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Notice of 2024 Annual Meeting

and Proxy Statement

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ANNUAL MEETING OF STOCKHOLDERS

March 26, 2024

Dear Fellow Stockholder,

You are invited to attend the CrossFirst Bankshares, Inc. 2024 Annual Meeting of Stockholders to be held virtually on May 14, 2024, at 10:00 a.m. (Central Time) via live audio webcast and online platform that will allow stockholders to participate. We believe the virtual annual meeting format increases our ability to engage with all stockholders, regardless of size, resources or physical location. You will be able to attend the 2024 Annual Meeting of Stockholders online, vote your shares and submit questions during the meeting by visiting www.virtualshareholdermeeting.com/CFB2024. Be sure to have your control number available to log into the meeting.

All common stockholders of record as of the close of business on March 15, 2024, will be entitled to vote at the 2024 Annual Meeting of Stockholders.

Your vote is important. Whether or not you plan to attend the 2024 Annual Meeting of Stockholders, please read the enclosed Proxy Statement and vote as soon as possible via the Internet, by telephone, or by completing, signing, dating and returning your proxy card or voting instruction form. Voting in advance of the meeting will not prevent you from voting your shares during the meeting if you are a stockholder of record and wish to do so.

Details of the business to be conducted at the 2024 Annual Meeting of Stockholders are provided in the attached Notice of Annual Meeting of Stockholders and Proxy Statement.

On behalf of the entire Board of Directors, thank you for your continued support of CrossFirst Bankshares, Inc.

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

The 2024 Annual Meeting of Stockholders of CrossFirst Bankshares, Inc. will be held virtually via live audio webcast and online platform that will allow stockholders to participate as provided in this notice of meeting. You are cordially invited to attend the Annual Meeting; however, whether or not you expect to attend, you are urged to vote in advance of the meeting. Your prompt action will aid us in reducing the expense of proxy solicitation.

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All stockholders as of the close of business on the Record Date, or their duly appointed proxies, may attend the virtual Annual Meeting. Please note that if you hold your shares in “street name” through a broker, bank or other nominee, you will need a legal proxy from your broker, bank or other nominee (the stockholder of record) to attend. If you are a beneficial owner of our shares of common stock held in “street name,” you may vote at the Annual Meeting if you obtain a proxy from your bank, broker or other nominee that holds your shares. This booklet contains our Notice of Annual Meeting and 2024 Proxy Statement (the “Proxy Statement”).

	By order of the Board of Directors,
	Amy C. Abrams
	General Counsel and Corporate Secretary

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11440 TOMAHAWK CREEK PARKWAY

LEAWOOD, KANSAS 66211

PROXY STATEMENT

2024 ANNUAL MEETING OF STOCKHOLDERS

MAY 14, 2024

This Proxy Statement, the accompanying proxy card and our 2023 Annual Report to Stockholders are being furnished to you in connection with the solicitation of proxies by the Board of Directors (the “Board”) of CrossFirst Bankshares, Inc. (“we”, “us” or the “Company”), for use at the 2024 Annual Meeting of Stockholders (the “Annual Meeting”) or any adjournment or postponement thereof. The meeting will be held virtually at www.virtualshareholdermeeting.com/CFB2024 on Tuesday, May 14, 2024, at 10:00 a.m. (Central Time) via live audio webcast and online platform that will allow stockholders to participate. These materials were first sent or made available to common stockholders on or about March 26, 2024.

The Company is a Kansas corporation and registered bank holding company and is the holding company for CrossFirst Bank (the “Bank”). The only voting securities of the Company with respect to the matters to be considered by stockholders at the Annual Meeting are shares of our common stock, $0.01 par value per share (the “Common Stock”), which are listed on The Nasdaq Global Select Stock Market under the ticker “CFB.”

Proxy Summary and Highlights

This summary highlights selected information about the matters to be voted on at the Annual Meeting. You should read the entire Proxy Statement before voting. For more complete information regarding the Company’s 2023 performance, please review the Company’s 2023 Annual Report to Stockholders.

Please see the “Annual Meeting Matters” and “Information About the Meeting” sections beginning on page 50 for important information about the proxy materials, voting, and the Annual Meeting.

Voting Roadmap

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 Proxy Statement Page i

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Director Nominees

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Business Highlights

Strategic Growth

We successfully executed on our strategy during 2023, including both organic and in-organic growth initiatives. During the first quarter of 2023, we completed the system integration in connection with the acquisition of Farmers & Stockmens Bank.  We also completed the acquisition of Canyon Bancorporation, Inc. and Canyon Community Bank, N.A.  (collectively, “Canyon”) on August 1, 2023 (the “Tucson acquisition”) and the system integration in the fourth quarter of 2023.  The Tucson acquisition added liquidity and talent while deepening our Arizona franchise. In total, the acquisitions integrated during 2023 added $830 million in assets at an attractive price, and the resulting operations have met or exceed our financial projections.  We also continued our strong track record of organic growth both in our established markets as well as expanding our footprint within the dynamic Texas, Arizona and Colorado markets. In addition, we expanded several business verticals with strong contributions from our Restaurant Finance, Sponsor Finance and Small Business (“SBA”) verticals, in particular. We also continued to invest in our people and received the Don Clifton strengths-based leadership award during 2023.  

Banking Industry Events  

The banking industry faced significant upheaval due to the collapse of several banks in March 2023 related to failings in their liquidity management and their significant concentration in certain industries, including exposure to the technology sector and cryptocurrency.  Competition for deposits was exacerbated by a renewed focus on deposits in excess of FDIC insurance limits following the failures, in addition to increased focus on liquidity and interest rate management at all banks.  These challenges, combined with uncertainties around continued cost pressures from inflation, FDIC special assessments and potential for higher provisioning for expected credit losses all led to a highly volatile market for banks. We managed through these pressures by, among other things, expanding our liquidity availability, conducting proactive client outreach to clients to communicate the strength, stability and relationship focus of the Bank, improving liquidity in our securities portfolio, and identifying and executing strategies to realize non-interest expense savings.

2023 Business Results

Despite the headwinds experienced by the banking industry in 2023, we delivered strong financial and operational performance. Some highlights include:

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Corporate Governance Highlights

The Board believes strong corporate governance is critical to achieving the Company’s long-term goals and maintaining the trust and confidence of investors, employees, customers, regulatory agencies, and other stakeholders. The following are highlights of our corporate governance practices:

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Executive Compensation Highlights

Our Compensation Committee designed our 2023 executive compensation program to align with stockholder interests and the long-term interests of the Company, appropriately balance risk and reward, and attract and retain a talented executive team. To accomplish these goals, our executive compensation program was designed on the following principles:

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Highlights of our compensation program include:

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Board and Governance Matters

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Board and Governance Matters

 Proxy Statement Page 1

Board and Governance Matters

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Information Regarding the Board and Director Nominees

Background and Qualifications

The names of the proposed director nominees and our continuing directors, their respective ages and other biographical information as of March 26, 2024 (unless otherwise noted), are set forth in the following sections.

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Board and Governance Matters

Nominee Biographical Information

 Proxy Statement Page 3

Board and Governance Matters

The Board recommends a vote FOR the election of
Steven W. Caple, Ronald C. Geist, Kevin S. Rauckman and Grey Stogner.

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 Proxy Statement Page 4

Board and Governance Matters

Continuing Director Biographical Information

 Proxy Statement Page 5

Board and Governance Matters

 Proxy Statement Page 6

Board and Governance Matters

 Proxy Statement Page 7

Board and Governance Matters

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Board and Governance Matters

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Corporate Governance

Corporate Governance

Director Nominations, Skills and Qualifications

Nomination of Directors

The Nominating Committee is responsible for identifying, evaluating, and recommending candidates to the Board. The Nominating Committee may consider director candidates from a wide range of sources, including referrals from stockholders, officers, and directors. The Board is responsible for nominating directors for election by the stockholders and filling any vacancies on the Board that may occur. The Nominating Committee will continue to evaluate the composition of the Board, including the mix of skills and experiences of existing directors, as well as the potential benefits from new and different perspectives and skill sets.

Our director nomination process is designed to consider diversity among the many factors that the Board considers in evaluating prospective nominees. Diversity, as considered by the Nominating Committee, can encompass many attributes, from business experience to substantive expertise, education, background, gender, race and ethnicity. The goal of this process is to assemble a group of Board members with deep, varied experience, sound judgment and commitment to our success. We have disclosed the self-identified race, ethnicity, gender and LGBTQ+ status of those of our directors and director nominees who have consented to such disclosure in this Proxy Statement under “Board Diversity.” As of December 31, 2023, 7% of our directors and 57% of our executive leadership team self-identifies as female. We continue to look for ways to diversify and broaden our talent pool. We will also continue to evaluate opportunities to provide more transparency regarding our race/ethnicity data to increase awareness, accountability, and more diversity in our leadership.

Stockholder Recommendations for Director Candidates

Fulfilling its responsibility to identify, evaluate, and recommend director candidates, the Nominating Committee accepts stockholder recommendations of director candidates and evaluates such candidates in the same manner as other candidates. The Nominating Committee determines the need for additional or replacement Board members, then identifies and evaluates the director candidate under the Director Qualifications described below based on the information the Nominating Committee receives with the recommendation or which it otherwise possesses, which may be supplemented by certain inquiries. If the Nominating Committee determines, in consultation with other directors, that a more comprehensive evaluation is warranted, the Nominating Committee may then obtain additional information about the director candidate’s background and experience, including by means of interviews. The Nominating Committee will then evaluate the director candidate further, again using the qualification criteria described herein. The Nominating Committee receives input on such director candidates from other directors and recommends director candidates to the full Board for nomination. The Nominating Committee may engage a third party to assist in identifying director candidates or to assist in gathering information regarding a director candidate’s background and experience. If the Nominating Committee engages a third party, the Company pays for these services.

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Corporate Governance

Stockholders who wish to recommend a candidate for the Nominating Committee’s consideration must submit the recommendation in writing to CrossFirst Bankshares, Inc., 11440 Tomahawk Creek Parkway, Leawood, Kansas, 66211, Attn: General Counsel and Corporate Secretary. The written notice must demonstrate that it is being submitted by a stockholder of record of the Company and include information about each proposed director candidate, including name, age, business address, principal occupation, principal qualifications, and other relevant biographical information. In addition, the stockholder must confirm the candidate’s consent to serve as a director. Stockholders may make recommendations at any time and any nominations by stockholders will be evaluated in the same way as nominees identified by the Nominating Committee.

In addition, stockholders may nominate director candidates by complying with the advance notice bylaw provisions discussed at the end of this Proxy Statement under “General Information – Stockholder Proposals or Nominations Not Submitted Pursuant to Rule 14a-8.”

Director Qualifications

Our Corporate Governance Guidelines describe the minimum qualifications for our directors. The Board seeks members who combine a broad and relevant spectrum of experience and expertise with a reputation for integrity. The Board looks for directors who can best perpetuate the Company’s success and represent stockholder interests through the exercise of sound judgment, using their diversity of experience. Directors should be selected based upon their potential contributions to the Board and management and their ability to represent the interests of stockholders. Also, the Board will consider the diversity of a candidate’s perspectives, background, and other demographics. When considering potential director candidates, the Board also considers: (i) whether the individual meets various independence requirements; (ii) the individual’s understanding of banking, the varied disciplines relevant to the success of a publicly traded company in the current business environment and the Company’s business and markets; (iii) the professional expertise, business and financial experience and educational background of the individual; (iv) the individual’s understanding of, and commitment to, high standards of regulatory compliance; (v) the personal and professional integrity of the individual; and (vi) other factors that promote diversity of views and experience, including self-identified racial, ethnic and gender diversity. The Nominating Committee is committed to identifying potential candidates to increase gender and/or demographic diversity on the Board.

Generally, no director is permitted to serve on more than four public company boards (including the Company’s Board). Management directors may only serve on one other public company board. Our Chairman of the Board may serve on no more than two other public company boards (this is limited to one other board if they are serving as lead director or chairman of another public company board).

Director Retirement Policy

The Corporate Governance Guidelines include a retirement policy for directors. In general, under this policy, any director who has reached the age of 75 at or before the time for his or her election by stockholders or appointment to the Board will not be eligible for election or designation to the Board, and the Board will not nominate for election or designate any such person as a director; provided, that, the Board may waive the application of this policy if the Board determines that the value of a particular director’s contribution makes it advisable to do so.

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Corporate Governance

The Corporate Governance Guidelines also include a policy regarding a change of director’s circumstances. In general, under this policy, any director who retires, or makes a significant change to his or her principal employment or experiences a significant change in his or her personal circumstances that may reasonably have an adverse effect on the director’s service on the Board, including his or her independence or the Company’s business or reputation, must offer his or her resignation to the Board. The Nominating Committee then will review the appropriateness of that director’s continued service on the Board considering the new circumstances and will make a recommendation to the Board as to whether the resignation should be accepted.

Board Diversity

We continue to assess our overall board composition and build a diverse board to increase diversity of thought and to align board capability with our strategic focus. The following diversity statistics regarding our Board are reported in the standardized disclosure matrix required under applicable Nasdaq rules.

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The Company’s Board Diversity Matrix for 2023 is publicly available in the Company’s definitive proxy statement filed with the Securities and Exchange Commission (“SEC”) for the 2023 Annual Meeting of Stockholders.

Skills and Experience

The Nominating Committee works with the full Board to regularly evaluate Board composition to assess the skills and capabilities that are relevant to the Board’s work and the Company’s strategy and the number of directors needed to fulfill the Board’s responsibilities under our Corporate Governance Guidelines and Committee charters. The table below summarizes the key qualifications, skills, and attributes that each director and nominee bring to the Board. Each director and nominee possesses numerous other skills and competencies not identified below. A mark indicates a specific area of focus or expertise which the Board considers the person to contribute significantly to the overall Board skill set. A director or nominee may possess a qualification or skill even if a mark is absent from the table. Director and nominee biographies above under “Information Regarding the Board and Director Nominees” describe each person’s background and relevant experience in more detail.

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Corporate Governance

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Director Independence

As required under Nasdaq Stock Market, LLC (“Nasdaq”) rules, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the board of directors. Our Corporate Governance Guidelines, which are available on our website (investors.crossfirstbankshares.com), mirror this requirement. Our committee charters also require that each of the Audit Committee, Compensation Committee, Nominating Committee and Risk Committee be comprised of independent directors.

The Board reviewed the independence of all of our directors who served at any time since January 1, 2023. During this review, the Board considered transactions and relationships between each director or any member of his or her immediate family (or any entity of which a director or an immediate family member is an executive officer, general partner or significant equity holder) and the Company and its subsidiaries and affiliates. The Board also considered whether there were any transactions or relationships between directors or any member of their immediate family and members of the Company’s senior management or the Company’s independent registered public accounting firm. The purpose of this review was to determine whether any such relationships or transactions existed that were inconsistent with a determination that the director is independent.

As a result of this review, the Board affirmatively determined that each of Messrs. Brenneman, Bruce, Caple, Geist, Hansen, Humphreys, King, Kuykendall, Rauckman, Robinson, Stogner, and Swinson and Ms. Grigsby are independent under applicable Nasdaq and SEC rules.

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Corporate Governance

In determining that each of the directors other than Mr. Maddox is independent, the Board considered, among other things, certain relationships that were not prohibited under Nasdaq rules. The Board considered that the Company and its subsidiaries in the ordinary course of business have, during the last three years, leased office space to Mr. Brenneman in a Company-owned office building; sold products and services to some of our directors and their immediate family members as described below under “Certain Transactions”; and purchased services from a law firm at which Mr. Hansen’s son-in-law was a partner during 2023. In each case, the Board concluded that the transactions were either insignificant, in the ordinary course of business or the involved directors did not have a direct or indirect material interest in the transactions referred to above.

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Board and Committee Structure and Operations

Board and Committee Meetings

Our Board held nine meetings during 2023. Each director attended at least 75% of the total number of meetings of the Board and the committees on which such director served that were held while the director was a member of such committee. Our Board has established the following standing committees: Audit Committee, Compensation Committee, Corporate Governance & Nominating Committee and Risk Committee. The current membership and function of each committee and the number of meetings held by each committee during 2023 is described below.

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Corporate Governance

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Corporate Governance

Committee Matters

Our Board has adopted a written charter for each of the Audit, Compensation, Nominating, and Risk Committees setting forth the roles and responsibilities of each committee. The committee charters are available on the investor relations page of our internet site (investors.crossfirstbankshares.com).

All members of the Audit, Compensation, Nominating, and Risk Committees satisfy the standards of independence applicable to members of such committees under applicable Nasdaq rules. In addition, the Board has determined that the composition of the Audit Committee, the attributes of its members and the responsibilities of the Audit Committee, as reflected in its charter, are in accordance with applicable Nasdaq and SEC rules for audit committees. All Audit Committee members possess the required level of financial literacy, and at least two members of the Audit Committee meet the current standard of requisite banking or financial management expertise required under applicable FDIC rules. The Board has determined that Mr. Rauckman and Ms. Grigsby are “audit committee financial experts” as such term is defined in Item 407(d) of Regulation S-K.

Board Leadership Structure

The Company’s Bylaws, as well as our Corporate Governance Guidelines, provide that the roles of Chairman of the Board and the CEO may be, but need not be, held by the same person. The Board of Directors has separated the roles of Chairman of the Board and CEO in recognition of the differences between the two roles and to eliminate any inherent conflict of interest that may arise when the roles are combined. The CEO is responsible for setting our strategic direction and day-to-day leadership and performance. The Chairman of the Board provides guidance to the CEO, sets the agenda for board meetings, presides over meetings of the full Board of Directors (including executive sessions), and facilitates communication among the independent directors and between the independent directors and the CEO.

The Company has a strong independent Board, with all directors except for Mr. Maddox having been determined to be independent under Nasdaq rules. Further, as previously noted, all standing committees of the Board are composed solely of independent directors. The Board believes that having an Independent Chairman, separate from the CEO role, is the most appropriate leadership structure at this time. Although the Board believes that structure best serves the interests of the Company and its stockholders, the Board retains the flexibility to combine the roles in the future. The Board recognizes its responsibility for the establishment and maintenance of the most effective leadership structure for the Company, taking into account all relevant facts and circumstances. In our Corporate Governance Guidelines, the Board has indicated that it will appoint a Lead Director if the position of Chairman of the Board is not held by an independent director.

Executive Sessions

In accordance with our Corporate Governance Guidelines, the non-employee directors meet regularly in executive session without management present. The Chairman of the Board presides over full Board executive sessions and independent director only executive sessions. Additionally, each Board committee regularly meets in executive session, and the Chair of such committee will preside over executive sessions of the committees.

Board Attendance at Annual Stockholder Meeting

Members of our Board of Directors are invited and encouraged to attend each annual meeting of stockholders. All of our directors attended our 2023 Annual Meeting of Stockholders.

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Corporate Governance

Board and Committee Evaluations

To monitor and improve its effectiveness, and to solicit and act upon feedback, the Board and its committees annually engage in a formal self-evaluation process. The Nominating Committee facilitates the process, which includes a written self-evaluation questionnaire from each director, a self-evaluation by each committee and individual interviews with each director. The results are then reported to and evaluated by the full Board.

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Board Role in Risk Oversight

Our Board of Directors has ultimate authority and responsibility for overseeing our risk management. Our Board of Directors monitors, reviews and reacts to material enterprise risks identified by management. Our Board of Directors receives specific reports from executive management on credit, interest rate, liquidity, cybersecurity, operational, compliance, strategic, and reputational risks and the degree of exposure to those risks. Our Board of Directors helps ensure that management is properly focused on risk by, among other things, reviewing and discussing the performance of senior management and business line leaders. Committees of our Board of Directors have responsibility for risk oversight in specific areas. The Audit Committee oversees financial, accounting and internal control risk management policies. The Compensation Committee assesses and monitors risks in our compensation program. The Risk Committee assists our Board of Directors in its oversight of the enterprise-wide risk management of the Company, including but not limited to, risks associated with credit activities, regulatory compliance, technology, cybersecurity, investments, balance sheet management, and Company operations. The Risk Committee receives quarterly reporting on the Company’s risk profile from management and engages in extensive discussion on risk domains exceeding the Company’s risk appetite or an increasing direction. The Company’s risk indicators are evaluated annually. The potential impacts of emerging risks are considered and mitigation efforts discussed.

Our Chief Risk Officer is responsible for identifying, analyzing, and reporting internal and external risks over the short-term, intermediate-term, and long-term. She works in concert with other members of our management team, including our Managing Director, Compliance (who reports to her), Chief Credit Officer, Chief Accounting Officer and Director, Internal Audit (who reports to the Audit Committee), to ensure that existing and emerging risks are identified and mitigated. Our Disclosure Controls Committee, which is comprised of a cross-functional group of our senior management team, meets at least quarterly to ensure appropriate risks are identified and analyzed, and considered for timely disclosure.

The Bank also has a separate board of directors, which consists of certain members of the Company’s Board and executive team. Its members include Messrs. Bruce, Geist, King, Kuykendall, Hansen, Maddox, Rauckman, Rapp and Robinson. The board of directors of the Bank meets on a regular basis and has constituted certain management committees - Internal Risk Committee, Credit Risk Management Committee, Asset/Liability Committee (ALCO) and Technology, Operations and Compliance Committee - that also take an active role in risk management oversight of the Bank. Each of these committees meets regularly and is comprised of executives responsible for major categories of risk. The Internal Risk Committee reviews the Company’s risk appetite statement and enterprise risk management policy on an annual basis, which are ultimately approved by the Company’s or the Bank’s board, as appropriate, and establishes various risk tolerances focused on quantitative and qualitative key risk indicators. The Board of Directors of the Bank regularly shares its materials with the Company’s Board and reports on matters related to credit, interest rate, liquidity, operational, compliance, strategic, and reputational risks.

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Corporate Governance

Other Matters

Delinquent Section 16(a) Reports

Under U.S. securities laws, directors, certain officers and persons holding more than 10% of our Common Stock must report their initial ownership of our Common Stock and Series A Preferred Stock and any changes in their ownership to the SEC. The SEC has designated specific due dates for these reports, and we must identify in this Proxy Statement those persons who did not file these reports when due. Based solely on our review of copies of the reports filed with the SEC and the written representations of our directors and Section 16 officers, we believe that one transaction which was required to be reported under Section 16(a) was not timely filed during 2023. One Form 4 relating to the vesting of a prior grant of 5,000 restricted stock units by Mr. Rapp was not timely filed following the May 11, 2023 vesting, but was filed on December 8, 2023.

Code of Business Conduct and Ethics

The Company maintains a Code of Business Conduct and Ethics (“Code of Conduct”), which is applicable to all of our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer and other senior financial officers. The Code of Conduct is publicly available without charge on our website at investors.crossfirstbankshares.com, or by writing to: CrossFirst Bankshares, Inc., 11440 Tomahawk Creek Parkway, Leawood, Kansas, 66211, Attn: General Counsel and Corporate Secretary. If we make any material amendment to our Code of Conduct, or if we grant any waiver from a provision of the Code of Conduct for any executive officer or director, we will disclose the nature of the amendment or waiver on our website. We may also elect to disclose the amendment or waiver in a current report on Form 8-K filed with the SEC.

Compensation Committee Interlocks and Insider Participation

During 2023, no member of the Compensation Committee was an officer or employee or former officer of the Company or any of our subsidiaries. Additionally, none of our executive officers served as a member of (i) the board of directors or compensation committee of another entity in which one of the executive officers of such entity served on our Compensation Committee, or (ii) the compensation committee of another entity in which one of the executive officers of such entity served as a member of our Board.  Messrs. Kuykendall, Geist or their affiliated entities purchased 2,000 and 1,600 shares, respectively, of Series A Preferred Stock from the Company for $1,000 per share in connection with a private offering of the Series A Preferred Stock to accredited investors disclosed pursuant to the Company’s current report on Form 8-K filed with the SEC on March 31, 2023.  The purchases of shares in the offering by directors and their affiliated entities were on the same terms as purchases by outside investors in the offering.

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Director Compensation

Director Compensation

Director Compensation and Role of the Compensation Committee

The compensation paid to our non-employee directors further advances the interests of the Company and our stockholders by encouraging increased share ownership to promote long-term stockholder value.

The Compensation Committee is responsible for reviewing the effectiveness of the non-employee director compensation program in supporting the Company’s ability to attract qualified directors and align their interests with stockholders. The Compensation Committee reviews director compensation regularly and considers a variety of factors, including our financial performance, general market conditions, director compensation at companies within our peer group, director responsibilities, and trends in director compensation practices. Any recommendations for changes in director compensation are made to our Board.

Our non-employee directors are paid a cash retainer commensurate with the period of service during the Board year in quarterly installments. In addition, each non-employee director also receives a grant of restricted Common Stock with a fixed grant date value during each year of service on the Board. The compensation payable under our directors’ compensation program is described below.

Compensation Program

*Each director may elect to receive the cash portion of such director’s fees in restricted stock.

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Meridian Compensation Partners, LLC (“Meridian”), the Compensation Committee’s independent compensation consultant, periodically provides the Compensation Committee with a review of our current Board compensation package relative to our peer group. See discussion under “Executive Compensation – Overview – Peer Group” for more information on the peer group used by Meridian to benchmark board compensation. No changes were made to the non-employee director compensation program for the May 2023- May 2024 Board term from the prior term.

Compensation recommendations are made to our Compensation Committee and Board with respect to the non-employee directors based on Meridian’s benchmarking review. The Compensation Committee then makes the ultimate decision as to the total compensation and compensation components of our non-employee directors. No non-employee director may receive equity awards with a fair market value on the date of grant that exceeds $200,000 in any calendar year.

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Director Compensation

Following a review of the Company’s Board compensation practices, and based on Meridian’s recommendations, changes to align target compensation for non-employee directors with the median for our peer group will be implemented in May 2024 for the 2024-2025 Board term. Changes will include an increase of $5,000 to the annual cash retainer for all non-employee directors; an increase of $15,000 for the target annual restricted stock award for all non-employee directors; an increase of $1,500 to each of the Compensation Committee, Nominating Committee and Risk Committee member fees; and an increase of $2,500 for the Audit Committee member retainer.

Each non-employee director is required to maintain a direct or indirect Common Stock ownership requirement of $150,000, which may be accumulated over a three-year period. As of December 31, 2023, all non-employee directors who were directors on such date were in compliance with these guidelines.

Directors who also serve on the Bank’s board of directors do not receive any additional compensation for such service.

Reimbursements

We reimburse our non-employee directors for reasonable expenses incurred for continuing education training and in attending Board, committee and stockholder meetings, including reasonable expenses for travel, meals and lodging. As applicable, we also reimburse our non-employee directors for similar travel, lodging and other expenses for a guest to accompany them to a limited number of Board meetings held as retreats to which we invite spouses for business purposes. No Board retreats were held in 2023.

Directors Deferred Fee Plan

We have a voluntary Directors’ Deferred Fee Plan (the “Directors’ Deferred Fee Plan”) that permits electing directors to receive deferred shares of our Common Stock in lieu of the cash or equity component of directors’ fees. If a director elects to defer any of his or her compensation under the Directors’ Deferred Fee Plan, the payment of the deferred shares is deferred for tax purposes until a director’s service on our Board of Directors ends. Before any deferred shares are delivered to a participating director, the director does not have any right to vote any of his or her deferred shares nor to receive any cash dividends on the deferred shares to the extent dividends are payable on shares of our Common Stock. If and when we pay a cash dividend on our shares, additional deferred shares would be credited to a participating director’s account. The additional shares credited would have a value equal to the dividends that otherwise would have been payable to a plan account if the hypothetical shares then credited were actual shares of our Common Stock. All credited whole deferred shares will be settled in actual shares of our Common Stock and such shares will be issued to a director upon the director’s termination from service on our Board of Directors. Any fractional deferred share will be rounded up to a whole share. The Directors’ Deferred Fee Plan applies only to eligible director compensation earned after 2018.

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2023 Non-Employee Director Compensation Table

The following table sets forth compensation earned, awarded or paid during 2023 to each director who served on our Board of Directors in 2023, other than Mr. Maddox, who was an employee of the Company and did not receive any additional compensation for his service as a director. The compensation of Mr. Maddox is described in the “Summary Compensation Table” below. The table below also includes other compensation earned by each such director from us or the Bank.

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Director Compensation

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Executive Compensation

Executive Compensation

Overview

As an Emerging Growth Company under the JOBS Act, we have opted to comply with the executive compensation disclosure rules applicable to “smaller reporting companies” as defined in the rules promulgated under the Securities Act. These rules permit us to limit reporting of compensation disclosure to all persons serving as our principal executive officer during our last completed fiscal year and our two other most highly compensated executive officers, which are referred to as our “named executive officers” or “NEOs.”

Our NEOs for 2023, are:

We compensate our NEOs through a combination of base salary, annual cash incentives, long-term equity incentives and limited other benefits, including perquisites. Our Board of Directors believes the executive compensation packages that we provide to our executives, including the NEOs, should reward performance and attract and retain top talent. Each element of compensation is designed to achieve a specific purpose and to contribute to a total package that is competitive with similar packages provided by other institutions that compete for the services of individuals like our NEOs.

Compensation Program and Objectives

The Company’s 2023 executive compensation program and compensation decisions were based on the following principles:

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Pay for Performance

Our compensation program is grounded on a pay for performance philosophy and is designed to reward achievement of the Company’s financial and strategic goals included in our business plans established before each performance cycle. In determining executive compensation, the Compensation Committee considers financial performance and strategic performance factors, risk performance, internal pay equity and individual NEO performance. The targeted compensation for our NEOs is in the form of fixed and variable compensation, a large portion of which is paid in performance-based restricted stock units (“PSUs”) tied to the long-term performance of the Company and designed to be aligned with stockholder interests. Financial performance factors considered by the Compensation Committee in setting and determining executive annual and long-term compensation include the following:

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Practices and Policies Supporting Strong Corporate Governance and Compensation Programs

We continue to maintain our disciplined approach to executive compensation with a focus on pay for performance, strong governance, risk management, and simplicity as evidenced by the following practices:

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Balanced Compensation Structure

The Compensation Committee determines compensation targets (sum of base salary, target cash incentive award opportunity under the Company’s Annual Incentive Plan (“AIP”) and LTI opportunities) for the NEOs at the beginning of the year, based on each executive’s role, market practice and our desired pay mix. We intend for our compensation program to provide our NEOs with target compensation that, on average, approximates the median for our peer group. Individual components of compensation may be greater or lesser than the median based on Company and individual performance. Target AIP and LTI opportunities are established for, and communicated to, the NEOs at the beginning of the year or, if later, at the time of any subsequent increase in AIP or LTI opportunity. The actual year-end AIP awards paid and LTI awards made to the NEOs are determined by the Compensation Committee based on its evaluation of financial performance, risk performance, individual performance and other performance factors. The Compensation Committee also considers compensation levels of other executives in similar roles both within the Company and at peer companies when making compensation decisions.  The Compensation Committee uses discretion to exercise its judgment instead of solely relying on formulaic structure which it believes provides the right level of transparency while maintaining the flexibility necessary to pay amounts deemed appropriate for performance.  

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Executive Compensation

The Compensation Committee has determined that the balance of the following pay components provides an effective combination of risk and reward:

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Review of Compensation Policies and Practices Related to Risk Management

Our executive compensation program reinforces effective risk management through risk-balancing features that discourage and mitigate excessive risk-taking, and an accountability framework that, under defined conditions, enables the forfeiture or recovery of compensation in the event executives’ actions, or inactions, result in specified types of negative outcomes for our Company. The Compensation Committee believes that the 2023 compensation decisions for our NEOs were reasonable and appropriate and consistent with our compensation principles.

Risk-Balancing Features

To discourage imprudent risk-taking, the Company embedded risk-balancing features throughout our program for 2023, which include:

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Compensation Risk Assessment

The Compensation Committee oversees an annual risk assessment of the Company’s employee compensation practices to evaluate compensation-based risks. Senior leaders may be asked to compile and analyze information about the Company’s incentive compensation practices and payment history to understand how evaluation of business risk events affect certain AIP and LTI performance measures and compensation decisions. After evaluation of the data and based on management’s evaluation of compensation risks, the Company’s CHRO prepares a report of the risk assessment, which includes any recommendations for risk adjustments to incentive compensation in connection with risk events. Such report is then shared with the Compensation Committee.

Recoupment of Incentive Compensation

The Board has adopted a Clawback Policy that provides for the recoupment and/or cancellation by the Company of incentive compensation payable to our executive officers and certain other executives if the Company (i) restates any of its financial statements due to the material noncompliance by the Company with any financial reporting requirement under applicable securities laws, or (ii) suffers significant financial or reputational harm resulting from any intentional theft, embezzlement, fraud, violation of law, gross dishonesty or other gross misconduct of the employee. The policy was updated in October 2023 to comply with the new SEC and Nasdaq requirements implementing a mandatory clawback for erroneously-awarded incentive compensation in the event of a financial restatement subject to the requirements.  The repayment obligation or forfeiture right applies to the extent repayment is required by applicable law, or to the extent the executive’s incentive compensation is determined to be in excess of the amount that would have been payable taking into account any such restatement. For financial restatements, the reimbursement or forfeiture obligation will apply to any erroneously-awarded compensation received or deemed received by the employee in the three completed fiscal years of the Company immediately preceding the date the restatement is determined to be necessary and any transition period (that results from a change in the Company’s fiscal year) within or immediately following those three completed fiscal years. The Compensation Committee has the sole discretion to determine the method for recouping erroneously awarded compensation under the Clawback Policy, which may include, without limitation, requiring reimbursement of cash incentive compensation previously paid; seeking recovery of any gain realized on any equity-based awards; offsetting the recouped amount from any compensation otherwise owed or dividends payable by the Company and its subsidiaries; cancelling outstanding vested or unvested equity awards; or forfeiture of awards or incentive compensation.  No executive officer may be indemnified against the loss of any erroneously awarded compensation or any claims relating to the enforcement of the Company’s Clawback Policy.

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Prohibition on Hedging and Pledging

All Company directors, officers and employees are prohibited from purchasing any financial instrument that is designed to hedge or offset any decrease in the market value of Company securities, and from participating in derivative or speculative transactions with respect to Company securities, including but not limited to prepaid variable forward contracts, collars, equity swaps, exchange funds, puts, calls and other derivative instruments. All directors and Section 16 officers are also prohibited from participating in short sales of the Company’s securities and from holding Company securities in a margin account or otherwise pledging Company securities as collateral for a loan.

Stock Ownership Guidelines

We utilize contractual stock ownership guidelines that require the retention of equity awards made to our executives and non-employee directors to further align their interests with the long-term interests of stockholders. See “Employment Agreements” below. As of December 31, 2023, each of our NEOs was in compliance with their specific contractual ownership holding requirement.

Peer Group

The independent compensation consultant retained by the Compensation Committee works with our management team to review and propose a peer group to analyze potential peer companies based on industry, markets, business models and a range of financial measures. Based on this analysis, an appropriate peer group is proposed. The Compensation Committee reviews and approves the peer group for the upcoming year based on the analysis provided and in consultation with the CHRO.

The companies included in our peer group for compensation benchmark purposes for 2023 were selected based on industry and scope relevance, including alignment with the Company based on, among other things, banks of similar asset size (positioning the Company at median) and similar business model. The peer group included 17 regional banks between $4.4 billion and $13.7 billion in assets, with positive cumulative earnings, relevant geography and business profile. The changes from our 2022 peer group included the removal of BancFirst Corporation, Inc., Merchants Bancorp. and West Bancorporation, Inc.; and the addition of First Foundation, Inc. and Origin Bancorp, Inc.

The peer group used to set 2023 compensation consisted of the following companies:

We recently reviewed our peer group for 2024 compensation benchmark purposes and made no changes to our 2023 peer group listed above.

Market-Competitive Pay Opportunity

The Compensation Committee reviewed and considered competitive market data from the following sources when approving NEO compensation: proxy data from an established peer group of companies (discussed above) and other market survey data from companies within the financial services industry.

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Role of the Compensation Committee

The Compensation Committee is responsible for the review and approval of all aspects of the Company’s executive compensation program and makes all decisions regarding the compensation of the Company’s NEOs. Specifically, the Committee has responsibility to, among other things:

Role of Executive Officers in Compensation Decisions

Our CEO, CHRO, and CFO provide information to the Compensation Committee at its request. Examples of information that management provides the Compensation Committee include business strategy, financial performance, risk assessments, and accounting and legal considerations. Management representatives also provide the Compensation Committee with preliminary reviews of Company performance and individual executive performance for its determination of compensation pay decisions. The CEO provides feedback and recommendations on executives’ overall contribution to Company performance, individual responsibility, and/or strategic goals. For 2023 compensation decisions, the CEO provided his recommendations to the Compensation Committee. No NEO was involved in his or her own pay recommendations or decisions, and the Compensation Committee meets in executive session to determine CEO compensation. The decisions of the Compensation Committee for 2023 performance are reflected below under “Components of Compensation.”

Use of an Independent Compensation Consultant

The Compensation Committee has authority to secure the services of advisors both internal and external to the Company, including the retention of outside consultants to review executive compensation and non-employee director compensation and to perform any other analysis the Compensation Committee deems appropriate. Historically, the Compensation Committee has worked with our internal resources, such as our CHRO, along with an independent compensation consultant to fulfill its responsibilities.

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After considering the independence of Meridian by applying the factors required by applicable Nasdaq and SEC rules, the Compensation Committee has retained Meridian to provide independent counsel on the design and market competitiveness of the Company’s executive compensation program. Periodically, Meridian conducts benchmarking studies of executive and non-employee director compensation. Additionally, Meridian is consulted and provides input on peer group selection, updates on trends in executive and director compensation, performance metric plan design, stock ownership requirements, updates and market alignment of our clawback practices and compensation disclosures included in our proxy statement.

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Components of Compensation

Base Salary

We provide each of our current NEOs with a competitive fixed annual base salary. The base salaries for our NEOs are reviewed annually by the Compensation Committee, considering the results achieved by each executive, their future potential, scope of responsibilities, experience, and competitive pay practices. For the fiscal year ended December 31, 2023, and in an effort to more closely align with the median of our peer group, our NEOs received annualized base salaries as follows: (i) $725,000 for Mr. Maddox; (ii) $450,000 for Mr. Clouse; and (iii) $430,000 for Mr. Rapp. In February 2024, the Compensation Committee set base salaries for our NEOs as follows: (i) $785,000 for Mr. Maddox; (ii) $460,000 for Mr. Clouse; and (iii) $450,000 for Mr. Rapp.

Annual Incentive Program

Each of our current NEOs is entitled to participate in our AIP, which provides for an annual cash award determined by the Compensation Committee based on attainment of certain performance criteria. Our AIP is designed to motivate and reward superior performance, attract and retain talent, encourage teamwork and collaboration, and ensure incentives are appropriately risk balanced.

Pursuant to the terms of the AIP, participants are awarded a cash incentive based on attainment of corporate performance and individual performance goals during each calendar year. Award opportunities and performance goals are approved by the Compensation Committee at the beginning of each year. For 2023, the Company must have achieved at least a threshold level of Adjusted PPCM for any awards to be paid, and awards were subject to reduction for certain items. Adjusted PPCM reflects our drive to expand income, grow bottom line earnings and enhance operating efficiency, which we believe are important drivers of return for our stockholders.

Each participant under the AIP is assigned an incentive award opportunity with threshold, target, and maximum performance levels of achievement. If actual performance falls below the threshold level of performance, there would be no award payout. Performance at the threshold, target and maximum performance levels would result in payments equal to 50%, 100%, and 150% of the targeted incentive opportunity, respectively. Payouts for performance between the threshold and target or target and maximum performance levels would be interpolated to reward incremental achievement.

In 2023, awards for our NEOs were based 70% on achievement of Adjusted PPCM and 30% on measurable individual performance goals pertaining to each NEO’s area of responsibility. The following summarizes the goals, actual results and payout for the NEOs under the AIP for 2023:

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The Company’s actual PPCM achievement was $98.6 million and was adjusted by the Compensation Committee in accordance with the AIP to exclude certain irregular and non-cash expenses that were not reflective of Company financial performance.  The Compensation Committee believes that the adjustments to PPCM were appropriate and better reflect the true measure of financial performance and ensure our cash incentive program incentivizes our executives to continue to drive income expansion and efficiency. These adjustments resulted in an Adjusted PPCM achievement level for 2023 of $106.3 million, which resulted in attainment of 96.22%. Based on this attainment level and the evaluation of individual performance, NEO payouts under the AIP for 2023 were calculated at a 94.68% achievement level. Cash awards under the AIP of $514,823, $213,030, and $203,562 were paid to Messrs. Maddox, Clouse, and Rapp, respectively. Calculations of performance measures for compensatory purposes may vary from year to year and be different from those used for financial reporting purposes. See Annex I for further details regarding Adjusted PPCM, including a reconciliation to its most directly comparable financial measure prepared in accordance with Generally Accepted Accounting Principles (“GAAP”).

2023 Performance-based Cash Incentive Attainment

For 2024, cash incentive awards for our NEOs will be based on achievement of pre-established goals for Company performance (80%) - including Adjusted PPCM (50%), non-interest income (15%) and non-interest expense/average assets (15%) - and individual performance (20%) at threshold, target and maximum performance levels, which would result in payments equal to 50%, 100% and 150% respectively, of each NEO’s incentive opportunity. If actual performance falls below threshold, there would be no award payout for 2024. Payouts for performance between the threshold and target or target and maximum performance levels will be interpolated to reward incremental achievement. For 2024, the Compensation Committee established the target incentive opportunity for Mr. Maddox at 75% of base salary, Mr. Clouse at 55% of base salary and Mr. Rapp at 55% of base salary.

Equity Awards

We grant equity awards to our employees, including our NEOs, to promote achievement of our long-term financial objectives and value creation for stockholders, provide rewards for our overall performance and tie value to our stock price performance, align our employees’ interests with those of our stockholders and promote equity ownership among our employees to cultivate an owner mentality. The Compensation Committee considers market practices, external competitiveness, stockholder interests, and advice from our independent compensation consultant in establishing the amount and characteristics of equity grant awards. We intend that the value of long-term incentive awards for our executives approximate the market median for our peer group and the total compensation opportunity for such executive officers approximate the market median level when combined with base salary and target annual bonuses. A summary of our equity compensation plans is provided below under “Equity Based Plans.”

In 2023, as part of our annual compensation cycle, we granted time-based RSUs and PSUs to Messrs. Maddox, Clouse, and Rapp. For 2023, the value of the award grants was targeted to market median levels and split with 50% of the value being granted in RSUs and 50% of the value being granted in PSUs. The Compensation Committee has discretion to adjust the size of PSU awards by +/- 20% depending on extraordinary events or the Company’s performance in other areas. Each of Messrs. Maddox, Clouse and Rapp received the following equity awards as part of their 2023 total compensation package:

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Each year, the Compensation Committee selects financial performance measures (“Performance Measures”) to hold NEOs accountable to drive long term business growth, profitability and return to our stockholders. Specific targets for each Performance Measure are established each year based on our financial plan and expectations for the three-year performance period. Prior to approval, the Compensation Committee reviews the performance targets proposed by management to ensure they reflect appropriate business growth and return to our stockholders.

The Compensation Committee established the Performance Measures for 2023-2025 PSU awards during the first quarter of 2023. Substantially consistent with the prior year, Company Performance Measures included Adjusted EPS (75%) and TSR (25%) relative to the KBW Regional Banking Index (KRX). At the end of the three-year period, the Compensation Committee will review and certify Company performance for Adjusted EPS and TSR. The Compensation Committee believes these Performance Measures support the achievement of our long-term strategic and financial objectives and create an incentive to deliver stockholder value. Actual vesting of the PSUs is contingent upon three-year performance goals established for each Performance Measure. The PSUs granted in March 2023 to Messrs. Maddox, Clouse and Rapp will cliff vest at the end of the performance period based on certification of performance and can vary between 50% of target for threshold performance and 150% of target for maximum performance; no shares will vest for performance below threshold on each measure. Linear interpolation will be used if achievement is between values, and the entire award will be forfeited if threshold performance is not met on both measures.

The PSU awards that were previously granted in 2021 (“2021-2023 PSUs”) were subject to performance vesting conditions tied to Adjusted EPS and TSR, in each case over the period from January 1, 2021 to December 31, 2023.  The actual performance relative to the Adjusted EPS target was $3.92, which resulted in attainment of 150% of target performance.  The actual achievement under the TSR metric was 59th percentile performance, which resulted in attainment of 118.28% of target performance.  For the 2021-2023 PSUs, the Compensation Committee reviewed the Company’s actual performance against the Adjusted EPS and TSR targets and confirmed that the awards achieved a payout of 142.07% of target.  A summary of the Company’s performance as measured against the targets, and the resulting payout under the 2021-2023 PSUs, is set forth below.

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