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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Citizens Financial Services Inc | NASDAQ:CZFS | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
1.18 | 2.14% | 56.40 | 22.36 | 89.44 | 56.9449 | 54.25 | 56.35 | 17,030 | 22:30:00 |
☐
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Preliminary Proxy Statement
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☐
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Confidential, for Use of the Commission Only (as permitted by Rule 14(a)-6(e)(2))
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☒
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Definitive Proxy Statement
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☐
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Definitive Additional Materials
|
☐
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Soliciting Material under §240.14a-12
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☒
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No fee required
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☐
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Fee paid previously with preliminary materials.
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
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1.
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To elect three Class 1 directors to serve for three-year terms, and until their successors are duly elected and qualified;
|
2.
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To ratify the appointment of S.R. Snodgrass, P.C., Certified Public Accountants, as the independent registered public accounting firm for the
Company for the fiscal year ending December 31, 2024;
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3.
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To approve, on a non-binding advisory basis, the compensation of the Company’s named executive officers as disclosed in this proxy statement;
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4.
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To vote, on a non-binding advisory basis, regarding the frequency of the non-binding advisory vote to approve the compensation of the Company’s
named executive officers; and
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5.
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To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.
|
•
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“FOR” THE ELECTION OF THE THREE CLASS 1 DIRECTORS TO SERVE FOR THREE-YEAR TERMS, AND UNTIL THEIR SUCCESSORS ARE DULY ELECTED AND
QUALIFIED;
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•
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“FOR” RATIFICATION OF S.R. SNODGRASS, P.C. AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM;
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•
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“FOR” THE APPROVAL, ON A NON-BINDING ADVISORY BASIS, OF THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS; AND
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•
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“ONE YEAR” WITH RESPECT TO THE NON-BINDING ADVISORY VOTE ON THE FREQUENCY OF THE SHAREHOLDER VOTES TO APPROVE THE COMPENSATION OF
THE NAMED EXECUTIVE OFFICERS.
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Director
|
Audit and
Examination
Committee
|
Compensation/
Human
Resource
Committee
|
Governance
and
Nominating
Committee
|
||||||
Robert W. Chappell
|
X
|
*
|
X
|
||||||
Rinaldo A. DePaola
|
X
|
X
|
*
|
||||||
Thomas E. Freeman
|
X
|
X
|
X
|
||||||
Roger C. Graham, Jr.
|
X
|
||||||||
Janie M. Hilfiger
|
X
|
X
|
|||||||
E. Gene Kosa(1)
|
X
|
*
|
|||||||
R. Joseph Landy
|
X
|
X
|
|||||||
Christopher W. Kunes
|
X
|
X
|
|||||||
Alletta M. Schadler
|
X
|
X
|
|||||||
Number of Meetings in 2023
|
6
|
6
|
6
|
||||||
* Denotes Chairperson
(1) Mr. Kosa is retiring from the Board immediately prior to the Annual Meeting.
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Director Questionnaire:
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Board members complete a detailed questionnaire which (a) provides for quantitative ratings in key areas, and (b) seeks subjective comment in each of
those areas.
When answering the questions, each Board member ranks all other peer Board members, as well as themselves.
|
Frequency:
|
Annually.
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Completed By:
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All members of the Board.
|
Findings:
|
The third-party consultant provides a written summary report based on the data analysis and feedback from the directors. The findings are made
available to the Governance & Nominating Committee.
Each director is able to see their own score, and the Board median score.
If a director receives an average score of 7 or below on any question by 3 or more peer directors, representatives of the Governance & Nominating
Committee will talk to the director and determine what is needed to remedy the situation. If a director’s overall average score is a 7 or below, representatives of the Governance and Nominating Committee will talk to the director and
determine what is needed to remedy the situation.
Any question that 3 or more directors score 7 or below is determined to be a board weakness and representatives of the Governance and Nominating
Committee will determine, after consultation with management and/or consultants, what education or resource is needed to improve the score.
|
Presentation & Recommendations:
|
The final summary report is reviewed and discussed with the Governance & Nominating Committee by a representative of BoardEvals, LLC. The
Governance & Nominating Committee will then make a summary report to the full Board.
|
1. |
The name and address of the person recommended as a director candidate;
|
2. |
All information relating to such person that is required to be disclosed in solicitations of proxies for election of directors pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”);
|
3. |
The written consent of the person being recommended as a director candidate to be named in the Proxy Statement as a nominee and to serve as a director if elected;
|
4. |
As to the person making the recommendation, the name and address, as they appear on the Company’s books, of such person, and number of shares of common stock of the
Company owned by such person; provided, however, that if the person is not a registered holder of the Company’s common stock, the person should submit his or her name and address along with a current written statement from the record holder
of the shares that reflects the recommending person’s beneficial ownership of the Company’s common stock; and
|
5.
|
A statement disclosing whether the person making the recommendation is acting with or on behalf of any other person and, if applicable, the identity
of such person.
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Board Skills Matrix
|
||||||||||||
Black
|
Chappell
|
DePaola
|
Freeman
|
Graham
|
Hilfiger
|
Jones
|
Kosa(1)
|
Kunes
|
Landy
|
Richards
|
Schadler
|
|
Skills and Experience
|
||||||||||||
Finance and Accounting
|
X
|
X
|
X
|
X
|
||||||||
Independent Financial Expert
|
||||||||||||
CEO/Business Head
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
Business Skills and Knowledge
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
Mergers and Acquisitions
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
||
Human Capital Management/ Compensation
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
||||
Industry and Technology
|
X
|
X
|
X
|
X
|
X
|
X
|
||||||
Growth and Emerging Technologies
|
X
|
X
|
X
|
X
|
X
|
X
|
||||||
Cybersecurity
|
||||||||||||
Risk Management
|
X
|
X
|
X
|
X
|
||||||||
Ag Experience
|
X
|
X
|
X
|
X
|
X
|
X
|
||||||
Agri-Business Experience
|
X
|
X
|
X
|
X
|
||||||||
Environmental
|
X
|
|||||||||||
Public Company Governance
|
X
|
X
|
X
|
X
|
||||||||
Sales and Marketing
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
Government Policy and Sustainability
|
X
|
X
|
X
|
|||||||||
Legal, Legislative or Regulatory
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
|||
Tenure and Independence
|
||||||||||||
Years on Board
|
19
|
17
|
17
|
13
|
22
|
2
|
5
|
22
|
5
|
22
|
6
|
8
|
Independence
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
(1)
|
Mr. Kosa is retiring from the Board immediately prior to the Annual Meeting.
|
Board Diversity Matrix
|
||||||||||||
Black
|
Chappell
|
DePaola
|
Freeman
|
Graham
|
Hilfiger
|
Jones
|
Kosa(1)
|
Kunes
|
Landy
|
Richards
|
Schadler
|
|
Demographics
|
||||||||||||
Age
|
57
|
57
|
68
|
64
|
68
|
65
|
63
|
77
|
59
|
69
|
63
|
88
|
Gender Identity
|
M
|
M
|
M
|
M
|
M
|
F
|
M
|
M
|
M
|
M
|
M
|
F
|
African American or Black
|
||||||||||||
Alaskan Native or Native American
|
||||||||||||
Asian
|
||||||||||||
Hispanic or Latinx
|
||||||||||||
Native Hawaiian or Pacific Islander
|
||||||||||||
White
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
X
|
Two or More Races of Ethnicities
|
||||||||||||
LGBTQ+
|
||||||||||||
Directors who are Military Veterans
|
X
|
|||||||||||
Directors with Disabilities:
|
3
|
•
|
review all incentive compensation paid or awarded to covered executives during the recoupment period; and
|
•
|
if any incentive compensation would have been lower based on the restatement, to recover the incremental portion of the
incentive compensation in excess of what should have been paid based on the restated financials from the covered executive, subject to certain limited exceptions.
|
Name
|
Fees Earned or
Paid in Cash ($)(1) |
Stock Awards
($)(2) |
All Other
Compensation ($)(3) |
Total
($) |
||||
Robert W. Chappell
|
43,157
|
12,376
|
647
|
56,180
|
||||
Rinaldo A. DePaola
|
43,057
|
12,376
|
647
|
56,080
|
||||
Thomas E. Freeman
|
40,432
|
12,376
|
647
|
53,455
|
||||
Roger C. Graham, Jr.
|
43,457
|
12,376
|
647
|
56,480
|
||||
Janie M. Hilfiger
|
40,882
|
12,376
|
621
|
53,879
|
||||
E. Gene Kosa(4)
|
42,607
|
12,376
|
589
|
55,572
|
||||
Christopher W. Kunes
|
40,607
|
12,376
|
647
|
53,630
|
||||
R. Joseph Landy
|
65,237
|
12,376
|
647
|
78,260
|
||||
Alletta M. Schadler
|
40,882
|
12,376
|
9,148(5)
|
62,406
|
(1) |
Includes fees deferred at the election of the non-employee director pursuant to the Directors Deferred Compensation Plan.
|
(2) |
Reflects the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 – Share Based
Payment. The amounts were calculated based on the Company’s stock price of $61.88 on the date of grant. For applicable directors, stock award amounts represent fully vested grants of 200 shares of common stock made under the 2016 Equity
Incentive Plan and granted in 2023.
|
(3) |
Consists of a life insurance benefit, spousal expense at a retreat, and holiday gifts.
|
(4) |
Mr. Kosa is retiring from the Board immediately prior to the Annual Meeting.
|
(5) |
Includes imputed income from a split dollar life insurance benefit of $8,826.
|
Year Ended December 31,
|
|||
2023
|
2022
|
||
Audit Fees(1)
|
$371,566
|
$205,262
|
|
Audit-Related Fees
|
-
|
-
|
|
Tax Service Fees(2)
|
$14,162
|
$13,900
|
|
All Other Fees(3)
|
$76,780
|
$68,073
|
|
TOTAL
|
$462,508
|
$287,235
|
(1) |
Audit fees consist of fees for professional services rendered for the audit of the Company’s financial statements and internal controls over financial reporting and
review of financial statements included in the Company’s quarterly SEC reports, a Form S-4MEF filing, a Form S-3 filing, a Form 8-K/A filing, and compliance audits required by HUD.
|
(2) |
Tax service fees consist of compliance fees for the preparation of original tax returns.
|
(3) |
All other fees include network security attack and penetration testing, consulting services related to regulatory compliance, and facilitation of strategic planning and
enterprise risk management sessions with management and the Board of Directors.
|
Name of Beneficial Owner
|
Amount and Nature of
Beneficial Ownership
|
Percent of Class
|
|||
Randall E. Black
|
42,544
|
(1)
|
*
|
||
Robert W. Chappell
|
11,001
|
*
|
|||
Rinaldo A. DePaola
|
17,689
|
(2)
|
*
|
||
Thomas E. Freeman
|
13,949
|
(3)
|
*
|
||
Roger C. Graham, Jr.
|
62,068
|
(4)
|
1.3%
|
||
Janie M. Hilfiger
|
2,121
|
(5)
|
*
|
||
Mickey L. Jones
|
14,280
|
(6)
|
*
|
||
E. Gene Kosa
|
6,404
|
(7)
|
*
|
||
Christopher W. Kunes
|
10,960
|
*
|
|||
R. Joseph Landy
|
26,270
|
(8)
|
*
|
||
David Z. Richards, Jr.
|
1,454
|
(9)
|
*
|
||
Alletta M. Schadler
|
28,996
|
*
|
|||
Executive Officers and Directors as a Group (19 persons)
|
276,689
|
(10)
|
5.9%
|
(1)
|
Mr. Black beneficially owns 1,796 shares individually, 40,438 shares jointly with his spouse, and 310 shares are held by his spouse.
|
(2)
|
Mr. DePaola beneficially owns 7,276 shares individually, 8,268 shares jointly with his spouse, and his remaining 2,145 shares are held by his
spouse.
|
(3)
|
Mr. Freeman beneficially owns 13,949 shares jointly with his spouse. Of the 13,949 jointly owned shares, 4,000 shares are pledged as collateral on
a loan.
|
(4)
|
Of the 62,068 beneficially owned shares, 5,015 shares are pledged as collateral on a loan.
|
(5)
|
Mrs. Hilfiger beneficially owns 1,536 shares individually, and 585 shares jointly with her spouse.
|
(6)
|
Mr. Jones beneficially owns 425 shares individually, 12,991 shares jointly with his spouse, and 864 shares are held by his spouse.
|
(7)
|
Mr. Kosa beneficially owns 5,479 shares jointly with his spouse, 903 shares in an investment club, and his remaining 22 shares are held by his
spouse.
|
(8)
|
Mr. Landy beneficially owns 16,558 shares individually, and 9,712 shares jointly with his spouse.
|
(9)
|
Includes 1,078 shares of restricted stock for which Mr. Richards has voting but not investment power.
|
(10)
|
Includes 1,323 shares of restricted stock beneficially owned by executive officers not individually listed in the table for which
the executive officer has voting but not investment power.
|
Name of Beneficial Owner
|
Amount and Nature of
Beneficial Ownership
|
Percent of Class
|
|||
BlackRock, Inc.
|
281,347
|
(1)
|
6.0%
|
(1)
|
Based on a Schedule 13G filed on January 29, 2024 by BlackRock, Inc.
(“BlackRock”), which listed its address as 50 Hudson Yards, New York, NY 10001. BlackRock possesses sole voting power with respect to 276,512 shares of common stock and possesses sole dispositive power with respect to 281,347 shares of
common stock. BlackRock has indicated that it filed the Schedule 13G on behalf of the following subsidiaries: BlackRock Advisors, LLC, BlackRock Asset Management Canada Limited, BlackRock Fund Advisors, BlackRock Institutional Trust
Company, National Association, BlackRock Financial Management, Inc. and BlackRock Investment Management, LLC.
|
Name
|
Age as of February 26, 2024
|
Principal Occupation
for Past Five Years
|
||
Zerick D. Cook
|
49
|
Executive Vice President, Chief Credit Officer for the Bank since 2020. Prior to 2020, he was Senior Vice President, Chief Credit Officer for the
Bank since 2019. Prior to 2019 was Senior Vice President, Senior Credit Officer for Riverview Bank since 2018. Prior to 2018 was Senior Vice President, Director
of C&I, and State College Regional Executive for Riverview Bank since 2017. Prior to 2017 was Senior Vice President, Business Services Officer for Branch Banking and Trust Co. (formerly Susquehanna Bank) from 2015. Prior to
2015 was Senior Vice President, Commercial Executive for Branch Banking and Trust Co. (BB&T Bank) from 2014.
|
||
LeeAnn Gephart
|
40
|
Executive Vice President, Chief Banking Officer for the Bank since 2021. Prior to 2021, she was Executive Vice President, Chief Marketing Officer for
Riverview Bank since 2019. Prior to 2019 was Senior Vice President, Director of Marketing and Delivery Channel Services for Riverview Bank since 2018. Prior to 2018 was Vice President, Chief Marketing & Culture Officer for Woodlands
Bank since 2015.
|
||
Stephen J. Guillaume
|
47
|
Executive Vice President and Chief Financial Officer of the Company and Bank since 2023. Prior to 2023 was Senior Vice President and Chief Financial
Officer of the Company and the Bank since 2019. Prior to November 2019 was Vice President of Finance of the Bank since April 2013. Mr. Guillaume is a member of the First Citizens Insurance Agency Inc. Board since 2021. Mr. Guillaume is the
first cousin of Randall E. Black.
|
||
Jeffrey L. Wilson
|
62
|
Executive Vice President, Chief Lending Officer for the Bank since 2016. Prior to 2016 was Senior Vice President, Chief Lending Officer. Prior to
2011 was Vice President, Chief Lending Officer since 2010. Prior to 2010 was a Vice President, Business Development Officer since 1987 for First Citizens.
|
•
|
Earning levels. For the year ended December
31, 2023, net income totaled $17.8 million, which was impacted by the one-time costs associated with the acquisition of HVB, which after tax totaled $11.1 million. Revenue growth was strong due to the HVB acquisition and higher market
rates, as interest income increased $43.8 million, or 52.5%. Net interest income before the provision for loan loss increased $8.1 million, or 11.3%, compared to 2022 levels and was due to the increase in size of the Company due to the HVB
acquisition.
|
•
|
Solid performance metrics. Basic earnings
per share of $4.06 for 2023 compared to basic earnings per share of $7.25 for 2022. If the one-time costs of the HVB acquisition are excluded, basic earnings per share would have been $6.56 for 2023 compared to $7.32 for 2022. Return on
equity for the years ended December 31, 2023 and 2022 was 6.52% and 12.98%, respectively, while return on assets was 0.66% and 1.29%, respectively. If the one-time costs of the HVB acquisition are excluded, return on equity for the years ended December 31, 2023 and 2022 was 10.52% and 13.11%, respectively, while return on assets was 1.07% and 1.30%, respectively.
|
•
|
Growth. Total assets increased $641.9
million, or 27.5%, to close the year at $2.98 billion as of December 31, 2023, compared to $2.33 billion at December 31, 2022, due to the acquisition closing in the second quarter of 2023. Net loans ended 2023 at $2.23 billion, an increase
of 30.6% or $521.2 million, which was primarily due to the HVB acquisition. Total deposits increased $477.3 million, to $2.32 billion at December 31, 2023 as a result of the HVB acquisition.
|
•
|
Asset quality. Asset quality remains solid
for the Company. Non-performing assets totaled $13.2 million as of December 31, 2023 compared to $7.5 million as of December 31, 2023. Non-accrual loans and loans past due 90 days or more increased $5.8 million, with $3.7 million due to
the HVB acquisition and the remaining $2.1 million increase primarily related to two customers. Foreclosed assets decreased $69,000. As a result, the ratio of non-performing assets to total loans was 0.59% at December 31, 2023 compared
to 0.43% at December 31, 2022. Annualized net charge-offs remain low at 0.06% for 2023.
|
•
|
Shareholder return. Cash dividends per
share increased 3.1% for the year ended December 31, 2023, resulting in $1.94 per share being paid, compared to $1.88 per share being paid for the year ended December 31, 2022.
|
• |
Chief Executive Officer/President. The Board of Directors conducted a performance review of Mr. Black during 2022 for purposes of determining his 2023 compensation. The Board
of Directors concluded that Mr. Black continues to exhibit strong business and leadership skills and is moving the Company in a direction that continues to enhance long-term shareholder value. Based on this review, the Board of Directors
approved a 6.33% increase in Mr. Black’s compensation. In addition, the Company allowed the term of Mr. Black’s employment agreement to extend through June 2026.
|
• |
Other Named Executive Officers. Mr. Black
conducted a performance review of our other named executive officers and determined that the officers continue to contribute greatly to the success of the Company and its affiliates. Based on this review, the Board of Directors approved a
6.19% increase in Mr. Jones’ compensation and a 3.85% increase in Mr. Richards’ compensation. In addition, the Company allowed the terms of the change in control agreement with Mr. Jones to extend through January 19, 2027 and allowed the
terms of the change in control agreement with Mr. Richards to extend through December 9, 2026.
|
• |
Annual Incentives. As a result of our strong
financial performance and the successful achievement of individual performance goals, our named executive officers earned awards under our Annual Incentive Plan for 2022 and the awards were distributed in the second calendar quarter of 2023.
The awards (if any) under the Annual Incentive Plan for 2023 have not yet been determined; however, the Compensation/Human Resource Committee expects the plan calculations to be made and awards determined (if any) by June 2024. See “Performance-Based Compensation” for additional information on the Annual Incentive Plan for 2023. See also “Grants of Plan-Based Awards During 2023” for information on potential incentive awards under the Annual Incentive Plan for 2023.
|
• |
Align the interests of executives with the interests of shareholders in the creation of long-term shareholder value;
|
• |
Reinforce key business objectives and deliver executive benefits in a cost-effective manner;
|
• |
Encourage management ownership of our common stock; and
|
• |
Attract and retain talented members of senior management.
|
• |
Base salary;
|
• |
Performance-based cash compensation through our Annual Incentive Plan;
|
• |
Long-term equity awards through our Annual Incentive Plan;
|
• |
Retirement benefits; and
|
• |
Employment and change in control agreements.
|
2023 Annual Incentive Plan Opportunities
|
|||
Name
|
Minimum
|
Target
|
Maximum
|
Randall E. Black
|
50.0%
|
75.0%
|
100.0%
|
Mickey L. Jones
|
37.5%
|
56.3%
|
75.0%
|
David Z. Richards, Jr.
|
17.5%
|
26.3%
|
35.0%
|
Name
|
Company/Bank
|
Branch/Departmental
|
Randall E. Black
|
85%
|
15%
|
Mickey L. Jones
|
80%
|
20%
|
David Z. Richards, Jr.
|
50%
|
50%
|
Financial Institution
|
City / Town
|
State
|
Adams County National Bank
|
Gettysburg
|
PA
|
Chemung Canal Trust Company
|
Elmira
|
NY
|
Citizens & Northern Bank
|
Wellsboro
|
PA
|
First Keystone Community Bank
|
Berwick
|
PA
|
F&M Trust
|
Chambersburg
|
PA
|
Orrstown Bank
|
Shippensburg
|
PA
|
Jersey Shore State Bank
|
Williamsport
|
PA
|
Peoples Security Bank & Trust
|
Hallstead
|
PA
|
QNB Bank
|
Quakertown
|
PA
|
AmeriServ Financial
|
Johnstown
|
PA
|
Ephrata National Bank
|
Ephrata
|
PA
|
First National Community Bank
|
Dunmore
|
PA
|
PeoplesBank
|
York
|
PA
|
Fidelity Deposit & Discount Bank
|
Dunmore
|
PA
|
ESSA Bank & Trust
|
Stroudsburg
|
PA
|
Name
and Principal Position |
Year
|
Salary ($)
|
Bonus ($)(7)
|
Stock Awards ($)(1)
|
Non-Equity Incentive Plan Compensation ($)(2)
|
Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)(3)
|
All Other Compensation ($)(4)
|
Total ($)
|
Randall E. Black
CEO & President of
the Company and
Bank
|
2023
2022
2021
|
575,000
590,751(5)
575,011(6)
|
250
250
250
|
16,676
20,944
13,712
|
-
561,226
505,608
|
57,397
186,483
418,139
|
90,084
85,228
136,159
|
739,407
1,444,882
1,648,879
|
Mickey L. Jones
Senior Executive Vice President, Chief Operating Officer, Treasurer of the Company and Bank
|
2023
2022
2021
|
350,000
329,600
320,000
|
250
250
250
|
9,255
11,660
8,404
|
-
229,293
205,493
|
110,138
101,151
161,221
|
52,534
51,294
49,332
|
522,177
723,248
744,700
|
David Z. Richards, Jr.
Senior Executive Vice President, Director of Emerging Markets
|
2023
|
300,000
|
250
|
45,109
|
-
|
-
|
62,223
|
407,582
|
(1)
|
Reflects the aggregate grant date fair value computed in accordance with Financial Accounting Board Accounting Standards Codification Topic 718–
Share Based Payment based on the per share price on the date of grant ($83.38 per share for the grants to Messrs. Black and Jones). For 2023, the stock award for Mr. Black constituted 200 fully vested shares. For 2023, the stock award for
Mr. Jones constituted 111 fully vested shares. For 2023, the stock awards for Mr. Richards constituted a grant of 242 restricted shares, based on a per share price of $61.98, that vest in three approximately equal annual installments
commencing on December 28, 2024, a grant of 359 restricted shares, based on a per share price of $83.38, that vest in three approximately equal annual installments commencing on June 29, 2024, awarded upon the achievement of certain
performance goals set forth in the Company’s Annual Incentive Plan, as well as 2 shares received for years of service, based on a per share price of $88.06, which shares were vested upon grant. The 359 restricted shares granted to Mr.
Richards relate to the equity portion of the Annual Incentive Plan for performance related to calendar year 2022.
|
(2)
|
Represents cash awards earned by each executive under the Annual Incentive Plan. Amounts for 2023 have not yet been determined. We expect to be
able to determine the Annual Incentive Plan awards for 2023 by the end of June 2024.
|
(3) |
Represents increase/(decrease) in pension value for tax-qualified and supplemental pension benefits for the executive officer.
|
(4) |
Amounts stated in this column for 2023 consist of:
|
Name
|
401(k)
Match Contribution
($)
|
Life
Insurance Premiums
($)
|
Auto
Benefits
($)
|
Club Dues
($)
|
Deferred Compensation Plan
Award
($)
|
Miscellaneous
($)(a)
|
Total
($)
|
Randall E. Black
|
11,550
|
5,128
|
7,860
|
4,319
|
57,500
|
3,727
|
90,084
|
Mickey L. Jones
|
11,550
|
2,772
|
-
|
1,589
|
35,000
|
1,623
|
52,534
|
David Z. Richards, Jr.
|
20,700
|
2,772
|
6,000
|
-
|
30,000
|
2,751
|
62,223
|
(a)
|
Miscellaneous items would include, if applicable: gross up on years of service award, cash dividends on restricted stock, stock dividends on
restricted stock, imputed income from split dollar bank owned life insurance, Christmas gift, and insurance opt out.
|
(5)
|
Includes $50,001 paid out for unused vacation time.
|
(6)
|
Includes $50,000 paid out for unused vacation time.
|
(7)
|
Represents a Christmas bonus paid to all eligible employees.
|
Year
|
Summary Comp. Table Total for CEO
($)
|
Comp. Actually Paid to CEO(2)
($)
|
Average Summary Comp. Table Total for Non-CEO NEOs(3)
($)
|
Average Comp. Actually Paid to Non-CEO NEOs(2)
($)
|
Value of Initial Fixed $100 Investment Based On TSR
|
Net Income
($)(1)
|
2023
|
739,407(4)
|
730,501(4)
|
464,880(4)
|
429,416(4)
|
87.69
|
17,811
|
2022
|
1,444,882
|
1,325,720
|
469,497
|
443,438
|
148.10
|
29,060
|
2021
|
1,648,879
|
1,418,622
|
462,656
|
423,070
|
112.91
|
29,118
|
(1)
|
Presented in thousands.
|
(2)
|
Compensation actually paid (“CAP”) is defined by the SEC and is computed by starting with the “Total” column of the Summary Compensation Table
(“SCT”) for each year and then:
|
•
|
subtracting the amount in the “Restricted Stock Awards” column of the SCT for such year,
|
•
|
adding, for all unvested equity awards granted during the reporting year and outstanding on the last day of the
reporting year, the fair value as of the last day of the reporting year, utilizing the same assumptions as the Outstanding Equity Awards at 2023 Fiscal Year-End table below.
|
•
|
adding, for all unvested equity awards granted prior to the reporting year and outstanding on the last day of
the reporting year, the change in fair value from the last day of the preceding year to the last day of the reporting year, utilizing the same assumptions as the Outstanding Equity Awards at 2023 Fiscal Year-End table below.
|
•
|
adding, for equity awards vesting during the reporting year, the change in fair value from the last day of the
preceding year to the vesting date,
|
•
|
adding the value of any dividends or other earnings paid in the reporting year on unvested equity awards that
are not otherwise included in the total compensation for the reporting year,
|
•
|
subtracting the amount in the “Change in Pension Value & Nonqualified Deferred Compensation Earnings”
column of the SCT for such year, and
|
•
|
adding, for all defined benefit and actuarial pension plans, (A) the service cost, calculated as the actuarial
present value attributable to services rendered during the reporting year, plus (B) the prior service cost, calculated as the entire cost of benefits granted in a plan amendment during the reporting year that are attributed by the benefit
formula to services rendered in periods prior to the amendment.
|
CEO SCT Total to CAP Reconciliation
|
2023
|
2022
|
2021
|
SCT Total Compensation
|
$ 739,407
|
$ 1,444,882
|
$ 1,648,879
|
SCT Stock Awards
|
(16,676)
|
(20,944)
|
(13,712)
|
Fair Value of New Unvested Equity Awards
|
—
|
—
|
—
|
Change in Fair Value of Existing Unvested Equity Awards
|
—
|
—
|
—
|
Change in Fair Value of Vesting Equity Awards
|
—
|
—
|
13,702
|
Fair Value of New Vested Equity Awards
|
16,676
|
20,944
|
13,702
|
Fair Value as of Prior Year-end of Equity Awards Forfeited
|
—
|
—
|
—
|
Dividends on Unvested Equity Awards
|
—
|
—
|
—
|
SCT Change in Pension Value & Nonqualified Deferred Compensation Earnings
|
(57,397)
|
(186,483)
|
(418,139)
|
Service Cost & Prior Service Cost
|
48,491
|
67,321
|
172,200
|
CAP
|
$ 730,501
|
$ 1,325,720
|
$ 1,418,622
|
Average Non-CEO NEOs SCT Total to CAP Reconciliation
|
2023
|
2022
|
2021
|
SCT Total Compensation
|
$ 464,880
|
$ 469,497
|
$ 462,656
|
SCT Stock Awards
|
(27,182)
|
(10,037)
|
(8,305)
|
Fair Value of New Unvested Equity Awards
|
19,448
|
4,757
|
4,097
|
Change in Fair Value of Existing Unvested Equity Awards
|
(2,862)
|
1,074
|
448
|
Change in Fair Value of Vesting Equity Awards
|
2
|
687
|
3,863
|
Fair Value of New Vested Equity Awards
|
4,716
|
5,830
|
4,202
|
Fair Value as of Prior Year-end of Equity Awards Forfeited
|
—
|
—
|
—
|
Dividends on Unvested Equity Awards
|
765
|
303
|
849
|
SCT Change in Pension Value & Nonqualified Deferred Compensation Earnings
|
(55,069)
|
(48,463)
|
(80,611)
|
Service Cost & Prior Service Cost
|
24,718
|
19,790
|
35,870
|
CAP
|
$ 429,416
|
$ 443,438
|
$ 423,070
|
(3)
|
The Non-CEO NEOs for each year are as follows:
|
•
|
For 2023: Mickey L. Jones and David Z. Richards, Jr.
|
•
|
For 2022: Mickey L. Jones and Stephen J. Guillaume
|
•
|
For 2021: Mickey L. Jones and Stephen J. Guillaume
|
(4)
|
Amounts for 2023 do not reflect any award payable to the Company’s named executive officers under the Annual Incentive Plan and the award amounts
for 2023 have not yet been determined. We expect to be able to determine the Annual Incentive Plan awards for 2023 by the end of June 2024.
|
(1)
|
Amounts for 2023 do not reflect any award payable to the Company’s named executive officers under the Annual Incentive Plan and the award amounts
for 2023 have not yet been determined. We expect to be able to determine the Annual Incentive Plan awards for 2023 by the end of June 2024.
|
(1)
|
Amounts for 2023 do not reflect any award payable to the Company’s named executive officers under the Annual Incentive Plan and the award amounts
for 2023 have not yet been determined. We expect to be able to determine the Annual Incentive Plan awards for 2023 by the end of June 2024.
|
Estimated Future Payouts
|
Estimated Future Payouts
|
|||||||||||
Under Non-Equity Incentive
|
Under Equity Incentive
|
|
||||||||||
Plan Awards(1)
|
Plan Awards
|
|||||||||||
Name
|
Grant
Date
|
Threshold
|
Target
|
Maximum
|
Threshold
|
Target
|
Maximum
|
All Other
Stock Awards
|
Grant Date Fair Value of Stock Awards | |||
Randall E. Black
|
$287,500
|
$431,250
|
$575,000
|
-
|
-
|
-
|
||||||
6/29/2023(2)
|
-
|
-
|
-
|
-
|
-
|
-
|
200
|
$16,676
|
||||
Mickey L. Jones
|
$131,250
|
$196,875
|
$262,500
|
-
|
-
|
-
|
||||||
6/29/2023(2)
|
-
|
-
|
-
|
-
|
-
|
-
|
111
|
$9,255
|
||||
David Z. Richards, Jr.
|
$52,500
|
$78,750
|
$105,000
|
-
|
-
|
-
|
||||||
4/27/2023(3)
|
2
|
$176
|
||||||||||
6/29/2023(2)
|
359
|
$29,934
|
||||||||||
12/28/2023(4)
|
242
|
$14,999
|
||||||||||
(1) |
These columns illustrate the possible payouts for each of our named executive officers under our Annual Incentive Plan for 2023. With respect to Mr. Richards, a
portion of the incentive opportunity under the Annual Incentive Plan is payable in Company common stock and a portion is paid in cash in accordance with the terms of the plan. The actual number of shares of restricted stock will be
determined when the award is distributed in 2024.
|
(2) |
Represents the date the Company granted restricted stock in connection with awards under the Annual Incentive Plan for performance related to calendar year 2022.
Includes 200 shares granted to Mr. Black upon the achievement of certain performance goals, which shares were vested upon grant. Represents 111 shares granted to Mr. Jones upon the achievement of certain performance goals, which shares were
vested upon grant. Represents 359 shares granted to Mr. Richards upon the achievement of certain performance goal that vest in three approximately equal annual installments commencing on June 29, 2024.
|
(3) |
Represents two shares granted to Mr. Richards for years of service which shares were vested upon grant.
|
(4) |
Represents a grant of 242 restricted shares that vest in three approximately equal annual installments commencing on December 28, 2024.
|
Stock Awards
|
||||
Name
|
Number of Shares
or Units of Stock
That Have Not Vested
|
Market Value of Shares
or Units of Stock
That Have Not Vested(1)
|
||
Randall E. Black
|
-
|
-
|
||
Mickey L. Jones
|
-
|
-
|
||
David Z. Richards, Jr.
|
1,078(2)
|
$69,768
|
(1) |
Based upon the Company’s closing stock price of $64.72 on December 31, 2023.
|
(2) |
Includes 242 shares that vest in three equal annual installments commencing on December 28, 2024, 359 shares that vest in three equal annual installments commencing on
June 29, 2024, 91 shares that vest in two equal installments on August 24, 2024 and August 24, 2025, 228 shares that vest in two equal installments on May 19, 2024 and May 19, 2025, 41 shares that will vest on August 2, 2024, and 117 shares
that will vest on June 4, 2024.
|
Name
|
Number of Shares
or Units of Stock
Acquired
On Vesting
|
Value Realized
on Vesting
|
||
Randall E. Black
|
-
|
-
|
||
Mickey L. Jones
|
-
|
-
|
||
David Z. Richards, Jr.(1)
|
427
|
$34,343
|
||
(1)
|
Includes 185 shares that vested on May 19, 2023 at $84.14 per share, 39 shares that vested on June 3, 2023 at $81.52 per share, 117 shares that
vested on June 4, 2023 at $81.52 per share, 40 shares that vested on August 2, 2023 at $79.20 per share, and 46 shares that vested on August 24, 2023 at $62.86 per share
|
Name
|
Executive
Contributions
in Last
Fiscal Year
($)
|
Registrant Contributions
in Last
Fiscal Year
($)(1)
|
Aggregate
Earnings
in Last
Fiscal Year
($)(2)
|
Aggregate
Withdrawals/
Distributions
($)
|
Aggregate Balance
at Last
Fiscal Year End
($)(3)
|
Randall E. Black
|
-
|
57,500
|
22,225
|
-
|
492,126
|
Mickey L. Jones
|
-
|
35,000
|
7,641
|
-
|
169,196
|
David Z. Richards, Jr.
|
-
|
30,000
|
5,806
|
-
|
128,556
|
(1)
|
Contributions above are reflected for the named executive officers in the Summary Compensation Table.
|
(2)
|
Aggregate earnings in the last fiscal year are not reflected for the named executive officers in the Summary Compensation Table.
|
(3)
|
Of the amounts shown in this column, the following amounts were reported in the Summary Compensation Tables of the Company’s proxy statements for
previous years: Mr. Black - $299,375, Mr. Jones - $121,734, Mr. Richards - $0.
|
Name
|
Plan Name
|
Years of
Credited
Service
(#)
|
Present
Value of
Accumulated
Benefit
($)
|
Randall E. Black
|
First Citizens Community Bank Account Balance Pension Plan
|
31
|
587,080
|
Supplemental Executive Retirement Plan
|
31
|
1,684,719
|
|
Mickey L. Jones
|
First Citizens Community Bank Account Balance Pension Plan
|
20
|
437,816
|
Supplemental Executive Retirement Plan
|
20
|
846,866
|
|
Randall E. Black
|
Mickey L. Jones
|
David Z. Richards, Jr.
|
Death:
|
|
|
|
Employment Agreement
|
-
|
-
|
-
|
Change in Control Agreement
|
-
|
-
|
-
|
SERP(1)
|
$1,995,717
|
$846,866
|
-
|
Executive Deferred Compensation Plan
|
$492,126
|
$169,196
|
$128,556
|
Equity Awards
|
-
|
-
|
$69,768
|
|
|
|
|
Disability:
|
|
|
|
Employment Agreement
|
-
|
-
|
-
|
Change in Control Agreement
|
-
|
-
|
-
|
SERP(2)
|
$1,684,719
|
$846,866
|
-
|
Executive Deferred Compensation Plan
|
$492,126
|
$169,196
|
$128,556
|
Equity Awards
|
-
|
-
|
$69,768
|
|
|
|
|
Retirement or Voluntary Termination Without Good Reason:
|
|
||
Employment Agreement
|
-
|
-
|
-
|
Change in Control Agreement
|
-
|
-
|
-
|
SERP(3)
|
$1,684,719
|
$846,866
|
-
|
Executive Deferred Compensation Plan(3)
|
$492,126
|
$169,196
|
-
|
Equity Awards
|
-
|
-
|
-
|
Termination By Company For Cause:
|
|
|
|
Employment Agreement
|
-
|
-
|
-
|
Change in Control Agreement
|
-
|
-
|
-
|
SERP
|
-
|
-
|
-
|
Executive Deferred Compensation Plan
|
-
|
-
|
-
|
Equity Awards
|
-
|
-
|
-
|
|
|
|
|
Voluntary Termination By Executive For Good Reason (not in Connection with a Change in Control):
|
|
||
Employment Agreement(4)
|
$1,168,306
|
-
|
-
|
Change in Control Agreement
|
-
|
-
|
-
|
SERP(3)
|
$1,684,719
|
$846,866
|
-
|
Executive Deferred Compensation Plan(3)
|
$492,126
|
$169,196
|
-
|
Equity Awards
|
-
|
-
|
-
|
|
|
|
|
Termination By Company Without Cause (not in Connection with a Change in Control):
|
|||
Employment Agreement(4)
|
$1,168,306
|
-
|
-
|
Change in Control Agreement
|
-
|
-
|
-
|
SERP(3)
|
$1,684,719
|
$846,866
|
-
|
Executive Deferred Compensation Plan(3)
|
$492,126
|
$169,196
|
-
|
Equity Awards
|
-
|
-
|
$69,768
|
|
|
|
|
Termination in Connection with a Change-in-Control(5):
|
|
||
Employment Agreement(4)
|
$1,746,709
|
-
|
-
|
Change in Control Agreement(4)
|
-
|
$373,421
|
$323,712
|
SERP(1)
|
$1,995,717
|
$846,866
|
-
|
Executive Deferred Compensation Plan(3)
|
$492,126
|
$169,196
|
$128,556
|
Long-Term Incentive Award
|
-
|
-
|
-
|
Equity Awards
|
-
|
-
|
$69,768
|
Change-in-Control No Termination:
|
|||
Employment Agreement(4)
|
-
|
-
|
-
|
Change in Control Agreement(4)
|
-
|
-
|
-
|
SERP(1)
|
$1,995,717
|
$846,866
|
-
|
Executive Deferred Compensation Plan(3)
|
$492,126
|
$169,196
|
$128,556
|
Equity Awards
|
-
|
-
|
$69,768
|
(1)
|
Represents the executive’s normal retirement benefit under the arrangement, regardless of his age at the time of separation from service or death.
|
(2)
|
Represents the value of the executive’s early retirement benefit which fully vests upon his termination due to disability.
|
(3)
|
Mr. Black and Mr. Jones are fully vested under the Deferred Compensation Plan because of their age and years of service with the Bank. Mr. Richards
vesting would accelerate due to his change-in-control.
|
(4)
|
Amount includes base compensation and the value of continued health, life and disability, or continued health and long term disability, as
applicable, coverage for the period of time specified in the agreement.
|
(5)
|
The amount shown does not reflect adjustments that could be made to the executive’s total change in control severance payment to ensure the
executive’s severance payment would not be deemed an “excess parachute payment” under Section 280G of the Internal Revenue Code.
|
• |
any compensation paid to an executive officer of the Company if the Compensation/Human Resource Committee of the Board of Directors approved (or recommended that the
Board approve) such compensation;
|
• |
any compensation paid to a director of the Company if the Board or an authorized committee of the Board approved such compensation; and
|
• |
any transaction with a related person involving consumer and investor financial products and services provided in the ordinary course of the Company’s business and on
substantially the same terms as those prevailing at the time for comparable services provided to unrelated third parties or to the Company’s employees on a broad basis (and, in the case of loans, in compliance with the Sarbanes-Oxley Act of
2002).
|
• |
whether the terms of the proposed transaction are at least as favorable to the Company as those that might be achieved with an unaffiliated third party;
|
• |
the size of the transaction and the amount of consideration payable to the related person;
|
• |
the nature of the interest of the related person;
|
• |
whether the transaction may involve a conflict of interest; and
|
• |
whether the transaction involves the provision of goods and services to the Company that are available from unaffiliated third parties.
|
|
For the Year Ended
|
|
|
December 31,
|
|
|
2023
|
2022
|
Return on Average Assets and Equity Excluding BOLI death benefits, merger and acquisition costs and provision for credit losses - acquisition day 1
non-PCD
|
|
|
Net Income - GAAP
|
$ 17,811
|
$ 29,060
|
BOLI death benefits
|
(195)
|
-
|
After tax provision for credit losses - acquisition day 1 non-PCD
|
3,627
|
-
|
After tax merger and acquisition costs
|
7,513
|
292
|
Net Income excluding merger and acquisition costs - Non-GAAP
|
$ 28,756
|
$ 29,352
|
Average Assets
|
2,699,039
|
2,255,966
|
|
|
|
Return on Average assets, Excluding BOLI death benefits, merger and acquisition costs and provision for credit losses - acquisition day 1 non-PCD -
Non-GAAP
|
0.66%
|
1.29%
|
Return on Average assets, Excluding BOLI death benefits, merger and acquisition costs and provision for credit losses - acquisition day 1 non-PCD -
Non-GAAP
|
1.07%
|
1.30%
|
|
|
|
Average Stockholders Equity - GAAP
|
$ 273,322
|
$ 223,955
|
|
|
|
Return on Average stockholders equity
|
6.52%
|
12.98%
|
Return on Average stockholders equity, Excluding BOLI death benefits, merger and acquisition costs and provision for credit losses - acquisition day 1
non-PCD - Non-GAAP
|
10.52%
|
13.11%
|
1 Year Citizens Financial Servi... Chart |
1 Month Citizens Financial Servi... Chart |
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