Kenneth J. Lovik
About Kenneth J. Lovik
Executive Vice President and Chief Financial Officer of First Internet Bancorp; has served in the CFO role since at least 2016 based on SEC filings and certifications . Lovik is a Section 16 officer with compensation governed by pay-for-performance structures tied to Net Income, Net Interest Income, Texas Ratio, and Nonperforming Assets Ratio; 2024 corporate payout factor was 105% of target with his annual cash bonus at 47% of base salary . Company performance during 2024: net income reached $25.3 million and diluted EPS $2.88 (tripled vs 2023), revenue rose 33.3% to $134.7 million, deposits grew 21.3% to $4.9 billion, and asset quality remained solid (NPA/Assets 0.50%); book value per share increased to $44.31 and tangible book value per share to $43.77 . Total shareholder return (TSR) from the fixed $100 benchmark stood at 159.4 for 2024, reflecting multi-year value creation tracked in the pay-versus-performance disclosure .
Past Roles
No biography, prior roles, or education for Mr. Lovik were disclosed in the latest proxy statements. Skip per disclosure rules.
External Roles
No external directorships or roles for Mr. Lovik were disclosed in the latest proxy statements. Skip per disclosure rules.
Fixed Compensation
Multi-year compensation for Kenneth J. Lovik (NEO; CFO):
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $350,000 | $364,000 | $374,920 |
| Stock Awards ($) | $212,155 | $226,970 | $229,298 |
| Non-Equity Incentive Plan Compensation ($) | $149,333 | $109,200 | $176,681 |
| All Other Compensation ($) | $11,917 | $13,087 | $18,978 |
| Total ($) | $723,405 | $713,257 | $799,877 |
Performance Compensation
Annual Cash Bonus – 2024 Plan Design and Outcome
| Component | Weight | Threshold | Target | Maximum | 2024 Actual | Performance Level Achieved | Weighted Payout % |
|---|---|---|---|---|---|---|---|
| Net Income | 25% | $23.67m | $26.30m | $30.245m | $25.276m | 96% | 24% |
| Net Interest Income | 25% | $82.89m | $92.10m | $105.915m | $87.377m | 95% | 24% |
| Texas Ratio | 25% | 11.0% | 10.0% | 8.5% | 5.6% | 115% | 29% |
| Nonperforming Assets Ratio | 25% | 1.10% | 1.00% | 0.85% | 0.50% | 115% | 29% |
| Total Corporate Factor | — | — | — | — | — | — | 105% |
Additional payout conditions: positive net income, dividends paid at least equal to prior year, satisfactory regulatory review, and satisfactory individual performance rating; all conditions were satisfied for 2024 . Award earned by Lovik: $176,681 (47% of 2024 base salary) .
Equity Incentives – Grants and Vesting
| Grant Year | Grant Date | Award Type | Target Shares | Vesting / Performance Conditions |
|---|---|---|---|---|
| 2024 | Jan 2, 2024 | PRSUs | 5,580 | 3-year cliff vest (Dec 31, 2026) if gateway NPA goal met (<1.5% or better than 75th percentile of peer group); ROAA scale: 0% below threshold, 50% at 0.9%, 100% at 1.0%, 150% at ≥1.5%; continued employment required (pro rata on death/disability/without-cause post-65) |
| 2024 | Jan 2, 2024 | TRSUs | 3,720 | Time-vest in 3 equal installments on Jan 31, 2025, 2026, 2027; continued employment required (pro rata on death/disability/without-cause post-65) |
| 2025 | Jan 2025 | PRSUs | 3,901 | 3-year cliff vest (Dec 31, 2027) if gateway NPA goal met; ROAA scale: 0% below threshold, 90% threshold, 100% target, 150% max; continued employment required (pro rata on death/disability/without-cause post-65) |
| 2025 | Jan 2025 | TRSUs | 2,601 | Time-vest in 3 equal installments on Jan 31, 2026, 2027, 2028; continued employment required (pro rata on death/disability/without-cause post-65) |
Notable outcomes: 2021 PRSUs did not vest (ROAA goal not met; gateway NPA met); 2022 PRSUs did not vest (ROAA goal not met; gateway NPA met) .
Equity Ownership & Alignment
| As-of Date | Beneficial Ownership (Shares) | % of Outstanding | Notes |
|---|---|---|---|
| Mar 21, 2025 | 41,921 | Less than 1% | No pledging by executive officers reported; directors/officers compliant with hedging/pledging prohibitions |
| Mar 22, 2024 | 39,380 | Less than 1% | No pledging by Lovik noted; one grandfathered pledge exists for CEO (not Lovik) |
Outstanding equity awards at 12/31/2024 (Lovik):
| Grant Date | Type | Shares Unvested | Market/Payout Value ($) |
|---|---|---|---|
| 3/18/2022 | TRSUs | 595 | $21,414 |
| 3/18/2022 | PRSUs (target) | 2,679 | $96,417 |
| 1/6/2023 | TRSUs | 2,398 | $86,304 |
| 1/6/2023 | PRSUs (target) | 5,398 | $194,274 |
| 1/2/2024 | TRSUs | 3,720 | $133,883 |
| 1/2/2024 | PRSUs (target) | 5,580 | $200,824 |
Alignment policies:
- Stock ownership guideline: 2× base salary for NEOs; all covered individuals in compliance at year-end and proxy date .
- Hedging and pledging prohibited for executive officers and directors; compliance confirmed .
- Clawback: committee will recover erroneously awarded incentive compensation after an accounting restatement (SEC/Nasdaq compliant) .
Insider transactions note: one late Form 4 by Lovik in 2024 related to automatic tax withholding upon RSU vesting, not an open-market sale .
Employment Terms
Employment Agreements effective April 20, 2022 (auto-renew annually):
- Pre-change-of-control separation: continued base salary for the greater of remaining term or 24 months; lump-sum bonus equal to the greater of 3-year average or current plan designation; acceleration of all outstanding time-based equity awards; company portion of COBRA premiums up to 12 months; subject to release and 1-year non-compete/non-solicit/confidentiality .
- Within 12 months post-change-of-control: similar severance, with 24 months base continuation; COBRA premiums up to 18 months; subject to release and 1-year restrictive covenants .
Estimated payments if termination occurred at 12/31/2024:
| Scenario | Severance ($) | Bonus ($) | RSUs Accelerated ($) | Health Benefits ($) |
|---|---|---|---|---|
| Nonrenewal of Agreement | $749,840 | $176,681 | $241,601 | $15,370 |
| Involuntary Termination Without Cause | $749,840 | $176,681 | $241,601 | $15,370 |
| Death | — | $176,681 | — | — |
| Disability | $187,460 | $176,681 | — | — |
| Change in Control (double-trigger) | $749,840 | $176,681 | $241,601 | $23,022 |
Compensation Structure Analysis
- Cash vs equity mix: substantial equity weighting with 60% PRSUs and 40% TRSUs (multi-year vesting), emphasizing long-term, at-risk pay .
- Shift to RSU-only equity (no options outstanding or planned), reducing repricing risk and aligning with shareholder dilution controls .
- Performance rigor: PRSUs require a credit-quality gateway (NPA threshold) plus ROAA targets; prior-cycle PRSUs were forfeited when ROAA goals were not met, evidencing pay-for-performance discipline .
- Annual bonus metrics include asset quality (Texas Ratio, NPA) to disincentivize excessive credit risk; payouts are conditioned on positive net income, dividends, and regulatory reviews .
Compensation Peer Group (Benchmarking)
- 2024 peer group included Amerant Bancorp, Axos Financial, Bankwell Financial Group, Bridgewater Bancshares, Brookline Bancorp, Business First Bancshares, CapStar Financial, Coastal Financial, CrossFirst Bankshares, Equity Bancshares, Farmers & Merchants (FMAO, FMCB), FiveStar Bancorp, HarborOne Bancorp, Heritage Commerce, Hingham Institute, Independent Bank Corp., Mercantile Bank, MetroCity Bancshares, National Bank Holdings, Primis Financial, Republic Bancorp, Southern First Bancshares, Third Coast Bancshares .
- 2025 peer group remained the same criteria; awards sized as a % of base salary with reference price methodology .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay support: ~95% FOR .
- 2023 say-on-pay support: ~75% FOR; company engaged with investors; no material program changes were made given prior strong support .
Risk Indicators & Red Flags
- Hedging/pledging prohibitions in place and reported compliance; no pledging reported for Lovik .
- Clawback policy compliant with SEC/Nasdaq; no restatement-related recoveries disclosed .
- Equity option repricing risk absent (no options granted/outstanding) .
- One late Form 4 for tax withholding only; administrative timing rather than trading signal .
Investment Implications
- Alignment: Strong linkage of incentives to asset quality and ROAA, plus multi-year PRSU structures and ownership guidelines (2× salary), supports prudent risk-taking and long-term value creation .
- Retention: TRSU vesting cadence (annual tranches) and severance (24 months base + bonus components) provide retention hooks; forfeitures of PRSUs in 2021–2022 indicate performance hurdles are meaningful .
- Selling pressure: RSU vesting may trigger tax-withholding transactions (as noted in 2024) but hedging/pledging prohibitions and guideline compliance reduce forced-selling risks .
- Performance backdrop: 2024 saw material improvement in net income, revenue, and capital/liquidity metrics with TSR tracking favorably; compensation outcomes reflected asset quality strengths and improving NIM, reinforcing pay-for-performance alignment .