Rinaldo A. DePaola

About Rinaldo A. DePaola

Rinaldo A. DePaola, age 69, is the Lead Independent Director of Citizens Financial Services, Inc. (CZFS) and First Citizens Community Bank, serving on the board since 2006 (18 years of tenure). He is a retired partner of the law firm Griffin, Dawsey, DePaola & Jones, where he practiced law for 39 years specializing in business, probate, and trust matters; he retired in 2021. He chairs the Governance & Nominating Committee and serves on the Compensation/Human Resource Committee, reflecting deep governance and legal expertise and independent leadership on the board.

Past Roles

External Roles

Board Governance

• Roles and Independence
  • Lead Independent Director of the Company and Bank; appointment reflects adoption of best corporate practices. Independent under Nasdaq standards.
  • Committee leadership: Chair, Governance & Nominating; Member, Compensation/Human Resource; not listed on Audit & Examination. All committee members are independent.
• Attendance and Engagement
  • Board held 12 regular meetings in 2024; each director attended at least 83% of board and their committee meetings; all directors attended the 2024 Annual Meeting.
  • Executive sessions held 4 times in 2024; independent directors met separately twice in 2024.
  • Ongoing director education included Federal Reserve CRE presentation, capital planning, FDIC Directors’ College, goodwill impairment training, and multiple risk/compliance topics.
• Committee Activity (2024 meetings)
  • Audit & Examination: 6 meetings; Compensation/Human Resource: 10 meetings; Governance & Nominating: 8 meetings.
• Board Evaluation
  • Annual third-party facilitated board and director effectiveness evaluation via BoardEvals, LLC; remediation steps defined for low scores; oversight by Governance & Nominating Committee.

Fixed Compensation

Cash Fee Schedule (structure):

• Annual retainer: $26,375 (pro-rated for mid-year joinees; not applicable to DePaola)
• Board meeting or strategic retreat/training: $675 per meeting; committee meeting attendance: $350 per month; board conference call: $185; regional board meeting: $225; committee chairpersons (Credit, Audit, Compensation/Human Resource, Governance & Nominating): $2,400 annual retainer

2024 Director Stock Award Schedule (fully vested grants for non-employee directors):

Performance Compensation

Clawback policy applies to executives for incentive compensation in the event of an accounting restatement; hedging of company stock is prohibited for officers, employees, and directors (alignment-positive).

Other Directorships & Interlocks

Expertise & Qualifications

• Legal and governance: 39-year legal career (business, probate, trust), chair of Governance & Nominating, Lead Independent Director—supports board oversight, succession planning, and compliance.
• Board skills matrix highlights collective strengths core to CZFS’s strategy (finance/accounting, risk management, CEO/leadership, legal/regulatory), with Mr. DePaola contributing legal/regulatory and governance leadership.
• Community involvement in Bank markets cited as part of director profile and selection criteria; board maintains director stock ownership requirements for alignment.

Equity Ownership

• Shares pledged as collateral: None indicated for Mr. DePaola (pledges are disclosed for certain other directors; “unless otherwise indicated, none of the shares listed are pledged”).
• Director stock ownership guidelines: Each director must beneficially own the greater of (i) 3x the prior year’s cash retainer (using prior December 31 price) or (ii) 1,000 unencumbered shares; Mr. DePaola’s 18,229 shares exceed the requirement.

Board Governance

Insider Trades and Section 16 Compliance

Potential Conflicts and Related-Party Exposure

• Banking relationships: Board independence assessment explicitly considered loans/lines of credit to several directors including Mr. DePaola; company policy requires loans to related persons be ordinary course on substantially the same terms, with additional board approvals above thresholds ($300,000 for directors; >$100,000 for executive officers).
• Related-person transaction policy: Audit & Examination Committee pre-approves/ratifies and assesses terms vs unaffiliated third-party benchmarks.

Governance Assessment

• Positives

  • Strong independence posture: Lead Independent Director role; independent committee membership and chairmanship; separation of Chair and CEO; independent-only meetings and regular executive sessions.
  • Active governance processes: formal board evaluation with third-party facilitation; ongoing director education across key risk/compliance topics.
  • Alignment mechanisms: director stock ownership requirements; fully vested equity grants; hedging prohibition.
  • Attendance and engagement: ≥83% meeting attendance and full attendance at the annual meeting.

• Watch items / RED FLAGS

  • Loans/lines of credit to directors (including Mr. DePaola) require continued monitoring to ensure ordinary-course terms and no undue influence; policy controls and committee oversight mitigate risk.
  • 2024 say‑on‑pay approval was 67%, below typical community bank levels; while executive compensation program maintained, investor sentiment warrants ongoing engagement and responsiveness by the Compensation Committee where Mr. DePaola serves.

• Overall implication: Mr. DePaola’s legal background, independent leadership, and governance chair role support board effectiveness and investor confidence; related-party banking exposure is policy-governed and routinely overseen, with no pledging of his shares and strong ownership alignment.