James M. Costa
BANNERAbout James M. Costa
James M. Costa is Executive Vice President, Chief Risk Officer, and Chief Operating Officer at Banner Bank (Banner Corporation, NASDAQ: BANR). He joined Banner in October 2021 as CRO and was promoted to COO in May 2024, bringing nearly 30 years of banking experience including senior risk and credit roles at TCF Financial, Wachovia, and PNC; he is a U.S. Air Force veteran, holds a bachelor’s degree from The Ohio State University, and conducted doctoral studies in economics at the University of Minnesota . As of December 31, 2024, Banner reported revenues of $608.6 million (down from $620.4 million in 2023), ROA of 1.07%, and an adjusted efficiency ratio of 64.33%, while 2022–24 long-term performance units tracked ROATCE at 15.51% (69th percentile) and TSR at 22.17% (75th percentile), vesting at 144% of target .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| TCF Financial Corporation | Executive Vice President; Chief Risk Officer; Chief Credit Officer | 2013–Oct 2020 | Led enterprise risk and credit at a $49B multi‑regional bank holding company . |
| Mann Lake Group (consulting) | CEO & Founder | From Oct 2020 | Advised banks/fintechs on credit strategy, capital allocation, risk program design, regulatory relations, compliance risk . |
| Wachovia | Executive Vice President; Head of Credit Strategy | Not disclosed | Enterprise credit strategy leadership at a major U.S. bank . |
| PNC Financial Corp. | Executive Vice President; Head of Credit Strategy | Not disclosed | Enterprise credit strategy leadership at a major U.S. bank . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Midsize Bank Coalition of America | Advisory Board Member | Not disclosed | Provides insights into policy and industry trends for midsize banks . |
| Moody’s Analytics | Advisory Board Member | Not disclosed | Contributes risk analytics and industry perspectives . |
| Community/Non‑profit | Volunteer (Habitat for Humanity; Humane Society; UMN Center for Children’s Cancer Research) | Not disclosed | Community engagement and philanthropy . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary Paid ($) | $410,000 | $421,360 | $471,573 |
| Base Salary Rate ($) | — | $424,350 | $500,000 |
| Target Bonus (% of eligible earnings) | 65% | 65% | 65% |
| Actual Annual Incentive Paid ($) | $297,250 | $189,389 | $324,618 |
Performance Compensation
2024 Executive Incentive Plan — Corporate and Individual Results
| Metric | Weight | Target | Actual | Payout (% of target) | Notes |
|---|---|---|---|---|---|
| Pretax Pre‑Provision ROA | 30% | 1.49% | 1.47% | 95.45% | Non‑GAAP definition per plan . |
| Adjusted Efficiency Ratio | 25% | 62.30% | 62.29% | 100.22% | Non‑GAAP per plan . |
| Total Operating Revenue | 15% | $615.6m | $614.775m | 98.09% | Non‑GAAP per plan . |
| NPA / Total Assets (relative) | 10% | 50th percentile | 86th percentile | 150% (capped) | Relative to peer banks . |
| Individual Performance (Costa) | 20% | 100% | — | 113% | Above‑target leadership impact. |
| Total Annual Incentive Outcome | — | $306,523 | — | 106% of target; $324,618 | Corporate $255,651; Individual $68,968 . |
Long‑Term Incentive Awards and Vesting
| Award Type | Grant Date | Shares/Units | Fair Value ($) | Vesting | Performance Metrics |
|---|---|---|---|---|---|
| Time‑based RSUs | 4/1/2024 | 3,686 | $173,131 | Ratable over 3 years from grant | N/A |
| Performance Units (2024–26) | 4/1/2024 | Target 3,686; Threshold 1,843; Max 5,529 | $169,151 (grant‑date) | Vests based on 3‑year goals | 50% ROATCE (25th/50th/75th percentile ⇒ 50/100/150%); 50% TSR (same; capped at 100% if absolute TSR negative) . |
| Performance Units (2022–24) – Results | Vested 12/31/2024 | — | — | Vested at 144% of target | ROATCE 15.51% (69th ⇒ 138%); TSR 22.17% (75th ⇒ 150%) . |
| RSU Grant (promotion award) | 8/01/2025 | $300,000 award | — | One‑third annually over 3 years | Granted upon achievement of specified criteria post‑promotion . |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 9,818 shares; less than 1% of outstanding . |
| Unvested time‑based awards (12/31/2024) | 6,614 shares/units; market value $441,617 (at $66.77) . |
| Unearned performance units (target, 12/31/2024) | 9,444 units; payout value at target $630,576 (at $66.77) . |
| Stock ownership guidelines | COO required to hold 3x base salary (effective 2025); must retain 50% of net shares until met . |
| Pledging/hedging | Hedging and pledging prohibited (grandfathered exceptions only); no pledging disclosed for Costa . |
| Recent insider filings | Form 4 filings on 3/10/2025, 4/02/2025 (RSU activity), 8/05/2025 (promotion RSU grant) . |
Employment Terms
| Provision | Terms |
|---|---|
| Executive Severance & Change‑in‑Control Plan | Participants include Costa; outside change‑in‑control period: 1.0x base salary paid over 12 months plus 12 months COBRA reimbursement; within covered period (6 months pre/24 months post): 2.0x base salary plus target annual cash incentive, pro‑rated bonus, and 18 months COBRA reimbursement (double‑trigger) . |
| Potential payments (12/31/2024) | Involuntary termination: $858,732; Involuntary termination following change‑in‑control: $2,025,599; Equity plans accelerated vesting assumption shown as $1,387,481 in CIC/death/disability (performance assumed max for calc) . |
| Clawback policy | Recovery of erroneously awarded incentive‑based compensation for 3 years preceding a restatement (Nasdaq‑compliant), in addition to existing plan clawbacks for misconduct and materially inaccurate results . |
| Insider trading policy | Short sales, options, and hedging prohibited; pledging prohibited (except grandfathered), trading windows/blackouts apply . |
| Options | No stock option awards outstanding; company does not currently issue options . |
| Perquisites & benefits | Executives receive standard benefits; limited perquisites consistent with peers . |
Compensation Structure Analysis
- Pay mix emphasizes performance: annual incentive weighted 80% corporate/20% individual, and long‑term equity split evenly between time‑based RSUs and performance units for EVPs (Costa: 80% of salary total target LTI split 40/40) .
- Metrics are diversified and rigorous (PTPP ROA, efficiency, operating revenue, and relative NPA), with relative peer comparisons and payout caps; LTI ties to ROATCE and TSR percentile rankings with TSR cap when absolute TSR is negative .
- Governance guardrails: clawbacks, double‑trigger CIC, no option repricing/buyouts, no hedging/pledging, and robust stock ownership guidelines (COO 3x salary) .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay passed with over 96% support, indicating strong shareholder alignment and support for the executive pay program .
Competency, Track Record & Execution Risk
- Risk management credentials across large institutions and consulting underpin Costa’s role as CRO/COO, with Banner delivering steady core performance in 2024 despite headwinds (ROA 1.07%, adjusted efficiency 64.33%) .
- Long‑term incentives rewarded multi‑year value creation: 2022–24 performance units vested at 144% on strong relative ROATCE and TSR .
Performance Compensation — Detailed Tables
2024 Grants of Plan‑Based Awards (Costa)
| Grant Date | Cash Incentive Threshold ($) | Cash Incentive Target ($) | Cash Incentive Max ($) | Perf Units Threshold (#) | Perf Units Target (#) | Perf Units Max (#) | Time‑based RSUs (#) | Grant‑date Fair Value ($) |
|---|---|---|---|---|---|---|---|---|
| 4/1/2024 | $153,261 | $306,523 | $459,784 | 1,843 | 3,686 | 5,529 | 3,686 | $169,151 (perf units); $173,131 (RSUs) |
Outstanding Equity Awards (12/31/2024)
| Award Type | Unvested (#) | Market Value ($) | Unearned/Performance (#) | Payout Value at Target ($) |
|---|---|---|---|---|
| RSUs/Restricted Stock | 6,614 | $441,617 | — | — |
| Performance Units | — | — | 9,444 | $630,576 |
| Stock Price Reference | — | $66.77 (12/31/2024) | — | — |
Equity Ownership Table (Record Date: 3/14/2025)
| Holder | Shares Beneficially Owned | % of Outstanding |
|---|---|---|
| James M. Costa | 9,818 | <1% |
Employment & Contracts — Potential Payments (12/31/2024)
| Scenario | Amount ($) |
|---|---|
| Involuntary Termination (no CIC) | $858,732 |
| Involuntary Termination Following CIC | $2,025,599 |
| Death/Disability — Equity Accelerated | $1,387,481 (assumes max perf vest for calc) |
Investment Implications
- Alignment: Significant performance‑based pay and multi‑year PSU structure directly tie Costa’s compensation to ROATCE/TSR outcomes; strong governance (clawbacks, double‑trigger CIC, ownership rules) reduces agency risk .
- Retention and selling pressure: Three‑year RSU/PSU vesting creates periodic Form 4 activity; hedging/pledging prohibitions and ownership retention requirements limit short‑term selling pressure, while 2025 promotion grant ($300k RSU) further enhances retention .
- Change‑in‑control economics: Double‑trigger severance of 2x salary plus target bonus is moderate and market‑aligned; accelerated equity under specified scenarios can be meaningful but remains performance‑conditioned for PSUs .
- Execution: 2024 corporate incentive outcomes near target and strong 2022–24 PSU vesting indicate effective risk and operational execution under Costa’s leadership, supporting confidence in ongoing strategic initiatives .