified in her employment agreement combined with a salary increase approved by the Compensation Committee in 2023 and distributed in accordance with the Bank's biweekly payroll cycle. A profit sharing allocation of $87,348 was earned by Ms. Zins in 2023, under the provisions of the Company's Profit Sharing Plan. Ms. Zins is entitled to receive an annual contribution equal to ten percent (10%) of annual base salary in accordance with the Company’s SERP, which may be adjusted at the Compensation Committee’s and the Board’s discretion. Interest on the accruing contributions is credited based on the average yield of the Bank’s assets less a three year moving average rate of loan charge-offs.

Potential Payments upon Termination or Change in Control

In accordance with the terms of the 2023 Plan, which applied to all named executive officers, if the Company or the Bank is subjected to a change of control, any outstanding stock option grants or stock awards held by the named executive officers would not automatically vest. However, if the awards were not assumed by or replaced with comparable awards by the successor company, the Compensation Committee may immediately vest all shares at its sole discretion.

Additionally, the employment agreements in effect at December 31, 2023 with Messrs. Schierhorn, Ballard, Huston, and Craig, and Ms. Zins specify that if the Company or the Bank is subjected to a change of control and either the Company or the Bank terminates a named executive officer’s employment without cause or if a named executive terminates his or her employment for good reason within seven hundred and thirty days of the change in control the named executive is entitled to:

● All base salary earned and all reimbursable expenses incurred through the termination date payable in a lump sum no later than forty-five days after the day on which employment is terminated;

● An amount equal to two times their highest base salary over the prior three years for Messrs. Schierhorn, Ballard, Huston, and Ms. Zins; and, one times the highest base salary over the prior three years for Mr. Craig, also payable in a lump sum no later than forty-five days after the day on which employment is terminated;

● An amount equal to two times their average profit share received over the prior three years for Messrs. Schierhorn, Ballard, and Huston and Ms. Zins; and, one times the average profit share received over the prior three years for Mr. Craig payable in a lump sum no later than forty-five days after the day on which employment is terminated;

● The continuation of health and insurance benefits for two years following the termination date of their agreement for Messrs. Schierhorn, Ballard, and Huston Ms. Zins; and, one year for Mr. Craig; and,

● Receive age credit and credit for period of service towards all SERP plans for the remaining term covered by each named executive officer’s individual employment agreement.

For Messrs. Schierhorn, Ballard, Huston, Craig, and Ms. Zins, if the Company terminates the named executive officer’s employment without cause, or if they terminate their employment for good reason, the named executive officer is entitled to:

● All base salary earned and all reimbursable expenses incurred under the agreement through their termination date payable in a lump sum no later than forty-five days after the day on which employment is terminated;

● An amount equal to one times their highest base salary over the prior three years for Messrs. Schierhorn, Ballard, Huston, and Ms. Zins; and, seventy-five percent (75%) of his highest base salary over the prior three years for Mr. Craig, to be paid on the first day of the month following a period of six months after the termination;

● Continuation of health and insurance benefits for one year for Messrs. Schierhorn, Ballard, Huston and Ms. Zins; and nine months for Mr. Craig following the termination date of their agreement; and,

● Receive age credit and credit for period of service towards all SERP plans for the remaining term covered by each named executive officer’s individual employment agreement.

For Messrs. Schierhorn, Ballard, Huston, Craig, and Ms. Zins, in the event the Company terminates the named executive officer’s employment for cause or the named executive officer terminates their employment without good reason, the named executive officer is entitled only to payment of all base salary earned and all reimbursable expenses incurred through the termination date payable upon the effective date of termination and will have no right to receive compensation or other benefits for any period after termination.

If the employment of Messrs. Schierhorn, Ballard, Huston, Craig, or Ms. Zins is terminated on account of any mental or physical disability that prevents them from performing their duties, then they are entitled to one lump sum payment, on the first day of the month following a period of six months after employment was terminated, of all base salary earned and reimbursable expenses incurred through the termination date, as well as full base salary and health and dental insurance benefits provided, at the Company’s expense, less the amount of any payments received by the executive during the one year period following termination under any employer-sponsored disability insurance plan, for one year following the termination date.

If a named executive officer’s employment agreement is terminated due to their death, under the terms of the agreement, their beneficiaries will receive that portion of their base salary that otherwise would have been paid to them for the month in which their death occurred and any other amounts due them pursuant to the Company’s SERP, any supplemental deferred compensation plan, and any other death, insurance, employee benefit plan or stock benefit plan provided to them by the Company according to the terms of the respective plans.

The following table sets forth potential payments payable to our named executive officers in the event of termination of their employment or a change of control of the Company or the Bank as of December 31, 2023 under the provisions of their employment agreements as described above. The value of unvested options and restricted stock units in the discussion below is based on the closing price of the Company’s common stock on December 31, 2023 at $57.21 per share.


Potential Payments Upon Termination/Change of Control
Name	Salary	Cash Severance	Unvested Stock Options	Unvested Restricted Stock Units	Benefits
Joseph M. Schierhorn
Termination by Employer Without Cause	$22,332	$580,639	$—	$—	$—
By Executive For Good Reason	$22,332	$580,639	$—	$—	$—
Termination by Employer for Cause	$22,332	$—	$—	$—	$—
By Executive Without Good Reason	$22,332	$—	$—	$—	$—
Change in Control:
Without Cause	$22,332	$1,612,320	$—	$—	$—
For Good Reason within 730 days of change in control	$22,332	$1,612,320	$—	$—	$—
Death	$22,332	$—	$29,909	$244,516	$2,251,033
Disability	$22,332	$460,639	$29,909	$244,516	$2,232,883


Potential Payments Upon Termination/Change of Control
Name	Salary	Cash Severance	Unvested Stock Options	Unvested Restricted Stock Units	Benefits
Jed W. Ballard
Termination by Employer Without Cause	$13,592	$353,404	$—	$—	$23,839
By Executive For Good Reason	$13,592	$353,404	$—	$—	$23,839
Termination by Employer for Cause	$13,592	$—	$—	$—	$—
By Executive Without Good Reason	$13,592	$—	$—	$—	$—
Change in Control:
Without Cause	$13,592	$934,410	$—	$—	$47,679
For Good Reason within 730 days of change in control	$13,592	$934,410	$—	$—	$47,679
Death	$13,592	$—	$6,957	$143,540	$197,883
Disability	$13,592	$233,404	$6,957	$143,540	$203,572


Potential Payments Upon Termination/Change of Control
Name	Salary	Cash Severance	Unvested Stock Options	Unvested Restricted Stock Units	Benefits
Michael G. Huston
Termination by Employer Without Cause	$14,045	$365,161	$—	$—	$39,732
By Executive For Good Reason	$14,045	$365,161	$—	$—	$39,732
Termination by Employer for Cause	$14,045	$—	$—	$—	$—
By Executive Without Good Reason	$14,045	$—	$—	$—	$—
Change in Control:
Without Cause	$14,045	$989,212	$—	$—	$79,465
For Good Reason within 730 days of change in control	$14,045	$989,212	$—	$—	$79,465
Death	$14,045	$—	$5,833	$144,512	$259,368
Disability	$14,045	$245,161	$5,833	$144,512	$280,950


Potential Payments Upon Termination/Change of Control
Name	Salary	Cash Severance	Unvested Stock Options	Unvested Restricted Stock Units	Benefits
Benjamin D. Craig
Termination by Employer Without Cause	$10,946	$213,455	$—	$—	$—
By Executive For Good Reason	$10,946	$213,455	$—	$—	$—
Termination by Employer for Cause	$10,946	$—	$—	$—	$—
By Executive Without Good Reason	$10,946	$—	$—	$—	$—
Change in Control:
Without Cause	$10,946	$376,944	$—	$—	$—
For Good Reason within 730 days of change in control	$10,946	$376,944	$—	$—	$—
Death	$10,946	$—	$3,752	$79,007	$129,873
Disability	$10,946	$164,606	$3,752	$79,007	$111,723


Potential Payments Upon Termination/Change of Control
Name	Salary	Cash Severance	Unvested Stock Options	Unvested Restricted Stock Units	Benefits
Amber Zins
Termination by Employer Without Cause	$11,915	$309,798	$—	$—	$—
By Executive For Good Reason	$11,915	$309,798	$—	$—	$—
Termination by Employer for Cause	$11,915	$—	$—	$—	$—
By Executive Without Good Reason	$11,915	$—	$—	$—	$—
Change in Control:
Without Cause	$11,915	$784,748	$—	$—	$—
For Good Reason within 730 days of change in control	$11,915	$784,748	$—	$—	$—
Death	$11,915	$—	$3,995	$180,154	$77,339
Disability	$11,915	$189,798	$3,995	$180,154	$59,189

In addition to the above provisions, if the Company is required to prepare a qualifying accounting restatement, the Company will recover from the named executive officers the excess amount of erroneously awarded incentive-based compensation, whether cash or equity, provided to a covered executive over the amount that otherwise would have been received by the covered executive had such compensation been determined based on the restated financials, computed without regard to any taxes paid.

Grants of Plan-Based Awards

The Compensation Committee approved awards under our Profit Sharing Plan and awarded restricted stock grants and performance stock grants in 2023. Set forth below is information regarding awards granted during 2023:


Name	Estimated Future Payouts Under Non-Equity Incentive Plan Awards			Equity Incentive Grant Date	Estimated Future Payouts Under Equity Incentive Plan Awards	All Other Stock Awards: Number of Shares of Stock or Units	All Other Option Awards: Number of Shares Underlying Options	Exercise or Base Price of Option Awards per share	Grant Date Fair Value of Stock and Option Awards
	Threshold	Target	Maximum
Joseph M. Schierhorn	$74,869	$249,563	$374,345	3/23/2023	$—	5,136	—	$45.43	$233,328
Jed W. Ballard	$35,804	$119,348	$179,022	3/23/2023	$—	2,672	—	$45.43	$121,389
Michael G. Huston	$42,776	$142,587	$213,881	3/23/2023	$—	3,052	—	$45.43	$138,652
Benjamin D. Craig	$25,016	$83,387	$125,081	3/23/2023	$—	1,498	—	$45.43	$68,054
Amber Zins	$31,196	$103,986	$155,979	3/23/2023	$—	2,408	—	$45.43	$109,395

Profit Sharing Plan

The dollar values reflected in the above table as to estimated future payouts under the non-equity incentive plan awards to the named executive officers are based on a formula driven methodology applied to determine the annual profit sharing allocation to the Company’s Profit Sharing Plan participants recommended by the Chief Executive Officer as described above in the section entitled "Performance Based Annual Payment." The Company’s Profit Sharing Plan applies a weighted average based on the funding criteria to determine the total funding percentage of the target amount. The funding percentage is then applied to an individual’s targeted percent of base salary based on their grade to establish the total profit sharing amount, subject to the Chief Executive Officer's discretion and Compensation Committee and Board approval.

2023 Stock Incentive Plan

The provisions of the 2023 Plan permit the Compensation Committee flexibility in determining the terms of the stock option agreements and letter agreements for restricted/performance shares and units granted, respectively, as related to the death, disability, retirement, and termination of employment and in the event of a change in control.

Shares Available for Issuance

The 2023 Plan provides that a total of 325,000 shares may be issued to eligible participants. Additionally, any shares under the 2023 Plan that are forfeited back to the Company and shares that are withheld by the Company to pay for taxes with respect to awards other than options or stock appreciation rights shall again be available for issue pursuant to new awards granted under this plan. For purposes of calculating available shares, stock options or stock appreciation rights granted are counted as one share for every one share granted, and any shares that are subject to awards other than stock options or stock appreciation rights are counted as three shares for every one share granted. As of December 31, 2023 under the 2023 Plan and previous plans, there were a total of 104,610 options, 43,028 shares of restricted stock, and 9,846 performance units outstanding and there were 218,461 shares available for issuance.

Stock Options

The 2023 Plan provides that the exercise of stock options or any other awards as set by the Compensation Committee shall not be less than one-hundred percent (100%) of the fair market value of the shares at the close of business on the date of grant. Outstanding options may not be repriced without shareholder approval. All options granted under the 2023 Plan will expire not more than ten years from the date of grant. Each option is exercisable subject to the vesting schedule determined by the Compensation Committee. The exercise price for shares purchased upon the exercise of an option must be in paid in cash or such other consideration, including shares of the Company’s common stock, as the Compensation Committee deems acceptable. Under the 2023 Plan, only non-qualified stock options may be granted and no incentive stock options may be issued under the 2023 Plan.

Stock Awards

The 2023 Plan also authorizes the grant of restricted stock, restricted units, performance shares and performance units. Restricted stock awards and restricted unit awards will have a vesting period that is determined, in its sole discretion, by the Compensation Committee subject to limitations imposed by the Internal Revenue Service. Vesting periods will be set forth in the applicable award agreement.

Each grant of performance shares and performance units will be subject to the achievement of performance goals designated by the Compensation Committee and the corresponding award agreement. The performance goals that may be used by the Compensation Committee for such awards consist of goals measuring one or any combination of the following factors: revenue, net interest margin, net interest income, non-interest income, net income, pre- or post-tax income, earnings per share, return on equity, return on assets, share price performance, total shareholder return, improvement in or attainment of expense levels, asset growth, loan growth, deposit growth, growth in other components of the Company's balance sheet, asset quality, regulatory capital levels, or any other metric as determined by the Compensation Committee in its discretion. Performance goals may be measured solely on a corporate, subsidiary, division or business unit basis and performance criteria may reflect absolute entity performance or a relative comparison of entity performance to the performance of a peer group of entitles.

The Compensation Committee has the discretion to adjust the amount payable under a performance based award upwards or downwards.

Stock Appreciation Rights

Stock appreciation rights, which are grants of rights that entitle the holder to payment equal to the difference between the fair market value of a share at the time of grant versus the fair market value at the time the stock appreciation right is exercised. Stock appreciation rights may be granted in connection with options or separately. Similarly, the 2023 Plan authorizes the grant of dividend equivalent rights, either in connection with other awards (particularly stock awards and stock appreciation rights) or separately.

Recoupment

Awards granted under the 2023 Plan are also subject to recoupment, in whole or in part, in the event that the Company is required to prepare a qualifying accounting restatement in accordance with the terms of the 2023 Plan and the Company’s Compensation Recovery Policy.

Amendment and Termination