Terri L. Degner
About Terri L. Degner
Independent director of FS Bancorp, Inc. with over 45 years of banking experience; appointed to FS Bancorp’s Board on September 30, 2024 (FSB Bank board since January 1, 2024); age 62; core credentials include former EVP/CFO & Treasurer of Anchor Bank and designation as an “audit committee financial expert.” Education: B.A. in Accounting (cum laude), St. Martin’s College (1998); Pacific Coast Banking School (with honors), University of Washington (2000). Independence determined under Nasdaq rules. Term to expire 2026.
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Anchor Bank | EVP, Chief Financial Officer & Treasurer | 2004–2018 | Led finance and ALM; adds financial expertise to FS Bancorp board |
| 1st Security Bank (post-acquisition) | Consultant (post-merger transition) | 2018–2023 | Assisted with integration and transition matters |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| NeighborWorks of Grays Harbor (WA) | Director and Treasurer | Current | Non-profit board service |
| Financial Managers Society | Director at Large | Current | Industry education and networking body |
| St. Martin’s University | Accounting Advisory Board Member | Current | Academic advisory role |
Board Governance
- Independence: Board determined 6 of 7 directors independent, including Degner. Independent Board Chair; all committees composed solely of independent directors.
- Committee assignments: Audit Committee member; not a chair. Designated by the Board as an “audit committee financial expert.”
- Attendance: FS Bancorp and Bank boards each held nine meetings in 2024; no director attended fewer than 75% of combined board and committee meetings.
- Tenure and term: Appointed to FS Bancorp Board on Sept. 30, 2024; nominated for a one-year term to maintain class balance (term to expire 2026). Age 62.
- Executive sessions: Independent directors hold regular executive sessions after Audit Committee and Board meetings.
Fixed Compensation
| Component (Director compensation, 2024) | Amount |
|---|---|
| Fees earned or paid in cash ($) | 71,335 |
| Stock awards – grant date fair value ($) | 73,465 |
| Option awards – grant date fair value ($) | 37,905 |
| All other compensation ($) | 1,750 |
| Total ($) | 184,455 |
| Program structure (Bank board) | Non-employee directors: $3,850/month retainer; Board Chair $4,950/month; Committee chairs annual $3,960; Board meeting fee $825/meeting; Committee meeting fee $550/meeting. |
| Director stock ownership guideline | 2x annual cash retainer (excl. committee fees); 3-year compliance window for new directors; retain 50% of net-after-tax vested shares until compliant. |
Notes:
- 2024 annual equity grants to directors consisted of 750 restricted shares and options to purchase 1,500 shares on August 15, 2024 (time-based vesting).
Performance Compensation
- Structure: Director equity awards are time-based and do not include performance conditions (RS and options vest pro rata 20% per year beginning one year after grant). No PSU/TSR metrics apply to director grants.
- Equity awards detail (Degner, 2024): 750 restricted shares granted 8/15/2024 (vests 8/15/2025); 1,500 options granted 8/15/2024 (vests 8/15/2025; 20% annually over five years).
Other Directorships & Interlocks
| Type | Company | Role | Notes |
|---|---|---|---|
| Public company boards | — | — | No other public company directorships disclosed. |
| Committee interlocks | — | — | Compensation Committee interlocks: none among members; Degner is not on Compensation Committee. |
Expertise & Qualifications
- Financial expertise/CPA-equivalent: Identified as a “financial expert” by the Board; skills matrix flags financial expertise.
- Deep banking experience: >45 years; former CFO/Treasurer of Anchor Bank; ALM expertise; post-merger integration consulting for 1st Security Bank.
- Education: B.A. Accounting (cum laude); Pacific Coast Banking School (honors).
Equity Ownership
| Item | Detail |
|---|---|
| Beneficial ownership (shares) | 6,028 shares as of March 21, 2025; <1% of outstanding. |
| Shares outstanding reference | 7,756,000 shares outstanding as of record date (Mar 21, 2025). |
| Ownership as % of outstanding | ≈0.08% (6,028 / 7,756,000), calculated from disclosed figures. |
| Restricted stock outstanding | 1,750 shares outstanding at 12/31/2024. |
| Options outstanding | 3,500 options outstanding at 12/31/2024; none exercisable within 60 days of record date (beneficial table includes only options exercisable within 60 days). |
| Hedging/pledging | Prohibited for directors; no exceptions noted as of proxy date. |
| Ownership guideline compliance | Company reports 5 of 6 non-employee directors meet guidelines; remaining director expected to meet within 3 years; individual status not disclosed. |
Governance Assessment
-
Positives for investor confidence
- Independent director with audit committee financial expert designation, serving on the Audit Committee; bolsters financial oversight and risk management.
- Strong, directly relevant background (former bank CFO; ALM expertise), plus recent post-acquisition integration work with 1st Security Bank.
- Good engagement/attendance culture at the board level (no director <75% attendance; regular executive sessions).
- Robust trading policy (anti-hedging/pledging) and stock ownership guidelines enhancing alignment; clawback policy and governance practices in place.
-
Watch items / potential red flags
- Section 16(a) compliance note: initial Form 3 was inadvertently filed late by Degner (administrative control/process point).
- Ownership currently below 1% of outstanding shares; while typical for community bank directors, investors may monitor progress versus the 2x cash retainer guideline over the 3-year window for new directors (individual compliance not disclosed).
- No related-party transactions disclosed involving Degner; director/officer loans are subject to standard policies and disclosed if material; only one officer listed in 2024 table (not Degner).
-
Compensation structure (director)
- Balanced mix of cash plus time-based equity (RS and options) with transparent grant practices; annual retainer and meeting fees set at the Bank board level.
- No performance-conditioned director equity; alignment relies on required ownership and at-risk equity value rather than explicit metrics.
-
Contextual signals
- Independent Board Chair, majority independent board, and fully independent committees support board effectiveness.
Overall: Degner strengthens board financial oversight as an audit committee financial expert with deep community bank CFO/ALM experience. The only noted governance blemish is a late initial Form 3 filing; otherwise, policies on ownership, hedging/pledging, and committee independence are solid. Monitor her progress toward director ownership guidelines within the three-year window and ongoing audit/risk oversight contributions.