Joseph Wright Jr.

About Joseph T. Wright, Jr.

Independent director since 2009; age 69. Practicing attorney at Wright, Reihner & Mulcahey (formerly Wright & Reihner PC) since 1980, with experience in financially complex matters involving shareholders, employment, contracts, valuation, real estate, and risk assessment. Chair of the Compensation Committee; member of the Nominating & Corporate Governance Committee. Board determined him independent under Nasdaq listing standards; attended at least 75% of board/committee meetings in 2024 and attended the 2024 annual meeting.

Past Roles

External Roles

Board Governance

• Committee assignments and chair roles:
  • Compensation Committee: Chair; committee met seven times in 2024.
  • Nominating & Corporate Governance Committee: Member; committee met two times in 2024.
  • Audit Committee: Not listed as a member (committee met five times in 2024; financial experts identified were Lambert, Lochen, and Melone).
• Independence and attendance:
  • Board affirmed Wright is independent under Nasdaq standards; each director attended at least 75% of board/committee meetings in 2024; all directors attended the 2024 annual meeting.
• Risk oversight context: Compensation Committee oversees risks/exposures associated with executive compensation and incentive plans; Nominating & Governance oversees leadership, succession, and governance; Audit oversees financial reporting, controls, and related-party transactions.

Fixed Compensation

• Director compensation structure (policy):
  • Annual cash retainer: $20,000 for non-employee directors; Board Chair retainer: $40,000; Committee chair stipends: Compensation Chair $292/month; Audit Chair $417/month; Nominating & Governance Chair $250/month; other bank committee chairs $209/month. Meeting fees: $2,000 per board/Bank meeting; $500 per committee meeting; $300 per advisory meeting.
• 2024 actual compensation for Joseph T. Wright, Jr.: | Component | Amount ($) | Notes | |---|---|---| | Fees Earned or Paid in Cash | 65,508 | Includes retainer, meeting fees, and chair stipend | | | All Other Compensation | 360 | Imputed income from supplemental life insurance split-dollar arrangement | |

Performance Compensation

• Annual equity grant policy: Target value $15,000 based on average December closing price; grants made as restricted stock and fully vested upon grant for 2025 award.
• 2025 grant detail applicable to Wright:
  • 280 shares of restricted stock granted January 31, 2025 to each legacy PFIS non-employee director; fully vested at grant; grant-date closing price $50.79/share; Wright’s 2024 proxy-reported stock award fair value $14,412.
• Performance metrics context (for executive incentives, not director pay): | Performance Measure (Company-identified “most important”) | |---| | EPS growth; Revenue growth; Asset growth; Loan growth; Deposit growth; Expense-to-asset ratio; Ratio of non-performing assets to average loans+OREO; Ratio of net charge-offs to average loans | |

Note: Due to the FNCB merger in H1 2024, the Compensation Committee did not set specific performance goals for 2024 and used discretionary bonus provisions in the Cash Incentive Plan.

Other Directorships & Interlocks

• Compensation Committee interlocks: None in 2024 involving PFIS and other entities; Wright was a member, and no member (except Lochen, a former PFIS executive officer 2006–2010) served as an officer or employee of the Company during 2024.

Expertise & Qualifications

• Legal expertise (40+ years), with extensive exposure to complex financial and governance matters, aligning with oversight of compensation risk and policy development.
• Board independence affirmed; committee leadership experience (Compensation Chair; member Nominating & Governance) supports board effectiveness.

Equity Ownership

• Stock ownership guidelines: Non-employee directors must beneficially own PFIS stock equal to 4x annual retainer; directors have five years to reach compliance; all non-employee directors were in compliance as of Dec 31, 2024.
• Hedging policy: Prohibits directors, officers, employees, and their related persons from engaging in any hedging or monetization transactions involving PFIS securities.
• Pledging: No explicit pledging policy disclosure in proxy; not stated.

Governance Assessment

• Strengths:
  • Independent director; active engagement with at least 75% attendance in 2024; leadership as Compensation Committee Chair; member of Nominating & Governance.
  • Ownership alignment: 43,639 shares beneficially owned; complies with 4x retainer ownership guideline; hedging prohibited, supporting alignment.
  • Clear director pay structure with modest cash retainer/meeting fees and annual equity grants (fully vested), reducing complexity and potential for pay-related conflicts.
  • Shareholder sentiment: 2025 say-on-pay supported (5,238,315 for; 373,168 against; 118,094 abstain; 1,749,307 broker non-votes), and Wright re-elected with 5,557,455 votes for.
• Areas to monitor:
  • Related-party exposure: PFIS Bank extends loans to directors and related persons under board-approved, arm’s-length terms; Audit Committee oversees related-party transactions; board concluded such relationships did not impair independence. Continued oversight is prudent.
  • Concentrated shareholding within the board (e.g., DeNaples Sr. at 3.4%) may influence governance dynamics; continued monitoring of committee independence and voting outcomes advised.
• RED FLAGS:
  • No hedging/pledging by Wright disclosed; no related-party transactions involving Wright disclosed in 2024; no compensation interlocks involving Wright.
  • Committee did not set 2024 executive performance goals due to merger and used discretionary bonus provisions; while situational, discretionary awards warrant scrutiny from a pay-for-performance perspective.

Director Compensation Summary (2024)

Director equity grant details: 280 restricted shares granted Jan 31, 2025 to each legacy PFIS non-employee director; fully vested at grant; grant-date closing price $50.79/share.

Committee Activity Snapshot (2024)

Related-Party Transactions Oversight

• The Bank maintains formal procedures requiring disinterested board approval for loans to related persons; transactions must be at market terms and are overseen by the Audit Committee; board determined such relationships did not impair independent directors’ independence.
• Example transactions disclosed (not involving Wright): Subordinated Notes due 2030 acquired by Louis A. DeNaples, Sr. and JJS Family Partnership (interest 5.375% through June 2025; each received $34,266 interest in 2024).

Say-on-Pay & Shareholder Feedback (2025 Annual Meeting)

Director Ownership Policy & Trading Restrictions

• Ownership guideline: 4x annual retainer for non-employee directors; compliance achieved by all non-employee directors as of 12/31/2024.
• Hedging prohibition: Directors and related persons are prohibited from hedging or monetization transactions in PFIS securities.