
	December 31, 2023	December 31, 2022
Outstanding performance units (maximum issuance)	273,202	209,702
Outstanding RSU’s	290,141	269,868
Outstanding options	333,608	222,032
2018 Stock Incentive Plan	732,427	342,157
Non-Management Director Plan	130,162	55,878
2018 Employee Stock Purchase Plan	447,655	515,941
Total	2,207,195	1,615,578

In April 2021, the Company’s board of directors authorized the repurchase of up to two million shares of the Company’s common stock. As of May 2022, this plan was depleted. In May 2022, the Company’s board of directors authorized the repurchase of up to two million shares of the Company’s common stock. The repurchases may be made in open market or privately negotiated transactions and the stock repurchase program will remain in effect until fully utilized or until modified, superseded or terminated. At December 31, 2023, there were two million shares available for repurchase under the plan.

The Company has 5,000,000 shares of authorized preferred stock with a par value of $0.01 with 75,000 shares issued and outstanding at the end of 2023 and 2022. The Board of Directors has the right to set for each series of preferred stock, subject to the laws of the State of Delaware, the dividend rate, conversion and redemption terms, voting rights and liquidation preferences, among others. In the fourth quarter 2021, the Company issued and sold 3,000,000 depositary shares, each representing 1/40th interest in a share of the Company’s 5% Noncumulative, Perpetual Preferred Stock, Series A (“Series A Preferred Stock”), totaling $72.0 million, net of issuance costs. The depositary shares trade under the ticker “EFSCP”. The Series A Preferred Stock may be redeemed at the Company’s option, subject to prior regulatory approval, in whole or in part on any dividend payment date on or after December 15, 2026 or within 90 days following a regulatory capital event, as defined in the offering documents. If any Series A Preferred Stock are redeemed, a proportionate number of depositary shares will also be redeemed.

The Company’s ability to pay dividends to its shareholders is generally dependent upon the payment of dividends by the Bank to the parent company. The Bank cannot pay dividends to the extent it would be deemed undercapitalized by the FDIC after making such dividend.

Preferred stock dividends, when and if declared by the board of directors, are payable, quarterly in arrears, on March 15, June 15, September 15 and December 15 of each year. If dividends on the Series A Preferred stock have not been declared or paid in six quarterly periods, whether or not consecutive, the number of directors on the board will automatically be increased by two and the holders of the Series A preferred stock will be entitled to vote for the additional directors. Quarterly dividends have been declared and paid in all periods since the preferred stock was issued.

Dividends on the Company’s capital stock are prohibited under the terms of the junior subordinated debenture agreements, see “Note 10 – Subordinated Debentures and Notes,” if the Company is in continuous default on its payment obligations to the capital trusts, has elected to defer interest payments on the debentures or extends the

interest payment period. Furthermore, unless dividends on all outstanding shares of the Series A Preferred Stock for the most recently completed dividend period have been paid or declared, dividends on, and repurchases of, common stock is prohibited. At December 31, 2023, the Company was not in default on any of the junior subordinated debenture issuances or preferred stock.


($ in thousands)	Net Unrealized Gain (Loss) on Available-for-Sale Debt Securities		Unamortized Gain (Loss) on Held-to-Maturity Securities		Net Unrealized Gain (Loss) on Cash Flow Hedges		Total
Balance, December 31, 2020	$	22,320	$	19,308	$	(4,508)	$	37,120
Net change	(17,049)		(3,624)		2,330		(18,343)
Balance, December 31, 2021	$	5,271	$	15,684	$	(2,178)	$	18,777
Net change	(149,623)		(2,696)		3,210		(149,109)
Transfer from available-for-sale to held-to-maturity	(197)		197		—		—
Balance, December 31, 2022	$	(144,549)	$	13,185	$	1,032	$	(130,332)
Net change	31,705		(2,605)		217		29,317

Balance, December 31, 2023	$	(112,844)	$	10,580	$	1,249	$	(101,015)


	2023						2022						2021
($ in thousands)	Pre-tax		Tax effect		After-tax		Pre-tax		Tax effect		After-tax		Pre-tax		Tax effect		After-tax
Change in unrealized gain (loss) on available-for-sale securities	$	42,988	$	10,833	$	32,155	$	(200,030)	$	(50,407)	$	(149,623)	$	(22,701)	$	(5,652)	$	(17,049)
Reclassification of gain on sale of available-for-sale securities(a)	(601)		(151)		(450)		—		—		—		—		—		—
Reclassification of gain on held-to-maturity securities(a)	(3,483)		(878)		(2,605)		(3,605)		(909)		(2,696)		(4,672)		(1,048)		(3,624)
Change in unrealized gain (loss) on cash flow hedges	(656)		(165)		(491)		3,741		943		2,798		1,533		372		1,161
Reclassification of loss on cash flow hedges(b)	945		237		708		551		139		412		1,543		374		1,169
Total other comprehensive income (loss)	$	39,193	$	9,876	$	29,317	$	(199,343)	$	(50,234)	$	(149,109)	$	(24,297)	$	(5,954)	$	(18,343)

The Company has adopted share-based compensation plans to reward and provide long-term incentive for directors and key employees of the Company including its subsidiaries. These plans provide for the granting of stock, stock options, stock-settled stock appreciation rights, and restricted stock units (“RSUs”), and may contain performance terms for key employees as designated by the Company’s Board of Directors upon the recommendation of the Compensation Committee of the Board. The Company uses authorized and unissued shares to satisfy share award exercises.

The total excess income tax benefit (expense) for share-based compensation arrangements was $0.3 million, $0.1 million, and $(0.1) million for the years ended December 31, 2023, 2022, and 2021, respectively. At December 31, 2023, there was $14.5 million of total unrecognized compensation cost related to unvested share-based compensation awards. The cost is expected to be recognized over a weighted-average term of approximately 2 years.


($ in thousands)	2023		2022		2021
Performance stock units	$	2,879	$	2,391	$	1,777
Restricted stock units	5,014		4,156		3,109
Stock options	1,609		916		396

Employee stock purchase plan	644		543		735
Total share-based compensation expense	$	10,146	$	8,006	$	6,017

The Company has entered into long-term incentive agreements with certain key employees. These awards are conditioned on certain performance criteria and market criteria measured against a group of peer banks over a three-year period for each grant. The awards contain minimum (threshold), target, and maximum (exceptional) performance levels. In the event of a change in control, as defined in the plan, the awards will vest at least at the target level. The amount of the awards is determined at the end of the three-year vesting and performance period. The fair value of performance units issued upon vesting in 2023, 2022, and 2021 were $1.6 million, $0.5 million, and $0.9 million, respectively.


($ in thousands, except per share data)	2021 - 2023 Cycle		2022 - 2024 Cycle		2023 - 2025 Cycle
Shares issuable at target	38,412		41,765		56,424
Maximum shares issuable	76,824		83,530		112,848
Unrecognized compensation cost	$	77	$	1,001	$	2,340
Weighted average grant date fair value (per share)	$	47.16	$	51.91	$	62.19

The Company awards nonvested stock, in the form of RSUs to employees. RSUs generally are subject to continued employment and generally vest ratably over three to five years. Vesting is accelerated upon a change in control or the employee meeting certain retirement criteria. RSUs do not carry voting or dividend rights until vested. Sales of the units are restricted prior to vesting.


($ in thousands)	2023		2022		2021
Total fair value of awards vesting during the year	$	3,894	$	3,888	$	2,855
Unrecognized compensation cost	8,438		8,507		4,622
Expected years to recognize unearned compensation	1.7 years		2.0 years		1.9 years
Weighted average grant date fair value	$	50.46	$	47.96	$	44.01

In determining compensation cost for stock options, the Black-Scholes option-pricing model is used to estimate the fair value on date of grant. The model utilizes several assumptions in its calculations. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield in effect at the time of the grant. The expected term of options granted is based on the option's vesting schedule and expected exercise patterns and represent the period of time options granted are expected to be outstanding. The expected volatility is based on the historical volatility of the Company's stock and expected term of the option. The dividend yield is determined by annualizing the dividend rate as a percentage of the Company's stock price.

Non-qualified stock options have been granted to key employees with exercise prices equal to the market price of the Company’s common stock at the date of grant and 10-year contractual terms. Stock options have a vesting schedule of three to five years.


	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term
Outstanding at December 31, 2022	222,032	$	46.12
Granted	122,161	54.46
Exercised	(909)	45.28
Forfeited	(9,676)	48.30
Outstanding at December 31, 2023	333,608	$	49.11	8.2 years
Exercisable at December 31, 2023	53,208	$	45.30	7.5 years

The Company’s Employee Stock Purchase Plan (“ESPP”) provides its eligible employees with an opportunity to purchase common stock through accumulated payroll contributions. The ESPP provides for shares to be purchased at 85% of the lesser of the stock price at the enrollment date or the exercise date. The maximum number of shares of common stock available for sale under the ESPP is 750,000. In 2023, 2022, and 2021, employees purchased 68,286, 55,123, and 64,826 shares, respectively, and there are 447,655 remaining shares available under the ESPP at December 31, 2023.

The Company has adopted a Stock Plan for Non-Management Directors, which provides for issuing up to 400,000 shares of common stock to non-management directors as compensation. At December 31, 2023, there were 108,893 shares of stock available for grant under the Stock Plan for Non-Management Directors, exclusive of 21,269 shares to be issued upon deferral release.

The Company has a 401(k) savings plan which covers substantially all full-time employees over the age of 21 and matches 100% of the first 6% of employee contributions. The amount charged to expense for the Company’s contributions to the plan was $6.5 million, $5.8 million and $4.9 million for 2023, 2022, and 2021, respectively.

The Company has a nonqualified deferred compensation plan that permits certain executives to participate and defer up to 25% of their base salary and/or up to 100% of their eligible bonus for a plan year. Participants make an irrevocable election when they elect to participate for a plan year to receive the vested account balance following their retirement date, or at a future date not less than five years after the beginning of the plan year. At December 31, 2023, the Company had a liability of $3.7 million related to the deferred compensation plan.