Mary H. Herfurth
About Mary H. Herfurth
Independent director at Lendway, Inc. (LDWY), elected to the board in July 2023; age 62 as disclosed in the 2024 proxy. Career spans bank regulation, credit risk, and lending, including roles as a national bank examiner (OCC), credit risk manager (Fingerhut), and product management/trading analytics (GMAC‑RESCAP). She founded and owns Bank Advantage Consulting, LLC (since 2008) and serves on regional bank boards; she holds a B.S. (St. Cloud State University) and an MBA in Finance (University of Minnesota – Carlson School). The board has determined she qualifies as an “audit committee financial expert” under SEC rules.
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Office of the Comptroller of the Currency (OCC) | National Bank Examiner | Not disclosed | Bank regulation experience cited as basis for audit financial expert designation |
| Fingerhut | Credit Risk Manager | Not disclosed | Credit evaluation expertise |
| GMAC-RESCAP | Trading Analyst; Product Manager | Not disclosed | Capital markets and product roles |
| Interface Financial Group | Principal and franchisee | 2008–2015 | Non-bank lending perspective |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Bank Advantage Consulting, LLC | Owner | Since 2008 | Independent consulting firm ownership |
| Grove Bank | Director | Not disclosed | Private/regional bank board service |
| Park State Bank | Director | Not disclosed | Private/regional bank board service |
| Park Financial Group, Inc. (holding co. for Park State Bank) | Director | Not disclosed | Holding company board service |
Board Governance
- Committee assignments (current): Audit Committee Chair; not listed on the Governance, Compensation & Nominating (GCN) Committee. The board classifies Herfurth as an independent director under Nasdaq rules, and the board designates her an “audit committee financial expert.”
- Attendance and engagement: In the 6‑month Transition Period ended 6/30/2025 the board met once and each director attended >75% of board and committee meetings; directors (including Herfurth) attended the 2024 annual meeting. In 2023, the board met 11 times and each director attended >75% of meetings.
- Audit Committee oversight remit includes appointing/evaluating the independent auditor, reviewing critical accounting policies, internal control assessments, financial statement reviews, and approving related‑party transactions.
Fixed Compensation
| Metric | 2023 | FYE 12/31/2024 | Transition Period Ended 6/30/2025 |
|---|---|---|---|
| Fees Earned or Paid in Cash (USD) | $9,167 | $22,000 | $11,000 |
- Director cash retainer policy: Non‑employee directors generally receive $17,000 annual cash retainer; Chairman of the Board and each Committee Chair receive an additional $5,000 annual cash retainer (structure applicable in 2023 and during the Transition Period ended 6/30/2025).
- Director Deferred Compensation Plan: Effective Jan 1, 2025, non‑employee directors (including Herfurth) may defer up to 100% of cash retainers into common stock equivalents; no company match. Distributions are in stock equivalents after separation; change‑in‑control cash-out feature exists but was waived for the 2024 legacy business sale.
Performance Compensation
| Component | 2023 | FYE 12/31/2024 | Transition Period Ended 6/30/2025 |
|---|---|---|---|
| Stock Awards (grant‑date fair value) | $0 (not disclosed for Herfurth) | $0 (director comp table shows cash only) | $0 (director comp table shows cash only) |
| Option Awards | $0 (not disclosed for Herfurth) | $0 (not disclosed) | $0 (not disclosed) |
| Performance metrics tied to director pay | Not disclosed | Not disclosed | Not disclosed |
- Stock equivalents via deferral: As of 6/30/2025, Herfurth held 9,193 common stock equivalents under the Director Deferred Compensation Plan. These are accruals of deferred cash retainers into stock equivalents.
Other Directorships & Interlocks
| Company | Public/Private | Role | Potential Interlock With LDWY |
|---|---|---|---|
| Grove Bank | Private | Director | None disclosed with LDWY |
| Park State Bank | Private | Director | None disclosed with LDWY |
| Park Financial Group, Inc. | Private | Director | None disclosed with LDWY |
The LDWY proxy biographical disclosure lists these bank boards for Ms. Herfurth; it does not disclose any other public company directorships for her.
Expertise & Qualifications
- Audit committee financial expert (SEC definition), based on experience analyzing and evaluating financial statements across bank and non‑bank lending and prior OCC examiner role.
- Credit risk, lending, and banking governance expertise relevant to LDWY’s financial oversight and post‑acquisition indebtedness/credit facility monitoring.
- Formal education: B.S. (St. Cloud State University) and MBA – Finance (University of Minnesota – Carlson).
Equity Ownership
| Item | As of | Detail |
|---|---|---|
| Common shares beneficially owned | 9/24/2025 | “—” for Ms. Herfurth in the beneficial ownership table (no common shares listed). |
| Stock equivalents (Director Deferred Compensation Plan) | 6/30/2025 | 9,193 stock equivalents credited; no voting rights; not acquirable within 60 days of 9/24/2025 (therefore excluded from beneficial ownership). |
| Hedging policy | — | Company prohibits hedging of LDWY equity by directors, officers, and employees. |
- Section 16(a) compliance: One late report for Ms. Herfurth related to a transaction in stock equivalents issued under the Director Deferred Compensation Plan (company notes one late report for several directors for such plan transactions for the twelve months ended 6/30/2025).
- Pledging: The proxy footnote discloses pledged LDWY shares at AO Partners Fund (associated with Director Nicholas J. Swenson); no pledging disclosure pertains to Ms. Herfurth.
Related‑Party Exposure (Context for Audit Chair Oversight)
| Transaction | Counterparty | Amount/Terms | Maturity/Notes |
|---|---|---|---|
| Delayed Draw Term Note (Aug 15, 2024) | Air T, Inc. | Up to $2.5M; 8.0% fixed; as of 12/31/2024, $3.5M outstanding after restatements/amendments; $69k deferred interest expense | Matures 8/15/2029; Air T may demand payment on/after 2/15/2026; no fees to Air T |
| Amended & Restated Delayed Draw Note (Sept 27, 2024; amended Jan 15, 2025) | Air T, Inc. | Increased to $3.5M then $3.75M; 8.0% fixed | Same maturity/demand terms; no fees |
| 2025 Promissory Notes (Sept 15, 2025) | Air T; AO Partners I, L.P.; Gary S. Kohler | Total $4.0M; 13.5% fixed; amounts of $1,100,156 (Air T), $1,699,844 (AO Partners Fund), $1,200,000 (Kohler) | Matures 6/1/2027; debt incurrence restrictions; no fees; pre‑approved by LDWY Audit Committee |
| Bloomia acquisition bridge loan (Feb 22, 2024) | Lenders incl. executive Werner Jansen (~$400k) | $12.1M total proceeds; interest 8% year 1, +2% each of next four anniversaries; accrued interest $1.331M by 12/31/2024 | Company guarantee of U.S. subsidiary; no cash interest/principal paid as of 12/31/2024 |
- Concentration of influence: Air T and affiliates own ~40% as a stockholder group; multiple LDWY directors/executives have roles at Air T (GC/Secretary, SVP Corporate Development, CEO), and Director Swenson is CEO of Air T and manages entities (AO Partners/Groveland) that hold LDWY shares; the 2025 Notes were pre‑approved by the Audit Committee per policy.
Governance Assessment
- Strengths: Herfurth brings deep bank regulation and credit risk expertise and is designated LDWY’s audit committee financial expert—well suited for oversight of internal controls, financial reporting, and complex financing arrangements. Attendance thresholds were met, and she serves as Audit Chair on a majority‑independent board; the company maintains anti‑hedging and clawback policies.
- Alignment: While the proxy shows no common shares beneficially owned for Herfurth as of 9/24/2025, she has accumulated 9,193 stock equivalents via the Director Deferred Compensation Plan, creating some alignment albeit without voting rights until distribution.
- Key risks and potential red flags:
- Related‑party financing: LDWY has material borrowings from Air T and affiliates (8.0% fixed and separate 13.5% notes), and several directors/executives are affiliated with Air T; though pre‑approved by the Audit Committee, this elevates conflict‑of‑interest risk that requires rigorous Audit Chair oversight.
- Pledging: Significant pledged LDWY shares associated with AO Partners Fund (director Swenson); while not attributable to Herfurth, pledged shares on the board can be a governance risk signal.
- Reporting: One late Section 16(a) filing for Herfurth related to a routine deferred compensation transaction—minor but noted.
Overall, Herfurth’s qualifications and independence support board effectiveness, particularly in finance/audit oversight. The concentration of influence and financing ties with Air T heighten the importance of her role as Audit Chair in monitoring related‑party transactions, ensuring robust disclosure, and safeguarding minority stockholder interests.