Madison County Financial : 2023 Annual Report and Proxy Statement

PROXY STATEMENT

OF

MADISON COUNTY FINANCIAL, INC.

111 WEST THIRD STREET

MADISON, NEBRASKA 68748

(402) 454-6511

ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON MONDAY, MAY 20, 2024

INTRODUCTION

This Proxy Statement is furnished in connection with the solicitation of proxies on behalf of the Board of Directors of Madison County Financial, Inc. to be used at Madison County Financial, Inc.'s

2024 Annual Meeting of Stockholders (the "Annual Meeting"), which will be held at the Norfolk branch of Madison County Bank, located at 1650 North 13th Street, Norfolk, NE 68701 at 9:00 a.m. Central Time, on Monday, May 20, 2024, and all adjournments of the Annual Meeting. The accompanying Notice of Annual Meeting of Stockholders and this Proxy Statement are first being mailed to stockholders on or about April 5, 2024.

REVOCATION OF PROXIES

Stockholders who execute proxies in the form solicited hereby retain the right to revoke them in the manner described below. Unless so revoked, the shares represented by such proxies will be voted at the Annual Meeting and all adjournments thereof. Proxies solicited on behalf of Madison County Financial, Inc.'s Board of Directors will be voted in accordance with the directions given thereon. Where no instructions are indicated, validly executed proxies will be voted "FOR" the proposals set forth

in this Proxy Statement.

The Board of Directors knows of no additional matters that will be presented for consideration at the Annual Meeting. Execution of a proxy, however, confers on the designated proxy holders discretionary authority to vote the shares in accordance with their best judgment on such other business, if any, which may properly come before the Annual Meeting or any adjournments thereof.

Proxies may be revoked by sending written notice of revocation to Madison County Financial, Inc.'s Secretary at Madison County Financial, Inc.'s address shown above, the submission of a later-dated proxy, or by voting in person at the Annual Meeting. The presence at the Annual Meeting of any stockholder who had returned a proxy does not revoke such proxy unless the stockholder delivers his or her ballot in person at the Annual Meeting or delivers a written revocation to Madison County Financial, Inc.'s Secretary prior to the voting of such proxy.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

Holders of record of Madison County Financial, Inc.'s common stock, par value $0.01 per share, as of the close of business on March 21, 2024 (the "Record Date") are entitled to one vote for each share then held. As of the Record Date, Madison County Financial, Inc. had 2,731,395 shares of common stock issued and outstanding. The presence in person or by proxy of a majority of the outstanding shares of common stock entitled to vote is necessary to constitute a quorum at the Annual Meeting.

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In accordance with the provisions of Madison County Financial, Inc.'s Articles of Incorporation, record holders of common stock who beneficially own in excess of 15% of the outstanding shares of common stock (the "Limit") are not entitled to any vote with respect to the shares held in excess of the Limit. The Company's Articles of Incorporation authorize the Board of Directors (i) to make all determinations necessary to implement and apply the Limit, including determining whether persons or entities are acting in concert, and (ii) to demand that any person who is reasonably believed to beneficially own stock in excess of the Limit supply information to Madison County Financial, Inc. to enable the Board of Directors to implement and apply the Limit.

As to the election of directors, the proxy card being provided by the Board of Directors enables a stockholder to vote FOR the election of the nominees proposed by the Board of Directors, to WITHHOLD AUTHORITY to vote for all the nominees being proposed or to vote FOR ALL EXCEPT one or more of the nominees being proposed. Directors are elected by a plurality of votes cast, without regard to either broker non-votes or proxies as to which the authority to vote for the nominees being proposed is withheld. Plurality means that individuals who receive the largest number of votes cast are elected, up to the maximum number of directors to be elected at the Meeting.

As to the ratification of Madison County Financial, Inc.'s independent auditor, the proxy card being provided by the Board of Directors enables a stockholder to: (i) vote FOR the proposal; (ii) vote AGAINST the proposal; or (iii) ABSTAIN from voting on the proposal. The ratification of Madison County Financial, Inc.'s independent auditor must be approved by the affirmative vote of a majority of the votes cast without regard to broker non-votes or proxies marked ABSTAIN.

In the event at the time of the Annual Meeting there are not sufficient votes for a quorum or to approve or ratify any matter being presented, the Annual Meeting may be adjourned in order to permit the further solicitation of proxies.

Proxies solicited hereby will be returned to us and will be tabulated by an Inspector of Election designated by Madison County Financial, Inc.'s Board of Directors.

Participants in the ESOP Plan. If you participate in the Madison County Bank Employee Stock Ownership Plan (the "ESOP"), you will receive a vote authorization form that reflects all shares you may direct the trustees to vote on your behalf under the plan. Under the terms of the ESOP, the ESOP trustee votes all shares held by the ESOP, but each ESOP participant may direct the trustee how to vote the shares of common stock allocated to his or her account. The ESOP trustee, subject to the exercise of its fiduciary responsibilities, will vote all unallocated shares of Madison County Financial, Inc. common stock held by the ESOP and all allocated shares for which no voting instructions are received in the same proportion as shares for which it has received timely voting instructions. The deadline for returning your voting instructions is May 13, 2024.

PROPOSAL I - ELECTION OF DIRECTORS

The Company's Board of Directors is comprised of seven members. The Company's bylaws provide that the terms of Madison County Financial, Inc.'s Board of Directors are classified, so that approximately one-third of the directors are to be elected annually. The Company's directors are generally elected to serve for a three-year period and until their respective successors shall have been elected and shall qualify. Two directors will be elected at the Annual Meeting. The Company's Nominating Committee has nominated Warren R. Blank and David J. Warnemunde, each to serve as a director for a three-year term. Messrs. Blank and Warnemunde are current members of the Board of Directors, and each has agreed to serve as a director, if elected.

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The table below sets forth certain information regarding the composition of Madison County Financial, Inc.'s Board of Directors, including the terms of office of each director. It is intended that the proxies solicited on behalf of the Board of Directors (other than proxies in which the vote is withheld as to one or more nominees) will be voted at the Annual Meeting for the election of the nominees identified below. If the nominee is unable to serve, the shares represented by all such proxies will be voted for the election of such other substitute as the Board of Directors may recommend. At this time, the Board of Directors knows of no reason why the nominees might be unable to serve, if elected. Except as indicated herein, there are no arrangements or understandings between any nominee and any other person pursuant to which such nominee was selected.

The Board of Directors recommends a vote "FOR" each of the nominees listed in this Proxy Statement.

The following table sets forth certain information regarding Madison County Financial, Inc.'s directors.

1. Includes service on the Board of Directors of Madison County Bank.

The Business Background of Madison County Financial, Inc.'s Directors and Executive Officers

The business experience for the past five years of each of Madison County Financial, Inc.'s directors and executive officers is set forth below. With respect to directors, the biographies also contain information regarding the person's experience, qualifications, attributes or skills that caused the Nominating and Corporate Governance Committee and the Board of Directors to determine that the person should serve as a director. Each director is also a director of Madison County Bank. Unless otherwise indicated, directors and executive officers have held their positions for the past five years.

Nominees:

Warren R. Blank is part owner of Bill Blank Agency, Inc., an insurance agency, real estate sales, appraisal and auctioneering services firm located in Madison, Nebraska. Mr. Blank's financial and commercial experience provides the Board with general business acumen. Mr. Blank is the Secretary of the Company. He is qualified as an independent director as he does not receive a salary, has no office

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space in the premises, is not involved in the day-to-day operations and is not compensated for the functions he performs as the Secretary of the Company. For decades, the position of Corporate Secretary has been filled by an Independent Director.

David J. Warnemunde is our President, Chief Executive Officer and Chairman of the Board. He has been employed by and has been the Chief Executive Officer of Madison County Bank since 1992 and has served as our President and Chief Executive Officer since 1994. Mr. Warnemunde's experience provides the Board with a perspective on the day to day operations of Madison County Bank, and assists the Board in assessing the trends and developments in the financial institutions industry on a local and national basis. Additionally, Mr. Warnemunde is active in civic and charitable organizations, including Knights of Columbus and the Madison, Jones & Remender Foundation. Mr. Warnemunde has extensive ties to the community that support our business generation. Mr. Warnemunde is the son of Director David D. Warnemunde, who is also President of the Warnemunde Insurance Agency, Inc., our insurance subsidiary and Mr. Warnemunde is the nephew by marriage of Dennis Johnson, President of Bush & Roe Financial, Inc., our insurance subsidiary.

Directors Continuing in Office

James R. Becker is the owner of JKB Farms, Inc., a family farming corporation and is actively engaged in farming in Madison County. Mr. Becker's experience in owning and managing his farm and his extensive knowledge of the farming industry in our market area provides the Board additional expertise with regard to risk assessment of agricultural real estate and non-real estate lending.

Richard D. Martinsen is a Certified Public Accountant with the firm of Mueller and Honcik PC and he manages the Albion, Nebraska office there. He was elected to the Board in August, 2021. Mr. Martinsen's extensive experience in auditing, accounting and tax law provide the Board with fiscal oversight and general business acumen.

Jon M. Moyer serves as our Bank Appraiser and in this position he conducts real estate appraisals and evaluations for Madison County Bank, a position he has held since 1994. Mr. Moyer has been employed by Madison County Bank since 1994. Mr. Moyer's extensive knowledge of the farming industry in our market area and his institutional knowledge of Madison County Bank provides the Board with valuable insight regarding risk assessment.

David D. Warnemunde is Vice President of Madison County Bank, Winside, Nebraska. Mr. Warnemunde is the father of David J. Warnemunde, our President and Chief Executive Officer, the President of Warnemunde Insurance Agency, Inc., our insurance subsidiary and the brother-in-law of Dennis Johnson, President of Bush & Roe Financial, Inc., our insurance subsidiary. Mr. Warnemunde's experience as a community bank executive provides the Board with valuable insight in assessing strategic transactions involving Madison County Financial, Inc. and Madison County Bank.

Carolyn S. Warren is Vice President and part-owner of Warren Garage Door, Inc., a garage door assembly, installation and servicing firm, and Apex Enterprises, LLC, a personal and commercial storage company, both located in Norfolk, Nebraska. Ms. Warren's extensive experience in retail and servicing small businesses, experience in managing the operation of multiple business enterprises, and the knowledge of the challenges and opportunities faced by local businesses provide the Board with general business acumen and also particular knowledge of developing a successful retail culture at the bank and our subsidiary businesses.

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