Steven D. Hovde
COASTAL FINANCIALAbout Steven D. Hovde
Independent director of Coastal Financial Corporation (CCB), age 70, serving since 2011. Chair and CEO of Hovde Group, LLC (investment banking/advisory to banks and thrifts) since 1988, bringing deep M&A and financial services expertise. Current external board roles include Republic Bank of Chicago and Uncomming Giving Corp; trustee of several charitable foundations. Board-determined independent under Nasdaq rules; term proposed to run to the 2026 annual meeting .
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Hovde Group, LLC | Chair & CEO | 1988–present | Leads investment banking/M&A/private equity activities focused on banks/thrifts |
| Coastal Financial Corporation (CCB) | Director | 2011–present | Finance/M&A expertise; independent director |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Republic Bank of Chicago | Director | Not disclosed | Ongoing board service |
| Uncomming Giving Corp | Director | Not disclosed | Ongoing board service |
| Various charitable foundations | Trustee | Not disclosed | Trustee roles |
Board Governance
- Committees: Compensation Committee (member); Governance & Nominating Committee (member). Not a committee chair .
- Independence: Board determined independent; only Sprink (CEO), Hamilton (President, CCBX) and Adams (legal services provider) are non-independent .
- Attendance: Board held 11 meetings in FY 2024; no director attended fewer than 75% of Board and key committee meetings . Six directors attended the 2024 annual meeting (individual attendance not specified) .
- Governance signals:
- Committee meeting cadence FY 2024: Audit 15; Compensation 3; Governance & Nominating 1 .
- Hedging/pledging policy prohibits hedging and generally prohibits pledging, with limited exceptions requiring ability to repay without resort to pledged securities .
- Clawback policy compliant with SEC/Nasdaq (applies to executives) .
- Board proposed bylaw amendments to remove the mandatory retirement age of 72—material for a 70-year-old director’s future tenure .
Fixed Compensation
| Year | Cash Retainer ($) | Equity (Restricted Stock) ($) | Total ($) |
|---|---|---|---|
| 2023 | 45,000 | 50,018 | 95,018 |
| 2024 | 47,917 | 70,031 | 117,947 |
- Director equity grant practice: Annual restricted stock (RSA) grants in May, vest 100% one day prior to the next annual meeting; amounts vary by chair roles (non-Chair ~$60k in 2024 program design) .
Performance Compensation
| Component | Structure | Metrics | Vesting |
|---|---|---|---|
| Director compensation | None performance-based | N/A | Time-based RSAs vest in full before next annual meeting |
No performance-conditioned pay elements are disclosed for directors; RSAs are time-based.
Other Directorships & Interlocks
- Compensation Committee interlocks: None; directors on the Compensation Committee were not Company officers, and no CCB executive served on boards/compensation committees of entities with executives serving on CCB’s board/Comp Committee .
- Related-party exposure: Legal services paid to Adams & Duncan, Inc., P.S. (partner is director Christopher D. Adams), totaling $971,000 in FY 2024; approved per policy. No Hovde-specific related-party transactions disclosed .
Expertise & Qualifications
- Financial services operator/investment banker with decades in bank/thrift M&A and advisory; valuable domain knowledge for CCB’s strategy and risk oversight .
- Board service at a commercial bank (Republic Bank of Chicago) enhances sector insight .
Equity Ownership
| As of | Shares Beneficially Owned | % of Outstanding | Composition | Pledged Shares |
|---|---|---|---|---|
| Mar 19, 2025 | 1,736,481 | 11.57% | 1,713,266 owned directly; 21,611 via an entity; 1,604 unvested restricted stock | 807,103 shares pledged and blocked from trading |
| Mar 20, 2024 | 1,743,266 | 13.02% | 1,711,841 owned directly; 30,000 via an entity; 1,425 unvested restricted stock | Not disclosed in 2024 table |
- Policy context: Company prohibits hedging and generally prohibits pledging, subject to limited exceptions requiring demonstrable capacity to repay without resort to pledged securities .
Governance Assessment
- Strengths:
- Independent director with extensive banking/M&A expertise; members of key governance and compensation committees .
- High ownership alignment as a >10% holder, potentially aligning incentives with long-term value creation .
- Board-level policies (clawback; hedging prohibition; committee independence) support governance quality .
- Say-on-pay approval was ~99% in 2024, indicating strong shareholder support for compensation practices .
- Watch items / RED FLAGS:
- Shares pledged: 807,103 shares are pledged and blocked—pledging can introduce counterparty risk or forced sales under stress (mitigated by policy exceptions but still a governance concern) .
- External bank directorships (Republic Bank of Chicago) could present potential conflicts if counterparties/customer relationships overlap; no related transactions disclosed, but continued monitoring advisable .
- Proposed removal of mandatory retirement age may reduce board refresh constraints; merits monitoring for board renewal and skills mix as directors age .
Overall, Hovde’s sector expertise and significant ownership support credibility and alignment, while the pledged-share position is a notable governance risk to track within the context of the Company’s pledging policy .