Common Stock
The rights
of the
holders of
Class A
common stock
and Class
B common
stock are
the same,
except for
voting and
conversion rights.
Holders of
Class A
common stock
are entitled
to voting
rights, while
holders of
Class B
common stock
have no
voting rights.
Shares of
Class
B common
stock
are convertible
into shares
of Class
A common
stock
if sold
or
transferred.
In June 2021, the Bank effected a 1 for 5
reverse stock split of all the Class A common
stock $
1.00
shares of
the Bank’s Class
A common
stock was combined
into
one
fully paid
share of Class
A common
stock. Any fractional
shares
resulting from
this
reverse
stock
split were
rounded
up to
one whole
share.
The
Bank has
adjusted
the Class
A
common stock, earnings per share and stock
options for this 1 for 5 reverse stock
split for all periods in 2021. The Class
B
common stock was not adjusted but if sold or exchanged would be converted
at the 1 for 5 reverse stock split of
1
Class
A
common
stock
for
5
shares
of
Class
B
common
stock.
Any
dividends
declared
by
the
Board
of
Directors
(the
“Board”) to include
Class B common
stock would also
be paid as if
the Class B common
stock had converted.
The 1 for 5
reverse stock
split resulted
in adjustments
to Consolidated
Balance Sheets,
Consolidated Statements
of Operations,
and
Consolidated Statements of Changes in Stockholders’
Equity.
In July 2021,
the Bank completed
the IPO of
its Class A
common stock, in
which it issued
and sold
4,600,000
of
Class
A
common
stock
at
a
price
of
$
10.00
per
share.
The
Bank
received
total
net
proceeds
of
$
40.0
deducting underwriting discounts and expenses.
In December 2021,
the Bank entered
into agreements with
the Class B
shareholders to exchange
all outstanding shares
of Class
B common
stock for
shares of
Class A
common stock
at a
ratio of
one share
of Class
A common
stock for
ever
five shares of
Class B common
stock. As
a result, a
total of
6,121,052
shares of
Class B common
stock were
exchanged
for
1,224,212
shares of Class A common stock.
In December 2021, the
Company acquired all
the issued and outstanding
shares of the Class
A voting common
stock
of the Bank, which at
the time were the only issued
and outstanding shares of the Bank’s capital stock,
in a share exchange
(the “Reorganization”)
effected under
the Florida
Business Corporation
Act. Each
of the outstanding
shares of
the Bank’s
Class A common stock, par value $
1.00
per share, formerly held by its shareholders was converted into and exchanged for
one newly
issued share
of the
Company’s
Class A
common stock,
par value
$
1.00
per share,
and the
Bank became
the
Company’s wholly owned subsidiary.
In the
Reorganization,
each
shareholder
of the
Bank
received securities
of
the same
class,
having
substantially
the
same designations,
rights,
powers, preferences,
qualifications,
limitations
and restrictions,
as those
that the
shareholder
held
in
the
Bank,
and
the
Company’s
current
shareholders
own
the
same
percentages
of
its
common
stock
as
they
previously owned of the Bank’s common stock.
Preferred Stock
In April 2021,
the Board
authorized and
approved the
offer to
repurchase all
outstanding shares
of Class
E preferred
stock at
the liquidation
value of
$
7.5
million along
with declared
dividends of
$
103
thousand.
All Class
E preferred
stock
shareholders approved the repurchase which the Bank
completed in April 2021.
The
Bank
offered
the
Class
C
and
Class
D
preferred
stockholders
the
ability
to
exchange
their
shares
for
Class
A
common stock. The offer
to exchange was voluntary
and the preferred stockholders
were given the option to
convert
90
%
of
their
preferred
shares
for
Class
A
common
stock
with
the
remaining
10
%
to
be
redeemed
in
the
form
of
cash.
The
exchange ratio for the
shares of Class A
common stock issued in
the preferred stock exchange transaction
was based upon
the IPO price for shares of Class A common stock.
During the year ended December 31, 2021,
47,473
shares of Class C preferred stock
and
11,061,552
D preferred stock converted into an aggregate of
10,278,072
shares of Class A common stock. The exchange of the Class
C and Class D preferred shares had
a total liquidation value of $
102.8
million. The remaining unconverted shares of
Class
C preferred stock
and Class
D preferred stock
totaling
1,234,354
shares were subsequently
redeemed at their
liquidation
value for $
11.4
The fair value of consideration
on the preferred stock
exchange and redemption of
the Class C and
Class D preferred
shares
exceeded
the
book
value
causing
a
one-time
reduction
in
net
income
available
to
common
stockholders
of
$
89.6
million.
As
of
September 30,
2022
and
December 31,
2021,
there
were
no
preferred
shares
outstanding
and
no
outstanding dividends to be paid.
Dividends
The following dividend amounts were paid on the preferred shares for the three
and nine months ended September 30,
2022 and 2021 (in thousands):
Declaration of dividends by the Board is required before dividend payments are made.
No
dividends were approved by
the Board for
the common stock classes
for the three
months ended September 30, 2022
and 2021. Additionally, there were
no
dividends declared and unpaid as of September 30,
2022 and 2021.
The
Company
and
the
Bank
exceeded
all
regulatory
capital
requirements
and
remained
significantly
above
“well-
capitalized”
guidelines.
At
September 30,
2022,
the
total
risk-based
capital
ratios
for
the
Company
and
the
Bank
were
13.65
% and
13.58
%, respectively.