Harold F. Hoose, III
About Harold F. Hoose, III
Harold F. Hoose, III is Executive Vice President and Chief Revenue Officer (CRO) of Citizens & Northern Bank since February 2021; age 58. He previously served as EVP and Director of Lending (since March 2005), a regional commercial relationship manager (since August 1997), and began his banking career in 1990 at Commonwealth Bank before moving into credit/lending in 1993; education includes a B.S. from Mansfield University and the Graduate School of Banking at the University of Colorado . Recent pay-for-performance metrics tied to his incentives include peer-relative (PPNR–NCOs)/Average Equity at 12.01% for the 12 months ended September 30, 2024 (63rd percentile), driving a 126% corporate payout factor in 2024; CZNC reported 2024 net income of $25.958 million, ROAA 1.00%, ROAE 9.76%; five-year pay-versus-performance TSR index stood at 85.52 on $100 invested since 12/31/2019 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Citizens & Northern Bank (C&N) | EVP & Chief Revenue Officer | Feb 2021–present | Executive accountability for revenue-generating functions |
| Citizens & Northern Bank | EVP & Director of Lending | Mar 2005–Feb 2021 | Led lending function; credit origination leadership |
| Citizens & Northern Bank | Regional commercial relationship manager | Aug 1997–Mar 2005 | Commercial client coverage and growth |
| Commonwealth Bank (Williamsport, PA) | Management trainee; credit/lending | 1990–1997 (credit since Apr 1993) | Early career in credit and lending development |
External Roles
No external directorships or public company board roles disclosed for Mr. Hoose in the proxy’s executive officer section .
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | 284,000 | 300,000 | 312,000 |
| Bonus (“holiday awards”) ($) | 500 | 500 | 500 |
| All Other Compensation ($) | 64,400 | 69,471 | 61,978 |
| SERP contributions (included in All Other) ($) | 19,300 | 23,523 | 26,224 |
| Perquisites (car/club/cell etc.) ($) | 6,616 | 5,443 | 5,116 |
Notes:
- 2024 base salaries for NEOs increased 3–5% over 2023 .
- No option awards in 2024, 2023 or 2022 .
Performance Compensation
| Component | Metric | Weight | Target | Actual | Payout (% of Base) |
|---|---|---|---|---|---|
| Corporate Earnings Performance | (PPNR–NCOs)/Avg Equity vs peer | 45% | 100% | 126.00% | 17.0% |
| KPI | Annual Avg Deposits (ex-brokered) | 10% | $2.010B | $1.996B | 1.6% |
| KPI | Net Interest Income (FTE) | 7.5% | $82.0M | $79.9M | 1.5% |
| KPI | Noninterest Income (ex-wealth) | 7.5% | $17.6M | $18.7M | 3.4% |
| KPI | Total Wealth Mgmt Revenue | 10% | $10.0M | $10.5M | 4.5% |
| KPI | Efficiency Ratio | 10% | 65.00% | 68.04% | 1.2% |
| Individual Performance | CEO-evaluated | 10% | — | — | 3.0% |
| Total | Weighted sum | 100% | 30.0% target; 45.0% max | — | 32.2% |
Additional details:
- Corporate factor derived from CZNC (PPNR–NCOs)/Avg Equity of 12.01% (peer median 10.94%) and 63rd percentile rank; corporate payout at 126% of target .
- KRIs acted as pass/fail gates for KPI eligibility; values acceptable in 2024 .
- Short-term incentive payouts to NEOs ranged 26.6%–34.6% of base in 2024; Mr. Hoose was 32.2% .
Equity Grants (Long-Term Incentives)
| Year | Award Type | Grant Date | Shares | Grant-Date FV ($) | Vesting |
|---|---|---|---|---|---|
| 2024 | RSA (time-based) | Jan 31, 2024 | 1,753 | 37,488 | 1/3 annually over 3 years |
| 2024 | PRSA (performance-based) | Feb 20, 2024 | 1,953 | 37,498 | 1/3 annually over 3 years; each tranche requires performance met for prior year |
| 2023 | RSA + PRSA mix | Jan 31, 2023 | 2,506 total | 58,515 | 1/3 annually; PRSA subject to ROAE/ROAA (for 2023 awards) |
Performance standards:
- 2024 PRSAs: 50% based on (PPNR–NCOs)/Avg Equity at ≥35th percentile; 50% based on (PPNR–NCOs)/Avg Assets at ≥65th percentile; peer comparison annually; forfeiture if thresholds unmet .
- 2024 outcome: all potential PRSA shares from 2022, 2023, 2024 grants vested based on 2024 performance .
Historic equity actions:
- 2022 PRSA performance conditions were not met, causing forfeiture in Q1 2023 of 2,165 shares for Mr. Hoose .
Equity Ownership & Alignment
| Metric | Value |
|---|---|
| Beneficial Ownership (Feb 5, 2025) | 54,622 shares; includes 6,320 restricted shares |
| % of Shares Outstanding | ~0.35% (54,622 / 15,467,390) |
| Outstanding Unvested at 12/31/2024 | 6,713 shares; $124,862 market value |
| Shares Vested in 2024 | 3,703 shares; $76,615 value realized |
| Stock Ownership Guidelines | EVP must own ≥1× previous year’s base salary; all NEOs in compliance or within 5-year window |
| Anti-Hedging Policy | Hedging transactions prohibited for directors and officers |
| Pledging | No specific pledging disclosure identified in proxy |
Notes:
- No stock options outstanding at 12/31/2024; legacy options existed at 12/31/2022 (3,521 exercisable at $20.45, expired 1/3/2024) .
Employment Terms
| Term | Details |
|---|---|
| Agreement effective | Original: Sept 19, 2013; currently extended through Sept 30, 2025 |
| Auto-renewal | Automatically extended an additional 12 months unless nonrenewal notice by July 19 each year |
| Non-compete / Non-solicit | 18 months post-termination; within 35 miles of any corporate office |
| Severance multiple (CIC) | 1.5× (salary + highest bonus/incentive + highest stock incentives in prior 3 years); benefits continuation 18 months |
| Severance multiple (no CIC) | 0.5×; benefits continuation 6 months |
| Trigger mechanics | Double-trigger (termination by Co without cause or by executive for good reason following a change in control) |
| Potential payout illustration (as of 12/31/2024) | Without cause/good reason pre-CIC: Cash $261,108; SERP $296,046; Health/Welfare $11,599 . Upon/after CIC: Cash $783,324; SERP $296,046; Health/Welfare $34,796; Restricted stock acceleration $124,862 |
| Perquisites/benefits | Automobile allowance/use; country club membership (for certain executives including Mr. Hoose); life/long-term disability insurance |
| Clawback | Executive compensation recoupment policy aligned with Nasdaq listing standards |
| Tax gross-ups | None; payments limited to avoid or minimize excise tax under IRC 280G/4999 |
Multi-Year Compensation Summary (Harold F. Hoose, III)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | 284,000 | 300,000 | 312,000 |
| Stock Awards ($) | 100,405 | 58,515 | 74,986 |
| Non-Equity Incentive Plan ($) | 30,000 | 55,429 | 100,311 |
| Bonus ($) | 500 | 500 | 500 |
| All Other Compensation ($) | 64,400 | 69,471 | 61,978 |
| Total ($) | 479,305 | 483,915 | 549,775 |
Compensation Structure Analysis
- Equity mix is entirely RSAs/PRSAs; no options granted in 2022–2024, and none outstanding at 12/31/2024, reflecting a shift away from options to stock awards .
- Long-term incentives increased to 25% of 2023 base for Mr. Hoose in 2024 (from 20.6% of 2022 base in 2023), with balanced RSA/PRSA design and annual performance tranches, increasing at-risk equity .
- Performance metrics evolved from Core ROAE/ROAA to (PPNR–NCOs)-based measures in 2024, maintaining peer-relative rigor and forfeiture provisions for PRSAs .
Compensation Peer Group (used for 2024 program)
ACNB; AmeriServ Financial; Arrow Financial; Chemung Financial; Citizens Financial Services; Civista Bancshares; CNB Financial; Codorus Valley; Fidelity D&D; First United; Franklin Financial; LCNB; Mid Penn; Norwood Financial; Orrstown Financial; Penns Woods Bancorp; Peoples Financial Services; SB Financial Group; Shore Bancshares; Summit Financial Group .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay approval ~82%; the Committee did not modify practices based on the result .
- 2023 say-on-pay approval ~87% .
Investment Implications
- Alignment: High variable pay linked to peer-relative profitability and KPIs; PRSA design with annual vesting contingent on performance supports pay-for-performance and reduces windfalls; clawback and anti-hedging policies further align interests .
- Retention risk: Employment agreement incorporates double-trigger CIC protection at 1.5× multiple and 18 months of benefits; 18-month non-compete post-termination limits immediate competitive mobility; auto-renewal through 9/30/2025 suggests contract continuity .
- Insider selling pressure: 6,713 unvested shares at year-end and ongoing 1/3 annual vesting of RSAs/PRSAs can create periodic selling capacity; note anti-hedging and ownership guidelines (EVP ≥1× salary) may curb near-term dispositions; no specific pledging disclosures identified .
- Signals: 2024 corporate payout at 126% reflects strong peer-relative (PPNR–NCOs)/Avg Equity; focus on deposit growth, NII, wealth revenue, and efficiency ratio in KPIs ties incentives to core banking levers likely to drive earnings and TSR .