Note 15 - Preferred Stock and Common Stock Warrant

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Preferred Stock and Common Stock Warrant Disclosure [Text Block]

NOTE

15:

     PREFERRED STOCK AND COMMON STOCK WARRANT

On

January

30,

2009,

the Company issued and sold, and the Treasury purchased,

(1)

17,000

shares of the Company’s Fixed Rate Cumulative Perpetual Preferred Stock Series A (the “Series A Preferred Shares”), and

(2)

a

ten

-year warrant to purchase up to

459,459

shares of the Company's common stock at an exercise price of

$5.55

per share (the “Warrant”), for an aggregate purchase price of

$17.0

million. The Certificate of Designations by which the Series A Preferred Shares were created (the “Certificate of Designations”) provided, among other things, that the Series A Preferred Shares were redeemable at the liquidation amount of

$1,000

per share plus accrued but unpaid dividends. The Certificate of Designations also provided for a dividend rate of

5%

per annum for the

first

five

years from the date of issuance which increased to

9%

per annum thereafter. The Series A Preferred Shares qualified as Tier

1

capital.

On

June

13,

2012,

with regulatory approval, the Company redeemed

5,000

Series A Preferred Shares for

$5

million plus accrued and unpaid dividends of

$19,444,

leaving

12,000

Series A Preferred Shares remaining outstanding and owned by Treasury.

The Company entered into a Placement Agency Agreement with the Treasury on

April

15,

2013

in connection with a private auction by the Treasury of all of its remaining

12,000

Series A Preferred Shares which was conducted immediately thereafter (the “Private Auction”). On

April

29,

2013,

the Treasury settled the sale of such Series A Preferred Shares to the winning bidders in the Private Auction, consisting of

six

parties unrelated to the Company.

Shortly thereafter, the Company repurchased the Warrant from Treasury pursuant to the terms thereof for the aggregate purchase price of

$2,003,250

in cash. As a result of the Warrant repurchase, the Company’s participation in the CPP was completed.

On

April

3,

2014,

the Company received approval from the Board of Governors of the Federal Reserve System to redeem the Company’s remaining

12,000

Series A Preferred Shares from the parties who had purchased them from Treasury or their affiliates, for the liquidation amount of

$12

million plus accrued but unpaid dividends of

$19.50

per Series A Preferred Share. At the time of the redemption, the Series A Preferred Shares carried a coupon rate of

9.0%

per annum. The Company provided the holders of the Series A Preferred Stock with a formal notice of redemption and

thirty

days thereafter redeemed the Series A Preferred Stock on

May

7,

2014,

plus all accrued and unpaid dividends.