Gary Sims
About Gary Sims
Gary L. Sims, 63, is Senior Vice President & Chief Credit Officer of MidWestOne Financial Group (MOFG) and Executive Vice President & Chief Credit Officer of MidWestOne Bank. He joined MOFG in June 2018 after senior credit leadership roles at NBH Bank (2011–2018) and Regions Bank (2005–2011). He holds a BBA in Finance from the University of North Texas. In 2024, company credit metrics improved (nonperforming assets ratio to 0.40%, classified loan ratio to 2.57%, net charge-offs 0.07%), and management emphasizes proactive ACL coverage calibration (mid‑120 bps target) under CECL to reflect economic uncertainty, with Sims leading credit risk management and portfolio cleanup actions .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| NBH Bank | Managing Director – Corporate & Institutional; Chief Credit Officer | May 2011 – June 2018 | Led enterprise credit risk; institutional/corporate portfolio oversight |
| Regions Bank (Dallas) | Senior Credit Officer | Apr 2005 – May 2011 | Senior credit underwriting/portfolio risk; large-bank credit processes |
External Roles
No public company directorships or external board roles disclosed for Sims in MOFG’s latest proxy .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 271,750 | 281,261 | 289,699 |
| All Other Compensation ($) | 23,180 | 14,575 | 21,583 |
| Deferred Comp – Above‑Market Interest ($) | — | — | 2,020 |
| Total Compensation ($) | 500,768 | 460,057 | 591,419 |
- 2025 base salary set at $301,287 (+4.0% YoY) effective January 2025 .
- Perquisites are limited; Sims does not receive the $500/month auto stipend provided to some executives .
Performance Compensation
| Component | Design | Weighting | Target | Actual 2024 | Payout |
|---|---|---|---|---|---|
| Annual Cash Incentive | 5 equally weighted goals; 3 financial + 2 individual | 20% each (60% financial, 40% individual) | $115,880 (40% of salary) | Paid $138,091 | 119.2% of target |
| Core EPS (Financial) | Company-level metric | 20% | Budgeted target | Above target | 127% of target |
| Core ROATCE (Financial) | Company-level metric | 20% | Budgeted target | Above target | 126% of target |
| Efficiency Ratio (Financial) | Company-level metric | 20% | Budgeted target | Above threshold, below target | 83% of target |
| Individual Goal #1 | Strategic plan execution / asset quality | 20% | Set by HCCC | Achieved | 135% of target |
| Individual Goal #2 | Asset quality maintenance/improvement | 20% | Set by HCCC | Achieved | 125% of target |
- Long-Term Incentives (2024 grant): $140,000 grant value, 60% PSUs and 40% RSUs; PSUs measured on 3‑year cumulative core diluted EPS and 3‑year ROATCE, equally weighted; vest at 3 years, payout 50–150% of target based on performance .
- PSU outcome for 2022–2024 performance cycle: 0% payout (below threshold), reinforcing pay-for-performance rigor .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (Mar 3, 2025) | 14,442 shares; includes 1,758 ESOP-allocated shares |
| Ownership as % of Shares Outstanding | ~0.069% (14,442 / 20,815,715) |
| Unvested RSUs (12/31/2024) | 3,982 units; MV $115,956 at $29.12 |
| Unearned PSUs (12/31/2024) | 2,922 units; payout value at target $85,089 |
| 2024 Equity Grant Detail | PSUs target 3,432 shares; RSUs 2,288 shares; grant date 2/15/2024 |
| 2025 Equity Approval | Total $163,450 (PSUs $98,070; RSUs $65,380) |
| Ownership Guidelines | NEOs: 3× base salary (unvested shares included); 50% retention of net shares until compliant; all NEOs were in compliance as of 12/31/2024 |
| Hedging/Pledging | Hedging prohibited; no pledging disclosed for Sims |
Vesting schedules and upcoming events:
- 2022 RSUs: 558 vest 2/15/2025 (already vested) .
- 2023 RSUs: 495 vest 2/15/2025; 495 vest 2/15/2026 .
- 2023 PSUs: up to 1,114 vest on 2/15/2026 if threshold achieved .
- 2024 RSUs: 763 vest 2/15/2025; 762 vest 2/15/2026; 763 vest 2/15/2027 .
- 2024 PSUs: up to 1,716 vest on 2/15/2027 if threshold achieved .
- 2022–2024 PSUs (vesting 2/15/2025): 0% payout .
Employment Terms
| Term | Provision |
|---|---|
| Agreement Term | Through 12/31/2025; auto-renews 1 year each Jan 1 unless non-renewal notice; CIC keeps agreements in effect for 2 years post-closing |
| Severance (No CIC) | 100% of then-current base salary, paid over 12 months, upon involuntary termination without cause or resignation for good reason |
| Severance (CIC – Covered Period) | 200% of “Base Compensation” (greater of current base or base at CIC date + prior-year incentive), paid lump sum |
| Illustrative CIC Benefits | If involuntary termination in connection with CIC: cash $855,580; RSU acceleration $115,962; PSU vesting $135,053; total $1,106,595 (values at $29.12) |
| Retirement Treatment | RSUs continue on schedule subject to non-compete; PSUs prorated for actual performance for the cycle (values shown: RSU $115,962; PSU $56,794) |
| Equity Acceleration | Death/Disability: RSUs 100% vest; PSUs vest at target; CIC without termination: PSUs continue per plan; CIC + involuntary termination: RSUs 100% vest; PSUs vest at target (for 2023 plan) or based on actual to date (2017 plan) |
| Restrictive Covenants | Non-compete & non-solicit: 15 months post-termination; confidentiality obligations survive |
| COBRA Coverage | Eligible to continue medical/dental/vision at active-employee rates (incremental monthly costs disclosed) |
| 280G Cutback | Aggregate CIC benefits capped at $1 below excise tax trigger; no tax gross-up |
| Clawback | SEC/Nasdaq-compliant clawback (Aug 2023) covers incentive compensation for restatements or misconduct |
Performance & Track Record
- Credit approach: Sims guided proactive ACL calibration using Moody’s CECL scenarios to maintain coverage in the mid‑120 bps range during heightened uncertainty .
- Portfolio management: Continued reduction of office exposure and nonperforming assets; Sims indicated no expectation of elevated charge-offs near-term as cleanup continues .
- Sector commentary: Agricultural portfolio tone stable for 2025, with tariff-driven input price risks potentially impacting 2026; MOFG engaged proactively with ag customers .
- Company TSR and Say‑on‑Pay: Five-year company TSR below peer index; 2024 say‑on‑pay approved by 95.1% of votes, reflecting support for compensation design aligning CAP to TSR and EPS .
Compensation Structure Analysis
- Mix and risk: Shift from options to RSUs/PSUs; unvested awards do not receive dividends and are subject to forfeiture, reducing risk; PSU payout at 0% for 2022–2024 underscores performance gating .
- Alignment: Financial metrics (Core EPS, Core ROATCE, Efficiency Ratio) form 60% of annual incentive; individual credit-quality goals comprise 40% for Sims, aligning pay with asset quality outcomes .
- Governance: Independent consultant (F.W. Cook), stock ownership guidelines (Sims in compliance), anti-hedging, clawback; peer group reviewed annually (e.g., CrossFirst added) .
Equity Ownership & Selling Pressure
- Near-term vests: Feb 15, 2026 RSUs (762 + 495); Feb 15, 2026 PSUs (up to 1,114 if threshold met). Feb 15, 2027 RSUs (763) and PSUs (up to 1,716). Corporate blackout windows apply, reducing opportunistic selling risk .
- No pledging disclosed; hedging prohibited; retention ratios apply until guideline compliance (Sims in compliance), moderating net shares available to sell post-vest .
Say‑on‑Pay & Peer Benchmarking
- 2024 say‑on‑pay: 95.1% approval .
- Peer group: Upper Midwest regional/community banks; annual competitive review; target compensation levels consider performance, scope, and internal equity rather than fixed percentiles .
Investment Implications
- Compensation-payoffs align with credit outcomes: Sims’ incentive structure ties materially to EPS/ROATCE/efficiency and asset quality, reinforcing risk-aware credit management; zero PSU payout (2022–2024) validates hurdle rigor .
- Upcoming vesting may marginally increase insider share liquidity in 1H26 (subject to blackout/retention rules), but anti-hedging and ownership guidelines temper selling pressure .
- Change-in-control risk/reward: The announced Nicolet merger (expected 1H26) can trigger severance and equity acceleration if Sims is terminated in the covered window; illustrative total CIC benefits ~$1.11m, subject to 280G cutback and restrictive covenants, a factor for retention and potential insider trading timing around closing .
- Credit cycle sensitivity: Management commentary (Sims) highlights proactive CECL and sector monitoring; watch CRE office and 2026 ag input/tariff dynamics for future charge-offs and ACL trends .
Citations:
- Executive bio/education/age/tenure: **[1412665_0001412665-25-000046_mofg-20250310.htm:16]**
- 2024 credit metrics/business highlights & say-on-pay: **[1412665_0001412665-25-000046_mofg-20250310.htm:28]**
- Earnings call (ACL posture; CRE office cleanup; nonperforming assets, charge-offs): **[1412665_MOFG_3423472_12]** **[1412665_MOFG_3423472_14]** **[1412665_1978951_6]** **[1412665_1978951_7]**
- Incentive plan design/weights/payouts: **[1412665_0001412665-25-000046_mofg-20250310.htm:34]** **[1412665_0001412665-25-000046_mofg-20250310.htm:35]** **[1412665_0001412665-25-000046_mofg-20250310.htm:36]**
- Equity grants/PSU metrics/vesting schedules: **[1412665_0001412665-25-000046_mofg-20250310.htm:37]** **[1412665_0001412665-25-000046_mofg-20250310.htm:38]** **[1412665_0001412665-25-000046_mofg-20250310.htm:39]** **[1412665_0001412665-25-000046_mofg-20250310.htm:46]** **[1412665_0001412665-25-000046_mofg-20250310.htm:47]**
- 2025 compensation decisions/equity grants: **[1412665_0001412665-25-000046_mofg-20250310.htm:42]**
- Ownership guidelines/anti-hedging/clawback: **[1412665_0001412665-25-000046_mofg-20250310.htm:24]**
- Beneficial ownership & ESOP allocation: **[1412665_0001412665-25-000046_mofg-20250310.htm:63]**
- Employment agreements, severance/CIC, COBRA, non-compete, 280G cutback: **[1412665_0001412665-25-000046_mofg-20250310.htm:51]** **[1412665_0001412665-25-000046_mofg-20250310.htm:52]** **[1412665_0001412665-25-000046_mofg-20250310.htm:49]** **[1412665_0001412665-25-000046_mofg-20250310.htm:50]**
- Pay vs Performance TSR: **[1412665_0001412665-25-000046_mofg-20250310.htm:54]**
- Peer group details: **[1412665_0001412665-25-000046_mofg-20250310.htm:31]** **[1412665_0001412665-25-000046_mofg-20250310.htm:32]**
- Nicolet merger announcement and timeline: **[1412665_0001412665-25-000159_mofg-20250930.htm:9]**