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Stockholders' Equity
9 Months Ended
Sep. 30, 2022
Stockholders' Equity [Abstract]  
Stockholders' Equity
8.
 
STOCKHOLDERS’ EQUITY
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
 
par value. Each five
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
 
share of
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
 
shares
of
 
Class
 
A
 
common
 
stock
 
at
 
a
 
price
 
of
 
$
10.00
 
per
 
share.
 
The
 
Bank
 
received
 
total
 
net
 
proceeds
 
of
 
$
40.0
 
million
 
after
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
 
shares of Class
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
 
million.
 
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.
Three Months Ended
September 30,
Nine Months Ended
September 30,
2022
2021
2022
2021
Preferred stock - Class C: Non-voting, Non-cumulative, Perpetual:
$
1.00
 
par value; $
1,000
 
per share liquidation preference; annual
dividend rate of
4
% of liquidation preference paid quarterly. Quarterly
dividend of $
10.00
 
per share.
$
-
$
440
$
-
$
1,494
Preferred stock - Class D: Non-voting, Non-cumulative, Perpetual:
$
1.00
 
par value; $
5.00
 
per share liquidation preference; annual
dividend rate of
4
% of par value paid quarterly. Quarterly dividend of
$
0.01
 
per share.
-
102
-
348
Preferred stock - Class E: Non-voting, Partially Cumulative,
Perpetual: $
1.00
 
par value; $
1,000
 
per share liquidation preference;
annual dividend rate of
7
% of liquidation preference paid quarterly.
Quarterly dividend of $
17.50
 
per share.
-
-
-
235
Total
 
dividends paid
$
-
$
542
$
-
$
2,077