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Florida
(State or other jurisdiction of incorporation or organization) |
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6021
(Primary Standard Industrial Classification Code) |
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46-5144312
(I.R.S. Employer Identification Number) |
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John P. Greeley, Esquire
Smith Mackinnon, PA 255 South Orange Avenue Suite 1200 Orlando, Florida 32801 Phone: (407) 843-7300 Facsimile: (407) 843-2448 |
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Javier J. Holtz
Marquis Bancorp, Inc. 355 Alhambra Circle Suite 125 Coral Gables, Florida 33134 Phone: (305) 443-2922 Facsimile: (305) 774-9937 |
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Matthew M. Guest, Esquire
Wachtell, Lipton, Rosen & Katz 51 West 52nd Street New York, NY 10019 Phone: (212) 403-1000 Facsimile: (212) 403-2000 |
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| Large accelerated filer ☐ | | | Accelerated filer ☐ | | | Non-accelerated filer ☐ | | |
Smaller reporting company ☒
Emerging growth company ☒ |
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Title of Each Class of Securities to be Registered
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Amount to Be
Registered |
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Proposed Maximum
Offering Price Per Unit |
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Proposed Maximum
Aggregate Offering Price |
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Amount of
Registration Fee |
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Class A common stock, par value $0.01 per share
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5,287,956 shares(1)
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| | | | | N/A | | | | | | $ | 74,789,821(2) | | | | | | $ | 9,707.72(3) | | |
| PROFESSIONAL HOLDING CORP. | | |
MARQUIS BANCORP, INC.
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Daniel R. Sheehan Chairman and Chief Executive Officer Professional Holding Corp. |
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Javier J. Holtz Chairman and Chief Executive Officer Marquis Bancorp, Inc. |
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| | | | 288 | | | |
| | | | 294 | | | |
| | | | 294 | | | |
| | | | 295 | | |
| | |
At or For the Three Months
Ended December 31, |
| |
At or For the Year
Ended December 31, |
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(Dollars in thousands, except per share data)
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2019
|
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2018
|
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2019
|
| |
2018
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Balance Sheet Data | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and due from banks
|
| | | $ | 171,980 | | | | | $ | 64,842 | | | | | $ | 171,980 | | | | | $ | 64,842 | | |
Federal funds sold
|
| | | | 26,970 | | | | | | 22,041 | | | | | | 26,970 | | | | | | 22,041 | | |
Investment securities
|
| | | | 28,655 | | | | | | 20,786 | | | | | | 28,655 | | | | | | 20,786 | | |
Loans, net
|
| | | | 785,167 | | | | | | 601,480 | | | | | | 785,167 | | | | | | 601,480 | | |
Total assets
|
| | | | 1,053,047 | | | | | | 729,625 | | | | | | 1,053,047 | | | | | | 729,625 | | |
Total deposits
|
| | | | 892,873 | | | | | | 603,302 | | | | | | 892,873 | | | | | | 603,302 | | |
FHLB advances
|
| | | | 55,000 | | | | | | 40,000 | | | | | | 55,000 | | | | | | 40,000 | | |
Total liabilities
|
| | | | 973,745 | | | | | | 649,944 | | | | | | 973,745 | | | | | | 649,944 | | |
Total shareholders’ equity
|
| | | | 79,302 | | | | | | 79,681 | | | | | | 79,302 | | | | | | 79,681 | | |
Tangible common equity(1)
|
| | | | 79,302 | | | | | | 79,681 | | | | | | 79,302 | | | | | | 79,681 | | |
Income Statement Data | | | | | | | | | | | | | | | | | | | | | | | | | |
Total interest income
|
| | | $ | 10,610 | | | | | $ | 8,308 | | | | | $ | 39,210 | | | | | $ | 27,750 | | |
Total interest expense
|
| | | | 3,172 | | | | | | 2,002 | | | | | | 11,167 | | | | | | 5,837 | | |
Net interest income
|
| | | | 7,438 | | | | | | 6,306 | | | | | | 28,043 | | | | | | 21,913 | | |
Provision for loan losses
|
| | | | 100 | | | | | | 360 | | | | | | 862 | | | | | | 1,150 | | |
Total noninterest income
|
| | | | 681 | | | | | | 556 | | | | | | 2,808 | | | | | | 1,874 | | |
Total noninterest expense
|
| | | | 6,909 | | | | | | 5,656 | | | | | | 26,997 | | | | | | 19,862 | | |
Income before taxes
|
| | | | 1,110 | | | | | | 846 | | | | | | 2,992 | | | | | | 2,775 | | |
Income tax expense
|
| | | | 122 | | | | | | 60 | | | | | | 656 | | | | | | 669 | | |
Net income
|
| | | | 988 | | | | | | 786 | | | | | | 2,336 | | | | | | 2,106 | | |
Selected Professional Performance Ratios | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average assets (ROAA)
|
| | | | 0.39% | | | | | | 0.43% | | | | | | 0.26% | | | | | | 0.33% | | |
Return on average equity (ROAE)
|
| | | | 5.03% | | | | | | 4.81% | | | | | | 2.94% | | | | | | 3.52% | | |
Return on average tangible common equity (ROATCE)
|
| | | | 5.03% | | | | | | 4.81% | | | | | | 2.94% | | | | | | 3.52% | | |
Net interest margin
|
| | | | 3.08% | | | | | | 3.62% | | | | | | 3.34% | | | | | | 3.60% | | |
Noninterest income / average assets
|
| | | | 0.27% | | | | | | 0.31% | | | | | | 0.32% | | | | | | 0.29% | | |
Noninterest expense / average assets
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| | | | 2.70% | | | | | | 3.11% | | | | | | 3.04% | | | | | | 3.10% | | |
Net operating income / average assets
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| | | | 2.91% | | | | | | 3.46% | | | | | | 3.15% | | | | | | 3.42% | | |
Efficiency Ratio
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| | | | 85.10% | | | | | | 82.42% | | | | | | 87.51% | | | | | | 83.50% | | |
Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock issued and outstanding
|
| | | | 5,867,446 | | | | | | 5,923,884 | | | | | | 5,867,446 | | | | | | 5,923,884 | | |
Basic weighted average shares outstanding
|
| | | | 5,755,707 | | | | | | 5,186,806 | | | | | | 5,850,816 | | | | | | 4,910,402 | | |
Diluted weighted average shares outstanding
|
| | | | 5,793,494 | | | | | | 5,406,306 | | | | | | 5,888,607 | | | | | | 5,129,314 | | |
Basic earnings per share
|
| | | $ | 0.17 | | | | | $ | 0.15 | | | | | $ | 0.40 | | | | | $ | 0.43 | | |
Diluted earnings per share
|
| | | | 0.17 | | | | | | 0.15 | | | | | | 0.40 | | | | | | 0.41 | | |
Book value per share
|
| | | | 13.52 | | | | | | 13.45 | | | | | | 13.52 | | | | | | 13.45 | | |
Tangible book value per share(1)
|
| | | | 13.52 | | | | | | 13.45 | | | | | | 13.52 | | | | | | 13.45 | | |
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At or For the Three Months
Ended December 31, |
| |
At or For the Year
Ended December 31, |
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(Dollars in thousands, except per share data)
|
| |
2019
|
| |
2018
|
| |
2019
|
| |
2018
|
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Asset Quality Ratios | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonperforming assets ($)
|
| | | $ | 2,646 | | | | | $ | — | | | | | $ | 2,646 | | | | | $ | — | | |
Nonperforming assets / assets
|
| | | | 0.25% | | | | | | 0.00% | | | | | | 0.25% | | | | | | 0.00% | | |
Nonperforming loans / loans
|
| | | | 0.34% | | | | | | 0.00% | | | | | | 0.34% | | | | | | 0.00% | | |
Net charge-offs (recoveries) to average loans
|
| | | | 0.00% | | | | | | 0.00% | | | | | | 0.00% | | | | | | 0.00% | | |
Allowance for loan losses / total loans
|
| | | | 0.83% | | | | | | 0.94% | | | | | | 0.83% | | | | | | 0.94% | | |
Allowance for loan losses / nonperforming loans
|
| | | | 247.46% | | | | | | N/A | | | | | | 247.46% | | | | | | N/A | | |
Professional Capital Ratios
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| | | | | | | | | | | | | | | | | | | | | | | | |
Tier 1 leverage ratio
|
| | | | 7.8% | | | | | | 11.0% | | | | | | 7.8% | | | | | | 11.0% | | |
Common equity tier 1 capital ratio
|
| | | | 10.6% | | | | | | 15.7% | | | | | | 10.6% | | | | | | 15.7% | | |
Tier 1 risk-based capital ratio
|
| | | | 10.6% | | | | | | 15.7% | | | | | | 10.6% | | | | | | 15.7% | | |
Total risk-based capital ratio
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| | | | 11.6% | | | | | | 16.9% | | | | | | 11.6% | | | | | | 16.9% | | |
Tangible common equity / tangible assets(1)
|
| | | | 7.5% | | | | | | 10.9% | | | | | | 7.5% | | | | | | 10.9% | | |
Bank Capital Ratios | | | | | | | | | | | | | | | | | | | | | | | | | |
Tier 1 leverage ratio
|
| | | | 8.7% | | | | | | 8.6% | | | | | | 8.7% | | | | | | 8.6% | | |
Common equity tier 1 capital ratio
|
| | | | 11.8% | | | | | | 12.3% | | | | | | 11.8% | | | | | | 12.3% | | |
Tier 1 risk-based capital ratio
|
| | | | 11.8% | | | | | | 12.3% | | | | | | 11.8% | | | | | | 12.3% | | |
Total risk-based capital ratio
|
| | | | 12.8% | | | | | | 13.4% | | | | | | 12.8% | | | | | | 13.4% | | |
Tangible common equity / tangible assets(1)
|
| | | | 8.4% | | | | | | 8.5% | | | | | | 8.4% | | | | | | 8.5% | | |
| | |
At or For the Three Months
Ended December 31, |
| |
At or For the Year
Ended December 31, |
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(Dollars in thousands, except per share data)
|
| |
2019
|
| |
2018
|
| |
2019
|
| |
2018
|
| ||||||||||||
Balance Sheet Data | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and due from banks
|
| | | $ | 65,000 | | | | | $ | 66,628 | | | | | $ | 65,000 | | | | | $ | 66,628 | | |
Federal funds sold
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Investment Securities
|
| | | | 30,615 | | | | | | 33,520 | | | | | | 30,615 | | | | | | 33,520 | | |
Loans, net
|
| | | | 542,568 | | | | | | 551,364 | | | | | | 542,568 | | | | | | 551,364 | | |
Total assets
|
| | | | 645,971 | | | | | | 662,324 | | | | | | 645,971 | | | | | | 662,324 | | |
Total deposits
|
| | | | 525,935 | | | | | | 524,231 | | | | | | 525,935 | | | | | | 524,231 | | |
FHLB advances
|
| | | | 50,000 | | | | | | 75,000 | | | | | | 50,000 | | | | | | 75,000 | | |
Total liabilities
|
| | | | 587,701 | | | | | | 611,519 | | | | | | 587,701 | | | | | | 611,519 | | |
Total shareholders’ equity
|
| | | | 58,269 | | | | | | 50,805 | | | | | | 58,269 | | | | | | 50,805 | | |
Tangible common equity(1)
|
| | | | 58,269 | | | | | | 50,805 | | | | | | 58,269 | | | | | | 50,805 | | |
Income Statement Data | | | | | | | | | | | | | | | | | | | | | | | | | |
Total interest income
|
| | | $ | 7,807 | | | | | $ | 7,802 | | | | | $ | 32,123 | | | | | $ | 28,240 | | |
Total interest expense
|
| | | | 2,553 | | | | | | 2,182 | | | | | | 10,217 | | | | | | 7,073 | | |
Net interest income
|
| | | | 5,254 | | | | | | 5,620 | | | | | | 21,906 | | | | | | 21,167 | | |
Provision for loan losses
|
| | | | (216) | | | | | | 437 | | | | | | 151 | | | | | | 1,149 | | |
Total noninterest income
|
| | | | 299 | | | | | | 427 | | | | | | 1,440 | | | | | | 1,257 | | |
Total noninterest expense
|
| | | | 3,690 | | | | | | 3,271 | | | | | | 13,811 | | | | | | 12,326 | | |
Income before taxes
|
| | | | 2,079 | | | | | | 2,339 | | | | | | 9,384 | | | | | | 8,949 | | |
Income tax expense
|
| | | | 464 | | | | | | 405 | | | | | | 2,308 | | | | | | 2,141 | | |
Net income
|
| | | | 1,615 | | | | | | 1,934 | | | | | | 7,076 | | | | | | 6,808 | | |
Selected Marquis Performance Ratios | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average assets (ROAA)
|
| | | | 0.93% | | | | | | 1.22% | | | | | | 1.06% | | | | | | 1.13% | | |
Return on average equity (ROAE)
|
| | | | 11.11% | | | | | | 15.40% | | | | | | 12.88% | | | | | | 14.48% | | |
Return on average tangible common equity (ROATCE)
|
| | | | 11.11% | | | | | | 15.40% | | | | | | 12.88% | | | | | | 14.48% | | |
Net interest margin
|
| | | | 3.11% | | | | | | 3.64% | | | | | | 3.38% | | | | | | 3.60% | | |
Noninterest income / average assets
|
| | | | 0.17% | | | | | | 0.27% | | | | | | 0.22% | | | | | | 0.21% | | |
Noninterest expense / average assets
|
| | | | 2.12% | | | | | | 2.06% | | | | | | 2.07% | | | | | | 2.05% | | |
Net operating income /average assets
|
| | | | 0.93% | | | | | | 1.22% | | | | | | 1.06% | | | | | | 1.13% | | |
Efficiency Ratio
|
| | | | 66.45% | | | | | | 54.09% | | | | | | 59.16% | | | | | | 54.97% | | |
Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock issued and outstanding
|
| | | | 3,419,188 | | | | | | 3,411,946 | | | | | | 3,419,188 | | | | | | 3,411,946 | | |
Basic weighted average shares outstanding
|
| | | | 3,419,188 | | | | | | 3,411,946 | | | | | | 3,417,344 | | | | | | 3,407,680 | | |
Diluted weighted average shares outstanding
|
| | | | 3,818,561 | | | | | | 3,539,558 | | | | | | 3,802,754 | | | | | | 3,562,681 | | |
Basic earnings per share
|
| | | $ | 0.47 | | | | | $ | 0.57 | | | | | $ | 2.07 | | | | | $ | 2.00 | | |
Diluted earnings per share
|
| | | $ | 0.42 | | | | | $ | 0.55 | | | | | $ | 1.86 | | | | | $ | 1.91 | | |
Book value per share
|
| | | $ | 17.04 | | | | | $ | 14.89 | | | | | $ | 17.04 | | | | | $ | 14.89 | | |
Tangible book value per share(1)
|
| | | $ | 17.04 | | | | | $ | 14.89 | | | | | $ | 17.04 | | | | | $ | 14.89 | | |
| | |
At or For the Three Months
Ended December 31, |
| |
At or For the Year
Ended December 31, |
| ||||||||||||||||||
(Dollars in thousands, except per share data)
|
| |
2019
|
| |
2018
|
| |
2019
|
| |
2018
|
| ||||||||||||
Asset Quality Ratios | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonperforming assets ($)
|
| | | $ | 110 | | | | | $ | 2,112 | | | | | $ | 110 | | | | | $ | 2,112 | | |
Nonperforming assets / assets
|
| | | | 0.02% | | | | | | 0.32% | | | | | | 0.02% | | | | | | 0.32% | | |
Nonperforming loans / loans
|
| | | | 0.02% | | | | | | 0.07% | | | | | | 0.02% | | | | | | 0.07% | | |
Net charge-offs (recoveries) to average loans
|
| | | | 0.00% | | | | | | 0.09% | | | | | | (0.01%) | | | | | | 0.09% | | |
Allowance for loan losses / total loans
|
| | | | 0.93% | | | | | | 0.87% | | | | | | 0.93% | | | | | | 0.87% | | |
Allowance for loan losses / nonperforming loans
|
| | | | 4,616.36% | | | | | | 1,203.71% | | | | | | 4,616.36% | | | | | | 1,203.71% | | |
Marquis Capital Ratios
|
| | | | | | | | | | | | | | | | | | | | | | | | |
Tier 1 leverage ratio
|
| | | | 8.4% | | | | | | 8.1% | | | | | | 8.4% | | | | | | 8.1% | | |
Common equity tier 1 capital ratio
|
| | | | 10.2% | | | | | | 8.9% | | | | | | 10.2% | | | | | | 8.9% | | |
Tier 1 risk-based capital ratio
|
| | | | 10.2% | | | | | | 8.9% | | | | | | 10.2% | | | | | | 8.9% | | |
Total risk-based capital ratio
|
| | | | 12.9% | | | | | | 11.5% | | | | | | 12.9% | | | | | | 11.5% | | |
Tangible common equity / tangible assets(1)
|
| | | | 9.0% | | | | | | 7.7% | | | | | | 9.0% | | | | | | 7.7% | | |
Marquis Bank Capital Ratios | | | | | | | | | | | | | | | | | | | | | | | | | |
Tier 1 leverage ratio
|
| | | | 9.8% | | | | | | 9.5% | | | | | | 9.8% | | | | | | 9.5% | | |
Common equity tier 1 capital ratio
|
| | | | 11.8% | | | | | | 10.5% | | | | | | 11.8% | | | | | | 10.5% | | |
Tier 1 risk-based capital ratio
|
| | | | 11.8% | | | | | | 10.5% | | | | | | 11.8% | | | | | | 10.5% | | |
Total risk-based capital ratio
|
| | | | 12.8% | | | | | | 11.4% | | | | | | 12.8% | | | | | | 11.4% | | |
Tangible common equity / tangible assets(1)
|
| | | | 10.4% | | | | | | 9.0% | | | | | | 10.4% | | | | | | 9.0% | | |
| | |
At or For the Quarter
Ended December 31, |
| |
At or For the Year
Ended December 31, |
| ||||||||||||||||||
(Dollars in thousands, except per share data)
|
| |
2019
|
| |
2018
|
| |
2019
|
| |
2018
|
| ||||||||||||
Tangible Common Equity | | | | | | | | | | | | | | | | | | | | | | | | | |
Total shareholders’ equity
|
| | | $ | 79,302 | | | | | $ | 79,681 | | | | | $ | 79,302 | | | | | $ | 79,681 | | |
Less: intangible assets
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Tangible common equity
|
| | | | 79,302 | | | | | | 79,681 | | | | | | 79,302 | | | | | | 79,681 | | |
| | |
At or For the Quarter
Ended December 31, |
| |
At or For the Year
Ended December 31, |
| ||||||||||||||||||
(Dollars in thousands, except per share data)
|
| |
2019
|
| |
2018
|
| |
2019
|
| |
2018
|
| ||||||||||||
Tangible Common Equity to Tangible Assets | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets
|
| | | $ | 1,053,047 | | | | | $ | 729,625 | | | | | $ | 1,053,047 | | | | | $ | 729,625 | | |
Less: intangible assets
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Tangible assets
|
| | | $ | 1,053,047 | | | | | $ | 729,625 | | | | | $ | 1,053,047 | | | | | $ | 729,625 | | |
Tangible common equity to tangible assets
|
| | | | 8.4% | | | | | | 8.5% | | | | | | 8.4% | | | | | | 8.5% | | |
Tangible Book Value Per Share | | | | | | | | | | | | | | | | | | | | | | | | | |
Total shareholders’ equity
|
| | | $ | 79,302 | | | | | $ | 79,681 | | | | | $ | 79,302 | | | | | $ | 79,681 | | |
Less: intangible assets
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Tangible common equity
|
| | | $ | 79,302 | | | | | $ | 79,681 | | | | | $ | 79,302 | | | | | $ | 79,681 | | |
Divide by shares of common stock outstanding
|
| | | | 5,867,446 | | | | | | 5,923,884 | | | | | | 5,867,446 | | | | | | 5,923,884 | | |
Tangible book value per share
|
| | | $ | 13.52 | | | | | $ | 13.45 | | | | | $ | 13.52 | | | | | $ | 13.45 | | |
| | |
At or For the Quarter
Ended December 31, |
| |
At or For the Year
Ended December 31, |
| ||||||||||||||||||
(Dollars in thousands, except per share data)
|
| |
2019
|
| |
2018
|
| |
2019
|
| |
2018
|
| ||||||||||||
Tangible Common Equity
|
| | | | | ||||||||||||||||||||
Total shareholders’ equity
|
| | | $ | 58,269 | | | | | $ | 50,805 | | | | | $ | 58,269 | | | | | $ | 50,805 | | |
Less: intangible assets
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Tangible common equity
|
| | | $ | 58,269 | | | | | $ | 50,805 | | | | | $ | 58,269 | | | | | $ | 50,805 | | |
Tangible Common Equity to Tangible Assets | | | | | | | | | | | | | | | | | | | | | | | | | |
Total assets
|
| | | $ | 645,971 | | | | | $ | 662,324 | | | | | $ | 645,971 | | | | | $ | 662,324 | | |
Less: intangible assets
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Tangible assets
|
| | | $ | 645,971 | | | | | $ | 662,324 | | | | | $ | 645,971 | | | | | $ | 662,324 | | |
Tangible common equity to tangible assets
|
| | | | 9.0% | | | | | | 7.7% | | | | | | 9.0% | | | | | | 7.7% | | |
Tangible Book Value Per Share | | | | | | | | | | | | | | | | | | | | | | | | | |
Total shareholders’ equity
|
| | | $ | 58,269 | | | | | $ | 50,805 | | | | | $ | 58,269 | | | | | $ | 50,805 | | |
Less: intangible assets
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Tangible common equity
|
| | | $ | 58,269 | | | | | $ | 50,805 | | | | | $ | 58,269 | | | | | $ | 50,805 | | |
Divide by shares of common stock outstanding
|
| | | | 3,419,188 | | | | | | 3,411,946 | | | | | | 3,419,188 | | | | | | 3,411,946 | | |
Tangible book value per share
|
| | | $ | 17.04 | | | | | $ | 14.89 | | | | | $ | 17.04 | | | | | $ | 14.89 | | |
(Dollars in thousands, except per share information)
|
| |
As of and for the Nine Months
Ended September 30, |
| |
As of and for the Years
Ended December 31, |
| ||||||||||||||||||||||||
|
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||||
Balance Sheet Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and due from banks
|
| | | $ | 104,097 | | | | | $ | 55,344 | | | | | $ | 64,842 | | | | | $ | 20,836 | | | | | $ | 6,553 | | |
Federal funds sold
|
| | | | 26,398 | | | | | | 21,127 | | | | | | 22,041 | | | | | | 16,290 | | | | | | 10,167 | | |
Investment Securities
|
| | | | 29,435 | | | | | | 21,447 | | | | | | 20,786 | | | | | | 27,036 | | | | | | 31,176 | | |
Loans, net
|
| | | | 764,663 | | | | | | 587,564 | | | | | | 601,480 | | | | | | 465,587 | | | | | | 320,650 | | |
Total assets
|
| | | | 963,193 | | | | | | 705,480 | | | | | | 729,625 | | | | | | 547,021 | | | | | | 385,184 | | |
Total deposits
|
| | | | 823,065 | | | | | | 603,561 | | | | | | 603,302 | | | | | | 459,174 | | | | | | 323,922 | | |
FHLB advances
|
| | | | 50,000 | | | | | | 40,000 | | | | | | 40,000 | | | | | | 25,000 | | | | | | 20,000 | | |
Total liabilities
|
| | | | 885,221 | | | | | | 646,629 | | | | | | 649,944 | | | | | | 489,429 | | | | | | 348,278 | | |
Total shareholders’ equity
|
| | | | 77,972 | | | | | | 58,851 | | | | | | 79,681 | | | | | | 57,592 | | | | | | 36,906 | | |
Tangible common equity(2)
|
| | | | 77,972 | | | | | | 58,851 | | | | | | 79,681 | | | | | | 57,592 | | | | | | 36,906 | | |
Income Statement Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total interest income
|
| | | $ | 28,600 | | | | | $ | 19,442 | | | | | $ | 27,750 | | | | | $ | 18,857 | | | | | $ | 14,265 | | |
Total interest expense
|
| | | | 7,995 | | | | | | 3,835 | | | | | | 5,837 | | | | | | 2,869 | | | | | | 2,122 | | |
Net interest income
|
| | | | 20,605 | | | | | | 15,607 | | | | | | 21,913 | | | | | | 15,988 | | | | | | 12,143 | | |
Provision for loan losses
|
| | | | 762 | | | | | | 790 | | | | | | 1,150 | | | | | | 991 | | | | | | 1,065 | | |
Total noninterest income
|
| | | | 2,127 | | | | | | 1,318 | | | | | | 1,874 | | | | | | 1,786 | | | | | | 1,369 | | |
Total noninterest expense
|
| | | | 20,088 | | | | | | 14,206 | | | | | | 19,862 | | | | | | 13,125 | | | | | | 10,573 | | |
Income before taxes
|
| | | | 1,882 | | | | | | 1,929 | | | | | | 2,775 | | | | | | 3,658 | | | | | | 1,874 | | |
Income tax expense
|
| | | | 534 | | | | | | 609 | | | | | | 669 | | | | | | 1,844 | | | | | | 743 | | |
Net income
|
| | | | 1,348 | | | | | | 1,320 | | | | | | 2,106 | | | | | | 1,814 | | | | | | 1,131 | | |
Composition of Loan Portfolio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate
|
| | | $ | 262,761 | | | | | $ | 175,358 | | | | | $ | 191,930 | | | | | $ | 156,720 | | | | | $ | 116,208 | | |
Residential real estate
|
| | | | 349,306 | | | | | | 300,284 | | | | | | 311,404 | | | | | | 224,246 | | | | | | 140,160 | | |
Commercial
|
| | | | 114,003 | | | | | | 95,569 | | | | | | 83,276 | | | | | | 59,065 | | | | | | 37,873 | | |
Construction and development
|
| | | | 37,925 | | | | | | 18,496 | | | | | | 17,608 | | | | | | 28,272 | | | | | | 29,036 | | |
Consumer and other loans
|
| | | | 7,900 | | | | | | 3,594 | | | | | | 3,244 | | | | | | 1,755 | | | | | | 1,025 | | |
Deposits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NOW Accounts
|
| | | $ | 37,297 | | | | | $ | 25,996 | | | | | $ | 25,088 | | | | | $ | 19,515 | | | | | $ | 12,087 | | |
Money market accounts
|
| | | | 475,670 | | | | | | 346,416 | | | | | | 352,002 | | | | | | 260,850 | | | | | | 146,829 | | |
Savings accounts
|
| | | | 10,188 | | | | | | 2,392 | | | | | | 2,389 | | | | | | 2,660 | | | | | | 2,343 | | |
Certificates of deposit
|
| | | | 111,983 | | | | | | 84,821 | | | | | | 93,578 | | | | | | 75,302 | | | | | | 98,901 | | |
Noninterest-bearing deposits
|
| | | | 187,927 | | | | | | 143,936 | | | | | | 130,245 | | | | | | 100,847 | | | | | | 63,762 | | |
(Dollars in thousands, except per share information)
|
| |
As of and for the Nine Months
Ended September 30, |
| |
As of and for the Years
Ended December 31, |
| ||||||||||||||||||||||||
|
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||||
Selected Professional Performance Ratios | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average assets
(ROAA)(1) |
| | | | 0.21% | | | | | | 0.29% | | | | | | 0.33% | | | | | | 0.39% | | | | | | 0.33% | | |
Return on average equity
(ROAE)(1) |
| | | | 2.25% | | | | | | 3.04% | | | | | | 3.52% | | | | | | 3.30% | | | | | | 3.15% | | |
Return on average tangible common equity (ROATCE)(1)(2)
|
| | | | 2.25% | | | | | | 3.04% | | | | | | 3.52% | | | | | | 3.30% | | | | | | 3.15% | | |
Net interest margin(3)
|
| | | | 3.43% | | | | | | 3.59% | | | | | | 3.60% | | | | | | 3.68% | | | | | | 3.59% | | |
Noninterest income / average assets
|
| | | | 0.34% | | | | | | 0.29% | | | | | | 0.29% | | | | | | 0.39% | | | | | | 0.38% | | |
Noninterest expense / average
assets |
| | | | 3.17% | | | | | | 3.09% | | | | | | 3.10% | | | | | | 2.85% | | | | | | 2.95% | | |
Net operating income / average
assets |
| | | | 3.25% | | | | | | 3.40% | | | | | | 3.42% | | | | | | 3.47% | | | | | | 3.37% | | |
Efficiency ratio(4)
|
| | | | 88.37% | | | | | | 83.94% | | | | | | 83.50% | | | | | | 73.84% | | | | | | 78.25% | | |
Per Share Data(6)
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock issued and outstanding
|
| | | | 5,740,486 | | | | | | 4,818,267 | | | | | | 5,923,884 | | | | | | 4,818,267 | | | | | | 3,513,478 | | |
Basic weighted average shares outstanding
|
| | | | 5,882,519 | | | | | | 4,818,267 | | | | | | 4,910,402 | | | | | | 4,705,865 | | | | | | 3,510,365 | | |
Diluted weighted average shares outstanding
|
| | | | 6,085,397 | | | | | | 5,036,983 | | | | | | 5,129,314 | | | | | | 4,913,707 | | | | | | 3,708,461 | | |
Basic earnings per share
|
| | | $ | 0.23 | | | | | $ | 0.27 | | | | | $ | 0.43 | | | | | $ | 0.39 | | | | | $ | 0.32 | | |
Diluted earnings per share
|
| | | | 0.22 | | | | | | 0.26 | | | | | | 0.41 | | | | | | 0.37 | | | | | | 0.30 | | |
Book value per share
|
| | | | 13.58 | | | | | | 12.21 | | | | | | 13.45 | | | | | | 11.95 | | | | | | 10.50 | | |
Tangible book value per share(2)
|
| | | | 13.58 | | | | | | 12.21 | | | | | | 13.45 | | | | | | 11.95 | | | | | | 10.50 | | |
Asset Quality Ratios | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonperforming assets ($)
|
| | | $ | 4,730 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Nonperforming assets / assets
|
| | | | 0.49% | | | | | | 0.00% | | | | | | 0.00% | | | | | | 0.00% | | | | | | 0.00% | | |
Nonperforming loans(5) / loans
|
| | | | 0.62% | | | | | | 0.00% | | | | | | 0.00% | | | | | | 0.00% | | | | | | 0.00% | | |
Net charge-offs (recoveries) to average loans
|
| | | | 0.00% | | | | | | 0.00% | | | | | | 0.00% | | | | | | 0.00% | | | | | | 0.00% | | |
Allowance for loan losses / total
loans |
| | | | 0.84% | | | | | | 0.90% | | | | | | 0.94% | | | | | | 0.96% | | | | | | 1.09% | | |
Allowance for loan losses / nonperforming loans(7)
|
| | | | 136.34% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Professional Capital Ratios | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tier 1 leverage ratio
|
| | | | 8.4% | | | | | | 8.8% | | | | | | 11.0% | | | | | | 11.3% | | | | | | 9.8% | | |
Common equity tier 1 capital ratio
|
| | | | 11.5% | | | | | | 11.8% | | | | | | 15.7% | | | | | | 14.1% | | | | | | 12.0% | | |
Tier 1 risk-based capital ratio
|
| | | | 11.5% | | | | | | 11.8% | | | | | | 15.7% | | | | | | 14.1% | | | | | | 12.0% | | |
Total risk-based capital ratio
|
| | | | 12.5% | | | | | | 12.9% | | | | | | 16.9% | | | | | | 15.2% | | | | | | 13.2% | | |
Tangible common equity / tangible assets(2)
|
| | | | 8.1% | | | | | | 8.4% | | | | | | 10.9% | | | | | | 10.5% | | | | | | 9.6% | | |
Bank Capital Ratios | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tier 1 leverage ratio
|
| | | | 8.3% | | | | | | 8.5% | | | | | | 8.6% | | | | | | 8.7% | | | | | | 8.8% | | |
Common equity tier 1 capital ratio
|
| | | | 11.3% | | | | | | 11.5% | | | | | | 12.3% | | | | | | 10.8% | | | | | | 10.7% | | |
Tier 1 risk-based capital ratio
|
| | | | 11.3% | | | | | | 11.5% | | | | | | 12.3% | | | | | | 10.8% | | | | | | 10.7% | | |
Total risk-based capital ratio
|
| | | | 12.4% | | | | | | 12.6% | | | | | | 13.4% | | | | | | 12.0% | | | | | | 12.0% | | |
Tangible common equity / tangible assets(2)
|
| | | | 8.0% | | | | | | 8.2% | | | | | | 8.5% | | | | | | 8.1% | | | | | | 8.5% | | |
(Dollars in thousands, except per share
information) |
| |
As of and for the
Nine Months Ended September 30, |
| |
As of and for the Years
Ended December 31, |
| ||||||||||||||||||||||||
|
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||||
Balance Sheet Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Cash and due from banks
|
| | | $ | 80,790 | | | | | $ | 66,487 | | | | | $ | 66,628 | | | | | $ | 56,016 | | | | | $ | 48,616 | | |
Federal funds sold
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Investment securities
|
| | | | 27,668 | | | | | | 35,035 | | | | | | 33,520 | | | | | | 18,264 | | | | | | 15,003 | | |
Loans, net
|
| | | | 559,975 | | | | | | 533,967 | | | | | | 551,364 | | | | | | 458,869 | | | | | | 361,036 | | |
Total assets
|
| | | | 676,819 | | | | | | 643,570 | | | | | | 662,324 | | | | | | 539,184 | | | | | | 432,813 | | |
Total deposits
|
| | | | 577,906 | | | | | | 522,960 | | | | | | 524,231 | | | | | | 443,965 | | | | | | 347,127 | | |
FHLB advances
|
| | | | 30,000 | | | | | | 60,000 | | | | | | 75,000 | | | | | | 39,000 | | | | | | 36,000 | | |
Total liabilities
|
| | | | 620,375 | | | | | | 595,169 | | | | | | 611,519 | | | | | | 496,037 | | | | | | 394,211 | | |
Total shareholders’ equity
|
| | | | 56,444 | | | | | | 48,401 | | | | | | 50,805 | | | | | | 43,147 | | | | | | 38,601 | | |
Tangible common equity(2)
|
| | | | 56,444 | | | | | | 48,401 | | | | | | 50,805 | | | | | | 43,147 | | | | | | 38,601 | | |
Income Statement Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total interest income
|
| | | $ | 24,317 | | | | | $ | 20,438 | | | | | $ | 28,240 | | | | | $ | 21,303 | | | | | $ | 16,765 | | |
Total interest expense
|
| | | | 7,664 | | | | | | 4,891 | | | | | | 7,073 | | | | | | 4,012 | | | | | | 2,625 | | |
Net interest income
|
| | | | 16,653 | | | | | | 15,546 | | | | | | 21,167 | | | | | | 17,292 | | | | | | 14,140 | | |
Provision for loan losses
|
| | | | 367 | | | | | | 712 | | | | | | 1,149 | | | | | | 921 | | | | | | 640 | | |
Total noninterest income
|
| | | | 1,140 | | | | | | 830 | | | | | | 1,257 | | | | | | 1,309 | | | | | | 1,168 | | |
Total noninterest expense
|
| | | | 10,121 | | | | | | 9,054 | | | | | | 12,326 | | | | | | 10,637 | | | | | | 8,975 | | |
Income before taxes
|
| | | | 7,305 | | | | | | 6,611 | | | | | | 8,949 | | | | | | 7,042 | | | | | | 5,693 | | |
Income tax expense
|
| | | | 1,844 | | | | | | 1,737 | | | | | | 2,141 | | | | | | 3,080 | | | | | | 2,214 | | |
Net income
|
| | | | 5,461 | | | | | | 4,874 | | | | | | 6,808 | | | | | | 3,963 | | | | | | 3,479 | | |
Composition of Loan Portfolio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate
|
| | | $ | 404,087 | | | | | $ | 372,252 | | | | | $ | 384,697 | | | | | $ | 298,677 | | | | | $ | 240,623 | | |
Residential real estate
|
| | | | 64,985 | | | | | | 66,022 | | | | | | 69,568 | | | | | | 72,006 | | | | | | 60,500 | | |
Commercial
|
| | | | 72,902 | | | | | | 75,563 | | | | | | 80,172 | | | | | | 61,661 | | | | | | 46,408 | | |
Construction and development
|
| | | | 18,713 | | | | | | 22,129 | | | | | | 18,747 | | | | | | 28,629 | | | | | | 13,932 | | |
Consumer and other loans
|
| | | | 4,882 | | | | | | 3,180 | | | | | | 3,408 | | | | | | 2,210 | | | | | | 3,061 | | |
Deposits | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
NOW accounts
|
| | | $ | 17,654 | | | | | $ | 19,401 | | | | | $ | 15,196 | | | | | $ | 14,330 | | | | | $ | 10,100 | | |
Money market accounts
|
| | | | 166,184 | | | | | | 131,331 | | | | | | 105,969 | | | | | | 156,768 | | | | | | 117,716 | | |
Savings accounts
|
| | | | 3,549 | | | | | | 4,611 | | | | | | 3,751 | | | | | | 3,067 | | | | | | 2,810 | | |
Certificates of deposit
|
| | | | 243,211 | | | | | | 248,199 | | | | | | 282,321 | | | | | | 163,000 | | | | | | 123,711 | | |
Noninterest-bearing deposits
|
| | | | 147,308 | | | | | | 119,419 | | | | | | 116,995 | | | | | | 106,800 | | | | | | 92,790 | | |
(Dollars in thousands, except per share
information) |
| |
As of and for the
Nine Months Ended September 30, |
| |
As of and for the Years
Ended December 31, |
| ||||||||||||||||||||||||
|
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||||
Selected Marquis Performance Ratios
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Return on average assets (ROAA)(1)
|
| | | | 1.11% | | | | | | 1.10% | | | | | | 1.13% | | | | | | 0.81% | | | | | | 0.86% | | |
Return on average equity (ROAE)(1)
|
| | | | 13.53% | | | | | | 14.15% | | | | | | 14.38% | | | | | | 9.58% | | | | | | 9.13% | | |
Return on average tangible common equity
(ROATCE)(1)(2) |
| | | | 13.53% | | | | | | 14.15% | | | | | | 14.38% | | | | | | 9.58% | | | | | | 9.13% | | |
Net interest margin(3)(4)
|
| | | | 3.48% | | | | | | 3.60% | | | | | | 3.60% | | | | | | 3.64% | | | | | | 3.59% | | |
Noninterest income / average assets
|
| | | | 0.23% | | | | | | 0.19% | | | | | | 0.21% | | | | | | 0.27% | | | | | | 0.29% | | |
Noninterest expense / average assets
|
| | | | 2.05% | | | | | | 2.04% | | | | | | 2.05% | | | | | | 2.18% | | | | | | 2.22% | | |
Net operating income / average assets
|
| | | | 1.11% | | | | | | 1.10% | | | | | | 1.13% | | | | | | 0.81% | | | | | | 0.86% | | |
Efficiency ratio(5)
|
| | | | 56.88% | | | | | | 55.28% | | | | | | 54.97% | | | | | | 57.19% | | | | | | 58.63% | | |
Per Share Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Common stock issued and outstanding
|
| | | | 3,419,188 | | | | | | 3,411,946 | | | | | | 3,411,946 | | | | | | 3,394,690 | | | | | | 3,376,759 | | |
Basic weighted average shares
outstanding |
| | | | 3,416,730 | | | | | | 3,406,258 | | | | | | 3,407,680 | | | | | | 3,390,525 | | | | | | 3,410,566 | | |
Diluted weighted average shares outstanding
|
| | | | 3,811,038 | | | | | | 3,556,299 | | | | | | 3,562,681 | | | | | | 3,462,587 | | | | | | 3,507,127 | | |
Basic earnings per share
|
| | | $ | 1.60 | | | | | $ | 1.43 | | | | | $ | 2.00 | | | | | $ | 1.17 | | | | | $ | 1.02 | | |
Diluted earnings per share
|
| | | | 1.43 | | | | | | 1.37 | | | | | | 1.91 | | | | | | 1.14 | | | | | | 0.99 | | |
Book value per share
|
| | | | 16.51 | | | | | | 14.19 | | | | | | 14.89 | | | | | | 12.71 | | | | | | 11.43 | | |
Tangible book value per share(2)
|
| | | | 16.51 | | | | | | 14.19 | | | | | | 14.89 | | | | | | 12.71 | | | | | | 11.43 | | |
Asset Quality Ratios | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Nonperforming assets ($)
|
| | | $ | 1,818 | | | | | $ | 2,404 | | | | | $ | 2,112 | | | | | $ | 2,406 | | | | | $ | — | | |
Nonperforming assets / assets
|
| | | | 0.27% | | | | | | 0.37% | | | | | | 0.32% | | | | | | 0.45% | | | | | | — | | |
Nonperforming loans / loans
|
| | | | 0.02% | | | | | | 0.45% | | | | | | 0.07% | | | | | | 0.51% | | | | | | — | | |
Net charge-offs (recoveries) to average loans
|
| | | | (0.01)% | | | | | | 0.00% | | | | | | 0.09% | | | | | | 0.08% | | | | | | 0.00% | | |
Allowance for loan losses / total loans
|
| | | | 0.94% | | | | | | 0.91% | | | | | | 0.87% | | | | | | 0.91% | | | | | | 0.99% | | |
Allowance for loan losses / nonperforming loans
|
| | | | 4,812.73% | | | | | | 204.41% | | | | | | 1,203.71% | | | | | | 174.52% | | | | | | N/A | | |
Marquis Capital Ratios | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tier 1 leverage ratio
|
| | | | 8.4% | | | | | | 7.9% | | | | | | 8.1% | | | | | | 8.2% | | | | | | 9.4% | | |
Common equity tier 1 capital
ratio |
| | | | 9.7% | | | | | | 8.9% | | | | | | 8.9% | | | | | | 9.2% | | | | | | 10.6% | | |
Tier 1 risk-based capital ratio
|
| | | | 9.7% | | | | | | 8.9% | | | | | | 8.9% | | | | | | 9.2% | | | | | | 10.6% | | |
Total risk-based capital ratio
|
| | | | 12.3% | | | | | | 11.6% | | | | | | 11.5% | | | | | | 12.2% | | | | | | 14.2% | | |
Tangible common equity / tangible
assets(2) |
| | | | 8.3% | | | | | | 7.5% | | | | | | 7.7% | | | | | | 8.0% | | | | | | 8.9% | | |
(Dollars in thousands, except per share
information) |
| |
As of and for the
Nine Months Ended September 30, |
| |
As of and for the Years
Ended December 31, |
| ||||||||||||||||||||||||
|
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||||
Marquis Bank Capital Ratios | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Tier 1 leverage ratio
|
| | | | 9.7% | | | | | | 9.4% | | | | | | 9.5% | | | | | | 9.7% | | | | | | 11.1% | | |
Common equity tier 1 capital
ratio |
| | | | 11.2% | | | | | | 10.6% | | | | | | 10.5% | | | | | | 10.8% | | | | | | 12.7% | | |
Tier 1 risk-based capital ratio
|
| | | | 11.2% | | | | | | 10.6% | | | | | | 10.5% | | | | | | 10.8% | | | | | | 12.7% | | |
Total risk-based capital ratio
|
| | | | 12.2% | | | | | | 11.5% | | | | | | 11.4% | | | | | | 11.8% | | | | | | 13.7% | | |
Tangible common equity / tangible
assets(2) |
| | | | 9.6% | | | | | | 8.9% | | | | | | 9.0% | | | | | | 9.4% | | | | | | 10.8% | | |
| | |
As of September 30,
|
| |
As of December 31,
|
| ||||||||||||||||||||||||
(Dollars in thousands, except per share data)
|
| |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||
Tangible Common Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total shareholders’ equity
|
| | | $ | 77,972 | | | | | $ | 58,851 | | | | | $ | 79,681 | | | | | $ | 57,592 | | | | | $ | 36,906 | | |
Less: intangible assets
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Tangible common equity
|
| | | $ | 77,972 | | | | | $ | 58,851 | | | | | $ | 79,681 | | | | | $ | 57,592 | | | | | $ | 36,906 | | |
| | |
At or For the Quarter
Ended December 31, |
| |
At or For the Year
Ended December 31, |
| ||||||||||||||||||
(Dollars in thousands, except per share data)
|
| |
2019
|
| |
2018
|
| |
2019
|
| |
2018
|
| ||||||||||||
Tangible Common Equity | | | | | | | | | | | | | | | | | | | | | | | | | |
Total shareholders’ equity
|
| | | $ | 79,302 | | | | | $ | 79,681 | | | | | $ | 79,302 | | | | | $ | 79,681 | | |
Less: intangible assets
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Tangible common equity
|
| | | | 79,302 | | | | | | 79,681 | | | | | | 79,302 | | | | | | 79,681 | | |
| | |
Nine Months Ended
September 30, |
| |
Years Ended December 31,
|
| ||||||||||||||||||||||||
(Dollars in thousands, except per share data)
|
| |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||
Return on Average Tangible Common Equity
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income
|
| | | $ | 1,348 | | | | | $ | 1,320 | | | | | $ | 2,106 | | | | | $ | 1,814 | | | | | $ | 1,131 | | |
Add: intangible asset amortization, net of taxes
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Net income excluding intangible amortization, as adjusted
|
| | | | 1,348 | | | | | | 1,320 | | | | | | 2,106 | | | | | | 1,814 | | | | | | 1,131 | | |
Average total equity
|
| | | | 79,790 | | | | | | 57,989 | | | | | | 59,835 | | | | | | 55,016 | | | | | | 35,880 | | |
Less: average intangible assets
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Divide by average tangible common equity
|
| | | | 79,790 | | | | | | 57,989 | | | | | | 59,835 | | | | | | 55,016 | | | | | | 35,880 | | |
Return on average tangible common equity(1)
|
| | | | 2.25% | | | | | | 3.04% | | | | | | 3.52% | | | | | | 3.30% | | | | | | 3.15% | | |
|
| | |
As of September 30,
|
| |
As of December 31,
|
| ||||||||||||||||||||||||
(Dollars in thousands, except per share data)
|
| |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||
Tangible Book Value Per Share | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total shareholders’ equity
|
| | | $ | 77,972 | | | | | $ | 58,851 | | | | | $ | 79,681 | | | | | $ | 57,592 | | | | | $ | 36,906 | | |
Less: intangible assets
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Tangible common equity
|
| | | | 77,972 | | | | | | 58,851 | | | | | | 79,681 | | | | | | 57,592 | | | | | | 36,906 | | |
Divide by shares of common stock outstanding
|
| | | | 5,740,486 | | | | | | 4,818,267 | | | | | | 5,923,884 | | | | | | 4,818,267 | | | | | | 3,513,478 | | |
Tangible book value per share
|
| | | $ | 13.58 | | | | | $ | 12.21 | | | | | $ | 13.45 | | | | | $ | 11.95 | | | | | $ | 10.50 | | |
| | |
As of September 30,
|
| |
As of December 31,
|
| ||||||||||||||||||||||||
(Dollars in thousands, except per share data)
|
| |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||
Tangible Common Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total shareholders’ equity
|
| | | $ | 56,444 | | | | | $ | 48,401 | | | | | $ | 50,805 | | | | | $ | 43,147 | | | | | $ | 38,601 | | |
Less: intangible assets
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Tangible common equity
|
| | | $ | 56,444 | | | | | $ | 48,401 | | | | | $ | 50,805 | | | | | $ | 43,147 | | | | | $ | 38,601 | | |
|
| | |
Nine Months Ended
September 30, |
| |
Years Ended December 31,
|
| ||||||||||||||||||||||||
(Dollars in thousands, except per share data)
|
| |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||
Return on Average Tangible Common Equity
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Net income
|
| | | $ | 5,461 | | | | | $ | 4,874 | | | | | $ | 6,808 | | | | | $ | 3,963 | | | | | $ | 3,479 | | |
Add: intangible asset amortization, net of taxes
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Net income excluding intangible amortization, as adjusted
|
| | | | 5,461 | | | | | | 4,874 | | | | | | 6,808 | | | | | | 3,963 | | | | | | 3,479 | | |
Average total equity
|
| | | | 53,982 | | | | | | 46,071 | | | | | | 47,018 | | | | | | 41,321 | | | | | | 38,038 | | |
Less: average intangible assets
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Divide by average tangible common equity
|
| | | | 53,982 | | | | | | 46,071 | | | | | | 47,018 | | | | | | 41,321 | | | | | | 38,038 | | |
Return on average tangible common equity(1)
|
| | | | 13.53% | | | | | | 14.15% | | | | | | 14.48% | | | | | | 9.59% | | | | | | 9.15% | | |
|
| | |
As of September 30,
|
| |
As of December 31,
|
| ||||||||||||||||||||||||
(Dollars in thousands, except per share data)
|
| |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||
Tangible common equity / tangible assets
|
| | | | | | |||||||||||||||||||||||||
Total assets
|
| | | $ | 676,819 | | | | | $ | 643,570 | | | | | $ | 662,324 | | | | | $ | 539,184 | | | | | $ | 432,813 | | |
Less: intangible assets
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Tangible assets
|
| | | | 676,819 | | | | | | 643,570 | | | | | | 662,324 | | | | | | 539,184 | | | | | | 432,813 | | |
Tangible common equity / tangible assets
|
| | | | 8.3% | | | | | | 7.5% | | | | | | 7.7% | | | | | | 8.0% | | | | | | 8.9% | | |
| | |
As of September 30,
|
| |
As of December 31,
|
| ||||||||||||||||||||||||
(Dollars in thousands, except per share data)
|
| |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||
Tangible Book Value Per Share | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total shareholders’ equity
|
| | | $ | 56,444 | | | | | $ | 48,401 | | | | | $ | 50,805 | | | | | $ | 43,147 | | | | | $ | 38,601 | | |
Less: intangible assets
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Tangible common equity
|
| | | | 56,444 | | | | | | 48,401 | | | | | | 50,805 | | | | | | 43,147 | | | | | | 38,601 | | |
Divide by shares of common stock outstanding
|
| | | | 3,419,188 | | | | | | 3,411,946 | | | | | | 3,411,946 | | | | | | 3,394,690 | | | | | | 3,376,759 | | |
Tangible book value per share
|
| | | $ | 16.51 | | | | | $ | 14.19 | | | | | $ | 14.89 | | | | | $ | 12.71 | | | | | $ | 11.43 | | |
| | | | | | | | | | | | | | |
Merger Adjustments
|
| |||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Professional
Holding Corp. |
| |
Marquis
Bancorp, Inc. |
| |
Debit
|
| | | | | | | |
Credit
|
| | | | | | | |
Pro
Forma Combined |
| |||||||||||||||
Assets | | | | | | | | | |||||||||||||||||||||||||||||||||||
Cash and cash equivalents
|
| | | $ | 130,495 | | | | | $ | 80,790 | | | | | | | | | | | | | | | | | $ | 5,604 | | | | | | a | | | | | $ | 205,681 | | |
Securities available for sale, at fair value
|
| | | | 28,236 | | | | | | 26,171 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 54,407 | | |
Securities held to maturity
|
| | | | 224 | | | | | | 1,498 | | | | | | | | | | | | | | | | | | 5 | | | | | | b | | | | | | 1,717 | | |
Equity Securities
|
| | | | 975 | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 975 | | |
FRB and FHLB stock, at cost
|
| | | | 4,783 | | | | | | 1,871 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 6,654 | | |
Loans held for sale
|
| | | | 1,333 | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,333 | | |
Loans, net of unearned income
|
| | | | 769,779 | | | | | | 565,269 | | | | | | | | | | | | | | | | | | 13,032 | | | | | | c | | | | | | 1,322,016 | | |
Less allowance for loan losses
|
| | | | (6,449) | | | | | | (5,294) | | | | | | 5,294 | | | | | | c | | | | | | | | | | | | | | | | | | (6,449) | | |
Net loans
|
| | | | 764,663 | | | | | | 559,975 | | | | | | 5,294 | | | | | | | | | | | | 13,032 | | | | | | | | | | | | 1,316,900 | | |
Premises and equipment (net)
|
| | | | 3,999 | | | | | | 1,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4,999 | | |
Bank owned life insurance
|
| | | | 16,728 | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 16,728 | | |
Other real estate owned, net of valuation allowance
|
| | | | — | | | | | | 1,708 | | | | | | | | | | | | | | | | | | 700 | | | | | | d | | | | | | 1,008 | | |
Core deposit intangible
|
| | | | — | | | | | | — | | | | | | 5,654 | | | | | | e | | | | | | | | | | | | | | | | | | 5,654 | | |
Goodwill
|
| | | | — | | | | | | — | | | | | | 36,259 | | | | | | f | | | | | | | | | | | | | | | | | | 36,259 | | |
Deferred tax asset, net
|
| | | | 1,627 | | | | | | 1,594 | | | | | | 588 | | | | | | g | | | | | | | | | | | | | | | | | | 3,809 | | |
Other assets
|
| | | | 11,463 | | | | | | 2,212 | | | | | | 2,518 | | | | | | h | | | | | | | | | | | | | | | | | | 16,193 | | |
Total assets
|
| | | $ | 963,193 | | | | | $ | 676,819 | | | | | | 50,313 | | | | | | | | | | | | 19,341 | | | | | | | | | | | $ | 1,670,984 | | |
Liabilities | | | | | | | | | |||||||||||||||||||||||||||||||||||
Non-interest-bearing demand deposits
|
| | | | 187,927 | | | | | | 147,308 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 335,235 | | |
Interest bearing deposits
|
| | | | 635,138 | | | | | | 430,598 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,065,736 | | |
Total deposits
|
| | | | 823,065 | | | | | | 577,906 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,400,971 | | |
Other borrowed funds
|
| | | | 50,000 | | | | | | 30,000 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 80,000 | | |
Subordinated debt, net of issuance costs
|
| | | | — | | | | | | 9,710 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 9,710 | | |
Other liabilities
|
| | | | 12,156 | | | | | | 2,759 | | | | | | | | | | | | | | | | | | 2,518 | | | | | | h | | | | | | 17,433 | | |
Total liabilities
|
| | | | 885,221 | | | | | | 620,375 | | | | | | | | | | | | | | | | | | 2,518 | | | | | | | | | | | | 1,508,114 | | |
Shareholders’ equity | | | | | | | | | |||||||||||||||||||||||||||||||||||
Common stock and surplus
|
| | | | 72,572 | | | | | | 36,096 | | | | | | 36,096 | | | | | | i | | | | | | 84,898 | | | | | | i | | | | | | 157,470 | | |
Retained earnings
|
| | | | 5,463 | | | | | | 20,301 | | | | | | 20,301 | | | | | | i | | | | | | | | | | | | | | | | | | 5,463 | | |
Accumulated other comprehensive
income |
| | | | (63) | | | | | | 47 | | | | | | 47 | | | | | | b | | | | | | | | | | | | | | | | | | (63) | | |
Total shareholders’ equity
|
| | | | 77,972 | | | | | | 56,444 | | | | | | 56,444 | | | | | | | | | | | | 84,898 | | | | | | | | | | | | 162,870 | | |
Total liabilities and shareholders’ equity
|
| | | $ | 963,193 | | | | | $ | 676,819 | | | | | | 56,444 | | | | | | | | | | | | 87,416 | | | | | | | | | | | $ | 1,670,984 | | |
|
(Dollars in thousands)
|
| |
Professional
Holding Corp. |
| |
Marquis
Bancorp, Inc. |
| |
Pro
Forma Adjustments |
| | | | | | | |
Pro
Forma Combined |
| ||||||||||||
Interest and dividend income | | | | | | | |||||||||||||||||||||||||
Interest and fees on loans
|
| | | $ | 25,633 | | | | | $ | 26,797 | | | | | $ | 3,258 | | | | | | j | | | | | $ | 55,688 | | |
Interest income on securities and restricted stock
|
| | | | 829 | | | | | | 664 | | | | | | | | | | | | | | | | | | 1,493 | | |
Other interest income
|
| | | | 1,288 | | | | | | 779 | | | | | | | | | | | | | | | | | | 2,067 | | |
Total interest and dividend income
|
| | | | 27,750 | | | | | | 28,240 | | | | | | 3,258 | | | | | | | | | | | | 59,248 | | |
Interest expense | | | | | | | |||||||||||||||||||||||||
Interest expense on deposits
|
| | | | 5,104 | | | | | | 5,473 | | | | | | | | | | | | | | | | | | 10,577 | | |
Other interest expense
|
| | | | 733 | | | | | | 1,600 | | | | | | | | | | | | | | | | | | 2,333 | | |
Total interest expense
|
| | | | 5,837 | | | | | | 7,073 | | | | | | — | | | | | | | | | | | | 12,910 | | |
Net interest income
|
| | | | 21,913 | | | | | | 21,167 | | | | | | 3,258 | | | | | | | | | | | | 46,338 | | |
Provision for loan losses
|
| | | | 1,150 | | | | | | 1,149 | | | | | | | | | | | | | | | | | | 2,299 | | |
Net interest income after provision for loan losses
|
| | | | 20,763 | | | | | | 20,018 | | | | | | 3,258 | | | | | | | | | | | | 44,039 | | |
Noninterest income | | | | | | | |||||||||||||||||||||||||
Service charges on deposit accounts
|
| | | | 283 | | | | | | 750 | | | | | | | | | | | | | | | | | | 1,033 | | |
Income from Company owned life insurance
|
| | | | 288 | | | | | | — | | | | | | | | | | | | | | | | | | 288 | | |
Gain on sale of loans, net of commissions
|
| | | | — | | | | | | 250 | | | | | | | | | | | | | | | | | | 250 | | |
Other operating income
|
| | | | 1,303 | | | | | | 257 | | | | | | | | | | | | | | | | | | 1,560 | | |
Total non-interest income
|
| | | | 1,874 | | | | | | 1,257 | | | | | | — | | | | | | | | | | | | 3,131 | | |
Noninterest expense | | | | | | | |||||||||||||||||||||||||
Salaries and employee benefits
|
| | | | 13,538 | | | | | | 7,320 | | | | | | | | | | | | | | | | | | 20,858 | | |
Net occupancy and depreciation expense
|
| | | | 1,872 | | | | | | 1,335 | | | | | | | | | | | | | | | | | | 3,207 | | |
Data processing
|
| | | | 624 | | | | | | 657 | | | | | | | | | | | | | | | | | | 1,281 | | |
Marketing
|
| | | | 430 | | | | | | 193 | | | | | | | | | | | | | | | | | | 623 | | |
Professional fees
|
| | | | 693 | | | | | | 415 | | | | | | | | | | | | | | | | | | 1,108 | | |
Regulatory assessments
|
| | | | 535 | | | | | | 442 | | | | | | | | | | | | | | | | | | 977 | | |
Amortization on intangibles
|
| | | | — | | | | | | — | | | | | | 565 | | | | | | k | | | | | | 565 | | |
Other noninterest expense
|
| | | | 2,170 | | | | | | 1,964 | | | | | | | | | | | | | | | | | | 4,134 | | |
Total non-interest expense
|
| | | | 19,862 | | | | | | 12,326 | | | | | | 565 | | | | | | | | | | | | 32,753 | | |
Net income before taxes
|
| | | | 2,775 | | | | | | 8,949 | | | | | | 2,693 | | | | | | | | | | | | 14,417 | | |
Income tax expenses (benefit)
|
| | | | 669 | | | | | | 2,141 | | | | | | 681 | | | | | | l | | | | | | 3,491 | | |
Net income
|
| | | $ | 2,106 | | | | | $ | 6,808 | | | | | $ | 2,012 | | | | | | | | | | | $ | 10,926 | | |
Basic earnings per common share
|
| | | $ | 0.43 | | | | | $ | 2.00 | | | | | | | | | | | | | | | | | $ | 1.21 | | |
Diluted earnings per common share
|
| | | $ | 0.41 | | | | | $ | 1.91 | | | | | | | | | | | | | | | | | $ | 1.16 | | |
Weighted average common shares outstanding
|
| | | | 4,910,401 | | | | | | 3,407,680 | | | | | | 697,893 | | | | | | m | | | | | | 9,015,974 | | |
Weighted average diluted common shares outstanding
|
| | | | 5,129,314 | | | | | | 3,562,681 | | | | | | 729,637 | | | | | | m | | | | | | 9,421,632 | | |
(Dollars in thousands)
|
| |
Professional
Holding Corp. |
| |
Marquis
Bancorp, Inc. |
| |
Pro
Forma Adjustments |
| | | | | | | |
Pro
Forma Combined |
| ||||||||||||
Interest and dividend income | | | | | | | |||||||||||||||||||||||||
Interest and fees on loans
|
| | | $ | 26,289 | | | | | $ | 22,849 | | | | | $ | 2,444 | | | | | | j | | | | | $ | 51,582 | | |
Interest income on securities and restricted
stock |
| | | | 504 | | | | | | 609 | | | | | | | | | | | | | | | | | | 1,113 | | |
Other interest income
|
| | | | 1,807 | | | | | | 859 | | | | | | | | | | | | | | | | | | 2,666 | | |
Total interest and dividend income
|
| | | | 28,600 | | | | | | 24,317 | | | | | | 2,444 | | | | | | | | | | | | 55,361 | | |
Interest expense | | | | | | | |||||||||||||||||||||||||
Interest expense on deposits
|
| | | | 7,200 | | | | | | 6,387 | | | | | | | | | | | | | | | | | | 13,587 | | |
Other interest expense
|
| | | | 795 | | | | | | 1,277 | | | | | | | | | | | | | | | | | | 2,072 | | |
Total interest expense
|
| | | | 7,995 | | | | | | 7,664 | | | | | | | | | | | | | | | | | | 15,659 | | |
Net interest income
|
| | | | 20,605 | | | | | | 16,653 | | | | | | 2,444 | | | | | | | | | | | | 39,702 | | |
Provision for loan losses
|
| | | | 762 | | | | | | 367 | | | | | | | | | | | | | | | | | | 1,129 | | |
Net interest income after provision for loan
losses |
| | | | 19,843 | | | | | | 16,286 | | | | | | 2,444 | | | | | | | | | | | | 38,573 | | |
Non-interest income | | | | | | | |||||||||||||||||||||||||
Service charges on deposit accounts
|
| | | | 542 | | | | | | 593 | | | | | | — | | | | | | | | | | | | 1,135 | | |
Income from Company owned life insurance
|
| | | | 278 | | | | | | — | | | | | | — | | | | | | | | | | | | 278 | | |
Gain on sale of mortgage loans, net of commissions
|
| | | | — | | | | | | 312 | | | | | | — | | | | | | | | | | | | 312 | | |
Other operating income
|
| | | | 1,307 | | | | | | 235 | | | | | | — | | | | | | | | | | | | 1,542 | | |
Total non-interest income
|
| | | | 2,127 | | | | | | 1,140 | | | | | | — | | | | | | | | | | | | 3,267 | | |
Non-interest expense | | | | | | | |||||||||||||||||||||||||
Salaries and employee benefits
|
| | | | 13,534 | | | | | | 6,155 | | | | | | | | | | | | | | | | | | 19,689 | | |
Net occupancy and depreciation expense
|
| | | | 1,824 | | | | | | 1,111 | | | | | | | | | | | | | | | | | | 2,935 | | |
Data processing
|
| | | | 489 | | | | | | 456 | | | | | | | | | | | | | | | | | | 945 | | |
Marketing
|
| | | | 400 | | | | | | 96 | | | | | | | | | | | | | | | | | | 496 | | |
Professional fees
|
| | | | 1,106 | | | | | | 516 | | | | | | | | | | | | | | | | | | 1,622 | | |
Regulatory assessments
|
| | | | 353 | | | | | | 199 | | | | | | | | | | | | | | | | | | 552 | | |
Amortization expense
|
| | | | — | | | | | | — | | | | | | 424 | | | | | | k | | | | | | 424 | | |
Other non-interest expense
|
| | | | 2,382 | | | | | | 1,588 | | | | | | | | | | | | | | | | | | 3,970 | | |
Total non-interest expense
|
| | | | 20,088 | | | | | | 10,121 | | | | | | 424 | | | | | | l | | | | | | 30,633 | | |
Net income before taxes
|
| | | | 1,882 | | | | | | 7,305 | | | | | | 2,020 | | | | | | | | | | | | 11,207 | | |
Income tax expenses (benefit)
|
| | | | 534 | | | | | | 1,844 | | | | | | 511 | | | | | | l | | | | | | 2,889 | | |
Net income
|
| | | $ | 1,348 | | | | | $ | 5,461 | | | | | $ | 1,509 | | | | | | | | | | | $ | 8,318 | | |
Basic earnings per common share
|
| | | $ | 0.23 | | | | | $ | 1.60 | | | | | | | | | | | | | | | | | $ | 0.83 | | |
Diluted earnings per common share
|
| | | $ | 0.22 | | | | | $ | 1.43 | | | | | | | | | | | | | | | | | $ | 0.78 | | |
Weighted average common shares outstanding
|
| | | | 5,882,519 | | | | | | 3,416,730 | | | | | | 699,746 | | | | | | m | | | | | | 9,998,995 | | |
Weighted average diluted common shares outstanding
|
| | | | 6,085,397 | | | | | | 3,811,038 | | | | | | 780,501 | | | | | | m | | | | | | 10,676,936 | | |
| Purchase Price | | | | ||||||||||
| (Dollars in thousands) | | | | ||||||||||
|
Fair value of consideration
|
| | | | | | | | | $ | 84,898 | | |
|
Total pro forma purchase price
|
| | | | | | | | | | 84,898 | | |
| Fair value of assets acquired | | | | ||||||||||
|
Cash and cash equivalents
|
| | | $ | 75,186 | | | | |||||
|
Securities
|
| | | | 27,664 | | | | |||||
|
Net loans
|
| | | | 552,237 | | | | |||||
|
Premises and equipment (net)
|
| | | | 1,000 | | | | |||||
|
Bank owned life insurance
|
| | | | — | | | | |||||
|
Other real estate owned, net of valuation allowance
|
| | | | 1,008 | | | | |||||
|
Core deposit intangibles, net
|
| | | | 5,654 | | | | |||||
|
Deferred tax asset
|
| | | | 588 | | | | |||||
|
Other assets
|
| | | | 5,677 | | | | |||||
|
Total assets
|
| | | | 669,014 | | | |
| Fair value of liabilities assumed | | | | ||||||||||
|
Deposits
|
| | | | 577,906 | | | | |||||
|
Long-term borrowings
|
| | | | 39,710 | | | | |||||
|
Other liabilities
|
| | | | 2,759 | | | | |||||
|
Total liabilities
|
| | | | 620,375 | | | | |||||
|
Net assets acquired
|
| | | | | | | | | | 48,639 | | |
|
Preliminary pro forma goodwill
|
| | | | | | | | | | 36,259 | | |
| | |
Purchase
Price |
| |
Estimated
Goodwill |
| |
Equity
|
| |||||||||
Up 20%
|
| | | $ | 101,878 | | | | | $ | 53,239 | | | | | $ | 179,850 | | |
Up 10%
|
| | | | 93,388 | | | | | | 44,749 | | | | | | 171,360 | | |
As presented in pro forma
|
| | | | 84,898 | | | | | | 36,259 | | | | | | 162,870 | | |
Down 10%
|
| | | | 76,408 | | | | | | 27,769 | | | | | | 154,380 | | |
Down 20%
|
| | | | 67,918 | | | | | | 19,280 | | | | | | 145,896 | | |
| | |
As of and for the
nine months ended September 30, 2019 |
| |
As of and for the
year ended December 31, 2018 |
| ||||||
Professional Holding Corp. Historical | | | | ||||||||||
Net income per common share, basic
|
| | | $ | 0.23 | | | | | $ | 0.43 | | |
Net income per common share, diluted
|
| | | | 0.22 | | | | | | 0.41 | | |
Book value per common share, basic
|
| | | | 13.58 | | | | | | 13.45 | | |
Tangible book value per share, basic(1)
|
| | | | 13.58 | | | | | | 13.45 | | |
Cash dividends declared per share
|
| | | | — | | | | | | — | | |
Marquis Bancorp, Inc. Historical | | | | ||||||||||
Net income per common share, basic
|
| | | | 1.60 | | | | | | 2.00 | | |
Net income per common share, diluted
|
| | | | 1.43 | | | | | | 1.91 | | |
Book value per common share, basic
|
| | | | 16.51 | | | | | | 14.89 | | |
Tangible book value per share, basic(1)
|
| | | | 16.51 | | | | | | 14.89 | | |
Cash dividends declared per share
|
| | | | 0.22 | | | | | | — | | |
Pro Forma Combined | | | | ||||||||||
Net income per common share, basic
|
| | | | 0.83 | | | | | | 1.21 | | |
Net income per common share, diluted
|
| | | | 0.78 | | | | | | 1.16 | | |
Book value per common share, basic
|
| | | | 16.52 | | | | | | 15.84 | | |
Tangible book value per share, basic
|
| | | | 12.27 | | | | | | 12.22 | | |
Cash dividends declared per share
|
| | | | — | | | | | | — | | |
| | |
As of and for the
nine months ended September 30, 2019 |
| |
As of and for the
year ended December 31, 2018 |
| ||||||
Pro Forma Marquis Bancorp, Inc. Equivalent | | | | ||||||||||
Net income per common share, basic
|
| | | | 1.00 | | | | | | 1.46 | | |
Net income per common share, diluted
|
| | | | 0.94 | | | | | | 1.40 | | |
Book value per common share, basic
|
| | | | 19.90 | | | | | | 19.08 | | |
Tangible book value per share, basic
|
| | | | 14.78 | | | | | | 14.73 | | |
Cash dividends declared per share
|
| | | | — | | | | | | — | | |
| | |
Actual
|
| |||||||||
| | |
September 30,
2019 |
| |
December 31,
2018 |
| ||||||
Professional End of Period Shares Outstanding
|
| | | | 5,740,486 | | | | | | 5,923,884 | | |
Marquis End of Period Shares Outstanding
|
| | | | 3,419,188 | | | | | | 3,411,946 | | |
Professional End of Period Diluted Shares Outstanding
|
| | | | 5,921,719 | | | | | | 6,118,667 | | |
Marquis End of Period Diluted Shares Outstanding
|
| | | | 4,105,517 | | | | | | 3,914,385 | | |
| | |
Pro Forma
|
| |||||||||
Company End of Period Shares Outstanding
|
| | | | 9,859,924 | | | | | | 10,034,597 | | |
Company End of Period Diluted Shares Outstanding
|
| | | | 10,868,046 | | | | | | 10,834,718 | | |
|
Transaction Price / LTM Net Income(1):
|
| | | | 12.3x | | |
|
Transaction Price / 2019E Net Income(2):
|
| | | | 11.8x | | |
|
Transaction Price / Tangible Book Value Per Share(3):
|
| | | | 158.0% | | |
|
Tangible Book Premium/Core Deposits(4):
|
| | | | 10.3% | | |
|
Transaction Price / Total Assets(5):
|
| | | | 12.7% | | |
| Berkshire Bancorp Inc. | | | Blackhawk Bancorp Inc. | |
| River Financial Corp | | | Union Bank | |
| Private Bancorp of America Inc | | | GrandSouth Bancorporation | |
| Embassy Bancorp Inc. | | | Solvay Bank Corp. | |
| ENB Financial Corp | | | Westbury Bancorp Inc. | |
| First Miami Bancorp Inc. | | | Northway Financial Inc. | |
| Bank of Southern California NA | | | Kish Bancorp Inc. | |
| Security Federal Corp. | | | Two Rivers Financial Grp Inc. | |
| BNCCORP, INC. | | | Katahdin Bankshares Corp. | |
| Juniata Valley Financial Corp. | | | Town and Country Finl Corp | |
| Empire Bancorp Inc. | | | BancAffiliated Inc. | |
| South Atlantic Bancshares Inc. | | | Uwharrie Capital Corp | |
| | |
Professional
|
| |
Professional
Peer Group Median |
| |
Professional
Peer Group Mean |
| |
Professional
Peer Group High |
| |
Professional
Peer Group Low |
| |||||||||||||||
Market Capitalization ($M)
|
| | | $ | 65 | | | | | $ | 92 | | | | | $ | 97 | | | | | $ | 190 | | | | | $ | 35 | | |
Price/Tangible Book Value
|
| | | | 149.3% | | | | | | 114.2% | | | | | | 123.9% | | | | | | 191.9% | | | | | | 98.5% | | |
Price/MRQ EPS
|
| | | | 32.2x | | | | | | 12.3x | | | | | | 15.0x | | | | | | 33.7x | | | | | | 7.9x | | |
Dividend Yield
|
| | | | 0.0% | | | | | | 1.4% | | | | | | 1.7% | | | | | | 4.4% | | | | | | 0.0% | | |
Weekly Volume
|
| | | | 0.2% | | | | | | 0.1% | | | | | | 0.1% | | | | | | 0.5% | | | | | | 0.0% | | |
Insider Ownership
|
| | | | 19.4% | | | | | | 15.1% | | | | | | 22.0% | | | | | | 99.7% | | | | | | 0.0% | | |
Institutional Ownership
|
| | | | N/A | | | | | | 3.4% | | | | | | 4.1% | | | | | | 12.1% | | | | | | 0.0% | | |
Last Twelve Months Return
|
| | | | 2.5% | | | | | | -1.1% | | | | | | 1.1% | | | | | | 33.3% | | | | | | -15.7% | | |
Total Assets ($M)
|
| | | $ | 890 | | | | | $ | 855 | | | | | $ | 882 | | | | | $ | 1,132 | | | | | $ | 655 | | |
Total Loans ($M)
|
| | | $ | 723 | | | | | $ | 624 | | | | | $ | 621 | | | | | $ | 968 | | | | | $ | 371.5 | | |
Tangible Common Equity/Tangible Assets
|
| | | | 8.3% | | | | | | 9.0% | | | | | | 9.6% | | | | | | 21.0% | | | | | | 5.4% | | |
NPAs/Assets
|
| | | | 0.16% | | | | | | 0.30% | | | | | | 0.39% | | | | | | 0.91% | | | | | | 0.00% | | |
Last Twelve Months ROAA
|
| | | | 0.41% | | | | | | 0.87% | | | | | | 0.80% | | | | | | 0.99% | | | | | | 0.35% | | |
Last Twelve Months ROAE
|
| | | | 4.93% | | | | | | 8.75% | | | | | | 8.44% | | | | | | 12.04% | | | | | | 2.86% | | |
| American National Banksahres | | | Reliant Bancorp Inc. | |
| Red River Bancshares Inc. | | | ACNB Corp. | |
| Spirit of Texas Bancshares, Inc. | | | PCB Bancorp | |
| Bridgewater Bancshares Inc. | | | Orrstown Financial Services | |
| CapStar Financial Holdings Inc. | | | Unity Bancorp Inc. | |
| Central Valley Community Bancorp | | | FS Bancorp Inc. | |
| BayCom Corp. | | | First Bank | |
| BankFinancial Corp. | | | First Northwest Bancorp | |
| Pacific Mercantile Bancorp | | | First Financial Northwest Inc. | |
| | |
Professional
|
| |
Professional
Peer Group Median |
| |
Professional
Peer Group Mean |
| |
Professional
Peer Group High |
| |
Professional
Peer Group Low |
| |||||||||||||||
Market Capitalization ($M)
|
| | | $ | 261 | | | | | $ | 257 | | | | | $ | 254 | | | | | $ | 397 | | | | | $ | 144 | | |
Price/Tangible Book Value
|
| | | | 136.8% | | | | | | 134.4% | | | | | | 137.6% | | | | | | 181.4% | | | | | | 99.0% | | |
Price/MRQ EPS
|
| | | | 16.5x | | | | | | 13.1x | | | | | | 17.6x | | | | | | 64.3x | | | | | | 9.8x | | |
Dividend Yield
|
| | | | 0.0% | | | | | | 1.5% | | | | | | 1.9% | | | | | | 3.1% | | | | | | 0.7% | | |
Weekly Volume
|
| | | | N/A | | | | | | 0.9% | | | | | | 1.0% | | | | | | 1.6% | | | | | | 0.5% | | |
Insider Ownership
|
| | | | N/A | | | | | | 9.4% | | | | | | 13.0% | | | | | | 34.8% | | | | | | 2.9% | | |
Institutional Ownership
|
| | | | N/A | | | | | | 35.0% | | | | | | 37.0% | | | | | | 64.7% | | | | | | 1.3% | | |
Last Twelve Months Return
|
| | | | N/A | | | | | | -13.1% | | | | | | -11.0% | | | | | | 10.1% | | | | | | -24.4% | | |
Total Assets ($M)
|
| | | $ | 1,665 | | | | | $ | 1,749 | | | | | $ | 1,775 | | | | | $ | 2,418 | | | | | $ | 1,258 | | |
Total Loans ($M)
|
| | | $ | 1,274 | | | | | $ | 1,353 | | | | | $ | 1,351 | | | | | $ | 1,839 | | | | | $ | 886 | | |
Tangible Common Equity/ Tangible Assets
|
| | | | 11.7% | | | | | | 10.6% | | | | | | 10.7% | | | | | | 14.03% | | | | | | 8.10% | | |
NPAs/Assets
|
| | | | 0.15% | | | | | | 0.23% | | | | | | 0.28% | | | | | | 0.84% | | | | | | 0.07% | | |
Last Twelve Months ROAA
|
| | | | 0.90% | | | | | | 0.98% | | | | | | 1.10% | | | | | | 1.74% | | | | | | 0.56% | | |
Last Twelve Months ROAE
|
| | | | 6.92% | | | | | | 8.40% | | | | | | 9.55% | | | | | | 16.53% | | | | | | 4.82% | | |
| | |
Marquis
Contribution to Professional |
| |||
Total assets
|
| | | | 42% | | |
Total loans
|
| | | | 44% | | |
Total deposits
|
| | | | 43% | | |
Total tangible common equity
|
| | | | 30% | | |
2020 Est. Stand-Alone Net Income
|
| | | | 62% | | |
2021 Est. Stand-Alone Net Income
|
| | | | 47% | | |
Marquis Pro Forma Ownership
|
| | | | 43% | | |
Buyer
|
| |
Target
|
|
ChoiceOne Financial Services | | | County Bank Corp. | |
Delmar Bancorp | | | Virginia Partners Bank | |
Veritex Holdings Inc. | | | Green Bancorp Inc. | |
Riverview Financial Corp. | | | CBT Financial Corp. | |
Southern National Bncp of VA | | | Eastern Virginia Bankshares | |
Little Bank Inc. | | | Union Banc Corp. | |
Bay Banks of Virginia Inc. | | | Virginia BanCorp Inc. | |
Access National Corp. | | | Middleburg Financial Corp. | |
Standard Financial Corp. | | | Allegheny Valley Bancorp Inc. | |
Sunflower Financial Inc. | | | Strategic Growth Bancorp Inc. | |
Chemical Financial Corp. | | | Talmer Bancorp Inc. | |
| | |
Marquis/
Professional |
| |
Precedent
Transactions Median |
| |
Precedent
Transactions Mean |
| |
Precedent
Transactions High |
| |
Precedent
Transactions Low |
| |||||||||||||||
Deal Value ($M)
|
| | | $ | 86.3 | | | | | $ | 89.0 | | | | | $ | 282.5 | | | | | $ | 1,117.8 | | | | | $ | 30.7 | | |
Transaction price/Tangible book value per share:
|
| | | | 158.0% | | | | | | 135.4% | | | | | | 148.8% | | | | | | 249.9% | | | | | | 90.0% | | |
Transaction price/Earnings per share
|
| | | | 11.2x | | | | | | 15.2x | | | | | | 16.0x | | | | | | 21.0x | | | | | | 10.9x | | |
Transaction price/Total assets
|
| | | | 12.7% | | | | | | 13.2% | | | | | | 14.0% | | | | | | 22.8% | | | | | | 9.8% | | |
Core deposit premium
|
| | | | 10.3% | | | | | | 4.9% | | | | | | 5.8% | | | | | | 15.2% | | | | | | (1.8)% | | |
Target Total Assets ($M)
|
| | | $ | 680.3 | | | | | $ | 616.6 | | | | | $ | 1,668.3 | | | | | $ | 6,595.9 | | | | | $ | 299.5 | | |
Target NPAs/Assets
|
| | | | 0.27% | | | | | | 1.34% | | | | | | 1.28% | | | | | | 1.81% | | | | | | 0.01% | | |
Target TCE/TA
|
| | | | 9.31% | | | | | | 9.42% | | | | | | 9.27% | | | | | | 10.99% | | | | | | 7.36% | | |
Target LTM ROAA
|
| | | | 1.19% | | | | | | 0.66% | | | | | | 0.60% | | | | | | 1.13% | | | | | | (0.77)% | | |
Discount Rate
|
| |
1.30x
|
| |
1.40x
|
| |
1.50x
|
| |
1.60x
|
| |
1.70x
|
| |||||||||||||||
11.0%
|
| | | $ | 23.34 | | | | | $ | 25.00 | | | | | $ | 26.66 | | | | | $ | 28.33 | | | | | $ | 29.99 | | |
12.0%
|
| | | $ | 22.45 | | | | | $ | 24.04 | | | | | $ | 25.64 | | | | | $ | 27.24 | | | | | $ | 28.84 | | |
13.0%
|
| | | $ | 21.60 | | | | | $ | 23.13 | | | | | $ | 24.67 | | | | | $ | 26.20 | | | | | $ | 27.74 | | |
14.0%
|
| | | $ | 20.79 | | | | | $ | 22.27 | | | | | $ | 23.74 | | | | | $ | 25.22 | | | | | $ | 26.69 | | |
15.0%
|
| | | $ | 20.02 | | | | | $ | 21.44 | | | | | $ | 22.86 | | | | | $ | 24.28 | | | | | $ | 25.69 | | |
Discount Rate
|
| |
10.0x
|
| |
11.0x
|
| |
12.0x
|
| |
13.0x
|
| |
14.0x
|
| |||||||||||||||
11.0%
|
| | | $ | 22.83 | | | | | $ | 24.94 | | | | | $ | 27.06 | | | | | $ | 29.17 | | | | | $ | 31.28 | | |
12.0%
|
| | | $ | 21.96 | | | | | $ | 23.99 | | | | | $ | 26.02 | | | | | $ | 28.05 | | | | | $ | 30.08 | | |
13.0%
|
| | | $ | 21.13 | | | | | $ | 23.08 | | | | | $ | 25.03 | | | | | $ | 26.98 | | | | | $ | 28.93 | | |
14.0%
|
| | | $ | 20.34 | | | | | $ | 22.22 | | | | | $ | 24.09 | | | | | $ | 25.96 | | | | | $ | 27.84 | | |
15.0%
|
| | | $ | 19.59 | | | | | $ | 21.39 | | | | | $ | 23.19 | | | | | $ | 24.99 | | | | | $ | 26.79 | | |
| | |
Professional
|
| |
Marquis
|
| | |
75th Percentile
|
| |
Median
|
| |
25th Percentile
|
| |||||||||||||||
Total Assets ($M)
|
| | | $ | 890.4 | | | | | $ | 680.3 | | | | | | $ | 1,301.4 | | | | | $ | 1,190.5 | | | | | $ | 1,100.4 | | |
TCE / TA
|
| | | | 8.3% | | | | | | 9.3% | | | | | | | 10.7% | | | | | | 10.0% | | | | | | 9.2% | | |
NPAs / Assets
|
| | | | 0.16% | | | | | | 0.27% | | | | | | | 1.10% | | | | | | 0.73% | | | | | | 0.52% | | |
LTM Core ROAA
|
| | | | 0.41% | | | | | | 1.19% | | | | | | | 1.18% | | | | | | 1.05% | | | | | | 0.88% | | |
LTM Core ROAE
|
| | | | 4.9% | | | | | | 12.8% | | | | | | | 10.9% | | | | | | 10.1% | | | | | | 8.6% | | |
Market Capitalization ($M)
|
| | | | — | | | | | | — | | | | | | $ | 171.3 | | | | | $ | 145.0 | | | | | $ | 114.7 | | |
Price / TBV
|
| | | | — | | | | | | — | | | | | | | 134.0% | | | | | | 122.5% | | | | | | 115.9% | | |
Price / 2019 EPS
|
| | | | — | | | | | | — | | | | | | | 13.8x | | | | | | 11.8x | | | | | | 10.9x | | |
Price / 2020 EPS
|
| | | | — | | | | | | — | | | | | | | 12.4x | | | | | | 11.0x | | | | | | 9.9x | | |
YTD Stock Performance
|
| | | | — | | | | | | — | | | | | | | 7.7% | | | | | | 3.1% | | | | | | -3.3% | | |
| | |
Professional
|
| |
Marquis
|
| | |
75th Percentile
|
| |
Median
|
| |
25th Percentile
|
| |||||||||||||||
Total Assets ($M)
|
| | | $ | 890.4 | | | | | $ | 680.3 | | | | | | $ | 3,969.5 | | | | | $ | 2,507.8 | | | | | $ | 1,868.0 | | |
TCE / TA
|
| | | | 8.3% | | | | | | 9.3% | | | | | | | 9.5% | | | | | | 8.8% | | | | | | 8.4% | | |
NPAs / Assets
|
| | | | 0.16% | | | | | | 0.27% | | | | | | | 0.74% | | | | | | 0.37% | | | | | | 0.03% | | |
LTM Core ROAA
|
| | | | 0.41% | | | | | | 1.19% | | | | | | | 1.22% | | | | | | 1.05% | | | | | | 0.89% | | |
LTM Core ROAE
|
| | | | 4.9% | | | | | | 12.8% | | | | | | | 11.4% | | | | | | 10.0% | | | | | | 8.9% | | |
Market Capitalization ($M)
|
| | | | — | | | | | | — | | | | | | $ | 622.8 | | | | | $ | 315.1 | | | | | $ | 218.3 | | |
Price / TBV
|
| | | | — | | | | | | — | | | | | | | 177.8% | | | | | | 163.6% | | | | | | 146.5% | | |
Price / 2019 EPS
|
| | | | — | | | | | | — | | | | | | | 13.8x | | | | | | 13.6x | | | | | | 13.3x | | |
Price / 2020 EPS
|
| | | | — | | | | | | — | | | | | | | 13.8x | | | | | | 13.2x | | | | | | 12.7x | | |
YTD Stock Performance
|
| | | | — | | | | | | — | | | | | | | 5.3% | | | | | | 0.0% | | | | | | -6.7% | | |
| | |
Price Per Share
|
| |
Implied
Exchange Ratio |
| |
1.2048x vs.
Implied |
| |||||||||||||||
| | |
PHC
|
| |
MBI
|
| ||||||||||||||||||
PHC High, MBI High
|
| | | $ | 18.12 | | | | | $ | 20.19 | | | | | | 1.1140x | | | | | | 8.20% | | |
PHC Midpoint, MBI Midpoint
|
| | | $ | 14.44 | | | | | $ | 15.78 | | | | | | 1.0923x | | | | | | 10.30% | | |
PHC Low, MBI Low
|
| | | $ | 11.21 | | | | | $ | 11.89 | | | | | | 1.0605x | | | | | | 13.60% | | |
PHC High, MBI Low
|
| | | $ | 18.12 | | | | | $ | 11.89 | | | | | | 0.6560x | | | | | | 83.70% | | |
PHC Low, MBI High
|
| | | $ | 11.21 | | | | | $ | 20.19 | | | | | | 1.8009x | | | | | | -33.10% | | |
| 2008 | | |
•
Professional Bank raised $13.9 million in capital and commenced banking operations from a single branch in South Miami, FL.
•
Abel L. Iglesias joined the Bank as an Executive Vice President and Chief Lending Officer in April
|
|
| 2013 | | |
•
Abel L. Iglesias joined the Bank as an Executive Vice President and Chief Lending Officer in April
•
Hired a team from a South Florida-based regional bank in May
•
Daniel R. Sheehan, one of our founders, appointed as Chairman of the Bank Board of Directors, or Bank Board, in September and, in connection with our Bank Board and management team, developed a growth and expansion strategy for the Bank
•
Ended the year with approximately $217 million in total assets
|
|
| 2014 | | |
•
Opened our second branch in Coral Gables, FL in January, and relocated our headquarters
•
Completed a $3.3 million private placement in February
•
Effectuated a share exchange to form Professional Holding Corp., with Professional Bank as its wholly owned subsidiary. Daniel R. Sheehan named Chairman and CEO of Professional Holding Corp.
|
|
| 2015 | | |
•
Reported total assets in excess of $250 million as of March 31
•
Completed a $15.0 million private placement in April
|
|
| 2016 | | |
•
Hired a commercial and industrial, or C&I, banking team from a large national bank to establish our Palm Beach Gardens, FL loan production office in February
•
Established a SBA department with bankers from a large regional bank in February
•
Abel L. Iglesias assumed the role of President and Chief Executive Officer of the Bank following the unexpected passing of the Bank's then President and Chief Executive Officer in September
•
Completed a core system conversion to CSI enabling a foundation for greater technological flexibility
|
|
| 2017 | | |
•
Completed an $18.9 million private placement in February
•
Hired a private banking team from a large national bank to establish our loan production office in Boca Raton, FL in March
•
Opened a loan production office in Fort Lauderdale, FL in October
•
Converted our Palm Beach Gardens, FL loan production office to a full-service branch in November
•
Reported total assets in excess of $500 million as of December 31
|
|
| 2018 | | |
•
Hired a senior banker from a large national bank in February to establish a West Palm Beach, FL loan production office, which opened in April
•
Hired a new Chief Risk Officer and Chief Credit Officer
•
Hired a banking team from a large national bank in April for our Dadeland branch (which opened in 2019)
•
Hired senior bankers from a large Southeastern regional bank for our Palm Beach Gardens, FL branch in October
•
Hired a banking team from a large, Southeastern regional bank for our Fort Lauderdale, FL loan production office in October
•
Completed a $20.0 million private placement in December
|
|
| 2019 | | |
•
Hired a private banking team from a large South Florida-based bank in January to establish our Doral, FL loan production office, which opened in July
•
Hired treasury management bankers from a large, Southeastern regional bank in the first quarter
•
Converted our existing loan production office in Boca Raton, FL into a full-service branch in May
•
Opened our fifth branch in Miami, FL (Dadeland) in May
•
Hired the former president of a South Florida-based community bank and a team from a large national bank in May to establish Wellington, FL loan production office, which opened in July
•
In preparation of our initial public offering to more accurately reflect his functional role, Daniel R. Sheehan assumed the title of Chief Executive Officer of the Bank in July with Abel L. Iglesias remaining as President and assuming the additional role of Chief Operating Officer of the Bank
•
Announced a pending merger with Marquis Bancorp, Inc. on August 12
•
Reported total assets of $963.2 million as of September 30
•
Opened our Digital Innovation Center in Cleveland, OH on October 28
|
|
Current Locations
|
| |
Date Loan
Production Office (LPO) Opened |
| |
Date of Branch
Opening / Conversion |
| |
Total Deposits as of
September 30, 2019 (thousands) |
| |||
South Miami
|
| |
—
|
| |
Aug. 2008
|
| | | $ | 306,683 | | |
Coral Gables
|
| |
—
|
| |
Jan. 2014
|
| | | $ | 227,958 | | |
Palm Beach Gardens
|
| |
Feb. 2016
|
| |
Nov. 2017
|
| | | $ | 204,558 | | |
Boca Raton
|
| |
Mar. 2017
|
| |
May 2019
|
| | | $ | 71,161 | | |
Fort Lauderdale LPO
|
| |
Oct. 2017
|
| |
—
|
| | | | — | | |
West Palm Beach LPO
|
| |
Apr. 2018
|
| |
—
|
| | | | — | | |
Dadeland
|
| |
—
|
| |
May 2019
|
| | | $ | 12,705 | | |
Doral LPO
|
| |
Jul. 2019
|
| |
—
|
| | | | — | | |
Wellington LPO
|
| |
Jul. 2019
|
| |
—
|
| | | | — | | |
|
Rolando DiGasbarro
|
| |
•
Founder and principal of Windsor Investment Holdings
•
Former Investment Banker for Lehman Brothers
•
Director since 2014
|
|
|
Carlos M. Garcia
|
| |
•
Founder and CEO of BayBoston Managers LLC and Managing Partner of BayBoston Capital L.P.
•
Current member of the Financial Oversight and Management Board for Puerto Rico
•
Current Chairman of the Board of CFG Partners L.P.
•
Former interim President and CEO, COO and Senior Executive Vice President of Santander Bancorp; and former interim CEO, COO and President at Banco Santander Puerto Rico
•
Former President, CEO and Chairman at the Government Development Bank for Puerto Rico
•
Director since 2015
|
|
|
Jon L. Gorney
|
| |
•
Former CIO of National City Corporation
•
Former Chairman and CEO of National Processing Company
•
Director since 2017
|
|
|
Herbert Martens
|
| |
•
Founder of Professional Bank
•
Managing Partner of Advent Associates, LLC
•
Former President and CEO for NatCity Investment & EVP Wealth Management — National City Corporation
•
Director since 2008
|
|
|
Dr. Lawrence Schimmel
|
| |
•
Founder of Professional Bank
•
Chief Medical Officer of Clinigence Holdings Co.
•
Former Chairman of MegaBank
•
Former CEO of Allied Health Group
•
Director since 2008
|
|
|
Anton V. Schutz
|
| |
•
Founder and Principal of Mendon Capital Advisors Corp.
•
Director since 2015
|
|
Market Area
|
| |
Total
Population 2020 (Estimated) |
| |
Change
2010 – 2020 (%) |
| |
Change
2020 – 2025 (%) |
| |
Median
Household Income 2020 ($) |
| |
Projected
Household Income Change 2020 – 2025 (%) |
| |
Unemployment
Rate (%) |
| ||||||||||||||||||
Miami-Dade County
|
| | | | 2,834,352 | | | | | | 13.5 | | | | | | 6.3 | | | | | | 53,537 | | | | | | 12.1 | | | | | | 3.9 | | |
Broward County
|
| | | | 1,981,920 | | | | | | 13.4 | | | | | | 6.3 | | | | | | 63,317 | | | | | | 11.4 | | | | | | 3.4 | | |
Palm Beach County
|
| | | | 1,508,665 | | | | | | 14.3 | | | | | | 6.5 | | | | | | 66,729 | | | | | | 11.2 | | | | | | 3.6 | | |
Miami-Dade MSA
|
| | | | 6,324,937 | | | | | | 13.7 | | | | | | 6.3 | | | | | | 60,197 | | | | | | 11.5 | | | | | | 3.5 | | |
Florida
|
| | | | 21,794,397 | | | | | | 15.9 | | | | | | 6.6 | | | | | | 58,586 | | | | | | 11.6 | | | | | | 3.3 | | |
United States
|
| | | | 330,342,293 | | | | | | 7.0 | | | | | | 3.3 | | | | | | 66,010 | | | | | | 9.9 | | | | | | 3.5 | | |
Location
|
| |
Street Address
|
| |
City & State
|
|
Bank Branches | | | | ||||
Coral Gables
|
| | 396 Alhambra Circle, Suite 150 | | | Coral Gables, FL | |
South Miami
|
| | 1518 San Ignacio Avenue | | | Coral Gables, FL | |
Palm Beach Gardens
|
| | 5100 PGA Boulevard, Suite 101 | | | Palm Beach Gardens, FL | |
Boca Raton
|
| | 980 N. Federal Highway, Suite 100 | | | Boca Raton, FL | |
Dadeland
|
| | 9150 South Dadeland Boulevard, Suite 104 | | | Miami, FL | |
Location
|
| |
Street Address
|
| |
City & State
|
|
Loan Production Offices | | | | ||||
Doral
|
| | 9690 NW 41 Street, Unit 1 | | | Doral, FL | |
Fort Lauderdale
|
| | 888 East Las Olas Boulevard, Suite 201 | | | Fort Lauderdale, FL | |
West Palm Beach
|
| | 625 North Flagler Drive, Suite 509 | | | West Palm Beach, FL | |
Wellington
|
| | 12008 South Shore Blvd, #108 | | | Wellington, FL | |
| | |
September 30, 2019
|
| |||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Percent
|
| ||||||
Commercial real estate
|
| | | $ | 404,087 | | | | | | 71.4% | | |
Residential real estate
|
| | | | 64,985 | | | | | | 11.5% | | |
Commercial
|
| | | | 72,902 | | | | | | 12.9% | | |
Construction and development
|
| | | | 18,713 | | | | | | 3.3% | | |
Consumer and other loans
|
| | | | 4,882 | | | | | | 0.9% | | |
Total loans
|
| | | $ | 565,569 | | | | | | 100.0% | | |
| | |
Nine Months Ended September 30,
|
| |||||||||||||||
(Dollars in thousands)
|
| |
2019
|
| |
2018
|
| |
Change
|
| |||||||||
Interest income
|
| | | $ | 28,600 | | | | | $ | 19,442 | | | | | | 47.1% | | |
Interest expense
|
| | | | 7,995 | | | | | | 3,835 | | | | | | 108.5% | | |
Net Interest income
|
| | | | 20,605 | | | | | | 15,607 | | | | | | 32.0% | | |
Provision for loan losses
|
| | | | 762 | | | | | | 790 | | | | | | (3.5)% | | |
Net interest income after provision
|
| | | | 19,843 | | | | | | 14,817 | | | | | | 33.9% | | |
Noninterest income
|
| | | | 2,127 | | | | | | 1,318 | | | | | | 61.4% | | |
Noninterest expense
|
| | | | 20,088 | | | | | | 14,206 | | | | | | 41.4% | | |
Income before income taxes
|
| | | | 1,882 | | | | | | 1,929 | | | | | | (2.4)% | | |
Income tax expense
|
| | | | 534 | | | | | | 609 | | | | | | (12.3)% | | |
Net income
|
| | | $ | 1,348 | | | | | $ | 1,320 | | | | | | 2.1% | | |
| | |
For the Nine Months Ended September 30,
|
| |||||||||||||||||||||||||||||||||
| | |
2019
|
| |
2018
|
| ||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Average
Outstanding Balance |
| |
Interest
Income/Expense(4) |
| |
Average
Yield/Rate |
| |
Average
Outstanding Balance |
| |
Interest
Income/Expense(4) |
| |
Average
Yield/Rate |
| ||||||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest earning assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | $ | 64,727 | | | | | $ | 1,131 | | | | | | 2.33% | | | | | $ | 35,180 | | | | | $ | 510 | | | | | | 1.93% | | |
Federal funds sold
|
| | | | 24,487 | | | | | | 459 | | | | | | 2.50% | | | | | | 20,495 | | | | | | 284 | | | | | | 1.85% | | |
Federal Reserve Bank stock, FHLB stock and other corporate stock
|
| | | | 4,196 | | | | | | 200 | | | | | | 6.36% | | | | | | 3,086 | | | | | | 155 | | | | | | 6.70% | | |
Investment securities
|
| | | | 28,182 | | | | | | 521 | | | | | | 2.46% | | | | | | 25,051 | | | | | | 478 | | | | | | 2.54% | | |
Loans(1)
|
| | | | 678,571 | | | | | | 26,289 | | | | | | 5.17% | | | | | | 496,416 | | | | | | 18,015 | | | | | | 4.84% | | |
Total interest earning assets
|
| | | | 800,163 | | | | | | 28,600 | | | | | | 4.77% | | | | | | 580,228 | | | | | | 19,442 | | | | | | 4.47% | | |
Noninterest earning assets
|
| | | | 44,988 | | | | | | | | | | | | | | | | | | 32,315 | | | | | | | | | | | | | | |
Total assets
|
| | | | 845,151 | | | | | | | | | | | | | | | | | | 612,543 | | | | | | | | | | | | | | |
Liabilities and shareholders’ equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | | 547,245 | | | | | | 7,200 | | | | | | 1.75% | | | | | | 394,080 | | | | | | 3,332 | | | | | | 1.13% | | |
Borrowed funds
|
| | | | 45,058 | | | | | | 795 | | | | | | 2.35% | | | | | | 32,930 | | | | | | 503 | | | | | | 2.04% | | |
Total interest-bearing liabilities
|
| | | | 592,303 | | | | | | 7,995 | | | | | | 1.80% | | | | | | 427,010 | | | | | | 3,835 | | | | | | 1.20% | | |
Noninterest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing deposits
|
| | | | 163,513 | | | | | | | | | | | | | | | | | | 123,703 | | | | | | | | | | | | | | |
Other noninterest-bearing liabilities
|
| | | | 9,545 | | | | | | | | | | | | | | | | | | 3,841 | | | | | | | | | | | | | | |
Shareholders’ equity
|
| | | | 79,790 | | | | | | | | | | | | | | | | | | 57,989 | | | | | | | | | | | | | | |
Total liabilities and shareholders’ equity
|
| | | $ | 845,151 | | | | | | | | | | | | | | | | | $ | 612,543 | | | | | | | | | | | | | | |
Net interest spread(2)
|
| | | | | | | | | | | | | | | | 2.97% | | | | | | | | | | | | | | | | | | 3.27% | | |
Net interest income
|
| | | | | | | | | $ | 20,605 | | | | | | | | | | | | | | | | | $ | 15,607 | | | | | | | | |
Net interest margin(3)
|
| | | | | | | | | | | | | | | | 3.43% | | | | | | | | | | | | | | | | | | 3.59% | | |
| | |
For the Nine Months Ended September 30, 2019
Compared to 2018 |
| |||||||||||||||
| | |
Change Due To
|
| | ||||||||||||||
(Dollars in thousands)
|
| |
Volume
|
| |
Rate
|
| |
Total
|
| |||||||||
Interest income | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | $ | 428 | | | | | $ | 193 | | | | | $ | 621 | | |
Federal funds sold
|
| | | | 55 | | | | | | 120 | | | | | | 175 | | |
Federal Reserve Bank stock, Federal Home Loan Bank stock and other corporate stock
|
| | | | 56 | | | | | | (11) | | | | | | 45 | | |
Investment securities
|
| | | | 59 | | | | | | (16) | | | | | | 43 | | |
Loans
|
| | | | 6,625 | | | | | | 1,649 | | | | | | 8,274 | | |
Total
|
| | | $ | 7,224 | | | | | $ | 1,934 | | | | | $ | 9,158 | | |
Interest expense | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | | 1,226 | | | | | | 2,642 | | | | | | 3,868 | | |
Borrowed funds
|
| | | | 185 | | | | | | 107 | | | | | | 292 | | |
Total
|
| | | $ | 1,411 | | | | | $ | 2,749 | | | | | $ | 4,160 | | |
| | |
Nine Months Ended September 30,
|
| |||||||||||||||
(Dollars in thousands)
|
| |
2019
|
| |
2018
|
| |
Increase (Decrease)
|
| |||||||||
Noninterest income | | | | | | | | | | | | | | | | | | | |
Deposit account service charges
|
| | | $ | 542 | | | | | $ | 437 | | | | | | 24.0% | | |
Mortgage banking revenue
|
| | | | 201 | | | | | | 144 | | | | | | 39.6% | | |
Gain (loss) on sale of securities
|
| | | | 3 | | | | | | — | | | | | | N/A | | |
Swap referral fees
|
| | | | 802 | | | | | | 19 | | | | | | 4,121.1% | | |
SBA loan origination fees
|
| | | | 79 | | | | | | 296 | | | |
(73.3)%
|
| |||
Other fees and charges
|
| | | | 500 | | | | | | 422 | | | |
18.5%
|
| |||
Total noninterest income
|
| | | $ | 2,127 | | | | | $ | 1,318 | | | | | | 61.4% | | |
| | |
Nine Months Ended September 30,
|
| |||||||||||||||
(Dollars in thousands)
|
| |
2019
|
| |
2018
|
| |
Increase (Decrease)
|
| |||||||||
Noninterest expense | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits
|
| | | $ | 13,534 | | | | | $ | 9,331 | | | | | | 45.0% | | |
Occupancy and equipment
|
| | | | 1,824 | | | | | | 1,400 | | | | | | 30.3% | | |
Professional services
|
| | | | 1,106 | | | | | | 400 | | | | | | 176.5% | | |
Data processing
|
| | | | 489 | | | | | | 466 | | | | | | 4.9% | | |
Marketing
|
| | | | 400 | | | | | | 279 | | | | | | 43.4% | | |
Other
|
| | | | 2,735 | | | | | | 2,330 | | | | | | 17.4% | | |
Total noninterest expense
|
| | | $ | 20,088 | | | | | $ | 14,206 | | | | | | 41.4% | | |
| | |
Years Ended December 31,
|
| |
Years Ended December 31,
|
| ||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
2018
|
| |
2017
|
| |
Change
|
| |
2017
|
| |
2016
|
| |
Change
|
| ||||||||||||||||||
Interest income
|
| | | $ | 27,750 | | | | | $ | 18,857 | | | | | | 47.2% | | | | | $ | 18,857 | | | | | $ | 14,265 | | | | | | 32.2% | | |
Interest expense
|
| | | | 5,837 | | | | | | 2,869 | | | | | | 103.5% | | | | | | 2,869 | | | | | | 2,122 | | | | | | 35.2% | | |
Net Interest income
|
| | | | 21,913 | | | | | | 15,988 | | | | | | 37.1% | | | | | | 15,988 | | | | | | 12,143 | | | | | | 31.7% | | |
Provision for loan losses
|
| | | | 1,150 | | | | | | 991 | | | | | | 16.0% | | | | | | 991 | | | | | | 1,065 | | | | | | (6.9)% | | |
Net interest income after provision
|
| | | | 20,763 | | | | | | 14,997 | | | | | | 38.4% | | | | | | 14,997 | | | | | | 11,078 | | | | | | 35.4% | | |
Noninterest income
|
| | | | 1,874 | | | | | | 1,786 | | | | | | 4.9% | | | | | | 1,786 | | | | | | 1,369 | | | | | | 30.5% | | |
Noninterest expense
|
| | | | 19,862 | | | | | | 13,125 | | | | | | 51.3% | | | | | | 13,125 | | | | | | 10,573 | | | | | | 24.1% | | |
Income before income taxes
|
| | | | 2,775 | | | | | | 3,658 | | | | | | (24.1)% | | | | | | 3,658 | | | | | | 1,874 | | | | | | 95.2% | | |
Income tax expense
|
| | | | 669 | | | | | | 1,844 | | | | | | (63.7)% | | | | | | 1,844 | | | | | | 743 | | | | | | 148.2% | | |
Net income
|
| | | $ | 2,106 | | | | | $ | 1,814 | | | | | | 16.1% | | | | | $ | 1,814 | | | | | $ | 1,131 | | | | | | 60.4% | | |
| | |
For the Years Ended December 31,
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Average
Outstanding Balance |
| |
Interest
Income/ Expense(4) |
| |
Average
Yield/Rate |
| |
Average
Outstanding Balance |
| |
Interest
Income/ Expense(4) |
| |
Average
Yield/Rate |
| |
Average
Outstanding Balance |
| |
Interest
Income/ Expense(4) |
| |
Average
Yield/Rate |
| |||||||||||||||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest earning assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | $ | 41,306 | | | | | $ | 852 | | | | | | 2.06% | | | | | $ | 10,190 | | | | | $ | 112 | | | | | | 1.10% | | | | | $ | 12,817 | | | | | $ | 67 | | | | | | 0.52% | | |
Federal funds sold
|
| | | | 20,736 | | | | | | 414 | | | | | | 2.00% | | | | | | 12,292 | | | | | | 144 | | | | | | 1.17% | | | | | | 8,935 | | | | | | 50 | | | | | | 0.56% | | |
Federal Reserve Bank stock, FHLB stock
and other corporate stock |
| | | | 3,232 | | | | | | 214 | | | | | | 6.62% | | | | | | 2,078 | | | | | | 118 | | | | | | 5.66% | | | | | | 1,856 | | | | | | 99 | | | | | | 5.34% | | |
Investment securities
|
| | | | 24,056 | | | | | | 637 | | | | | | 2.65% | | | | | | 29,398 | | | | | | 626 | | | | | | 2.13% | | | | | | 33,597 | | | | | | 582 | | | | | | 1.73% | | |
Loans(1)
|
| | | | 520,131 | | | | | | 25,633 | | | | | | 4.93% | | | | | | 380,285 | | | | | | 17,857 | | | | | | 4.70% | | | | | | 281,434 | | | | | | 13,468 | | | | | | 4.79% | | |
Total interest earning assets
|
| | | | 609,461 | | | | | | 27,750 | | | | | | 4.55% | | | | | | 434,243 | | | | | | 18,857 | | | | | | 4.34% | | | | | | 338,639 | | | | | | 14,265 | | | | | | 4.21% | | |
Noninterest earning assets
|
| | | | 32,182 | | | | | | | | | | | | | | | | | | 26,275 | | | | | | | | | | | | | | | | | | 19,745 | | | | | | | | | | | | | | |
Total assets
|
| | | | 641,643 | | | | | | | | | | | | | | | | | | 460,518 | | | | | | | | | | | | | | | | | | 358,384 | | | | | | | | | | | | | | |
Liabilities and shareholders’ equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | | 415,553 | | | | | | 5,104 | | | | | | 1.23% | | | | | | 293,560 | | | | | | 2,634 | | | | | | 0.90% | | | | | | 234,983 | | | | | | 1,945 | | | | | | 0.83% | | |
Borrowed funds
|
| | | | 34,713 | | | | | | 733 | | | | | | 2.11% | | | | | | 17,480 | | | | | | 235 | | | | | | 1.34% | | | | | | 16,965 | | | | | | 177 | | | | | | 1.04% | | |
Total interest-bearing liabilities
|
| | | | 450,266 | | | | | | 5,837 | | | | | | 1.30% | | | | | | 311,040 | | | | | | 2,869 | | | | | | 0.92% | | | | | | 251,948 | | | | | | 2,122 | | | | | | 0.84% | | |
Noninterest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing deposits
|
| | | | 127,659 | | | | | | | | | | | | | | | | | | 91,230 | | | | | | | | | | | | | | | | | | 68,142 | | | | | | | | | | | | | | |
Other noninterest-bearing liabilities
|
| | | | 3,883 | | | | | | | | | | | | | | | | | | 3,232 | | | | | | | | | | | | | | | | | | 2,414 | | | | | | | | | | | | | | |
Shareholders’ equity
|
| | | | 59,835 | | | | | | | | | | | | | | | | | | 55,016 | | | | | | | | | | | | | | | | | | 35,880 | | | | | | | | | | | | | | |
Total liabilities and shareholders’
equity |
| | | $ | 641,643 | | | | | | | | | | | | | | | | | $ | 460,518 | | | | | | | | | | | | | | | | | $ | 358,384 | | | | | | | | | | | | | | |
Net interest spread(2)
|
| | | | | | | | | | | | | | | | 3.25% | | | | | | | | | | | | | | | | | | 3.42% | | | | | | | | | | | | | | | | | | 3.37% | | |
Net interest income
|
| | | | | | | | | $ | 21,913 | | | | | | | | | | | | | | | | | $ | 15,988 | | | | | | | | | | | | | | | | | $ | 12,143 | | | | | | | | |
Net interest margin(3)
|
| | | | | | | | | | | | | | | | 3.60% | | | | | | | | | | | | | | | | | | 3.68% | | | | | | | | | | | | | | | | | | 3.59% | | |
|
| | |
For the Years Ended December 31, 2018
Compared to 2017 |
| |
For the Years Ended December 31, 2017
Compared to 2016 |
| ||||||||||||||||||||||||||||||
| | |
Change Due To
|
| | | | | | | |
Change Due To
|
| | |||||||||||||||||||||||
(Dollars in thousands)
|
| |
Volume
|
| |
Rate
|
| |
Total
|
| |
Volume
|
| |
Rate
|
| |
Total
|
| ||||||||||||||||||
Interest income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | $ | 343 | | | | | $ | 397 | | | | | $ | 740 | | | | | $ | (14) | | | | | $ | 59 | | | | | $ | 46 | | |
Federal funds sold
|
| | | | 99 | | | | | | 171 | | | | | | 270 | | | | | | 19 | | | | | | 75 | | | | | | 94 | | |
Federal Reserve Bank stock, Federal Home Loan Bank stock and other corporate stock
|
| | | | 65 | | | | | | 31 | | | | | | 96 | | | | | | 12 | | | | | | 7 | | | | | | 19 | | |
Investment securities
|
| | | | (114) | | | | | | 125 | | | | | | 11 | | | | | | (73) | | | | | | 116 | | | | | | 44 | | |
Loans
|
| | | | 6,567 | | | | | | 1,209 | | | | | | 7,776 | | | | | | 4,730 | | | | | | (341) | | | | | | 4,389 | | |
Total
|
| | | $ | 6,960 | | | | | $ | 1,933 | | | | | $ | 8,893 | | | | | $ | 4,675 | | | | | $ | (83) | | | | | $ | 4,592 | | |
Interest expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | | 1,095 | | | | | | 1,375 | | | | | | 2,470 | | | | | | 485 | | | | | | 205 | | | | | | 690 | | |
Borrowed funds
|
| | | | 232 | | | | | | 266 | | | | | | 498 | | | | | | 5 | | | | | | 53 | | | | | | 58 | | |
Total
|
| | | $ | 1,327 | | | | | $ | 1,641 | | | | | $ | 2,968 | | | | | $ | 490 | | | | | $ | 258 | | | | | $ | 748 | | |
| | |
Years Ended December 31,
|
| |
Years Ended December 31,
|
| ||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
2018
|
| |
2017
|
| |
Increase (Decrease)
|
| |
2017
|
| |
2016
|
| |
Increase (Decrease)
|
| ||||||||||||||||||
Noninterest income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposit account service charges
|
| | | $ | 283 | | | | | $ | 194 | | | | | | 45.9% | | | | | $ | 194 | | | | | $ | 188 | | | | | | 3.2% | | |
Mortgage banking revenue
|
| | | | 209 | | | | | | 18 | | | | | | 1,061.1% | | | | | | 18 | | | | | | 86 | | | | | | (79.1)% | | |
Gain (loss) on sale of securities
|
| | | | — | | | | | | — | | | | | | 0.0% | | | | | | — | | | | | | — | | | | | | 0.0% | | |
Swap referral fees
|
| | | | 211 | | | | | | 169 | | | | | | 24.9% | | | | | | 169 | | | | | | 63 | | | | | | 168.3% | | |
SBA origination fees
|
| | | | 308 | | | | | | 646 | | | | | | (52.3)% | | | | | | 646 | | | | | | 368 | | | | | | 75.5% | | |
Other fees and charges
|
| | | | 863 | | | | | | 759 | | | | | | 13.7% | | | | | | 759 | | | | | | 664 | | | | | | 14.3% | | |
Total noninterest income
|
| | | $ | 1,874 | | | | | $ | 1,786 | | | | | | 4.9% | | | | | $ | 1,786 | | | | | $ | 1,369 | | | | | | 30.5% | | |
| | |
Years Ended December 31,
|
| |
Years Ended December 31,
|
| ||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
2018
|
| |
2017
|
| |
Increase (Decrease)
|
| |
2017
|
| |
2016
|
| |
Increase (Decrease)
|
| ||||||||||||||||||
Noninterest expense | | | | | | | | ||||||||||||||||||||||||||||||
Salaries and benefits
|
| | | $ | 13,538 | | | | | $ | 8,672 | | | | | | 56% | | | | | $ | 8,672 | | | | | $ | 6,290 | | | | | | 38% | | |
Occupancy and equipment
|
| | | | 1,872 | | | | | | 1,473 | | | | | | 27% | | | | | | 1,473 | | | | | | 1,167 | | | | | | 26% | | |
Professional services
|
| | | | 693 | | | | | | 396 | | | | | | 75% | | | | | | 396 | | | | | | 496 | | | | | | (20)% | | |
Data processing
|
| | | | 624 | | | | | | 524 | | | | | | 19% | | | | | | 524 | | | | | | 983 | | | | | | (47)% | | |
Marketing
|
| | | | 430 | | | | | | 180 | | | | | | 139% | | | | | | 180 | | | | | | 185 | | | | | | (3)% | | |
Other
|
| | | | 2,705 | | | | | | 1,880 | | | | | | 44% | | | | | | 1,880 | | | | | | 1,452 | | | | | | 29% | | |
Total noninterest expense
|
| | | $ | 19,862 | | | | | $ | 13,125 | | | | | | 51% | | | | | $ | 13,125 | | | | | $ | 10,573 | | | | | | 24% | | |
| | | | | | | | | | | | | | |
December 31,
|
| |||||||||||||||||||||||||||||||||
| | |
September 30, 2019
|
| |
2018
|
| |
2017
|
| |
2016
|
| ||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Book Value
|
| |
Fair Value
|
| |
Book Value
|
| |
Fair Value
|
| |
Book Value
|
| |
Fair Value
|
| |
Book Value
|
| |
Fair Value
|
| ||||||||||||||||||||||||
Securities Available for Sale | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Government-sponsored agencies
|
| | | $ | 16,139 | | | | | $ | 16,024 | | | | | $ | 7,563 | | | | | $ | 7,449 | | | | | $ | 10,173 | | | | | $ | 10,111 | | | | | $ | 12,466 | | | | | $ | 12,423 | | |
Mortgage-backed securities
|
| | | | 5,688 | | | | | | 5,628 | | | | | | 6,533 | | | | | | 6,308 | | | | | | 7,827 | | | | | | 7,626 | | | | | | 9,597 | | | | | | 9,370 | | |
U.S. Agency obligations
|
| | | | 4,493 | | | | | | 4,585 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Mutual funds
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,000 | | | | | | 963 | | | | | | 1,000 | | | | | | 963 | | |
Corporate bonds
|
| | | | 2,000 | | | | | | 1,999 | | | | | | 6,000 | | | | | | 5,828 | | | | | | 7,990 | | | | | | 8,020 | | | | | | 7,976 | | | | | | 8,012 | | |
Total
|
| | | $ | 28,320 | | | | | $ | 28,236 | | | | | $ | 20,096 | | | | | $ | 19,585 | | | | | $ | 26,990 | | | | | $ | 26,720 | | | | | $ | 31,039 | | | | | $ | 30,768 | | |
Securities Held to Maturity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Mortgage-backed securities
|
| | | | 224 | | | | | | 236 | | | | | | 259 | | | | | | 265 | | | | | | 316 | | | | | | 325 | | | | | | 408 | | | | | | 426 | | |
Total
|
| | | $ | 224 | | | | | $ | 236 | | | | | $ | 259 | | | | | $ | 265 | | | | | $ | 316 | | | | | $ | 325 | | | | | $ | 408 | | | | | $ | 426 | | |
Equity Securities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Mutual Funds
|
| | | | 975 | | | | | | 975 | | | | | | 942 | | | | | | 942 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total
|
| | | $ | 975 | | | | | $ | 975 | | | | | $ | 942 | | | | | $ | 942 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
|
| | |
One Year or Less
|
| |
More than One Year
Through Five Years |
| |
More than Five Years
Through 10 Years |
| |
More than 10 Years
|
| |
Total
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||
At September 30, 2019 (Dollars in thousands) |
| |
Book Value
|
| |
Weighted
Average Yield |
| |
Book Value
|
| |
Weighted
Average Yield |
| |
Book Value
|
| |
Weighted
Average Yield |
| |
Book Value
|
| |
Weighted
Average Yield |
| |
Book Value
|
| |
Fair Value
|
| |
Weighted
Average Yield |
| |||||||||||||||||||||||||||||||||
Securities Available for Sale | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Government- sponsored agencies
|
| | | $ | — | | | | | | 0.00% | | | | | $ | 319 | | | | | | 2.96% | | | | | $ | 12,159 | | | | | | 3.16% | | | | | $ | 3,661 | | | | | | 3.71% | | | | | $ | 16,139 | | | | | $ | 16,024 | | | | | | 3.28% | | |
Mortgage-backed securities
|
| | | | — | | | | | | 0.00% | | | | | | — | | | | | | 0.00% | | | | | | 1,972 | | | | | | 1.57% | | | | | | 3,716 | | | | | | 2.11% | | | | | | 5,688 | | | | | | 5,628 | | | | | | 1.92% | | |
U.S. Agency obligations
|
| | | | — | | | | | | 0.00% | | | | | | 3,489 | | | | | | 2.65% | | | | | | 1,004 | | | | | | 2.66% | | | | | | | | | | | | — | | | | | | 4,493 | | | | | | 4,585 | | | | | | 2.65% | | |
Corporate bonds
|
| | | | — | | | | | | 0.00% | | | | | | 2,000 | | | | | | 3.48% | | | | | | — | | | | | | 0.00% | | | | | | — | | | | | | 0.00% | | | | | | 2,000 | | | | | | 1,999 | | | | | | 3.48% | | |
Total
|
| | | $ | — | | | | | | 0.00% | | | | | $ | 5,808 | | | | | | 2.95% | | | | | $ | 15,135 | | | | | | 2.92% | | | | | $ | 7,377 | | | | | | 2.91% | | | | | $ | 28,320 | | | | | $ | 28,236 | | | | | | 2.93% | | |
Securities Held to Maturity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Mortgage-backed
securities |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 224 | | | | | | — | | | | | | 224 | | | | | | 236 | | | | | | 3.74% | | |
Total
|
| | | $ | — | | | | | | 0.00% | | | | | $ | — | | | | | | 0.00% | | | | | $ | — | | | | | | 0.00% | | | | | $ | 224 | | | | | | 3.74% | | | | | $ | 224 | | | | | $ | 236 | | | | | | 3.74% | | |
Equity Securities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Mutual Funds
|
| | | | 975 | | | | | | 2.34% | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 975 | | | | | | 975 | | | | | | 2.34% | | |
Total
|
| | | $ | 975 | | | | | | 2.34% | | | | | $ | — | | | | | | 0.00% | | | | | $ | — | | | | | | 0.00% | | | | | $ | — | | | | | | — | | | | | $ | 975 | | | | | $ | 975 | | | | | | 2.34% | | |
|
| | | | | | | | | | | | | | |
December 31,
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
September 30, 2019
|
| |
2018
|
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| ||||||||||||||||||||||||||||||||||||
Commercial real estate
|
| | | $ | 262,761 | | | | | | 34.0% | | | | | $ | 191,930 | | | | | | 31.6% | | | | | $ | 156,720 | | | | | | 33.3% | | | | | $ | 116,208 | | | | | | 35.8% | | | | | $ | 84,679 | | | | | | 34.1% | | | | | $ | 63,638 | | | | | | 34.0% | | |
Owner Occupied
|
| | | | 106,918 | | | | | | — | | | | | | 98,610 | | | | | | — | | | | | | 71,944 | | | | | | — | | | | | | 51,509 | | | | | | — | | | | | | 25,744 | | | | | | — | | | | | | 15,629 | | | | | | — | | |
Non-Owner Occupied
|
| | | | 155,843 | | | | | | — | | | | | | 93,320 | | | | | | — | | | | | | 84,776 | | | | | | — | | | | | | 64,699 | | | | | | — | | | | | | 58,935 | | | | | | — | | | | | | 48,009 | | | | | | — | | |
Residential real estate
|
| | | | 349,306 | | | | | | 45.3% | | | | | | 311,404 | | | | | | 51.3% | | | | | | 224,246 | | | | | | 47.7% | | | | | | 140,160 | | | | | | 43.2% | | | | | | 110,870 | | | | | | 44.6% | | | | | | 90,040 | | | | | | 48.0% | | |
Commercial
|
| | | | 114,003 | | | | | | 14.8% | | | | | | 83,276 | | | | | | 13.7% | | | | | | 59,065 | | | | | | 12.6% | | | | | | 37,873 | | | | | | 11.7% | | | | | | 33,861 | | | | | | 13.6% | | | | | | 23,640 | | | | | | 12.6% | | |
Construction and development
|
| | | | 37,925 | | | | | | 4.9% | | | | | | 17,608 | | | | | | 2.9% | | | | | | 28,272 | | | | | | 6.0% | | | | | | 29,036 | | | | | | 9.0% | | | | | | 18,813 | | | | | | 7.6% | | | | | | 9,427 | | | | | | 5.0% | | |
Consumer and other loans
|
| | | | 7,900 | | | | | | 1.0% | | | | | | 3,244 | | | | | | 0.5% | | | | | | 1,755 | | | | | | 0.4% | | | | | | 1,025 | | | | | | 0.3% | | | | | | 271 | | | | | | 0.1% | | | | | | 809 | | | | | | 0.4% | | |
Total loans
|
| | | $ | 771,895 | | | | | | 100.0% | | | | | $ | 607,462 | | | | | | 100.0% | | | | | $ | 470,058 | | | | | | 100.0% | | | | | $ | 324,302 | | | | | | 100.0% | | | | | $ | 248,494 | | | | | | 100.0% | | | | | $ | 187,554 | | | | | | 100.0% | | |
Unearned loan origination fees (costs),
net |
| | | | (783) | | | | | | | | | | | | (297) | | | | | | | | | | | | 64 | | | | | | | | | | | | (120) | | | | | | | | | | | | (11) | | | | | | | | | | | | 150 | | | | | | | | |
Allowance for loan losses
|
| | | | (6,449) | | | | | | | | | | | | (5,685) | | | | | | | | | | | | (4,535) | | | | | | | | | | | | (3,532) | | | | | | | | | | | | (2,457) | | | | | | | | | | | | (1,875) | | | | | | | | |
Loans, net
|
| | | $ | 764,663 | | | | | | | | | | | $ | 601,480 | | | | | | | | | | | $ | 465,587 | | | | | | | | | | | $ | 320,650 | | | | | | | | | | | $ | 246,026 | | | | | | | | | | | $ | 185,829 | | | | | | | | |
|
| | |
As of September 30, 2019
|
| |||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Percent
|
| ||||||
CRE and Construction & Development Loans, combined | | | | | | | | | | | | | |
1 – 4 Family Construction
|
| | | $ | 17,668 | | | | | | 5.9% | | |
Assignment of Mortgage
|
| | | | 9,085 | | | | | | 3.0% | | |
Auto (Car Lot/Auto Repair)
|
| | | | 14,518 | | | | | | 4.8% | | |
Commercial Construction
|
| | | | 8,746 | | | | | | 2.9% | | |
Educational Facility
|
| | | | 15,095 | | | | | | 5.0% | | |
Hotel
|
| | | | 6,702 | | | | | | 2.2% | | |
Land Development
|
| | | | 5,612 | | | | | | 1.9% | | |
Mixed Use
|
| | | | 18,431 | | | | | | 6.1% | | |
Multifamily
|
| | | | 22,118 | | | | | | 7.4% | | |
Office
|
| | | | 37,483 | | | | | | 12.5% | | |
Other / Special Use
|
| | | | 31,211 | | | | | | 10.4% | | |
Religious Facility
|
| | | | 4,700 | | | | | | 1.6% | | |
Retail
|
| | | | 52,672 | | | | | | 17.5% | | |
Vacant Land
|
| | | | 6,042 | | | | | | 2.0% | | |
Warehouse
|
| | | | 50,603 | | | | | | 16.8% | | |
Total
|
| | | $ | 300,686 | | | | | | 100.0% | | |
|
| | |
As of September 30, 2019
|
| |||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Percent
|
| ||||||
CRE and Construction & Development Loans, combined | | | | | | | | | | | | | |
Broward
|
| | | $ | 54,099 | | | | | | 18.0% | | |
Miami-Dade
|
| | | | 156,075 | | | | | | 51.9% | | |
Palm Beach
|
| | | | 59,823 | | | | | | 19.9% | | |
Other FL County
|
| | | | 27,430 | | | | | | 9.1% | | |
Out of State
|
| | | | 3,259 | | | | | | 1.1% | | |
Total
|
| | | $ | 300,686 | | | | | | 100.0% | | |
| | |
As of September 30, 2019
|
| |||||||||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Percent
|
| |
LTV (%)
|
| |||||||||
Residential Real Estate | | | | | | | | | | | | | | | | | | | |
Primary Residences
|
| | | $ | 253,102 | | | | | | 72.4% | | | | | | 58.3% | | |
Investor Owned Residences
|
| | | | 71,498 | | | | | | 20.5% | | | | | | 47.5% | | |
HELOC
|
| | | | 23,374 | | | | | | 6.7% | | | | | | 49.3% | | |
Loans Held for Sale
|
| | | | 1,332 | | | | | | 0.4% | | | | | | 0.0% | | |
Total
|
| | | $ | 349,306 | | | | | | 100.0% | | | | | | | | |
| | |
As of September 30, 2019
|
| |||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Percent
|
| ||||||
Commercial Loans | | | | | | | | | | | | | |
Business Products
|
| | | $ | 1,150 | | | | | | 1.0% | | |
Business Services
|
| | | | 12,692 | | | | | | 11.1% | | |
Communication
|
| | | | 10,645 | | | | | | 9.3% | | |
Construction
|
| | | | 11,332 | | | | | | 10.0% | | |
Finance
|
| | | | 29,783 | | | | | | 26.1% | | |
Healthcare
|
| | | | 4,041 | | | | | | 3.5% | | |
Services
|
| | | | 12,436 | | | | | | 10.9% | | |
Technology
|
| | | | 780 | | | | | | 0.7% | | |
Trade
|
| | | | 30,871 | | | | | | 27.1% | | |
Transportation
|
| | | | 173 | | | | | | 0.2% | | |
Utilities
|
| | | | 100 | | | | | | 0.1% | | |
Total
|
| | | $ | 114,003 | | | | | | 100.0% | | |
| | |
September 30, 2019
|
| |||||||||||||||||||||
(Dollars in thousands)
|
| |
Due in One
Year or Less |
| |
Due in One to
Five Years |
| |
Due After
Five Years |
| |
Total
|
| ||||||||||||
Commercial Real Estate
|
| | | $ | 20,870 | | | | | $ | 48,105 | | | | | $ | 193,786 | | | | | $ | 262,761 | | |
Residential Real Estate
|
| | | | 38,638 | | | | | | 39,422 | | | | | | 271,246 | | | | | | 349,306 | | |
Commercial
|
| | | | 59,554 | | | | | | 19,141 | | | | | | 35,308 | | | | | | 114,003 | | |
Construction and Development
|
| | | | 18,481 | | | | | | 4,680 | | | | | | 14,764 | | | | | | 37,925 | | |
Consumer and Other
|
| | | | 3,964 | | | | | | 2,223 | | | | | | 1,713 | | | | | | 7,900 | | |
Total loans
|
| | | $ | 141,507 | | | | | $ | 113,571 | | | | | $ | 516,817 | | | | | $ | 771,895 | | |
Amounts with fixed rates
|
| | | $ | 67,826 | | | | | $ | 93,612 | | | | | $ | 488,877 | | | | | $ | 650,315 | | |
Amounts with floating rates
|
| | | $ | 73,681 | | | | | $ | 19,959 | | | | | $ | 27,940 | | | | | $ | 121,580 | | |
| | | | | | | | |
December 31,
|
| |||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
September 30, 2019
|
| |
2018
|
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| ||||||||||||||||||
Accruing loans 90 or more days past due
|
| | | $ | 3,174 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Nonaccrual Loans | | | | | | | | ||||||||||||||||||||||||||||||
Commercial real estate
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Residential real estate
|
| | | | 487 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commercial
|
| | | | 1,069 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 33 | | |
Construction and development
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Consumer and other loans
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total nonperforming loans
|
| | | $ | 4,730 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 33 | | |
Other real estate owned
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total nonperforming assets
|
| | | $ | 4,730 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 33 | | |
Restructured loans-nonaccrual
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 33 | | |
Restructured loans-accruing
|
| | | $ | 376 | | | | | $ | 357 | | | | | $ | 409 | | | | | $ | 478 | | | | | $ | 493 | | | | | $ | 606 | | |
Ratio of nonperforming loans to total loans
|
| | | | 0.62% | | | | | | 0.00% | | | | | | 0.00% | | | | | | 0.00% | | | | | | 0.00% | | | | | | 0.02% | | |
Ratio of nonperforming assets to total assets
|
| | | | 0.49% | | | | | | 0.00% | | | | | | 0.00% | | | | | | 0.00% | | | | | | 0.00% | | | | | | 0.02% | | |
(Dollars in thousands)
|
| |
Pass
|
| |
Special
Mention |
| |
Substandard
|
| |
Doubtful
|
| |
Total
|
| |||||||||||||||
September 30, 2019 | | | | | | | |||||||||||||||||||||||||
Commercial real estate
|
| | | $ | 258,569 | | | | | $ | 1,746 | | | | | $ | 2,446 | | | | | $ | — | | | | | $ | 262,761 | | |
Residential real estate
|
| | | | 348,549 | | | | | | 757 | | | | | | — | | | | | | — | | | | | | 349,306 | | |
Commercial
|
| | | | 111,774 | | | | | | 432 | | | | | | 1,797 | | | | | | — | | | | | | 114,003 | | |
Construction and development
|
| | | | 37,925 | | | | | | — | | | | | | — | | | | | | — | | | | | | 37,925 | | |
Consumer
|
| | | | 7,900 | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,900 | | |
Total
|
| | | $ | 764,717 | | | | | $ | 2,935 | | | | | $ | 4,243 | | | | | $ | — | | | | | $ | 771,895 | | |
December 31, 2018 | | | | | | | |||||||||||||||||||||||||
Commercial real estate
|
| | | $ | 189,228 | | | | | $ | 2,702 | | | | | $ | — | | | | | $ | — | | | | | $ | 191,930 | | |
Residential real estate
|
| | | | 311,013 | | | | | | 391 | | | | | | — | | | | | | — | | | | | | 311,404 | | |
Commercial
|
| | | | 82,668 | | | | | | 577 | | | | | | 31 | | | | | | — | | | | | | 83,276 | | |
Construction and development
|
| | | | 17,608 | | | | | | — | | | | | | — | | | | | | — | | | | | | 17,608 | | |
Consumer
|
| | | | 3,244 | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,244 | | |
Total
|
| | | $ | 603,761 | | | | | $ | 3,670 | | | | | $ | 31 | | | | | $ | — | | | | | $ | 607,462 | | |
December 31, 2017 | | | | | | | |||||||||||||||||||||||||
Commercial real estate
|
| | | $ | 155,671 | | | | | $ | 1,049 | | | | | $ | — | | | | | $ | — | | | | | $ | 156,720 | | |
Residential real estate
|
| | | | 224,246 | | | | | | — | | | | | | — | | | | | | — | | | | | | 224,246 | | |
Commercial
|
| | | | 58,936 | | | | | | 98 | | | | | | 31 | | | | | | — | | | | | | 59,065 | | |
Construction and development
|
| | | | 28,272 | | | | | | — | | | | | | — | | | | | | — | | | | | | 28,272 | | |
Consumer
|
| | | | 1,755 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,755 | | |
Total
|
| | | $ | 468,880 | | | | | $ | 1,147 | | | | | $ | 31 | | | | | $ | — | | | | | $ | 470,058 | | |
December 31, 2016 | | | | | | | |||||||||||||||||||||||||
Commercial real estate
|
| | | $ | 116,208 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 116,208 | | |
Residential real estate
|
| | | | 139,931 | | | | | | 229 | | | | | | — | | | | | | — | | | | | | 140,160 | | |
Commercial
|
| | | | 37,525 | | | | | | 280 | | | | | | 68 | | | | | | — | | | | | | 37,873 | | |
Construction and development
|
| | | | 29,036 | | | | | | — | | | | | | — | | | | | | — | | | | | | 29,036 | | |
Consumer
|
| | | | 1,025 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,025 | | |
Total
|
| | | $ | 323,725 | | | | | $ | 509 | | | | | $ | 68 | | | | | $ | — | | | | | $ | 324,302 | | |
| | |
Nine Months Ended September 30,
|
| |
Year Ended December 31,
|
| ||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| |||||||||||||||||||||
Balance at beginning of period
|
| | | $ | 5,685 | | | | | $ | 4,535 | | | | | $ | 4,535 | | | | | $ | 3,532 | | | | | $ | 2,457 | | | | | $ | 1,875 | | | | | $ | 1,547 | | |
Charge-offs | | | | | | | | | |||||||||||||||||||||||||||||||||||
Commercial real estate
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Residential real estate
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commercial
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Construction and development
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Consumer and other
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 14 | | | | | | — | | |
Total Charge-offs
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 14 | | | | | | — | | |
Recoveries | | | | | | | | | |||||||||||||||||||||||||||||||||||
Commercial real estate
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Residential real estate
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commercial
|
| | | | — | | | | | | — | | | | | | — | | | | | | 12 | | | | | | 11 | | | | | | 2 | | | | | | — | | |
Construction and development
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Consumer and other
|
| | | | 2 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total recoveries
|
| | | | 2 | | | | | | — | | | | | | — | | | | | | 12 | | | | | | 11 | | | | | | 2 | | | | | | — | | |
Net charge-offs (recoveries)
|
| | | | (2) | | | | | | — | | | | | | — | | | | | | (12) | | | | | | (11) | | | | | | 12 | | | | | | — | | |
Provision for loan losses
|
| | | | 762 | | | | | | 790 | | | | | | 1,150 | | | | | | 991 | | | | | | 1,065 | | | | | | 596 | | | | | | 328 | | |
Balance at end of period
|
| | | $ | 6,449 | | | | | $ | 5,325 | | | | | $ | 5,685 | | | | | $ | 4,535 | | | | | $ | 3,532 | | | | | $ | 2,457 | | | | | $ | 1,875 | | |
Ratio of net charge-offs to average loans
|
| | | | 0.00% | | | | | | 0.00% | | | | | | 0.00% | | | | | | 0.00% | | | | | | 0.00% | | | | | | 0.01% | | | | | | 0.00% | | |
|
| | |
Nine Months Ended September 30,
|
| |
Year Ended December 31,
|
| ||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| |||||||||||||||||||||
ALLL as a percentage of loans at end of period
|
| | | | 0.84% | | | | | | 0.90% | | | | | | 0.94% | | | | | | 0.96% | | | | | | 1.09% | | | | | | 0.99% | | | | | | 1.00% | | |
ALLL as a multiple of net charge-offs
|
| | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | 206.9% | | | | | | N/A | | |
ALLL as a percentage of nonperforming loans
|
| | | | 136.3% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
|
| | |
September 30, 2019
|
| |
December 31, 2018
|
| |
December 31, 2017
|
| |
December 31, 2016
|
| |
December 31, 2015
|
| |
December 31, 2014
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Allowance
|
| |
Percent
|
| |
Allowance
|
| |
Percent
|
| |
Allowance
|
| |
Percent
|
| |
Allowance
|
| |
Percent
|
| |
Allowance
|
| |
Percent
|
| |
Allowance
|
| |
Percent
|
| ||||||||||||||||||||||||||||||||||||
Commercial real estate
|
| | | $ | 1,788 | | | | | | 27.7% | | | | | $ | 1,435 | | | | | | 25.2% | | | | | $ | 1,275 | | | | | | 28.1% | | | | | $ | 838 | | | | | | 23.7% | | | | | $ | 730 | | | | | | 29.7% | | | | | $ | 346 | | | | | | 18.5% | | |
Residential real estate
|
| | | | 3,292 | | | | | | 51.0% | | | | | | 1,822 | | | | | | 32.0% | | | | | | 1,590 | | | | | | 35.0% | | | | | | 1,281 | | | | | | 36.3% | | | | | | 912 | | | | | | 37.2% | | | | | | 1,075 | | | | | | 57.3% | | |
Commercial
|
| | | | 1,036 | | | | | | 16.1% | | | | | | 2,106 | | | | | | 37.1% | | | | | | 1,170 | | | | | | 25.8% | | | | | | 648 | | | | | | 18.3% | | | | | | 534 | | | | | | 21.7% | | | | | | 318 | | | | | | 17.0% | | |
Construction and development
|
| | | | 255 | | | | | | 4.0% | | | | | | 262 | | | | | | 4.6% | | | | | | 452 | | | | | | 10.0% | | | | | | 742 | | | | | | 21.0% | | | | | | 266 | | | | | | 10.8% | | | | | | 109 | | | | | | 5.8% | | |
Consumer and other
|
| | | | 78 | | | | | | 1.2% | | | | | | 60 | | | | | | 1.1% | | | | | | 48 | | | | | | 1.1% | | | | | | 23 | | | | | | 0.7% | | | | | | 15 | | | | | | 0.6% | | | | | | 27 | | | | | | 1.4% | | |
Total allowance for loan losses
|
| | | $ | 6,449 | | | | | | 100.0% | | | | | $ | 5,685 | | | | | | 100.0% | | | | | $ | 4,535 | | | | | | 100.0% | | | | | $ | 3,532 | | | | | | 100.0% | | | | | $ | 2,457 | | | | | | 100.0% | | | | | $ | 1,875 | | | | | | 100.0% | | |
|
| | |
For the Nine Months Ended
September 30, 2019 |
| |
For the Year Ended December 31
|
| ||||||||||||||||||||||||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Average
Balance |
| |
Average Rate
|
| |
Average
Balance |
| |
Average Rate
|
| |
Average
Balance |
| |
Average Rate
|
| |
Average
Balance |
| |
Average Rate
|
| ||||||||||||||||||||||||
NOW accounts
|
| | | $ | 30,680 | | | | | | 0.37% | | | | | $ | 24,791 | | | | | | 0.29% | | | | | $ | 14,473 | | | | | | 0.23% | | | | | $ | 12,926 | | | | | | 0.21% | | |
Money market accounts
|
| | | | 407,669 | | | | | | 1.76% | | | | | | 304,772 | | | | | | 1.18% | | | | | | 198,513 | | | | | | 0.80% | | | | | | 137,005 | | | | | | 0.65% | | |
Savings accounts
|
| | | | 7,999 | | | | | | 1.38% | | | | | | 2,354 | | | | | | 0.13% | | | | | | 2,234 | | | | | | 0.10% | | | | | | 1,921 | | | | | | 0.10% | | |
Certificates of deposit
|
| | | | 100,897 | | | | | | 2.19% | | | | | | 83,636 | | | | | | 1.70% | | | | | | 78,340 | | | | | | 1.28% | | | | | | 83,131 | | | | | | 1.23% | | |
Total interest-bearing deposits
|
| | | | 547,245 | | | | | | 1.75% | | | | | | 415,553 | | | | | | 1.23% | | | | | | 293,560 | | | | | | 0.90% | | | | | | 234,983 | | | | | | 0.83% | | |
Noninterest-bearing
deposits |
| | | | 163,513 | | | | | | 0.00% | | | | | | 127,659 | | | | | | 0.00% | | | | | | 91,230 | | | | | | 0.00% | | | | | | 68,142 | | | | | | 0.00% | | |
Total deposits
|
| | | $ | 710,758 | | | | | | 1.35% | | | | | $ | 543,212 | | | | | | 0.94% | | | | | $ | 384,790 | | | | | | 0.68% | | | | | $ | 303,125 | | | | | | 0.64% | | |
|
| | |
For the Nine Months Ended
September 30, 2019 |
| |
For the Year Ended December 31
|
| ||||||||||||||||||||||||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Ending
Balance |
| |
% of Total
|
| |
Ending
Balance |
| |
% of Total
|
| |
Ending
Balance |
| |
% of Total
|
| |
Ending
Balance |
| |
% of Total
|
| ||||||||||||||||||||||||
NOW accounts
|
| | | $ | 37,297 | | | | | | 4.53% | | | | | $ | 25,088 | | | | | | 4.16% | | | | | $ | 19,515 | | | | | | 4.25% | | | | | $ | 12,087 | | | | | | 3.73% | | |
Money market accounts
|
| | | | 475,670 | | | | | | 57.79% | | | | | | 352,002 | | | | | | 58.35% | | | | | | 260,850 | | | | | | 56.81% | | | | | | 146,829 | | | | | | 45.33% | | |
Savings accounts
|
| | | | 10,188 | | | | | | 1.24% | | | | | | 2,389 | | | | | | 0.40% | | | | | | 2,660 | | | | | | 0.58% | | | | | | 2,343 | | | | | | 0.72% | | |
Certificates of deposit
|
| | | | 111,983 | | | | | | 13.61% | | | | | | 93,578 | | | | | | 15.51% | | | | | | 75,302 | | | | | | 16.40% | | | | | | 98,901 | | | | | | 30.53% | | |
Total interest-bearing deposits
|
| | | | 635,138 | | | | | | 77.17% | | | | | | 473,057 | | | | | | 78.41% | | | | | | 358,327 | | | | | | 78.04% | | | | | | 260,160 | | | | | | 80.32% | | |
Noninterest-bearing deposits
|
| | | | 187,927 | | | | | | 22.83% | | | | | | 130,245 | | | | | | 21.59% | | | | | | 100,847 | | | | | | 21.96% | | | | | | 63,762 | | | | | | 19.68% | | |
Total deposits
|
| | | $ | 823,065 | | | | | | 100.00% | | | | | $ | 603,302 | | | | | | 100.00% | | | | | $ | 459,174 | | | | | | 100.00% | | | | | $ | 323,922 | | | | | | 100.00% | | |
(Dollars in thousands)
|
| |
Three
Months or Less |
| |
Over
Three Through Six Months |
| |
Over Six
Months Through 12 Months |
| |
Over
12 Months |
| |
Total
|
| |||||||||||||||
$100,000 or more
|
| | | $ | 15,167 | | | | | $ | 18,503 | | | | | $ | 59,846 | | | | | $ | 11,116 | | | | | $ | 104,632 | | |
Less than $100,000
|
| | | | 1,694 | | | | | | 1,544 | | | | | | 3,476 | | | | | | 637 | | | | | | 7,351 | | |
Total
|
| | | $ | 16,861 | | | | | $ | 20,047 | | | | | $ | 63,322 | | | | | $ | 11,753 | | | | | $ | 111,983 | | |
| | |
Nine Months
Ended September 30, 2019 |
| |
Years Ended December 31,
|
| ||||||||||||||||||
(Dollars in thousands)
|
| |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||
Amount outstanding at period-end
|
| | | $ | 50,000 | | | | | $ | 40,000 | | | | | $ | 25,000 | | | | | $ | 20,000 | | |
Weighted average interest rate at period-end
|
| | | | 2.23% | | | | | | 2.27% | | | | | | 1.44% | | | | | | 1.02% | | |
Maximum month-end balance during period
|
| | | $ | 50,000 | | | | | $ | 40,000 | | | | | $ | 25,000 | | | | | $ | 20,000 | | |
Average balance outstanding during period
|
| | | | 45,055 | | | | | | 34,712 | | | | | | 17,479 | | | | | | 16,965 | | |
Weighted average interest rate during period
|
| | | | 2.33% | | | | | | 2.11% | | | | | | 1.34% | | | | | | 1.02% | | |
| | |
Actual
|
| |
Minimum for capital adequacy
|
| |
Minimum to be well capitalized
|
| |||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| ||||||||||||||||||
September 30, 2019 | | | | | | | | ||||||||||||||||||||||||||||||
Total risk-based capital ratio | | | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | $ | 84,082 | | | | | | 12.4% | | | | | $ | 54,424 | | | | | | 8.0% | | | | | $ | 68,030 | | | | | | 10.0% | | |
Company
|
| | | | 85,091 | | | | | | 12.5% | | | | | | 54,424 | | | | | | 8.0% | | | | | | N/A | | | | | | N/A | | |
Tier 1 risk-based capital ratio | | | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | | 77,026 | | | | | | 11.3% | | | | | | 40,818 | | | | | | 6.0% | | | | | | 54,424 | | | | | | 8.0% | | |
Company
|
| | | | 78,036 | | | | | | 11.5% | | | | | | 40,818 | | | | | | 6.0% | | | | | | N/A | | | | | | N/A | | |
| | |
Actual
|
| |
Minimum for capital adequacy
|
| |
Minimum to be well
capitalized |
| |||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| ||||||||||||||||||
Tier1 leverage ratio | | | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | | 77,026 | | | | | | 8.3% | | | | | | 36,992 | | | | | | 4.0% | | | | | | 46,240 | | | | | | 5.0% | | |
Company
|
| | | | 78,036 | | | | | | 8.4% | | | | | | 36,992 | | | | | | 4.0% | | | | | | N/A | | | | | | N/A | | |
Common equity tier 1 capital ratio
|
| | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | | 77,026 | | | | | | 11.3% | | | | | | 30,614 | | | | | | 4.5% | | | | | | 44,220 | | | | | | 6.5% | | |
Company
|
| | | | 78,036 | | | | | | 11.5% | | | | | | 30,614 | | | | | | 4.5% | | | | | | N/A | | | | | | N/A | | |
December 31, 2018 | | | | | | | | ||||||||||||||||||||||||||||||
Total risk-based capital ratio | | | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | $ | 68,427 | | | | | | 13.4% | | | | | $ | 40,731 | | | | | | 8.0% | | | | | $ | 50,914 | | | | | | 10.0% | | |
Company
|
| | | | 86,014 | | | | | | 16.9% | | | | | | 40,731 | | | | | | 8.0% | | | | | | N/A | | | | | | N/A | | |
Tier 1 risk-based capital ratio | | | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | | 62,519 | | | | | | 12.3% | | | | | | 30,549 | | | | | | 6.0% | | | | | | 40,731 | | | | | | 8.0% | | |
Company
|
| | | | 80,107 | | | | | | 15.7% | | | | | | 30,549 | | | | | | 6.0% | | | | | | N/A | | | | | | N/A | | |
Tier1 leverage ratio | | | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | | 62,519 | | | | | | 8.6% | | | | | | 29,129 | | | | | | 4.0% | | | | | | 36,411 | | | | | | 5.0% | | |
Company
|
| | | | 80,107 | | | | | | 11.0% | | | | | | 29,129 | | | | | | 4.0% | | | | | | N/A | | | | | | N/A | | |
Common equity tier 1 capital ratio
|
| | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | | 62,539 | | | | | | 12.3% | | | | | | 22,911 | | | | | | 4.5% | | | | | | 33,094 | | | | | | 6.5% | | |
Company
|
| | | | 80,107 | | | | | | 15.7% | | | | | | 22,911 | | | | | | 4.5% | | | | | | N/A | | | | | | N/A | | |
December 31, 2017 | | | | | | | | ||||||||||||||||||||||||||||||
Total risk-based capital ratio | | | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | $ | 49,234 | | | | | | 12.0% | | | | | $ | 32,866 | | | | | | 8.0% | | | | | $ | 41,083 | | | | | | 10.0% | | |
Company
|
| | | | 62,649 | | | | | | 15.2% | | | | | | 32,866 | | | | | | 8.0% | | | | | | N/A | | | | | | N/A | | |
Tier 1 risk-based capital ratio | | | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | | 44,476 | | | | | | 10.8% | | | | | | 24,650 | | | | | | 6.0% | | | | | | 32,866 | | | | | | 8.0% | | |
Company
|
| | | | 57,892 | | | | | | 14.1% | | | | | | 24,650 | | | | | | 6.0% | | | | | | N/A | | | | | | N/A | | |
Tier1 leverage ratio | | | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | | 44,476 | | | | | | 8.7% | | | | | | 20,513 | | | | | | 4.0% | | | | | | 25,641 | | | | | | 5.0% | | |
Company
|
| | | | 57,892 | | | | | | 11.3% | | | | | | 20,513 | | | | | | 4.0% | | | | | | N/A | | | | | | N/A | | |
Common equity tier 1 capital ratio
|
| | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | | 44,476 | | | | | | 10.8% | | | | | | 18,487 | | | | | | 4.5% | | | | | | 26,704 | | | | | | 6.5% | | |
Company
|
| | | | 57,892 | | | | | | 14.1% | | | | | | 18,487 | | | | | | 4.5% | | | | | | N/A | | | | | | N/A | | |
December 31, 2016 | | | | | | | | ||||||||||||||||||||||||||||||
Total risk-based capital ratio | | | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | $ | 36,800 | | | | | | 12.0% | | | | | $ | 24,628 | | | | | | 8.0% | | | | | $ | 30,785 | | | | | | 10.0% | | |
Company
|
| | | | 40,766 | | | | | | 13.2% | | | | | | 24,628 | | | | | | 8.0% | | | | | | N/A | | | | | | N/A | | |
Tier 1 risk-based capital ratio | | | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | | 33,045 | | | | | | 10.7% | | | | | | 18,471 | | | | | | 6.0% | | | | | | 24,628 | | | | | | 8.0% | | |
Company
|
| | | | 37,011 | | | | | | 12.0% | | | | | | 18,471 | | | | | | 6.0% | | | | | | N/A | | | | | | N/A | | |
| | |
Actual
|
| |
Minimum for capital adequacy
|
| |
Minimum to be well
capitalized |
| |||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| ||||||||||||||||||
Tier1 leverage ratio | | | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | | 33,045 | | | | | | 8.8% | | | | | | 15,036 | | | | | | 4.0% | | | | | | 18,795 | | | | | | 5.0% | | |
Company
|
| | | | 37,011 | | | | | | 9.8% | | | | | | 15,036 | | | | | | 4.0% | | | | | | N/A | | | | | | N/A | | |
Common equity tier 1 capital ratio
|
| | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | | 33,045 | | | | | | 10.7% | | | | | | 13,853 | | | | | | 4.5% | | | | | | 20,011 | | | | | | 6.5% | | |
Company
|
| | | | 37,011 | | | | | | 12.0% | | | | | | 13,853 | | | | | | 4.5% | | | | | | N/A | | | | | | N/A | | |
(Dollars in thousands)
|
| |
Due in One
Year or Less |
| |
Due after One
Through Three Years |
| |
Due After
Three Through Five Years |
| |
Due After
Five Years |
| |
Total
|
| |||||||||||||||
FHLB Advances
|
| | | $ | 10,000 | | | | | $ | 20,000 | | | | | $ | 20,000 | | | | | $ | — | | | | | $ | 50,000 | | |
Certificates of deposit $100,000 or more
|
| | | | 93,516 | | | | | | 11,116 | | | | | | — | | | | | | — | | | | | | 104,632 | | |
Certificates of deposit less than $100,000
|
| | | | 6,714 | | | | | | 637 | | | | | | — | | | | | | — | | | | | | 7,351 | | |
Operating leases
|
| | | | 1,060 | | | | | | 2,147 | | | | | | 2,138 | | | | | | 2,217 | | | | | | 7,562 | | |
Total
|
| | | $ | 111,290 | | | | | $ | 33,900 | | | | | $ | 22,138 | | | | | $ | 2,217 | | | | | $ | 169,545 | | |
| | |
As of
September 30, 2019 |
| |
As of December 31,
|
| ||||||||||||||||||
(Dollars in thousands)
|
| |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||
Unfunded lines of credit
|
| | | $ | 184,360 | | | | | $ | 106,866 | | | | | $ | 75,791 | | | | | $ | 74,536 | | |
Commitments to extend credit
|
| | | | 22,604 | | | | | | 30,599 | | | | | | 42,809 | | | | | | 44,802 | | |
Letters of credit
|
| | | | 10,697 | | | | | | 10,417 | | | | | | 10,546 | | | | | | 6,870 | | |
Total credit extension commitments
|
| | | $ | 217,661 | | | | | $ | 147,882 | | | | | $ | 129,146 | | | | | $ | 126,208 | | |
| | |
Nine Months
Ended September 30, 2019 |
| |
Years Ended December 31,
|
| ||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||
Return on Average Assets(1)
|
| | | | 0.21% | | | | | | 0.33% | | | | | | 0.39% | | | | | | 0.33% | | |
Return on Average Equity(1)
|
| | | | 2.25% | | | | | | 3.52% | | | | | | 3.30% | | | | | | 3.15% | | |
Average Equity to Average Assets
|
| | | | 9.44% | | | | | | 9.33% | | | | | | 11.95% | | | | | | 10.01% | | |
September 30, 2019 (Dollars in thousands) |
| |
Within One
Month |
| |
After One
Month Through Three Months |
| |
After Three
Months Through 12 Months |
| |
Within One
Year |
| |
Greater than
One Year or Nonsensitive |
| |
Total
|
| ||||||||||||||||||
Assets | | | | | | | | ||||||||||||||||||||||||||||||
Interest earning assets
|
| | | | | | | ||||||||||||||||||||||||||||||
Loans(1)
|
| | | $ | 158,263 | | | | | $ | 28,574 | | | | | $ | 149,311 | | | | | $ | 336,148 | | | | | $ | 428,515 | | | | | $ | 764,663 | | |
Securities
|
| | | | 22,799 | | | | | | 2,182 | | | | | | 1,784 | | | | | | 26,765 | | | | | | 2,670 | | | | | | 29,435 | | |
Interest-bearing deposits at other financial institutions(2)
|
| | | | 90,010 | | | | | | — | | | | | | — | | | | | | 90,010 | | | | | | — | | | | | | 90,010 | | |
Federal funds sold
|
| | | | 26,398 | | | | | | — | | | | | | — | | | | | | 26,398 | | | | | | — | | | | | | 26,398 | | |
Total interest earning assets
|
| | | $ | 297,470 | | | | | $ | 30,756 | | | | | $ | 151,095 | | | | | $ | 479,321 | | | | | $ | 431,185 | | | | | $ | 910,506 | | |
Liabilities | | | | | | | | ||||||||||||||||||||||||||||||
Interest-bearing liabilities
|
| | | | | | | ||||||||||||||||||||||||||||||
Interest-bearing deposits
|
| | | $ | 311,145 | | | | | $ | 9,214 | | | | | $ | 41,457 | | | | | $ | 361,816 | | | | | $ | 161,339 | | | | | $ | 523,155 | | |
Time deposits
|
| | | | 26,865 | | | | | | 9,552 | | | | | | 63,813 | | | | | | 100,230 | | | | | | 11,753 | | | | | | 111,983 | | |
Total interest-bearing deposits
|
| | | | 338,010 | | | | | | 18,766 | | | | | | 105,270 | | | | | | 462,046 | | | | | | 173,092 | | | | | | 635,138 | | |
Securities sold under agreements to
repurchase |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
FHLB Advances
|
| | | | 12,496 | | | | | | 10,000 | | | | | | 7,504 | | | | | | 30,000 | | | | | | 20,000 | | | | | | 50,000 | | |
Other borrowed funds
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total interest-bearing liabilities
|
| | | $ | 350,506 | | | | | $ | 28,766 | | | | | $ | 112,774 | | | | | $ | 492,046 | | | | | $ | 193,092 | | | | | $ | 685,138 | | |
Period gap
|
| | | $ | (53,036) | | | | | $ | 1,990 | | | | | $ | 38,321 | | | | | $ | (12,725) | | | | | $ | 238,093 | | | | | | | | |
Cumulative gap
|
| | | $ | (53,036) | | | | | $ | (51,046) | | | | | $ | (12,725) | | | | | $ | (12,725) | | | | | $ | 225,368 | | | | | | | | |
Ratio of cumulative gap to total earning
assets |
| | | | (17.83)% | | | | | | (165.97)% | | | | | | (8.42)% | | | | | | (2.65)% | | | | | | 52.27% | | | | | | | | |
Ratio of cumulative gap to cumulative total earning assets
|
| | | | (5.82)% | | | | | | (5.61)% | | | | | | (1.40)% | | | | | | (1.40)% | | | | | | 24.75% | | | | | | | | |
September 30, 2019 (Dollars in thousands) |
| |
Within One
Month |
| |
After One
Month Through Three Months |
| |
After Three
Months Through 12 Months |
| |
Within One
Year |
| |
Greater than
One Year or Nonsensitive |
| |
Total
|
| ||||||||||||||||||
Assets | | | | | | | | ||||||||||||||||||||||||||||||
Interest earning assets
|
| | | | | | | ||||||||||||||||||||||||||||||
Loans(1)
|
| | | $ | 28,315 | | | | | $ | 30,636 | | | | | $ | 144,402 | | | | | $ | 203,353 | | | | | $ | 561,310 | | | | | $ | 764,663 | | |
Securities
|
| | | | 1,811 | | | | | | 1,012 | | | | | | 3,220 | | | | | | 6,043 | | | | | | 23,392 | | | | | | 29,435 | | |
Interest-bearing deposits at other financial
institutions(2) |
| | | | 90,010 | | | | | | — | | | | | | — | | | | | | 90,010 | | | | | | — | | | | | | 90,010 | | |
Federal funds sold
|
| | | | 26,398 | | | | | | — | | | | | | — | | | | | | 26,398 | | | | | | — | | | | | | 26,398 | | |
Total interest earning
assets |
| | | $ | 146,534 | | | | | $ | 31,648 | | | | | $ | 147,622 | | | | | $ | 325,804 | | | | | $ | 584,702 | | | | | $ | 910,506 | | |
Liabilities | | | | | | | | ||||||||||||||||||||||||||||||
Interest-bearing liabilities
|
| | | | | | | ||||||||||||||||||||||||||||||
Interest-bearing deposits
|
| | | $ | 12,889 | | | | | $ | 25,778 | | | | | $ | 116,001 | | | | | $ | 154,668 | | | | | $ | 368,487 | | | | | $ | 523,155 | | |
Time deposits
|
| | | | 26,865 | | | | | | 9,552 | | | | | | 63,813 | | | | | | 100,230 | | | | | | 11,753 | | | | | | 111,983 | | |
Total interest-bearing deposits
|
| | | | 39,754 | | | | | | 35,330 | | | | | | 179,814 | | | | | | 254,898 | | | | | | 380,240 | | | | | | 635,138 | | |
Securities sold under agreements to repurchase
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
FHLB Advances
|
| | | | 3,263 | | | | | | 11,525 | | | | | | 14,434 | | | | | | 29,222 | | | | | | 20,778 | | | | | | 50,000 | | |
Other borrowed funds
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total interest-bearing liabilities
|
| | | $ | 43,017 | | | | | $ | 46,855 | | | | | $ | 194,248 | | | | | $ | 284,120 | | | | | $ | 401,018 | | | | | $ | 685,138 | | |
Period gap
|
| | | $ | 103,517 | | | | | $ | (15,207) | | | | | $ | (46,626) | | | | | $ | 41,684 | | | | | $ | 183,684 | | | | | | | | |
Cumulative gap
|
| | | $ | 103,517 | | | | | $ | 88,310 | | | | | $ | 41,684 | | | | | $ | 41,684 | | | | | $ | 225,368 | | | | | | | | |
Ratio of cumulative gap to total earning assets
|
| | | | 70.64% | | | | | | 279.04% | | | | | | 28.24% | | | | | | 12.79% | | | | | | 38.54% | | | | | | | | |
Net Interest Income at Risk – 12 months
|
| |
-400bps
|
| |
-300bps
|
| |
-200bps
|
| |
-100bps
|
| |
Flat
|
| |
+100bps
|
| |
+200bps
|
| |
+300bps
|
| |
+400bps
|
| |||||||||||||||||||||||||||
Policy Limit
|
| | | | (20.0)% | | | | | | (15.0)% | | | | | | (10.0)% | | | | | | (5.0)% | | | | | | N/A | | | | | | 10.0% | | | | | | 15.0% | | | | | | 20.0% | | | | | | 25.0% | | |
September 30, 2019
|
| | | | 2.4% | | | | | | 4.6% | | | | | | 3.78% | | | | | | 1.0% | | | | | | N/A | | | | | | (0.7)% | | | | | | (1.4)% | | | | | | (2.1)% | | | | | | (3.1)% | | |
December 31, 2018
|
| | | | (9.9)% | | | | | | (6.6)% | | | | | | (4.7)% | | | | | | (1.6)% | | | | | | N/A | | | | | | 0.6% | | | | | | 0.8% | | | | | | 1.0% | | | | | | 1.2% | | |
December 31, 2017
|
| | | | (11.8)% | | | | | | (8.2)% | | | | | | (5.6)% | | | | | | (4.3)% | | | | | | N/A | | | | | | (3.6)% | | | | | | (7.0)% | | | | | | (10.5)% | | | | | | 13.9% | | |
Net Interest Income at Risk – 24 months
|
| |
-400bps
|
| |
-300bps
|
| |
-200bps
|
| |
-100bps
|
| |
Flat
|
| |
+100bps
|
| |
+200bps
|
| |
+300bps
|
| |
+400bps
|
| |||||||||||||||||||||||||||
Policy Limit
|
| | | | (20.0)% | | | | | | (15.0)% | | | | | | (10.0)% | | | | | | (5.0)% | | | | | | N/A | | | | | | 10.0% | | | | | | 15.0% | | | | | | 20.0% | | | | | | 25.0% | | |
September 30, 2019
|
| | | | (8.3)% | | | | | | (4.5)% | | | | | | (1.9)% | | | | | | (2.6)% | | | | | | N/A | | | | | | 2.1% | | | | | | 3.6% | | | | | | 4.8% | | | | | | 5.6% | | |
December 31, 2018
|
| | | | (16.1)% | | | | | | (12.0)% | | | | | | (7.7)% | | | | | | (2.7)% | | | | | | N/A | | | | | | 1.3% | | | | | | 2.3% | | | | | | 3.1% | | | | | | 3.7% | | |
December 31, 2017
|
| | | | (18.4)% | | | | | | (13.7)% | | | | | | (10.2)% | | | | | | (6.2)% | | | | | | N/A | | | | | | 5.0% | | | | | | 9.8% | | | | | | 14.7% | | | | | | 19.6% | | |
Economic Value of Equity as of
|
| |
-400bps
|
| |
-300bps
|
| |
-200bps
|
| |
-100bps
|
| |
Flat
|
| |
+100bps
|
| |
+200bps
|
| |
+300bps
|
| |
+400bps
|
| |||||||||||||||||||||||||||
Policy Limit
|
| | | | (30.0)% | | | | | | (20.0)% | | | | | | (15.0)% | | | | | | (10.0)% | | | | | | N/A | | | | | | 17.5% | | | | | | 22.5% | | | | | | 27.5% | | | | | | 37.5% | | |
September 30, 2019
|
| | | | 5.8% | | | | | | 6.8% | | | | | | 6.9% | | | | | | 3.5% | | | | | | N/A | | | | | | (3.9)% | | | | | | (9.5)% | | | | | | (15.4)% | | | | | | (21.9)% | | |
December 31, 2018
|
| | | | (5.3)% | | | | | | (0.4)% | | | | | | 0.7% | | | | | | 0.6% | | | | | | N/A | | | | | | (3.7)% | | | | | | (8.2)% | | | | | | (13.2)% | | | | | | (19.0)% | | |
December 31, 2017
|
| | | | (4.2)% | | | | | | (0.7)% | | | | | | 1.8% | | | | | | (0.5)% | | | | | | N/A | | | | | | (2.6)% | | | | | | (5.0)% | | | | | | (7.2)% | | | | | | (9.7)% | | |
Name
|
| |
Age
|
| |
Position(s)
|
|
Executive Officers: | | | | ||||
Daniel R. Sheehan
|
| |
44
|
| | Chairman and Chief Executive Officer of the Company and Bank; Director of the Company and the Bank | |
Abel L. Iglesias
|
| |
57
|
| | President and Chief Operating Officer of the Bank; Director of the Company and the Bank | |
Ryan L. Gorney
|
| |
39
|
| | Chief Information and Digital Officer of the Bank | |
Mary Usategui
|
| |
35
|
| | Executive Vice President and Chief Financial Officer of the Bank; Corporate Secretary of the Company | |
Non-Executive Directors: | | | | ||||
Rolando DiGasbarro
|
| |
50
|
| | Director of the Company and the Bank | |
Carlos M. Garcia
|
| |
48
|
| | Director of the Company and the Bank | |
Jon L. Gorney
|
| |
69
|
| | Director of the Company and the Bank | |
Herbert Martens, Jr.
|
| |
67
|
| | Director of the Company and the Bank | |
Dr. Lawrence Schimmel, M.D.
|
| |
71
|
| | Director of the Company and the Bank | |
Anton V. Schutz
|
| |
55
|
| | Director of the Company and the Bank | |
|
Board of Directors
|
| ||||||
|
Class I
(Terms ending 2021) |
| |
Class II
(Terms ending 2022) |
| |
Class III
(Terms ending 2020) |
|
| Rolando DiGasbarro | | | Abel L. Iglesias | | | Jon L. Gorney | |
| Carlos M. Garcia | | | Daniel R. Sheehan | | | Herbert Martens, Jr. | |
| Dr. Lawrence Schimmel | | | | | | Anton V. Schutz | |
Name and Principal Position
|
| |
Year
|
| |
Salary
|
| |
Bonus
|
| |
Stock
Awards |
| |
Other
|
| |
Total
|
| ||||||||||||||||||
Daniel R. Sheehan
Chairman and Chief Executive Officer |
| | | | 2019 | | | | | $ | 400,000 | | | | | $ | 100,000 | | | | | $ | 665,000 | | | | | $ | 58,900 | | | | | $ | 1,223,900 | | |
Abel L. Iglesias
President and Chief Operating Officer |
| | | | 2019 | | | | | | 352,917 | | | | | | 120,000 | | | | | | 162,502 | | | | | | 58,004 | | | | | $ | 693,422 | | |
Ryan L. Gorney
Chief Information/Digital Officer |
| | | | 2019 | | | | | | 350,000 | | | | | | 50,000 | | | | | | 95,000 | | | | | | 37,619 | | | | | $ | 532,619 | | |
Name
|
| |
Year
|
| |
401(k)
Match |
| |
Health
Savings Account |
| |
Auto
Allowance |
| |
Health &
Welfare |
| |
Other(1)
|
| |
Total
|
| |||||||||||||||||||||
Daniel R. Sheehan
|
| | | | 2019 | | | | | $ | 16,462 | | | | | $ | — | | | | | $ | 6,000 | | | | | $ | 36,437 | | | | | $ | — | | | | | $ | 58,900 | | |
Abel L. Iglesias
|
| | | | 2019 | | | | | | 14,883 | | | | | | — | | | | | | 8,500 | | | | | | 32,221 | | | | | | 2,400 | | | | | $ | 58,004 | | |
Ryan L. Gorney
|
| | | | 2019 | | | | | | 7,593 | | | | | | — | | | | | | — | | | | | | 30,026 | | | | | | — | | | | | $ | 37,619 | | |
| | |
Option Awards(1)
|
| |
Share Appreciation Right Unit Awards(2)
|
| |
Stock Awards
|
| | | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||
Name
|
| |
Number of
Securities Underlying Unexercised Option Awards Exercisable |
| |
Number of
Securities Underlying Unexercised Option Awards Unexercisable |
| |
Option
Exercise Price |
| |
Number of
Securities Underlying Unexercised Units Exercisable |
| |
Number of
Securities Underlying Unexercised Units Unexercisable |
| |
Base
Price |
| |
Number of
Shares That Have Not Vested |
| |
Market
Value of Shares of Stock That Have Not Vested |
| |
Grant Date
|
| |
Expiration
Date |
| ||||||||||||||||||||||||||||||
Daniel R. Sheehan
|
| | | | 2,000 | | | | | | — | | | | | $ | 10.00 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 4/30/2010 | | | | | | 4/30/2020 | | |
Daniel R. Sheehan
|
| | | | 6,000 | | | | | | — | | | | | $ | 12.50 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1/1/2013 | | | | | | 1/1/2023 | | |
Daniel R. Sheehan
|
| | | | 5,000 | | | | | | — | | | | | $ | 12.50 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 10/1/2013 | | | | | | 10/1/2023 | | |
Daniel R. Sheehan
|
| | | | | | | | | | | | | | | | | | | | | | — | | | | | | 10,000 | | | | | $ | 11.50 | | | | | | | | | | | | | | | | | | 10/27/2014 | | | | | | N/A | | |
Daniel R. Sheehan
|
| | | | 5,000 | | | | | | — | | | | | $ | 13.00 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 12/31/2014 | | | | | | 12/31/2021 | | |
Daniel R. Sheehan
|
| | | | | | | | | | | | | | | | | | | | | | — | | | | | | 40,000 | | | | | $ | 11.50 | | | | | | | | | | | | | | | | | | 12/31/2015 | | | | | | N/A | | |
Daniel R. Sheehan
|
| | | | | | | | | | | | | | | | | | | | | | — | | | | | | 125,000 | | | | | $ | 12.75 | | | | | | | | | | | | | | | | | | 12/20/2016 | | | | | | N/A | | |
Daniel R. Sheehan
|
| | | | | | | | | | | | | | | | | | | | | | — | | | | | | 75,000 | | | | | $ | 15.00 | | | | | | | | | | | | | | | | | | 12/31/2017 | | | | | | N/A | | |
Daniel R. Sheehan
|
| | | | | | | | | | | | | | | | | | | | | | — | | | | | | 60,000 | | | | | $ | 18.25 | | | | | | | | | | | | | | | | | | 12/31/2018 | | | | | | N/A | | |
Daniel R. Sheehan
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 35,000 | | | | | $ | 665,000 | | | | | | 12/31/2019 | | | | | | N/A | | |
Abel L. Iglesias
|
| | | | | | | | | | | | | | | | | | | | | | — | | | | | | 12,000 | | | | | $ | 12.50 | | | | | | | | | | | | | | | | | | 3/1/2013 | | | | | | N/A | | |
Abel L. Iglesias
|
| | | | | | | | | | | | | | | | | | | | | | — | | | | | | 5,000 | | | | | $ | 11.50 | | | | | | | | | | | | | | | | | | 12/31/2014 | | | | | | N/A | | |
Abel L. Iglesias
|
| | | | | | | | | | | | | | | | | | | | | | — | | | | | | 20,000 | | | | | $ | 11.50 | | | | | | | | | | | | | | | | | | 12/31/2015 | | | | | | N/A | | |
Abel L. Iglesias
|
| | | | | | | | | | | | | | | | | | | | | | — | | | | | | 15,000 | | | | | $ | 12.75 | | | | | | | | | | | | | | | | | | 11/15/2016 | | | | | | N/A | | |
Abel L. Iglesias
|
| | | | | | | | | | | | | | | | | | | | | | — | | | | | | 25,000 | | | | | $ | 15.00 | | | | | | | | | | | | | | | | | | 12/31/2017 | | | | | | N/A | | |
Abel L. Iglesias
|
| | | | | | | | | | | | | | | | | | | | | | — | | | | | | 27,500 | | | | | $ | 18.25 | | | | | | | | | | | | | | | | | | 12/31/2018 | | | | | | N/A | | |
Abel L. Iglesias
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,096 | | | | | $ | 20,000 | | | | | | 7/15/2019 | | | | | | N/A | | |
Abel L. Iglesias
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 7,500 | | | | | $ | 142,500 | | | | | | 12/31/2019 | | | | | | N/A | | |
Ryan L. Gorney
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 5,000 | | | | | $ | 95,000 | | | | | | 12/31/2019 | | | | | | N/A | | |
Name
|
| |
Fees earned
or paid in cash |
| |
Stock Awards
|
| |
Total
Compensation |
| |||||||||
Rolando DiGasbarro(1)
|
| | | $ | 24,000 | | | | | $ | 10,000 | | | | | $ | 34,000 | | |
Carlos M. Garcia(2)
|
| | | | 24,000 | | | | | | 10,000 | | | | | | 34,000 | | |
Jon L. Gorney(3)
|
| | | | 24,000 | | | | | | 10,000 | | | | | | 34,000 | | |
Herbert Martens, Jr.(4)
|
| | | | 24,000 | | | | | | 10,000 | | | | | | 34,000 | | |
Dr. Lawrence Schimmel(5)
|
| | | | 24,000 | | | | | | 10,000 | | | | | | 34,000 | | |
Anton V. Schutz(6)
|
| | | | 24,000 | | | | | | 10,000 | | | | | | 34,000 | | |
| | |
Class A
Common Stock Beneficially Owned Prior to Our Initial Public Offering |
| |
Class B
Common Stock Beneficially Owned Prior to Our Initial Public Offering |
| |
% of Total
Voting Power before the Offering |
| |
Class A Common Stock Beneficially Owned
After the Initial Public Offering |
| ||||||||||||||||||||||||||||||||||||||||||
Name and Address of Beneficial Owner
|
| |
Number
|
| |
Percent
of Class A |
| |
Number
|
| |
Percent
of Class B |
| |
Number
|
| |
Percent (if
option not exercised) |
| |
Percent (if
option is exercised) |
| |
Pro Forma
Percent(1) |
| ||||||||||||||||||||||||||||||
5% or Greater Shareholders | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||
BayBoston Capital L.P.(2)
|
| | | | 423,416 | | | | | | 8.3% | | | | | | 60,880 | | | | | | 8.1% | | | | | | 8.3% | | | | | | 423,416 | | | | | | 5.2% | | | | | | 4.9% | | | | | | 3.3% | | |
1280 Center Street, Suite 2
Newton Center, MA 02459 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
EJF Capital, LLC(3)
|
| | | | 499,981 | | | | | | 9.8% | | | | | | 340,753 | | | | | | 45.3% | | | | | | 9.8% | | | | | | 499,981 | | | | | | 6.1% | | | | | | 5.8% | | | | | | 3.9% | | |
2107 Wilson Blvd., Suite 240
Arlington, VA 22201 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Emerald Advisers, Inc.(4)
|
| | | | 279,177 | | | | | | 5.5% | | | | | | — | | | | | | * | | | | | | 5.5% | | | | | | 279,177 | | | | | | 3.4% | | | | | | 3.2% | | | | | | 2.2% | | |
3195 Oregon Pike
Leola, PA 17540 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
RMB Capital Management, LLC(5)
|
| | | | 499,981 | | | | | | 9.8% | | | | | | 350,551 | | | | | | 46.6% | | | | | | 9.8% | | | | | | 499,981 | | | | | | 6.1% | | | | | | 5.8% | | | | | | 3.9% | | |
115 S. La Salle St.
Chicago, IL 60603 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Stephens Professional Holding LLC(6)
|
| | | | 279,177 | | | | | | 5.5% | | | | | | — | | | | | | * | | | | | | 5.5% | | | | | | 279,177 | | | | | | 3.4% | | | | | | 3.2% | | | | | | 2.2% | | |
111 Center Street
Little Rock, AR 72201 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Named Executive Officers and Directors | | | | | | | | | | | |||||||||||||||||||||||||||||||||||||||||||||
Rolando DiGasbarro(7)
|
| | | | 23,260 | | | | | | * | | | | | | — | | | | | | * | | | | | | * | | | | | | 23,260 | | | | | | * | | | | | | * | | | | | | * | | |
Carlos M. Garcia(8)
|
| | | | 423,416 | | | | | | 8.3% | | | | | | 60,880 | | | | | | 8.1% | | | | | | 8.3% | | | | | | 423,416 | | | | | | 5.2% | | | | | | 4.9% | | | | | | 3.3% | | |
Jon L. Gorney(9)
|
| | | | 6,005 | | | | | | * | | | | | | — | | | | | | * | | | | | | * | | | | | | 6,005 | | | | | | * | | | | | | * | | | | | | * | | |
Ryan L. Gorney(10)
|
| | | | 8,103 | | | | | | * | | | | | | — | | | | | | * | | | | | | * | | | | | | 8,103 | | | | | | * | | | | | | * | | | | | | * | | |
Abel L. Iglesias(11)
|
| | | | 9,406 | | | | | | * | | | | | | — | | | | | | * | | | | | | * | | | | | | 9,406 | | | | | | * | | | | | | * | | | | | | * | | |
Herbert Martens(12)
|
| | | | 41,736 | | | | | | * | | | | | | — | | | | | | * | | | | | | * | | | | | | 41,736 | | | | | | * | | | | | | * | | | | | | * | | |
Dr. Lawrence Schimmel, M.D.(13)
|
| | | | 57,794 | | | | | | 1.1% | | | | | | — | | | | | | * | | | | | | 1.1% | | | | | | 57,794 | | | | | | * | | | | | | * | | | | | | * | | |
Daniel R. Sheehan(14)
|
| | | | 93,734 | | | | | | 1.8% | | | | | | — | | | | | | * | | | | | | 1.8% | | | | | | 93,734 | | | | | | 1.1% | | | | | | 1.1% | | | | | | * | | |
Anton V. Schutz(15)
|
| | | | 500,507 | | | | | | 9.8% | | | | | | 350,551 | | | | | | 46.6% | | | | | | 9.8% | | | | | | 500,507 | | | | | | 6.1% | | | | | | 5.7% | | | | | | 3.9% | | |
All Directors and Executive Officers as a Group
(10 Persons) |
| | | | 1,173,877 | | | | | | 22.8% | | | | | | 411,431 | | | | | | 54.7% | | | | | | 22.8% | | | | | | 1,173,887 | | | | | | 14.2% | | | | | | 13.5% | | | | | | 9.1% | | |
| | |
Nine Months Ended September 30,
|
| |||||||||||||||
(Dollars in thousands)
|
| |
2019
|
| |
2018
|
| |
Change
|
| |||||||||
Interest income
|
| | | $ | 24,317 | | | | | $ | 20,438 | | | | | | 19.0% | | |
Interest expense
|
| | | | 7,664 | | | | | | 4,891 | | | | | | 56.7% | | |
Net Interest income
|
| | | | 16,653 | | | | | | 15,546 | | | | | | 7.1% | | |
Provision for loan losses
|
| | | | 367 | | | | | | 712 | | | | | | (48.5)% | | |
Net interest income after provision
|
| | | | 16,286 | | | | | | 14,834 | | | | | | 9.8% | | |
Noninterest income
|
| | | | 1,140 | | | | | | 830 | | | | | | 37.3% | | |
Noninterest expense
|
| | | | 10,121 | | | | | | 9,054 | | | | | | 11.8% | | |
Income before income taxes
|
| | | | 7,305 | | | | | | 6,611 | | | | | | 10.5% | | |
Income tax expense
|
| | | | 1,844 | | | | | | 1,737 | | | | | | 6.2% | | |
Net income
|
| | | $ | 5,461 | | | | | $ | 4,874 | | | | | | 12.0% | | |
|
| | |
Years Ended December 31,
|
| |
Years Ended December 31,
|
| ||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
2018
|
| |
2017
|
| |
Change
|
| |
2017
|
| |
2016
|
| |
Change
|
| ||||||||||||||||||
Interest income
|
| | | $ | 28,240 | | | | | $ | 21,303 | | | | | | 32.6% | | | | | $ | 21,303 | | | | | $ | 16,765 | | | | | | 27.1% | | |
Interest expense
|
| | | | 7,073 | | | | | | 4,012 | | | | | | 76.3% | | | | | | 4,012 | | | | | | 2,625 | | | | | | 52.8% | | |
Net Interest income
|
| | | | 21,167 | | | | | | 17,292 | | | | | | 22.4% | | | | | | 17,292 | | | | | | 14,140 | | | | | | 22.3% | | |
Provision for loan losses
|
| | | | 1,149 | | | | | | 921 | | | | | | 24.7% | | | | | | 921 | | | | | | 640 | | | | | | 44.0% | | |
Net interest income after provision
|
| | | | 20,018 | | | | | | 16,370 | | | | | | 22.3% | | | | | | 16,370 | | | | | | 13,500 | | | | | | 21.3% | | |
Noninterest income
|
| | | | 1,257 | | | | | | 1,309 | | | | | | (3.9)% | | | | | | 1,309 | | | | | | 1,168 | | | | | | 12.0% | | |
Noninterest expense
|
| | | | 12,326 | | | | | | 10,637 | | | | | | 15.9% | | | | | | 10,637 | | | | | | 8,975 | | | | | | 18.5% | | |
Income before income taxes
|
| | | | 8,949 | | | | | | 7,042 | | | | | | 27.1% | | | | | | 7,042 | | | | | | 5,693 | | | | | | 23.7% | | |
Income tax expense
|
| | | | 2,141 | | | | | | 3,080 | | | | | | (30.5)% | | | | | | 3,080 | | | | | | 2,214 | | | | | | 39.1% | | |
Net income
|
| | | $ | 6,808 | | | | | $ | 3,963 | | | | | | 71.8% | | | | | $ | 3,963 | | | | | $ | 3,479 | | | | | | 13.9% | | |
Preferred stock dividend declared
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 7 | | | | | | (100.0)% | | |
Net income available to common shareholders
|
| | | $ | 6,808 | | | | | $ | 3,963 | | | | | | | | | | | $ | 3,963 | | | | | $ | 3,472 | | | | | | 14.1% | | |
| | |
For the Nine Months Ended September 30,
|
| |||||||||||||||||||||||||||||||||
| | |
2019
|
| |
2018
|
| ||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Average
Outstanding Balance |
| |
Interest
Income/ Expense |
| |
Average
Yield/Rate |
| |
Average
Outstanding Balance |
| |
Interest
Income/ Expense |
| |
Average
Yield/Rate |
| ||||||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest earning assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | $ | 49,179 | | | | | $ | 859 | | | | | | 2.34% | | | | | $ | 45,600 | | | | | $ | 604 | | | | | | 1.77% | | |
Federal funds sold
|
| | | | — | | | | | | — | | | | | | 0.00% | | | | | | — | | | | | | — | | | | | | 0.00% | | |
Federal Reserve Bank stock, FHLB stock and other corporate stock
|
| | | | 2,077 | | | | | | — | | | | | | 0.00% | | | | | | 2,246 | | | | | | — | | | | | | 0.00% | | |
Investment securities
|
| | | | 31,751 | | | | | | 690 | | | | | | 2.58% | | | | | | 27,280 | | | | | | 454 | | | | | | 2.25% | | |
Loans
|
| | | | 557,712 | | | | | | 22,849 | | | | | | 5.48% | | | | | | 502,582 | | | | | | 19,380 | | | | | | 5.16% | | |
Total interest earning assets
|
| | | | 640,719 | | | | | | 24,317 | | | | | | 5.08% | | | | | | 577,708 | | | | | | 20,438 | | | | | | 4.73% | | |
Noninterest earning assets
|
| | | | 18,720 | | | | | | — | | | | | | | | | | | | 14,737 | | | | | | — | | | | | | | | |
Total assets
|
| | | | 659,439 | | | | | | 24,317 | | | | | | 4.93% | | | | | | 592,445 | | | | | | 20,438 | | | | | | 4.61% | | |
Liabilities and shareholders’ equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | | 426,884 | | | | | | 6,387 | | | | | | 2.00% | | | | | | 372,229 | | | | | | 3,758 | | | | | | 1.35% | | |
Borrowed funds
|
| | | | 45,320 | | | | | | 1,277 | | | | | | 3.78% | | | | | | 51,616 | | | | | | 1,133 | | | | | | 2.94% | | |
Total interest-bearing liabilities
|
| | | | 472,204 | | | | | | 7,664 | | | | | | 2.17% | | | | | | 423,845 | | | | | | 4,891 | | | | | | 1.54% | | |
Noninterest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing deposits
|
| | | | 130,521 | | | | | | | | | | | | | | | | | | 119,955 | | | | | | | | | | | | | | |
Other noninterest-bearing liabilities
|
| | | | 2,732 | | | | | | | | | | | | | | | | | | 2,574 | | | | | | | | | | | | | | |
Shareholders’ equity
|
| | | | 53,982 | | | | | | | | | | | | | | | | | | 46,071 | | | | | | | | | | | | | | |
Total liabilities and shareholders’ equity
|
| | | $ | 659,439 | | | | | | | | | | | | | | | | | $ | 592,445 | | | | | | | | | | | | | | |
Net interest spread
|
| | | | | | | | | | | | | | | | 2.91% | | | | | | | | | | | | | | | | | | 3.19% | | |
Net interest income
|
| | | | | | | | | $ | 16,653 | | | | | | | | | | | | | | | | | $ | 15,547 | | | | | | | | |
Net interest margin
|
| | | | | | | | | | | | | | | | 3.48% | | | | | | | | | | | | | | | | | | 3.60% | | |
|
| | |
For the Years Ended December 31,
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Average
Outstanding Balance |
| |
Interest
Income/ Expense |
| |
Average
Yield/Rate |
| |
Average
Outstanding Balance |
| |
Interest
Income/ Expense |
| |
Average
Yield/Rate |
| |
Average
Outstanding Balance |
| |
Interest
Income/ Expense |
| |
Average
Yield/Rate |
| |||||||||||||||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||
Interest earning assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||
Interest-bearing deposits
|
| | | $ | 41,500 | | | | | $ | 779 | | | | | | 1.88% | | | | | $ | 44,238 | | | | | $ | 483 | | | | | | 1.09% | | | | | $ | 48,476 | | | | | $ | 244 | | | | | | 0.50% | | |
Federal funds sold
|
| | | | — | | | | | | — | | | | | | 0.00% | | | | | | — | | | | | | — | | | | | | 0.00% | | | | | | 315 | | | | | | — | | | | | | 0.00% | | |
Federal Reserve Bank stock, FHLB stock and other corporate stock
|
| | | | 2,274 | | | | | | — | | | | | | 0.00% | | | | | | 1,614 | | | | | | — | | | | | | 0.00% | | | | | | 1,282 | | | | | | — | | | | | | 0.00% | | |
Investment securities
|
| | | | 29,132 | | | | | | 664 | | | | | | 2.29% | | | | | | 17,122 | | | | | | 299 | | | | | | 1.77% | | | | | | 14,686 | | | | | | 244 | | | | | | 1.68% | | |
Loans(1)
|
| | | | 514,258 | | | | | | 26,797 | | | | | | 5.21% | | | | | | 411,801 | | | | | | 20,521 | | | | | | 4.98% | | | | | | 328,733 | | | | | | 16,277 | | | | | | 4.95% | | |
Total interest earning assets
|
| | | | 587,164 | | | | | | 28,240 | | | | | | 4.81% | | | | | | 474,774 | | | | | | 21,303 | | | | | | 4.49% | | | | | | 393,492 | | | | | | 16,765 | | | | | | 4.26% | | |
Noninterest earning assets
|
| | | | 15,069 | | | | | | — | | | | | | | | | | | | 12,825 | | | | | | — | | | | | | | | | | | | 11,027 | | | | | | — | | | | | | | | |
Total assets
|
| | | | 602,233 | | | | | | 28,240 | | | | | | 4.69% | | | | | | 487,599 | | | | | | 21,303 | | | | | | 4.37% | | | | | | 404,519 | | | | | | 16,765 | | | | | | 4.15% | | |
Liabilities and shareholders’ equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | | 378,111 | | | | | | 5,473 | | | | | | 1.45% | | | | | | 289,856 | | | | | | 2,910 | | | | | | 1.00% | | | | | | 254,967 | | | | | | 2,315 | | | | | | 0.91% | | |
Borrowed funds
|
| | | | 52,304 | | | | | | 1,600 | | | | | | 3.06% | | | | | | 38,289 | | | | | | 1,101 | | | | | | 2.88% | | | | | | 23,939 | | | | | | 311 | | | | | | 1.30% | | |
Total interest-bearing liabilities
|
| | | | 430,415 | | | | | | 7,073 | | | | | | 1.64% | | | | | | 328,145 | | | | | | 4,012 | | | | | | 1.22% | | | | | | 278,906 | | | | | | 2,625 | | | | | | 0.94% | | |
Noninterest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing deposits
|
| | | | 122,571 | | | | | | | | | | | | | | | | | | 116,049 | | | | | | | | | | | | | | | | | | 85,944 | | | | | | | | | | | | | | |
Other noninterest-bearing liabilities
|
| | | | 10,156 | | | | | | | | | | | | | | | | | | 2,084 | | | | | | | | | | | | | | | | | | 1,631 | | | | | | | | | | | | | | |
Shareholders’ equity
|
| | | | 47,018 | | | | | | | | | | | | | | | | | | 41,321 | | | | | | | | | | | | | | | | | | 38,038 | | | | | | | | | | | | | | |
Total liabilities and shareholders’
equity |
| | | $ | 602,233 | | | | | | | | | | | | | | | | | $ | 487,599 | | | | | | | | | | | | | | | | | $ | 404,519 | | | | | | | | | | | | | | |
Net interest spread(2)
|
| | | | | | | | | | | | | | | | 3.17% | | | | | | | | | | | | | | | | | | 3.27% | | | | | | | | | | | | | | | | | | 3.32% | | |
Net interest income
|
| | | | | | | | | $ | 21,167 | | | | | | | | | | | | | | | | | $ | 17,292 | | | | | | | | | | | | | | | | | $ | 14,140 | | | | | | | | |
Net interest margin(3)
|
| | | | | | | | | | | | | | | | 3.60% | | | | | | | | | | | | | | | | | | 3.64% | | | | | | | | | | | | | | | | | | 3.59% | | |
|
| | |
For the Nine Months Ended September 30, 2019 Compared to 2018
|
| |||||||||||||||
| | |
Change Due To
|
| | | | | | | |||||||||
(Dollars in thousands)
|
| |
Volume
|
| |
Rate
|
| |
Interest Variance
|
| |||||||||
Interest income | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | $ | 47 | | | | | $ | 208 | | | | | $ | 255 | | |
Federal funds sold
|
| | | | — | | | | | | — | | | | | | — | | |
Federal Reserve Bank stock, Federal Home Loan
Bank stock and other corporate stock |
| | | | — | | | | | | — | | | | | | — | | |
Investment securities
|
| | | | 75 | | | | | | 80 | | | | | | 155 | | |
Loans
|
| | | | 2,126 | | | | | | 1,343 | | | | | | 3,469 | | |
Total interest income
|
| | | $ | 2,248 | | | | | $ | 1,631 | | | | | $ | 3,879 | | |
Interest expense | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | | 552 | | | | | | 2,077 | | | | | | 2,629 | | |
Borrowed funds
|
| | | | (138) | | | | | | 282 | | | | | | 144 | | |
Total interest expense
|
| | | $ | 414 | | | | | $ | 2,359 | | | | | $ | 2,773 | | |
Net interest income
|
| | | $ | 1,834 | | | | | ||||||||||
|
| | |
For the Years Ended December 31, 2018
Compared to 2017 |
| |
For the Years Ended December 31, 2017
Compared to 2016 |
| ||||||||||||||||||||||||||||||
| | |
Change Due To
|
| | | | | | | |
Change Due To
|
| | | | | | | ||||||||||||||||||
(Dollars in thousands)
|
| |
Volume
|
| |
Rate
|
| |
Interest Variance
|
| |
Volume
|
| |
Rate
|
| |
Interest Variance
|
| ||||||||||||||||||
Interest income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | $ | (30) | | | | | $ | 326 | | | | | $ | 296 | | | | | $ | (21) | | | | | $ | 260 | | | | | $ | 239 | | |
Federal funds sold
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Federal Reserve Bank stock, Federal
Home Loan Bank stock and other corporate stock |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Investment securities
|
| | | | 212 | | | | | | 153 | | | | | | 365 | | | | | | 41 | | | | | | 14 | | | | | | 55 | | |
Loans
|
| | | | 5,106 | | | | | | 1,170 | | | | | | 6,276 | | | | | | 4,113 | | | | | | 131 | | | | | | 4,244 | | |
Total interest income
|
| | | $ | 5,288 | | | | | $ | 1,649 | | | | | $ | 6,937 | | | | | $ | 4,133 | | | | | $ | 405 | | | | | $ | 4,538 | | |
Interest expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | | 885 | | | | | | 1,678 | | | | | | 2,563 | | | | | | 317 | | | | | | 278 | | | | | | 595 | | |
Borrowed funds
|
| | | | 403 | | | | | | 96 | | | | | | 499 | | | | | | 186 | | | | | | 604 | | | | | | 790 | | |
Total interest expense
|
| | | $ | 1,288 | | | | | $ | 1,774 | | | | | $ | 3,062 | | | | | $ | 503 | | | | | $ | 882 | | | | | $ | 1,385 | | |
Net interest income
|
| | | $ | 4,000 | | | | | | | | | | | | | | | | | $ | 3,630 | | | | | | | | | | | | | | |
| | |
Nine Months Ended September 30,
|
| |||||||||||||||
(Dollars in thousands)
|
| |
2019
|
| |
2018
|
| |
Increase (Decrease)
|
| |||||||||
Noninterest income | | | | | | | | | | | | | | | | | | | |
Deposit account service charges
|
| | | $ | 593 | | | | | $ | 554 | | | | | $ | 39 | | |
Gain (loss) on sale of loans
|
| | | | 312 | | | | | | 116 | | | | | | 196 | | |
Other fees and charges
|
| | | | 235 | | | | | | 161 | | | | | | 74 | | |
Total noninterest income
|
| | | $ | 1,140 | | | | | $ | 831 | | | | | $ | 309 | | |
|
| | |
Years Ended December 31,
|
| |
Years Ended December 31,
|
| ||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
2018
|
| |
2017
|
| |
Increase (Decrease)
|
| |
2017
|
| |
2016
|
| |
Increase (Decrease)
|
| ||||||||||||||||||
Noninterest income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposit account service charges
|
| | | $ | 750 | | | | | $ | 615 | | | | | $ | 136 | | | | | $ | 615 | | | | | $ | 408 | | | | | $ | 207 | | |
Gain (loss) on sale of loans
|
| | | | 250 | | | | | | 527 | | | | | | (277) | | | | | | 527 | | | | | | 626 | | | | | | (100) | | |
Other fees and charges
|
| | | | 257 | | | | | | 167 | | | | | | 89 | | | | | | 167 | | | | | | 134 | | | | | | 34 | | |
Total noninterest income
|
| | | $ | 1,257 | | | | | $ | 1,309 | | | | | $ | (52) | | | | | $ | 1,309 | | | | | $ | 1,168 | | | | | $ | 141 | | |
| | |
Nine Months Ended September 30,
|
| |||||||||||||||
(Dollars in thousands)
|
| |
2019
|
| |
2018
|
| |
Increase (Decrease)
|
| |||||||||
Noninterest expense | | | | | | | | | | | | | | | | | | | |
Salaries and benefits
|
| | | $ | 6,155 | | | | | $ | 5,531 | | | | | $ | 624 | | |
Occupancy and equipment
|
| | | | 1,111 | | | | | | 1,010 | | | | | | 101 | | |
Professional services
|
| | | | 516 | | | | | | 337 | | | | | | 179 | | |
Data Processing
|
| | | | 456 | | | | | | 403 | | | | | | 53 | | |
Advertising
|
| | | | 96 | | | | | | 147 | | | | | | (51) | | |
Other real estate owned expense
|
| | | | 107 | | | | | | — | | | | | | 107 | | |
Regulatory assessments
|
| | | | 199 | | | | | | 342 | | | | | | (143) | | |
Directors’ compensation
|
| | | | 756 | | | | | | 693 | | | | | | 63 | | |
Other
|
| | | | 725 | | | | | | 591 | | | | | | 134 | | |
Total noninterest expense
|
| | | $ | 10,121 | | | | | $ | 9,054 | | | | | $ | 1,067 | | |
|
| | |
Years Ended December 31,
|
| |
Years Ended December 31,
|
| ||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
2018
|
| |
2017
|
| |
Increase (Decrease)
|
| |
2017
|
| |
2016
|
| |
Increase (Decrease)
|
| ||||||||||||||||||
Noninterest expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries and benefits
|
| | | $ | 7,320 | | | | | $ | 6,275 | | | | | $ | 1,045 | | | | | $ | 6,275 | | | | | $ | 5,259 | | | | | $ | 1,016 | | |
Occupancy and equipment
|
| | | | 1,335 | | | | | | 1,110 | | | | | | 225 | | | | | | 1,110 | | | | | | 1,150 | | | | | | (40) | | |
Professional services
|
| | | | 415 | | | | | | 432 | | | | | | (17) | | | | | | 432 | | | | | | 339 | | | | | | 93 | | |
Data Processing
|
| | | | 545 | | | | | | 499 | | | | | | 46 | | | | | | 499 | | | | | | 485 | | | | | | 14 | | |
Advertising
|
| | | | 193 | | | | | | 138 | | | | | | 55 | | | | | | 138 | | | | | | 112 | | | | | | 27 | | |
Regulatory assessments
|
| | | | 442 | | | | | | 239 | | | | | | 203 | | | | | | 239 | | | | | | 280 | | | | | | (40) | | |
Directors’ compensation
|
| | | | 930 | | | | | | 738 | | | | | | 192 | | | | | | 738 | | | | | | 429 | | | | | | 308 | | |
Other
|
| | | | 1,146 | | | | | | 1,205 | | | | | | (59) | | | | | | 1,205 | | | | | | 920 | | | | | | 284 | | |
Total noninterest expense
|
| | | $ | 12,326 | | | | | $ | 10,637 | | | | | $ | 1,689 | | | | | $ | 10,637 | | | | | $ | 8,975 | | | | | $ | 1,662 | | |
At September 30, 2019
|
| |
One Year or Less
|
| |
More than One Year
Through Five Years |
| |
More than Five Years
Through 10 Years |
| |
More than 10 Years
|
| |
Total
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Book
Value |
| |
Weighted
Average Yield |
| |
Book
Value |
| |
Weighted
Average Yield |
| |
Book
Value |
| |
Weighted
Average Yield |
| |
Book
Value |
| |
Weighted
Average Yield |
| |
Book
Value |
| |
Fair
Value |
| |
Weighted
Average Yield |
| |||||||||||||||||||||||||||||||||
Securities Available for Sale | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Government-sponsored agencies
|
| | | $ | 2,000 | | | | | | 1.44% | | | | | $ | 7,000 | | | | | | 2.66% | | | | | $ | — | | | | | | | | | | | $ | — | | | | | | | | | | | $ | 9,000 | | | | | $ | 9,036 | | | | | | 2.39% | | |
Mortgage-backed securities
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,362 | | | | | | 2.43% | | | | | | 5,430 | | | | | | 1.52% | | | | | | 11,792 | | | | | | 11,874 | | | | | | 2.01% | | |
U.S. Agency obligations
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,254 | | | | | | 3.27% | | | | | | 2,013 | | | | | | 2.30% | | | | | | 3,267 | | | | | | 3,180 | | | | | | 2.67% | | |
State, county, and municipals
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,048 | | | | | | 2.30% | | | | | | — | | | | | | — | | | | | | 1,048 | | | | | | 1,075 | | | | | | 2.30% | | |
Corporate bonds
|
| | | | 501 | | | | | | 3.53% | | | | | | 499 | | | | | | 3.29% | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,000 | | | | | | 1,006 | | | | | | 3.41% | | |
Total
|
| | | $ | 2,501 | | | | | | | | | | | $ | 7,499 | | | | | | | | | | | $ | 8,664 | | | | | | | | | | | $ | 7,443 | | | | | | | | | | | $ | 26,107 | | | | | $ | 26,171 | | | | | | | | |
Securities Held to Maturity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S Treasury securities
|
| | | | — | | | | | | — | | | | | $ | 201 | | | | | | 1.80% | | | | | $ | — | | | | | | | | | | | $ | — | | | | | | | | | | | $ | 201 | | | | | $ | 201 | | | | | | 1.80% | | |
U.S. Government-sponsored agencies
|
| | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | — | | | | | | — | | | | | | — | | |
Mortgage-backed securities
|
| | | | 3 | | | | | | 5.43% | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 294 | | | | | | 1.21% | | | | | | 297 | | | | | | 292 | | | | | | 1.25% | | |
Foreign Sovereign (Israel)
|
| | | | — | | | | | | | | | | | | 1,000 | | | | | | 2,68% | | | | | | — | | | | | | | | | | | | — | | | | | | | | | | | | 1,000 | | | | | | 1,000 | | | | | | 2.68% | | |
Total
|
| | | $ | 3 | | | | | | | | | | | $ | 1,201 | | | | | | | | | | | $ | — | | | | | | | | | | | $ | 294 | | | | | | | | | | | $ | 1,498 | | | | | $ | 1,493 | | | | | | | | |
|
| | |
December 31,
|
| |||||||||||||||||||||||||||||||||||||||||||||
| | |
September 30, 2019
|
| |
2018
|
| |
2017
|
| |
2016
|
| ||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Book
Value |
| |
Percent
|
| |
Book
Value |
| |
Percent
|
| |
Book
Value |
| |
Percent
|
| |
Book
Value |
| |
Percent
|
| ||||||||||||||||||||||||
Securities Available for Sale | | ||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Government agencies
|
| | | $ | 3,267 | | | | | | 12.51% | | | | | $ | 4,182 | | | | | | 12.96% | | | | | $ | 5,533 | | | | | | 32.96% | | | | | $ | 5,477 | | | | | | 40.80% | | |
U.S. government-sponsored entities
|
| | | | 20,792 | | | | | | 79.64% | | | | | | 25,533 | | | | | | 79.12% | | | | | | 8,692 | | | | | | 51.78% | | | | | | 4,874 | | | | | | 36.31% | | |
State, county and municipal bonds
|
| | | | 1,048 | | | | | | 4.01% | | | | | | 1,054 | | | | | | 3.27% | | | | | | 1,061 | | | | | | 6.32% | | | | | | 1,068 | | | | | | 7.96% | | |
Corporate bonds
|
| | | | 1,000 | | | | | | 3.83% | | | | | | 1,501 | | | | | | 4.65% | | | | | | 1,502 | | | | | | 8.95% | | | | | | 2,004 | | | | | | 14.93% | | |
Total
|
| | | $ | 26,107 | | | | | | 100.00% | | | | | $ | 32,270 | | | | | | 100.00% | | | | | $ | 16,788 | | | | | | 100.00% | | | | | $ | 13,423 | | | | | | 100.00% | | |
Securities Held to Maturity | | ||||||||||||||||||||||||||||||||||||||||||||||||
U.S. Treasuries
|
| | | $ | 201 | | | | | | 13.42% | | | | | $ | 200 | | | | | | 12.91% | | | | | $ | 200 | | | | | | 12.35% | | | | | $ | 200 | | | | | | 11.74% | | |
U.S. government-sponsored entities
|
| | | | 297 | | | | | | 19.83% | | | | | | 349 | | | | | | 22.53% | | | | | | 420 | | | | | | 25.93% | | | | | | 503 | | | | | | 29.54% | | |
Foreign sovereign (Israel)
|
| | | | 1,000 | | | | | | 66.76% | | | | | | 1,000 | | | | | | 64.56% | | | | | | 1,000 | | | | | | 61.73% | | | | | | 1,000 | | | | | | 58.72% | | |
Total
|
| | | $ | 1,498 | | | | | | 100.00% | | | | | $ | 1,549 | | | | | | 100.00% | | | | | $ | 1,620 | | | | | | 100.00% | | | | | $ | 1,703 | | | | | | 100.00% | | |
| | | | | | | | | | | | | | |
December 31,
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
September 30, 2019
|
| |
2018
|
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| ||||||||||||||||||||||||||||||||||||
Commercial real estate
|
| | | $ | 404,087 | | | | | | 71.4% | | | | | $ | 384,697 | | | | | | 69.1% | | | | | $ | 298,677 | | | | | | 64.5% | | | | | $ | 240,623 | | | | | | 66.0% | | | | | $ | 201,833 | | | | | | 70.2% | | | | | $ | 132,386 | | | | | | 64.8% | | |
Owner Occupied
|
| | | | 165,662 | | | | | | — | | | | | | 171,924 | | | | | | — | | | | | | 135,101 | | | | | | — | | | | | | 102,593 | | | | | | — | | | | | | 66,032 | | | | | | — | | | | | | 30,032 | | | | | | — | | |
Non-Owner Occupied
|
| | | | 238,425 | | | | | | — | | | | | | 212,773 | | | | | | — | | | | | | 163,576 | | | | | | — | | | | | | 138,030 | | | | | | — | | | | | | 135,801 | | | | | | — | | | | | | 102,354 | | | | | | — | | |
Residential real estate
|
| | | | 64,985 | | | | | | 11.5% | | | | | | 69,568 | | | | | | 12.5% | | | | | | 72,006 | | | | | | 15.5% | | | | | | 60,500 | | | | | | 16.6% | | | | | | 44,081 | | | | | | 15.3% | | | | | | 41,154 | | | | | | 20.2% | | |
Commercial
|
| | | | 72,902 | | | | | | 12.9% | | | | | | 80,172 | | | | | | 14.4% | | | | | | 61,661 | | | | | | 13.3% | | | | | | 46,408 | | | | | | 12.7% | | | | | | 38,170 | | | | | | 13.3% | | | | | | 22,593 | | | | | | 11.1% | | |
Construction and development
|
| | | | 18,713 | | | | | | 3.3% | | | | | | 18,747 | | | | | | 3.4% | | | | | | 28,629 | | | | | | 6.2% | | | | | | 13,932 | | | | | | 3.8% | | | | | | 400 | | | | | | 0.1% | | | | | | 2,614 | | | | | | 1.3% | | |
Consumer and other loans
|
| | | | 4,882 | | | | | | 0.9% | | | | | | 3,408 | | | | | | 0.6% | | | | | | 2,210 | | | | | | 0.5% | | | | | | 3,061 | | | | | | 0.8% | | | | | | 3,125 | | | | | | 1.1% | | | | | | 5,457 | | | | | | 2.7% | | |
Total loans
|
| | | $ | 565,569 | | | | | | 100.0% | | | | | $ | 556,593 | | | | | | 100.0% | | | | | $ | 463,183 | | | | | | 100.0% | | | | | $ | 364,524 | | | | | | 100.0% | | | | | $ | 287,609 | | | | | | 100.0% | | | | | $ | 204,204 | | | | | | 100.0% | | |
Unearned loan origination fees (costs), net
|
| | | | (300) | | | | | | | | | | | | (366) | | | | | | | | | | | | (115) | | | | | | | | | | | | 136 | | | | | | | | | | | | (152) | | | | | | | | | | | | (157) | | | | | | | | |
Allowance for loan losses
|
| | | | (5,294) | | | | | | | | | | | | (4,863) | | | | | | | | | | | | (4,199) | | | | | | | | | | | | (3,625) | | | | | | | | | | | | (3,000) | | | | | | | | | | | | (2,711) | | | | | | | | |
Loans, net
|
| | | $ | 559,975 | | | | | | | | | | | $ | 551,364 | | | | | | | | | | | $ | 458,869 | | | | | | | | | | | $ | 361,035 | | | | | | | | | | | $ | 284,457 | | | | | | | | | | | $ | 201,336 | | | | | | | | |
|
| | |
As of September 30, 2019
|
| |||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Percent
|
| ||||||
CRE and Construction & Development Loans, combined | | | | | | | | | | | | | |
1 – 4 Family Construction
|
| | | $ | 2,845 | | | | | | 0.7% | | |
Commercial 1 – 4 Family Residential
|
| | | | 35,958 | | | | | | 8.5% | | |
Auto (Car Lot/Auto Repair)
|
| | | | 1,025 | | | | | | .2% | | |
Gas Station
|
| | | | 51,817 | | | | | | 12.3% | | |
Commercial Construction
|
| | | | 15,039 | | | | | | 3.6% | | |
Educational Facility
|
| | | | 4,435 | | | | | | 1.0% | | |
Hotel
|
| | | | 30,003 | | | | | | 7.1% | | |
Land Development
|
| | | | 11,824 | | | | | | 2.8% | | |
Multifamily
|
| | | | 19,270 | | | | | | 4.6% | | |
Office
|
| | | | 50,632 | | | | | | 12.0% | | |
Other/Special Use
|
| | | | 2,104 | | | | | | .5% | | |
Religious Facility
|
| | | | 5,084 | | | | | | 1.2% | | |
Retail
|
| | | | 120,140 | | | | | | 28.4% | | |
Warehouse
|
| | | | 72,624 | | | | | | 17.2% | | |
Total
|
| | | $ | 422,800 | | | | | | 100.0% | | |
|
| | |
As of September 30, 2019
|
| |||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Percent
|
| ||||||
CRE and Construction & Development Loans, combined | | | | | | | | | | | | | |
Broward
|
| | | $ | 83,645 | | | | | | 19.8% | | |
Miami-Dade
|
| | | | 265,508 | | | | | | 62.8% | | |
Palm Beach
|
| | | | 21,642 | | | | | | 5.1% | | |
Other FL County
|
| | | | 42,427 | | | | | | 10.0% | | |
Out of State
|
| | | | 9,578 | | | | | | 2.3% | | |
Total
|
| | | $ | 422,800 | | | | | | 100.0% | | |
|
| | |
As of September 30, 2019
|
| |||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Percent
|
| ||||||
Commercial and Industrial Loans | | | | | | | | | | | | | |
Business Products
|
| | | $ | 3,878 | | | | | | 5.3% | | |
Business Services
|
| | | | 5,188 | | | | | | 7.1% | | |
Information
|
| | | | 4,442 | | | | | | 6.1% | | |
Construction
|
| | | | 1,525 | | | | | | 2.1% | | |
Finance
|
| | | | 15,330 | | | | | | 21.0% | | |
Healthcare
|
| | | | 4,239 | | | | | | 5.8% | | |
Real Estate
|
| | | | 8,797 | | | | | | 12.1% | | |
Services
|
| | | | 9,252 | | | | | | 12.7% | | |
Trade
|
| | | | 19,187 | | | | | | 26.3% | | |
Transportation
|
| | | | 1,064 | | | | | | 1.5% | | |
Total
|
| | | $ | 72,902 | | | | | | 100.0% | | |
| | |
September 30, 2019
|
| |||||||||||||||||||||
(Dollars in thousands)
|
| |
Due in
One Year or Less |
| |
Due in
One to Five Years |
| |
Due After
Five Years |
| |
Total
|
| ||||||||||||
Commercial Real Estate
|
| | | $ | 34,552 | | | | | $ | 159,190 | | | | | $ | 210,345 | | | | | $ | 404,087 | | |
Residential Real Estate
|
| | | | 9,002 | | | | | | 41,972 | | | | | | 14,011 | | | | | | 64,985 | | |
Commercial
|
| | | | 37,269 | | | | | | 22,937 | | | | | | 12,696 | | | | | | 72,902 | | |
Construction and Development
|
| | | | 6,591 | | | | | | 12,122 | | | | | | — | | | | | | 18,713 | | |
Consumer and Other
|
| | | | 1,336 | | | | | | 885 | | | | | | 2,661 | | | | | | 4,882 | | |
Total loans
|
| | | $ | 88,750 | | | | | $ | 237,106 | | | | | $ | 239,713 | | | | | $ | 565,569 | | |
Amounts with fixed rates
|
| | | $ | 25,120 | | | | | $ | 148,367 | | | | | $ | 55,399 | | | | | $ | 228,886 | | |
Amounts with floating rates
|
| | | $ | 63,630 | | | | | $ | 88,739 | | | | | $ | 184,314 | | | | | $ | 336,683 | | |
(Dollars in thousands)
|
| |
Pass
|
| |
Special
Mention |
| |
Substandard
|
| |
Doubtful
|
| |
Total
|
| |||||||||||||||
September 30, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate
|
| | | $ | 404,087 | | | | | | — | | | | | | — | | | | | | — | | | | | $ | 404,087 | | |
Residential real estate
|
| | | | 64,875 | | | | | | — | | | | | | 110 | | | | | | — | | | | | | 64,985 | | |
Commercial
|
| | | | 72,902 | | | | | | — | | | | | | — | | | | | | — | | | | | | 72,902 | | |
Construction and development
|
| | | | 18,713 | | | | | | — | | | | | | — | | | | | | — | | | | | | 18,713 | | |
Consumer
|
| | | | 4,882 | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,882 | | |
Total
|
| | | $ | 565,459 | | | | | $ | — | | | | | $ | 110 | | | | | $ | — | | | | | $ | 565,569 | | |
December 31, 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate
|
| | | $ | 384,697 | | | | | | — | | | | | | — | | | | | | — | | | | | $ | 384,697 | | |
Residential real estate
|
| | | | 69,458 | | | | | | — | | | | | | 110 | | | | | | — | | | | | | 69,568 | | |
Commercial
|
| | | | 80,172 | | | | | | — | | | | | | — | | | | | | — | | | | | | 80,172 | | |
Construction and development
|
| | | | 18,747 | | | | | | — | | | | | | — | | | | | | — | | | | | | 18,747 | | |
Consumer
|
| | | | 3,408 | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,408 | | |
Total
|
| | | $ | 556,482 | | | | | $ | — | | | | | $ | 110 | | | | | $ | — | | | | | $ | 556,592 | | |
December 31, 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate
|
| | | $ | 298,677 | | | | | | — | | | | | | — | | | | | | — | | | | | $ | 298,677 | | |
Residential real estate
|
| | | | 69,906 | | | | | | — | | | | | | 2,100 | | | | | | — | | | | | | 72,006 | | |
Commercial
|
| | | | 61,356 | | | | | | — | | | | | | 305 | | | | | | — | | | | | | 61,661 | | |
Construction and development
|
| | | | 28,629 | | | | | | — | | | | | | — | | | | | | — | | | | | | 28,629 | | |
Consumer
|
| | | | 2,210 | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,210 | | |
Total
|
| | | $ | 460,778 | | | | | $ | — | | | | | $ | 2,405 | | | | | $ | — | | | | | $ | 463,183 | | |
December 31, 2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate
|
| | | $ | 240,623 | | | | | | — | | | | | | — | | | | | | — | | | | | $ | 240,623 | | |
Residential real estate
|
| | | | 59,958 | | | | | | — | | | | | | 542 | | | | | | — | | | | | | 60,500 | | |
Commercial
|
| | | | 41,695 | | | | | | 4,713 | | | | | | — | | | | | | — | | | | | | 46,408 | | |
Construction and development
|
| | | | 13,932 | | | | | | — | | | | | | — | | | | | | — | | | | | | 13,932 | | |
Consumer
|
| | | | 3,061 | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,061 | | |
Total
|
| | | $ | 359,269 | | | | | $ | 4,713 | | | | | $ | 542 | | | | | $ | — | | | | | $ | 364,524 | | |
| | |
September 30,
2019 |
| |
December 31,
|
| ||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
2018
|
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| |||||||||||||||||||||
Accruing loans 90 or more days past due
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Nonaccrual Loans | | ||||||||||||||||||||||||||||||||||||
Commercial real estate
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential real estate
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commercial
|
| | | | 110 | | | | | | 110 | | | | | | 2,100 | | | | | | — | | | | | | — | | | | | | 20 | | |
Construction and development
|
| | | | — | | | | | | 294 | | | | | | 306 | | | | | | — | | | | | | — | | | | | | — | | |
Consumer and other loans
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total nonperforming loans
|
| | | $ | 110 | | | | | $ | 404 | | | | | $ | 2,406 | | | | | $ | — | | | | | $ | — | | | | | $ | 20 | | |
Other real estate owned
|
| | | | 1,708 | | | | | | 1,708 | | | | | | — | | | | | | — | | | | | | 720 | | | | | | 743 | | |
Total nonperforming assets
|
| | | $ | 1,818 | | | | | $ | 2,112 | | | | | $ | 2,406 | | | | | $ | — | | | | | $ | 720 | | | | | $ | 763 | | |
Restructured loans – nonaccrual
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Restructured loans – accruing
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Ratio of nonperforming loans to total loans
|
| | | | 0.02% | | | | | | 0.07% | | | | | | 0.51% | | | | | | 0.00% | | | | | | 0.00% | | | | | | 0.01% | | |
Ratio of nonperforming assets to total assets
|
| | | | 0.27% | | | | | | 0.32% | | | | | | 0.45% | | | | | | 0.00% | | | | | | 0.21% | | | | | | 0.27% | | |
| | |
Nine Months Ended September 30,
|
| |
Year Ended December 31,
|
| ||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| |||||||||||||||||||||
Balance at beginning of period
|
| | | $ | 4,863 | | | | | $ | 4,199 | | | | | $ | 4,199 | | | | | $ | 3,625 | | | | | $ | 3,000 | | | | | $ | 2,711 | | | | | $ | 2,541 | | |
Charge-offs
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 48 | | |
Residential real estate
|
| | | | — | | | | | | — | | | | | | 491 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commercial
|
| | | | — | | | | | | — | | | | | | — | | | | | | 310 | | | | | | — | | | | | | — | | | | | | — | | |
Construction and development
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Consumer and other
|
| | | | — | | | | | | — | | | | | | — | | | | | | 41 | | | | | | 16 | | | | | | 9 | | | | | | — | | |
Total Charge-offs
|
| | | | — | | | | | | — | | | | | | 491 | | | | | | 351 | | | | | | 16 | | | | | | 9 | | | | | | 48 | | |
Recoveries
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commercial real estate
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Residential real estate
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commercial
|
| | | | 60 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 14 | | |
Construction and development
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Consumer and other
|
| | | | 4 | | | | | | 3 | | | | | | 6 | | | | | | 3 | | | | | | 1 | | | | | | — | | | | | | — | | |
Total recoveries
|
| | | | 64 | | | | | | 3 | | | | | | 6 | | | | | | 3 | | | | | | 1 | | | | | | — | | | | | | 14 | | |
Net charge-offs (recoveries)
|
| | | | (64) | | | | | | (3) | | | | | | 485 | | | | | | 348 | | | | | | 15 | | | | | | 9 | | | | | | 34 | | |
Provision for loan losses
|
| | | | 367 | | | | | | 712 | | | | | | 1,149 | | | | | | 922 | | | | | | 640 | | | | | | 298 | | | | | | 204 | | |
Balance at end of period
|
| | | $ | 5,294 | | | | | $ | 4,914 | | | | | $ | 4,863 | | | | | $ | 4,199 | | | | | $ | 3,625 | | | | | $ | 3,000 | | | | | $ | 2,711 | | |
Ratio of net charge-offs to average loans
|
| | | | (0.01)% | | | | | | 0.00% | | | | | | 0.09% | | | | | | 0.08% | | | | | | 0.00% | | | | | | 0.00% | | | | | | 0.02% | | |
ALLL as a percentage of loans
at end of period |
| | | | 0.94% | | | | | | 0.91% | | | | | | 0.87% | | | | | | 0.91% | | | | | | 0.99% | | | | | | 1.04% | | | | | | 1.33% | | |
ALLL as a multiple of net charge-offs
|
| | | | (82.72) | | | | | | (1,638.00) | | | | | | 10.03 | | | | | | 12.07 | | | | | | 241.67 | | | | | | 333.33 | | | | | | 79.74 | | |
ALLL as a percentage of nonperforming loans
|
| | | | 4,812.73% | | | | | | 204.41% | | | | | | 1,203.71% | | | | | | 174.52% | | | | | | N/A | | | | | | N/A | | | | | | 13,555.00% | | |
|
| | |
September 30, 2019
|
| |
December 31, 2018
|
| |
December 31, 2017
|
| |
December 31, 2016
|
| |
December 31, 2015
|
| |
December 31, 2014
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Allowance
|
| |
Percent
|
| |
Allowance
|
| |
Percent
|
| |
Allowance
|
| |
Percent
|
| |
Allowance
|
| |
Percent
|
| |
Allowance
|
| |
Percent
|
| |
Allowance
|
| |
Percent
|
| ||||||||||||||||||||||||||||||||||||
Commercial real estate
|
| | | $ | 3,577 | | | | | | 65.57% | | | | | $ | 3,082 | | | | | | 63.38% | | | | | $ | 2,758 | | | | | | 65.68% | | | | | $ | 2,314 | | | | | | 63.83% | | | | | $ | 2,009 | | | | | | 66.97% | | | | | $ | 1,860 | | | | | | 68.61% | | |
Residential real estate
|
| | | | 708 | | | | | | 13.37% | | | | | | 687 | | | | | | 14.13% | | | | | | 600 | | | | | | 14.29% | | | | | | 652 | | | | | | 17.99% | | | | | | 553 | | | | | | 18.43% | | | | | | 572 | | | | | | 21.10% | | |
Commercial
|
| | | | 758 | | | | | | 14.32% | | | | | | 846 | | | | | | 17.40% | | | | | | 568 | | | | | | 13.53% | | | | | | 506 | | | | | | 13.96% | | | | | | 412 | | | | | | 13.73% | | | | | | 215 | | | | | | 7.97% | | |
Construction and development
|
| | | | 192 | | | | | | 3.63% | | | | | | 216 | | | | | | 4.44% | | | | | | 236 | | | | | | 5.62% | | | | | | 125 | | | | | | 3.45% | | | | | | 3 | | | | | | 0.10% | | | | | | 28 | | | | | | 1.03% | | |
Consumer and other
|
| | | | 59 | | | | | | 1.11% | | | | | | 32 | | | | | | 0.66% | | | | | | 37 | | | | | | 0.88% | | | | | | 28 | | | | | | 0.77% | | | | | | 24 | | | | | | 0.77% | | | | | | 35 | | | | | | 1.29% | | |
Total allowance for loan
losses |
| | | $ | 5,294 | | | | | | 100.00% | | | | | $ | 4,863 | | | | | | 100.00% | | | | | $ | 4,199 | | | | | | 100.00% | | | | | $ | 3,625 | | | | | | 100.00% | | | | | $ | 3,001 | | | | | | 100.00% | | | | | $ | 2,710 | | | | | | 100.00% | | |
|
| | |
For the Nine Months Ended
September 30, 2019 |
| |
For the Year Ended December 31
|
| ||||||||||||||||||||||||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Average
Balance |
| |
Average
Rate |
| |
Average
Balance |
| |
Average
Rate |
| |
Average
Balance |
| |
Average
Rate |
| |
Average
Balance |
| |
Average
Rate |
| ||||||||||||||||||||||||
NOW accounts
|
| | | $ | 19,583 | | | | | | 0.05% | | | | | $ | 20,097 | | | | | | 0.05% | | | | | $ | 14,342 | | | | | | 0.05% | | | | | $ | 14,347 | | | | | | 0.06% | | |
Money market accounts
|
| | | | 128,256 | | | | | | 1.36% | | | | | | 138,225 | | | | | | 0.98% | | | | | | 135,475 | | | | | | 0.82% | | | | | | 116,650 | | | | | | 0.76% | | |
Savings accounts
|
| | | | 3,801 | | | | | | 0.20% | | | | | | 4,278 | | | | | | 0.20% | | | | | | 2,859 | | | | | | 0.20% | | | | | | 2,872 | | | | | | 0.20% | | |
Certificates of deposit
|
| | | | 275,244 | | | | | | 2.46% | | | | | | 215,511 | | | | | | 1.90% | | | | | | 137,180 | | | | | | 1.30% | | | | | | 121,071 | | | | | | 1.17% | | |
Total interest-bearing deposits
|
| | | | 426,884 | | | | | | 2.00% | | | | | | 378,111 | | | | | | 1.45% | | | | | | 289,856 | | | | | | 1.00% | | | | | | 254,941 | | | | | | 0.91% | | |
Noninterest-bearing deposits
|
| | | | 130,521 | | | | | | 0.00% | | | | | | 114,771 | | | | | | 0.00% | | | | | | 110,976 | | | | | | 0.00% | | | | | | 82,323 | | | | | | 0.00% | | |
Total deposits
|
| | | $ | 557,405 | | | | | | 1.53% | | | | | $ | 492,881 | | | | | | 1.11% | | | | | $ | 400,832 | | | | | | 0.73% | | | | | $ | 337,264 | | | | | | 0.69% | | |
|
(Dollars in thousands)
|
| |
Three Months
or Less |
| |
Over Three
Through Six Months |
| |
Over Six Months
Through 12 Months |
| |
Over
12 Months |
| |
Total
|
| |||||||||||||||
$100,000 or more
|
| | | $ | 69,558 | | | | | $ | 52,287 | | | | | $ | 50,455 | | | | | $ | 55,270 | | | | | $ | 227,570 | | |
Less than $100,000
|
| | | | 3,883 | | | | | | 1,843 | | | | | | 4,012 | | | | | | 5,903 | | | | | | 15,641 | | |
Total
|
| | | $ | 73,441 | | | | | $ | 54,130 | | | | | $ | 54,467 | | | | | $ | 61,173 | | | | | $ | 243,211 | | |
| | |
Nine Months
Ended September 30, 2019 |
| |
Years Ended December 31,
|
| ||||||||||||||||||
(Dollars in thousands)
|
| |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||
Amount outstanding at period-end
|
| | | $ | 30,000 | | | | | $ | 75,000 | | | | | $ | 39,000 | | | | | $ | 36,000 | | |
Weighted average interest rate at period-end
|
| | | | 2.09% | | | | | | 2.63% | | | | | | 1.44% | | | | | | 0.87% | | |
Maximum month-end balance during period
|
| | | $ | 56,000 | | | | | $ | 75,000 | | | | | $ | 39,000 | | | | | $ | 36,000 | | |
Average balance outstanding during period
|
| | | $ | 35,630 | | | | | $ | 42,663 | | | | | $ | 28,674 | | | | | $ | 22,213 | | |
Weighted average interest rate during period
|
| | | | 2.65% | | | | | | 1.95% | | | | | | 1.11% | | | | | | 0.83% | | |
| | |
Nine Months
Ended September 30, 2019 |
| |
Years Ended December 31,
|
| ||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||
Return on Average Assets
|
| | | | 1.11% | | | | | | 1.13% | | | | | | 0.81% | | | | | | 0.86% | | |
Return on Average Equity
|
| | | | 13.53% | | | | | | 14.35% | | | | | | 9.58% | | | | | | 9.13% | | |
Average Equity to Average Assets
|
| | | | 8.19% | | | | | | 7.81% | | | | | | 8.47% | | | | | | 9.40% | | |
| | |
Actual
|
| |
Minimum for capital adequacy
|
| |
Minimum to be well capitalized
|
| |||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| ||||||||||||||||||
September 30, 2019 | | | | | | | | ||||||||||||||||||||||||||||||
Total risk-based capital ratio | | | | | | | | ||||||||||||||||||||||||||||||
Marquis Bank
|
| | | $ | 70,920 | | | | | | 12.2% | | | | | $ | 46,619 | | | | | | 8.0% | | | | | $ | 58,274 | | | | | | 10.0% | | |
Marquis
|
| | | | 71,839 | | | | | | 12.3% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Tier 1 risk-based capital ratio | | | | | | | | ||||||||||||||||||||||||||||||
Marquis Bank
|
| | | | 65,188 | | | | | | 11.2% | | | | | | 34,964 | | | | | | 6.0% | | | | | | 46,619 | | | | | | 8.0% | | |
Marquis
|
| | | | 56,397 | | | | | | 9.7% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Tier 1 leverage ratio | | | | | | | | ||||||||||||||||||||||||||||||
Marquis Bank
|
| | | | 65,188 | | | | | | 9.7% | | | | | | 26,838 | | | | | | 4.0% | | | | | | 33,548 | | | | | | 5.0% | | |
Marquis
|
| | | | 56,397 | | | | | | 8.4% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Common equity tier 1 capital ratio
|
| | | | | | | ||||||||||||||||||||||||||||||
Marquis Bank
|
| | | | 65,188 | | | | | | 11.2% | | | | | | 26,223 | | | | | | 4.5% | | | | | | 37,878 | | | | | | 6.5% | | |
Marquis
|
| | | | 56,397 | | | | | | 9.7% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
| | |
Actual
|
| |
Minimum for capital adequacy
|
| |
Minimum to be well capitalized
|
| |||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| ||||||||||||||||||
December 31, 2018 | | | | | | | | ||||||||||||||||||||||||||||||
Total risk-based capital ratio | | | | | | | | ||||||||||||||||||||||||||||||
Marquis Bank
|
| | | $ | 65,167 | | | | | | 11.4% | | | | | $ | 45,768 | | | | | | 8.0% | | | | | $ | 57,210 | | | | | | 10.0% | | |
Marquis
|
| | | | 65,980 | | | | | | 11.5% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Tier 1 risk-based capital ratio | | | | | | | | ||||||||||||||||||||||||||||||
Marquis Bank
|
| | | | 59,885 | | | | | | 10.5% | | | | | | 34,326 | | | | | | 6.0% | | | | | $ | 45,768 | | | | | | 8.0% | | |
Marquis
|
| | | | 51,028 | | | | | | 8.9% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Tier 1 risk-based leverage ratio | | | | | | | | ||||||||||||||||||||||||||||||
Marquis Bank
|
| | | | 59,885 | | | | | | 9.5% | | | | | | 25,251 | | | | | | 4.0% | | | | | | 31,564 | | | | | | 5.0% | | |
Marquis
|
| | | | 51,028 | | | | | | 8.1% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Common equity tier 1 capital ratio
|
| | | | | | | ||||||||||||||||||||||||||||||
Marquis Bank
|
| | | | 59,885 | | | | | | 10.5% | | | | | | 25,744 | | | | | | 4.5% | | | | | | 37,186 | | | | | | 6.5% | | |
Marquis
|
| | | | 51,028 | | | | | | 8.9% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
December 31, 2017 | | | | | | | | ||||||||||||||||||||||||||||||
Total risk-based capital ratio | | | | | | | | ||||||||||||||||||||||||||||||
Marquis Bank
|
| | | $ | 55,528 | | | | | | 11.8% | | | | | $ | 37,620 | | | | | | 8.0% | | | | | $ | 47,025 | | | | | | 10.0% | | |
Marquis
|
| | | | 57,400 | | | | | | 12.2% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Tier 1 risk-based capital ratio | | | | | | | | ||||||||||||||||||||||||||||||
Marquis Bank
|
| | | | 50,995 | | | | | | 10.8% | | | | | | 28,215 | | | | | | 6.0% | | | | | | 37,620 | | | | | | 8.0% | | |
Marquis
|
| | | | 43,254 | | | | | | 9.2% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Tier 1 leverage ratio | | | | | | | | ||||||||||||||||||||||||||||||
Marquis Bank
|
| | | | 50,995 | | | | | | 9.7% | | | | | | 20,983 | | | | | | 4.0% | | | | | | 26,229 | | | | | | 5.0% | | |
Marquis
|
| | | | 43,254 | | | | | | 8.2% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Common equity tier 1 capital ratio
|
| | | | | | | ||||||||||||||||||||||||||||||
Marquis Bank
|
| | | | 50,995 | | | | | | 10.8% | | | | | | 21,161 | | | | | | 4.5% | | | | | | 30,566 | | | | | | 6.5% | | |
Marquis
|
| | | | 43,254 | | | | | | 9.2% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
December 31, 2016 | | | | | | | | ||||||||||||||||||||||||||||||
Total risk-based capital ratio | | | | | | | | ||||||||||||||||||||||||||||||
Marquis Bank
|
| | | $ | 50,303 | | | | | | 13.7% | | | | | $ | 29,410 | | | | | | 8.0% | | | | | $ | 36,763 | | | | | | 10.0% | | |
Marquis
|
| | | | 51,856 | | | | | | 14.2% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Tier 1 risk-based capital ratio | | | | | | | | ||||||||||||||||||||||||||||||
Marquis Bank
|
| | | | 46,678 | | | | | | 12.7% | | | | | | 22,058 | | | | | | 6.0% | | | | | | 29,410 | | | | | | 8.0% | | |
Marquis
|
| | | | 38,678 | | | | | | 10.6% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Tier 1 leverage ratio | | | | | | | | ||||||||||||||||||||||||||||||
Marquis Bank
|
| | | | 46,678 | | | | | | 11.1% | | | | | | 16,847 | | | | | | 4.0% | | | | | | 21,059 | | | | | | 5.0% | | |
Marquis
|
| | | | 38,678 | | | | | | 9.4% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Common equity tier 1 capital ratio
|
| | | | | | | ||||||||||||||||||||||||||||||
Marquis Bank
|
| | | | 46,678 | | | | | | 12.7% | | | | | | 16,543 | | | | | | 4.5% | | | | | | 23,896 | | | | | | 6.5% | | |
Marquis
|
| | | | 38,678 | | | | | | 10.6% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
(Dollars in thousands)
|
| |
Due in One Year
or Less |
| |
Due after One
Through Three Years |
| |
Due After Three
Through Five Years |
| |
Due After
Five Years |
| |
Total
|
| |||||||||||||||
FHLB Advances
|
| | | $ | 30,000 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 30,000 | | |
Certificates of deposit $100,000 or more
|
| | | | 172,300 | | | | | | 54,411 | | | | | | 859 | | | | | | — | | | | | | 227,570 | | |
Certificates of deposit less than $100,000
|
| | | | 9,738 | | | | | | 5,822 | | | | | | 81 | | | | | | — | | | | | | 15,641 | | |
Operating leases
|
| | | | 710 | | | | | | 1,161 | | | | | | 125 | | | | | | | | | | | | 1,996 | | |
Subordinated Debt, net of issuance
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total
|
| | | $ | 212,748 | | | | | $ | 61,394 | | | | | $ | 1,065 | | | | | $ | — | | | | | $ | 275,207 | | |
| | | | | | | | |
As of December 31,
|
| |||||||||||||||
(Dollars in thousands)
|
| |
As of September 30, 2019
|
| |
2018
|
| |
2017
|
| |
2016
|
| ||||||||||||
Unfunded lines of credit
|
| | | $ | 129,063 | | | | | $ | 119,327 | | | | | $ | 113,150 | | | | | $ | 73,405 | | |
Commitments to extend credit
|
| | | | 22,718 | | | | | | 27,017 | | | | | | 37,687 | | | | | | 34,987 | | |
Letters of credit
|
| | | | 2,010 | | | | | | 1,502 | | | | | | 2,568 | | | | | | 4,076 | | |
Total credit extension commitments
|
| | | $ | 153,791 | | | | | $ | 147,845 | | | | | $ | 153,405 | | | | | $ | 112,468 | | |
Location
|
| |
Street Address
|
| |
City & State
|
|
Coral Gables | | | 355 Alhambra Circle, Suite 125 | | | Coral Gables, FL | |
Aventura | | | 19058 NE 29th Avenue | | | Aventura, FL | |
Fort Lauderdale | | | 201 Southeast 12th Street | | | Fort Lauderdale, FL | |
| | |
Nine Months Ended September 30,
|
| | | | | | | |||||||||
(Dollars in thousands)
|
| |
2019
|
| |
2018
|
| |
Change
|
| |||||||||
Interest income
|
| | | $ | 24,317 | | | | | $ | 20,438 | | | | | | 19.0% | | |
Interest expense
|
| | | | 7,664 | | | | | | 4,891 | | | | | | 56.7% | | |
Net Interest income
|
| | | | 16,653 | | | | | | 15,547 | | | | | | 7.1% | | |
Provision for loan losses
|
| | | | 367 | | | | | | 712 | | | | | | (48.5)% | | |
Net interest income after provision
|
| | | | 16,286 | | | | | | 14,835 | | | | | | 9.8% | | |
Noninterest income
|
| | | | 1,140 | | | | | | 830 | | | | | | 37.3% | | |
Noninterest expense
|
| | | | 10,121 | | | | | | 9,054 | | | | | | 11.8% | | |
Income before income taxes
|
| | | | 7,305 | | | | | | 6,612 | | | | | | 10.5% | | |
Income tax expense
|
| | | | 1,844 | | | | | | 1,737 | | | | | | 6.2% | | |
Net income
|
| | | $ | 5,461 | | | | | $ | 4,875 | | | | | | 12.0% | | |
| | |
For the Nine Months Ended September 30,
|
| |||||||||||||||||||||||||||||||||
| | |
2019
|
| |
2018
|
| ||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Average
Outstanding Balance |
| |
Interest
Income/ Expense(4) |
| |
Average
Yield/Rate |
| |
Average
Outstanding Balance |
| |
Interest
Income/ Expense(4) |
| |
Average
Yield/Rate |
| ||||||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest earning assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | $ | 49,179 | | | | | $ | 859 | | | | | | 2.34% | | | | | $ | 45,600 | | | | | $ | 604 | | | | | | 1.77% | | |
Federal funds sold
|
| | | | — | | | | | | — | | | | | | 0.00% | | | | | | — | | | | | | — | | | | | | 0.00% | | |
Federal Reserve Bank stock, FHLB stock and other corporate stock
|
| | | | 2,077 | | | | | | — | | | | | | 0.00% | | | | | | 2,246 | | | | | | — | | | | | | 0.00% | | |
Investment securities
|
| | | | 31,751 | | | | | | 609 | | | | | | 2.58% | | | | | | 27,280 | | | | | | 454 | | | | | | 2.25% | | |
Loans(1)
|
| | | | 557,712 | | | | | | 22,849 | | | | | | 5.48% | | | | | | 502,582 | | | | | | 19,380 | | | | | | 5.16% | | |
Total interest earning assets
|
| | | | 640,719 | | | | | | 24,317 | | | | | | 5.08% | | | | | | 577,708 | | | | | | 20,438 | | | | | | 4.73% | | |
Noninterest earning assets
|
| | | | 18,720 | | | | | | | | | | | | | | | | | | 14,737 | | | | | | | | | | | | | | |
Total assets
|
| | | | 659,439 | | | | | | | | | | | | | | | | | | 592,445 | | | | | | | | | | | | | | |
Liabilities and shareholders’ equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | | 426,884 | | | | | | 6,387 | | | | | | 2.00% | | | | | | 372,229 | | | | | | 3,758 | | | | | | 1.35% | | |
Borrowed funds(5)
|
| | | | 45,320 | | | | | | 1,277 | | | | | | 3.78% | | | | | | 51,616 | | | | | | 1,133 | | | | | | 2.94% | | |
Total interest-bearing liabilities
|
| | | | 472,204 | | | | | | 7,664 | | | | | | 2.17% | | | | | | 423,845 | | | | | | 4,891 | | | | | | 1.54% | | |
Noninterest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing deposits
|
| | | | 130,521 | | | | | | | | | | | | | | | | | | 119,955 | | | | | | | | | | | | | | |
Other noninterest-bearing liabilities
|
| | | | 2,732 | | | | | | | | | | | | | | | | | | 2,574 | | | | | | | | | | | | | | |
Shareholders’ equity
|
| | | | 53,982 | | | | | | | | | | | | | | | | | | 46,071 | | | | | | | | | | | | | | |
Total liabilities and shareholders’ equity
|
| | | $ | 659,439 | | | | | | | | | | | | | | | | | $ | 592,445 | | | | | | | | | | | | | | |
Net interest spread(2)
|
| | | | | | | | | | | | | | | | 2.91% | | | | | | | | | | | | | | | | | | 3.19% | | |
Net interest income
|
| | | | | | | | | $ | 16,653 | | | | | | | | | | | | | | | | | $ | 15,547 | | | | | | | | |
Net interest margin(3)
|
| | | | | | | | | | | | | | | | 3.48% | | | | | | | | | | | | | | | | | | 3.60% | | |
| | |
For the Nine Months Ended September 30, 2019
Compared to 2018 |
| |||||||||||||||
| | |
Change Due To
|
| | | | | | | |||||||||
(Dollars in thousands)
|
| |
Volume
|
| |
Rate
|
| |
Total
|
| |||||||||
Interest income | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | $ | 47 | | | | | $ | 208 | | | | | $ | 255 | | |
Federal funds sold
|
| | | | — | | | | | | — | | | | | | — | | |
Federal Reserve Bank stock, Federal Home Loan Bank stock and other corporate stock
|
| | | | — | | | | | | — | | | | | | — | | |
Investment securities
|
| | | | 75 | | | | | | 80 | | | | | | 155 | | |
Loans
|
| | | | 2,126 | | | | | | 1,343 | | | | | | 3,469 | | |
Total
|
| | | $ | 2,248 | | | | | $ | 1,631 | | | | | $ | 3,879 | | |
Interest expense | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | | 552 | | | | | | 2,077 | | | | | | 2,629 | | |
Borrowed funds
|
| | | | (138) | | | | | | 282 | | | | | | 144 | | |
Total
|
| | | $ | 414 | | | | | $ | 2,359 | | | | | $ | 2,773 | | |
| | |
Nine Months Ended September 30,
|
| |||||||||||||||
(Dollars in thousands)
|
| |
2019
|
| |
2018
|
| |
Increase (Decrease)
|
| |||||||||
Noninterest income | | | | | | | | | | | | | | | | | | | |
Deposit account service charges
|
| | | $ | 593 | | | | | $ | 554 | | | | | | 7.0% | | |
Mortgage banking revenue
|
| | | | — | | | | | | — | | | | | | — | | |
Gain (loss) on sale of securities
|
| | | | — | | | | | | — | | | | | | — | | |
Gain (loss) on sale of loans
|
| | | | 312 | | | | | | 116 | | | | | | 169.0% | | |
Other fees and charges
|
| | | | 235 | | | | | | 161 | | | | | | 46.0% | | |
Total noninterest income
|
| | | $ | 1,140 | | | | | $ | 831 | | | | | | 37.2% | | |
| | |
Nine Months Ended September 30,
|
| |||||||||||||||
(Dollars in thousands)
|
| |
2019
|
| |
2018
|
| |
Increase (Decrease)
|
| |||||||||
Noninterest expense | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits
|
| | | $ | 6,155 | | | | | $ | 5,531 | | | | | | 11.3% | | |
Occupancy and equipment
|
| | | | 1,111 | | | | | | 1,010 | | | | | | 10.0% | | |
Professional services
|
| | | | 516 | | | | | | 337 | | | | | | 53.1% | | |
Data processing
|
| | | | 456 | | | | | | 403 | | | | | | 13.2% | | |
Advertising
|
| | | | 96 | | | | | | 147 | | | | | | (34.7)% | | |
Other real estate owned expense
|
| | | | 107 | | | | | | — | | | | | | 100% | | |
Regulatory assessments
|
| | | | 199 | | | | | | 342 | | | | | | (41.8)% | | |
Directors’ compensation
|
| | | | 756 | | | | | | 693 | | | | | | 9.1% | | |
Other
|
| | | | 725 | | | | | | 591 | | | | | | 22.7% | | |
Total noninterest expense
|
| | | $ | 10,121 | | | | | $ | 9,054 | | | | | | 11.8% | | |
| | |
Years Ended December 31,
|
| |
Years Ended December 31,
|
| ||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
2018
|
| |
2017
|
| |
Change
|
| |
2017
|
| |
2016
|
| |
Change
|
| ||||||||||||||||||
Interest income
|
| | | $ | 28,240 | | | | | $ | 21,303 | | | | | | 32.6% | | | | | $ | 21,303 | | | | | $ | 16,765 | | | | | | 27.1% | | |
Interest expense
|
| | | | 7,073 | | | | | | 4,012 | | | | | | 76.3% | | | | | | 4,012 | | | | | | 2,625 | | | | | | 52.8% | | |
Net Interest income
|
| | | | 21,167 | | | | | | 17,292 | | | | | | 22.4% | | | | | | 17,292 | | | | | | 14,140 | | | | | | 22.3% | | |
Provision for loan losses
|
| | | | 1,149 | | | | | | 921 | | | | | | 24.7% | | | | | | 921 | | | | | | 640 | | | | | | 44.0% | | |
Net interest income after provision
|
| | | | 20,018 | | | | | | 16,371 | | | | | | 22.3% | | | | | | 16,371 | | | | | | 13,500 | | | | | | 21.3% | | |
Noninterest income
|
| | | | 1,257 | | | | | | 1,309 | | | | | | (3.9)% | | | | | | 1,309 | | | | | | 1,168 | | | | | | 12.0% | | |
Noninterest expense
|
| | | | 12,326 | | | | | | 10,637 | | | | | | 15.9% | | | | | | 10,637 | | | | | | 8,975 | | | | | | 18.5% | | |
Income before income taxes
|
| | | | 8,949 | | | | | | 7,043 | | | | | | 27.1% | | | | | | 7,043 | | | | | | 5,693 | | | | | | 23.7% | | |
Income tax expense
|
| | | | 2,141 | | | | | | 3,080 | | | | | | (30.5)% | | | | | | 3,080 | | | | | | 2,214 | | | | | | 39.1% | | |
Net income
|
| | | $ | 6,808 | | | | | $ | 3,963 | | | | | | 71.8% | | | | | $ | 3,963 | | | | | $ | 3,479 | | | | | | 13.9% | | |
Preferred stock dividend declared
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 7 | | | | | | (100.0)% | | |
Net income available to common
shareholders |
| | | $ | 6,808 | | | | | $ | 3,963 | | | | | | 71.8% | | | | | $ | 3,963 | | | | | $ | 3,472 | | | | | | 14.1% | | |
| | |
For the Years Ended December 31,
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Average
Outstanding Balance |
| |
Interest
Income/ Expense(4) |
| |
Average
Yield/ Rate |
| |
Average
Outstanding Balance |
| |
Interest
Income/ Expense(4) |
| |
Average
Yield/ Rate |
| |
Average
Outstanding Balance |
| |
Interest
Income/ Expense(4) |
| |
Average
Yield/ Rate |
| |||||||||||||||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest earning assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | $ | 41,500 | | | | | $ | 779 | | | | | | 1.88% | | | | | $ | 44,238 | | | | | $ | 483 | | | | | | 1.09% | | | | | $ | 48,476 | | | | | $ | 244 | | | | | | 0.50% | | |
Federal funds sold
|
| | | | — | | | | | | — | | | | | | 0.00% | | | | | | — | | | | | | — | | | | | | 0.00% | | | | | | 315 | | | | | | — | | | | | | 0.00% | | |
Federal Reserve Bank stock, FHLB stock and other corporate stock
|
| | | | 2,274 | | | | | | — | | | | | | 0.00% | | | | | | 1,614 | | | | | | — | | | | | | 0.00% | | | | | | 1,282 | | | | | | — | | | | | | 0.00% | | |
Investment securities
|
| | | | 29,132 | | | | | | 664 | | | | | | 2.29% | | | | | | 17,122 | | | | | | 299 | | | | | | 1.77% | | | | | | 14,686 | | | | | | 244 | | | | | | 1.68% | | |
Loans(1)
|
| | | | 514,258 | | | | | | 26,797 | | | | | | 5.21% | | | | | | 411,801 | | | | | | 20,521 | | | | | | 4.98% | | | | | | 328,733 | | | | | | 16,277 | | | | | | 4.95% | | |
Total interest earning assets
|
| | | | 587,164 | | | | | | 28,240 | | | | | | 4.81% | | | | | | 474,774 | | | | | | 21,303 | | | | | | 4.49% | | | | | | 393,492 | | | | | | 16,765 | | | | | | 4.26% | | |
Noninterest earning assets
|
| | | | 15,069 | | | | | | | | | | | | | | | | | | 12,825 | | | | | | | | | | | | | | | | | | 11,027 | | | | | | | | | | | | | | |
Total assets
|
| | | | 602,233 | | | | | | | | | | | | | | | | | | 487,599 | | | | | | | | | | | | | | | | | | 404,519 | | | | | | | | | | | | | | |
Liabilities and shareholders’ equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | | 378,111 | | | | | | 5,473 | | | | | | 1.45% | | | | | | 289,856 | | | | | | 2,910 | | | | | | 1.00% | | | | | | 254,967 | | | | | | 2,315 | | | | | | 0.91% | | |
Borrowed funds(5)
|
| | | | 52,304 | | | | | | 1,600 | | | | | | 3.06% | | | | | | 38,289 | | | | | | 1,101 | | | | | | 2.88% | | | | | | 23,939 | | | | | | 311 | | | | | | 1.30% | | |
Total interest-bearing liabilities
|
| | | | 430,415 | | | | | | 7,073 | | | | | | 1.64% | | | | | | 328,145 | | | | | | 4,011 | | | | | | 1.22% | | | | | | 278,906 | | | | | | 2,625 | | | | | | 0.94% | | |
Noninterest-bearing liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing deposits
|
| | | | 122,571 | | | | | | | | | | | | | | | | | | 116,049 | | | | | | | | | | | | | | | | | | 85,944 | | | | | | | | | | | | | | |
Other noninterest-bearing liabilities
|
| | | | 2,229 | | | | | | | | | | | | | | | | | | 2,084 | | | | | | | | | | | | | | | | | | 1,631 | | | | | | | | | | | | | | |
Shareholders’ equity
|
| | | | 47,018 | | | | | | | | | | | | | | | | | | 41,321 | | | | | | | | | | | | | | | | | | 38,038 | | | | | | | | | | | | | | |
Total liabilities and shareholders’ equity
|
| | | $ | 602,233 | | | | | | | | | | | | | | | | | $ | 487,599 | | | | | | | | | | | | | | | | | $ | 404,519 | | | | | | | | | | | | | | |
Net interest spread(2)
|
| | | | | | | | | | | | | | | | 3.17% | | | | | | | | | | | | | | | | | | 3.27% | | | | | | | | | | | | | | | | | | 3.32% | | |
Net interest income
|
| | | | | | | | | $ | 21,167 | | | | | | | | | | | | | | | | | $ | 17,292 | | | | | | | | | | | | | | | | | $ | 14,140 | | | | | | | | |
Net interest margin(3)
|
| | | | | | | | | | | | | | | | 3.60% | | | | | | | | | | | | | | | | | | 3.64% | | | | | | | | | | | | | | | | | | 3.59% | | |
| | |
For the Years Ended December 31, 2018
Compared to 2017 |
| |
For the Years Ended December 31, 2017
Compared to 2016 |
| ||||||||||||||||||||||||||||||
| | |
Change Due To
|
| | | | | | | |
Change Due To
|
| | | | | | | ||||||||||||||||||
(Dollars in thousands)
|
| |
Volume
|
| |
Rate
|
| |
Total
|
| |
Volume
|
| |
Rate
|
| |
Total
|
| ||||||||||||||||||
Interest income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | $ | (30) | | | | | $ | 326 | | | | | $ | 296 | | | | | $ | (21) | | | | | $ | 260 | | | | | $ | 239 | | |
Federal funds sold
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Federal Reserve Bank stock, Federal
Home Loan Bank stock and other corporate stock |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Investment securities
|
| | | | 212 | | | | | | 153 | | | | | | 365 | | | | | | 41 | | | | | | 14 | | | | | | 55 | | |
Loans
|
| | | | 5,106 | | | | | | 1,170 | | | | | | 6,276 | | | | | | 4,113 | | | | | | 131 | | | | | | 4,244 | | |
Total
|
| | | $ | 5,288 | | | | | $ | 1,649 | | | | | $ | 6,937 | | | | | $ | 4,133 | | | | | $ | 405 | | | | | $ | 4,538 | | |
Interest expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | | 885 | | | | | | 1,678 | | | | | | 2,563 | | | | | | 317 | | | | | | 278 | | | | | | 595 | | |
Borrowed funds
|
| | | | 403 | | | | | | 96 | | | | | | 499 | | | | | | 186 | | | | | | 604 | | | | | | 790 | | |
Total
|
| | | $ | 1,288 | | | | | $ | 1,774 | | | | | $ | 3,062 | | | | | $ | 503 | | | | | $ | 882 | | | | | $ | 1,385 | | |
| | |
Years Ended December 31,
|
| |
Years Ended December 31,
|
| ||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
2018
|
| |
2017
|
| |
Increase
(Decrease) |
| |
2017
|
| |
2016
|
| |
Increase
(Decrease) |
| ||||||||||||||||||
Noninterest income | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposit account service charges
|
| | | $ | 750 | | | | | $ | 615 | | | | | | 22.0% | | | | | $ | 615 | | | | | $ | 408 | | | | | | 50.7% | | |
Mortgage banking revenue
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Gain (loss) on sale of securities
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Gain (loss) on sale of loans
|
| | | | 250 | | | | | | 527 | | | | | | (52.6)% | | | | | | 527 | | | | | | 626 | | | | | | (15.8)% | | |
Other fees and charges
|
| | | | 257 | | | | | | 167 | | | | | | 53.9% | | | | | | 167 | | | | | | 134 | | | | | | 24.6% | | |
Total noninterest income
|
| | | $ | 1,257 | | | | | $ | 1,309 | | | | | | (4.0)% | | | | | $ | 1,309 | | | | | $ | 1,168 | | | | | | 12.1% | | |
| | |
Years Ended December 31,
|
| |
Years Ended December 31,
|
| ||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
2018
|
| |
2017
|
| |
Increase
(Decrease) |
| |
2017
|
| |
2016
|
| |
Increase
(Decrease) |
| ||||||||||||||||||
Noninterest expense | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries and benefits
|
| | | $ | 7,320 | | | | | $ | 6,275 | | | | | | 16.7% | | | | | $ | 6,275 | | | | | $ | 5,259 | | | | | | 19.3% | | |
Occupancy and equipment
|
| | | | 1,335 | | | | | | 1,110 | | | | | | 20.3% | | | | | | 1,110 | | | | | | 1,150 | | | | | | (3.5)% | | |
Professional services
|
| | | | 415 | | | | | | 432 | | | | | | (3.9)% | | | | | | 432 | | | | | | 339 | | | | | | 27.4% | | |
Data processing
|
| | | | 545 | | | | | | 499 | | | | | | 9.2% | | | | | | 499 | | | | | | 485 | | | | | | 2.9% | | |
Advertising
|
| | | | 193 | | | | | | 138 | | | | | | 39.9% | | | | | | 138 | | | | | | 112 | | | | | | 23.2% | | |
Other real estate owned expense
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Regulatory assessments
|
| | | | 442 | | | | | | 239 | | | | | | 84.9% | | | | | | 239 | | | | | | 280 | | | | | | (14.6)% | | |
Directors’ compensation
|
| | | | 930 | | | | | | 738 | | | | | | 26.1% | | | | | | 738 | | | | | | 429 | | | | | | 72.0% | | |
Other
|
| | | | 1,146 | | | | | | 1,205 | | | | | | (4.9)% | | | | | | 1,205 | | | | | | 920 | | | | | | 31.2% | | |
Total noninterest expense
|
| | | $ | 12,326 | | | | | $ | 10,636 | | | | | | 15.9% | | | | | $ | 10,636 | | | | | $ | 8,974 | | | | | | 18.5% | | |
| | | | | | | | | | | | | | |
December 31,
|
| |||||||||||||||||||||||||||||||||
| | |
September 30, 2019
|
| |
2018
|
| |
2017
|
| |
2016
|
| ||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Book Value
|
| |
Fair Value
|
| |
Book Value
|
| |
Fair Value
|
| |
Book Value
|
| |
Fair Value
|
| |
Book Value
|
| |
Fair Value
|
| ||||||||||||||||||||||||
Securities Available for Sale | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Government-sponsored agencies
|
| | | $ | 9,000 | | | | | $ | 9,036 | | | | | $ | 15,683 | | | | | $ | 15,618 | | | | | $ | 4,999 | | | | | $ | 4,952 | | | | | $ | 3,499 | | | | | $ | 3,485 | | |
Mortgage-backed securities
|
| | | | 11,792 | | | | | | 11,874 | | | | | | 9,850 | | | | | | 9,730 | | | | | | 3,693 | | | | | | 3,632 | | | | | | 1,375 | | | | | | 1,344 | | |
U.S. Agency obligations
|
| | | | 3,267 | | | | | | 3,180 | | | | | | 4,182 | | | | | | 4,075 | | | | | | 5,533 | | | | | | 5,482 | | | | | | 5,477 | | | | | | 5,428 | | |
State, county, and municipals
|
| | | | 1,048 | | | | | | 1,075 | | | | | | 1,054 | | | | | | 1,039 | | | | | | 1,061 | | | | | | 1,069 | | | | | | 1,068 | | | | | | 1,056 | | |
Corporate bonds
|
| | | | 1,000 | | | | | | 1,006 | | | | | | 1,501 | | | | | | 1,509 | | | | | | 1,502 | | | | | | 1,510 | | | | | | 2,004 | | | | | | 1,987 | | |
Total
|
| | | $ | 26,107 | | | | | $ | 26,171 | | | | | $ | 32,270 | | | | | $ | 31,971 | | | | | $ | 16,788 | | | | | $ | 16,645 | | | | | $ | 13,423 | | | | | $ | 13,300 | | |
Securities Held to Maturity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Treasury securities
|
| | | | 201 | | | | | | 201 | | | | | | 200 | | | | | | 199 | | | | | | 199 | | | | | | 198 | | | | | | 200 | | | | | | 200 | | |
Mortgage-backed securities
|
| | | | 297 | | | | | | 292 | | | | | | 349 | | | | | | 335 | | | | | | 420 | | | | | | 412 | | | | | | 503 | | | | | | 490 | | |
Foreign Sovereign (Israel)
|
| | | | 1,000 | | | | | | 1,000 | | | | | | 1,000 | | | | | | 1,000 | | | | | | 1,000 | | | | | | 1,000 | | | | | | 1,000 | | | | | | 1,000 | | |
Total
|
| | | $ | 1,498 | | | | | $ | 1,493 | | | | | $ | 1,549 | | | | | $ | 1,534 | | | | | $ | 1,619 | | | | | $ | 1,610 | | | | | $ | 1,703 | | | | | $ | 1,690 | | |
|
| | |
One Year or Less
|
| |
More than
One Year Through Five Years |
| |
More than
Five Years Through 10 Years |
| |
More than 10 Years
|
| |
Total
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||
At September 30, 2019 (Dollars in thousands) |
| |
Book
Value |
| |
Weighted
Average Yield |
| |
Book
Value |
| |
Weighted
Average Yield |
| |
Book
Value |
| |
Weighted
Average Yield |
| |
Book
Value |
| |
Weighted
Average Yield |
| |
Book
Value |
| |
Fair
Value |
| |
Weighted
Average Yield |
| |||||||||||||||||||||||||||||||||
Securities Available for Sale | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Government-sponsored agencies
|
| | | $ | 2,000 | | | | | | 1.44% | | | | | $ | 7,000 | | | | | | 2.66% | | | | | $ | — | | | | | | 0.00% | | | | | $ | — | | | | | | 0.00% | | | | | $ | 9,000 | | | | | $ | 9,036 | | | | | | 2.39% | | |
Mortgage-backed securities
|
| | | | — | | | | | | 0.00% | | | | | | — | | | | | | 0.00% | | | | | | 6,362 | | | | | | 2.43% | | | | | | 5,430 | | | | | | 1.52% | | | | | | 11,792 | | | | | | 11,874 | | | | | | 2.01% | | |
U.S. Agency obligations
|
| | | | — | | | | | | 0.00% | | | | | | — | | | | | | 0.00% | | | | | | 1,254 | | | | | | 3.27% | | | | | | 2,013 | | | | | | 2.30% | | | | | | 3,267 | | | | | | 3,180 | | | | | | 2.67% | | |
State, county, and municipals
|
| | | | — | | | | | | 0.00% | | | | | | — | | | | | | 0.00% | | | | | | 1,048 | | | | | | 2.30% | | | | | | — | | | | | | 0.00% | | | | | | 1,048 | | | | | | 1,075 | | | | | | 2.30% | | |
Corporate bonds
|
| | | | 501 | | | | | | 3.53% | | | | | | 499 | | | | | | 3.29% | | | | | | — | | | | | | 0.00% | | | | | | — | | | | | | 0.00% | | | | | | 1,000 | | | | | | 1,006 | | | | | | 3.41% | | |
Total
|
| | | $ | 2,501 | | | | | | 1.86% | | | | | $ | 7,499 | | | | | | 2.71% | | | | | $ | 8,664 | | | | | | 2.53% | | | | | $ | 7,443 | | | | | | 1.73% | | | | | $ | 26,107 | | | | | $ | 26,171 | | | | | | 2.29% | | |
Securities Held to Maturity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Treasury securities
|
| | | $ | — | | | | | | 0.00% | | | | | $ | 201 | | | | | | 1.80% | | | | | $ | — | | | | | | 0.00% | | | | | $ | — | | | | | | 0.00% | | | | | $ | 201 | | | | | $ | 201 | | | | | | 1.80% | | |
Mortgage-backed securities
|
| | | | 3 | | | | | | 5.43% | | | | | | — | | | | | | 0.00% | | | | | | — | | | | | | 0.00% | | | | | | 294 | | | | | | 1.21% | | | | | | 297 | | | | | | 292 | | | | | | 1.25% | | |
Foreign Sovereign (Israel)
|
| | | | — | | | | | | 0.00% | | | | | | 1,000 | | | | | | 2.68% | | | | | | — | | | | | | 0.00% | | | | | | — | | | | | | 0.00% | | | | | | 1,000 | | | | | | 1,000 | | | | | | 2.68% | | |
Total
|
| | | $ | 3 | | | | | | 5.43% | | | | | $ | 1,201 | | | | | | 2.53% | | | | | $ | — | | | | | | 0.00% | | | | | $ | 294 | | | | | | 1.21% | | | | | $ | 1,498 | | | | | $ | 1,493 | | | | | | 2.27% | | |
|
| | | | | | | | | | | | | | |
December 31,
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
September 30, 2019
|
| |
2018
|
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| |
Amount
|
| |
Percent
|
| ||||||||||||||||||||||||||||||||||||
Commercial real estate
|
| | | $ | 404,087 | | | | | | 71.4% | | | | | $ | 384,697 | | | | | | 69.1% | | | | | $ | 298,677 | | | | | | 64.5% | | | | | $ | 240,623 | | | | | | 66.0% | | | | | $ | 201,833 | | | | | | 70.2% | | | | | $ | 132,386 | | | | | | 64.8% | | |
Owner Occupied
|
| | | | 165,662 | | | | | | — | | | | | | 171,924 | | | | | | — | | | | | | 135,101 | | | | | | — | | | | | | 102,593 | | | | | | — | | | | | | 66,032 | | | | | | — | | | | | | 30,032 | | | | | | — | | |
Non-Owner Occupied
|
| | | | 238,425 | | | | | | — | | | | | | 212,773 | | | | | | — | | | | | | 163,576 | | | | | | — | | | | | | 138,030 | | | | | | — | | | | | | 135,801 | | | | | | — | | | | | | 102,354 | | | | | | — | | |
Residential real estate
|
| | | | 64,985 | | | | | | 11.5% | | | | | | 69,568 | | | | | | 12.5% | | | | | | 72,006 | | | | | | 15.5% | | | | | | 60,500 | | | | | | 16.6% | | | | | | 44,081 | | | | | | 15.3% | | | | | | 41,154 | | | | | | 20.2% | | |
Commercial
|
| | | | 72,902 | | | | | | 12.9% | | | | | | 80,172 | | | | | | 14.4% | | | | | | 61,661 | | | | | | 13.3% | | | | | | 46,408 | | | | | | 12.7% | | | | | | 38,170 | | | | | | 13.3% | | | | | | 22,593 | | | | | | 11.1% | | |
Construction and development
|
| | | | 18,713 | | | | | | 3.3% | | | | | | 18,747 | | | | | | 3.4% | | | | | | 28,629 | | | | | | 6.2% | | | | | | 13,932 | | | | | | 3.8% | | | | | | 400 | | | | | | 0.1% | | | | | | 2,614 | | | | | | 1.3% | | |
Consumer and other loans
|
| | | | 4,882 | | | | | | 0.9% | | | | | | 3,408 | | | | | | 0.6% | | | | | | 2,210 | | | | | | 0.5% | | | | | | 3,061 | | | | | | 0.8% | | | | | | 3,125 | | | | | | 1.1% | | | | | | 5,457 | | | | | | 2.7% | | |
Total loans
|
| | | $ | 565,569 | | | | | | 100.0% | | | | | $ | 556,593 | | | | | | 100.0% | | | | | $ | 463,183 | | | | | | 100.0% | | | | | $ | 364,524 | | | | | | 100.0% | | | | | $ | 287,609 | | | | | | 100.0% | | | | | $ | 204,204 | | | | | | 100.0% | | |
Unearned loan origination fees (costs),
net |
| | | | (300) | | | | | | | | | | | | (366) | | | | | | | | | | | | (115) | | | | | | | | | | | | 136 | | | | | | | | | | | | (152) | | | | | | | | | | | | (157) | | | | | | | | |
Allowance for loan losses
|
| | | | (5,294) | | | | | | | | | | | | (4,863) | | | | | | | | | | | | (4,199) | | | | | | | | | | | | (3,625) | | | | | | | | | | | | (3,000) | | | | | | | | | | | | (2,711) | | | | | | | | |
Loans, net
|
| | | $ | 559,975 | | | | | | | | | | | $ | 551,364 | | | | | | | | | | | $ | 458,869 | | | | | | | | | | | $ | 361,035 | | | | | | | | | | | $ | 284,457 | | | | | | | | | | | $ | 201,336 | | | | | | | | |
|
| | |
As of September 30, 2019
|
| |||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Percent
|
| ||||||
CRE and Construction & Development Loans, combined | | | | | | | | | | | | | |
1 – 4 Family Construction
|
| | | $ | 2,845 | | | | | | 0.7% | | |
Commercial 1 – 4 Family Residential
|
| | | | 35,958 | | | | | | 8.5% | | |
Auto (Car Lot/Auto Repair)
|
| | | | 1,025 | | | | | | 0.2% | | |
Gas Station
|
| | | | 51,817 | | | | | | 12.3% | | |
Commercial Construction
|
| | | | 15,039 | | | | | | 3.6% | | |
Educational Facility
|
| | | | 4,435 | | | | | | 1.0% | | |
Hotel
|
| | | | 30,003 | | | | | | 7.1% | | |
Land Development
|
| | | | 11,824 | | | | | | 2.8% | | |
Mixed Use
|
| | | | 0 | | | | | | 0.0% | | |
Multifamily
|
| | | | 19,270 | | | | | | 4.6% | | |
Office
|
| | | | 50,632 | | | | | | 12.0% | | |
Other / Special Use
|
| | | | 2,104 | | | | | | 0.4% | | |
Religious Facility
|
| | | | 5,084 | | | | | | 1.2% | | |
Retail
|
| | | | 120,140 | | | | | | 28.4% | | |
Vacant Land
|
| | | | 0 | | | | | | 0.0% | | |
Warehouse
|
| | | | 72,624 | | | | | | 17.2% | | |
Total
|
| | | $ | 422,800 | | | | | | 100.0% | | |
| | |
As of September 30, 2019
|
| |||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Percent
|
| ||||||
CRE and Construction & Development Loans, combined | | | | | | | | | | | | | |
Broward
|
| | | $ | 83,645 | | | | | | 19.8% | | |
Miami-Dade
|
| | | | 265,508 | | | | | | 62.8% | | |
Palm Beach
|
| | | | 21,642 | | | | | | 5.1% | | |
Other FL County
|
| | | | 42,427 | | | | | | 10.0% | | |
Out of State
|
| | | | 9,578 | | | | | | 2.3% | | |
Total
|
| | | $ | 422,800 | | | | | | 100.0% | | |
| | |
As of September 30, 2019
|
| |||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Percent
|
| ||||||
Commercial Loans | | | | | | | | | | | | | |
Business Products
|
| | | $ | 3,878 | | | | | | 5.3% | | |
Business Services
|
| | | | 5,188 | | | | | | 7.1% | | |
Information
|
| | | | 4,442 | | | | | | 6.1% | | |
Construction
|
| | | | 1,525 | | | | | | 2.1% | | |
Finance
|
| | | | 15,330 | | | | | | 21.0% | | |
Healthcare
|
| | | | 4,239 | | | | | | 5.8% | | |
Services
|
| | | | 9,252 | | | | | | 12.7% | | |
Trade
|
| | | | 19,187 | | | | | | 26.3% | | |
Real Estate
|
| | | | 8,797 | | | | | | 12.1% | | |
Transportation
|
| | | | 1,064 | | | | | | 1.5% | | |
Total
|
| | | $ | 72,902 | | | | | | 100.0% | | |
| | |
September 30, 2019
|
| |||||||||||||||||||||
(Dollars in thousands)
|
| |
Due in
One Year or Less |
| |
Due in
One to Five Years |
| |
Due After
Five Years |
| |
Total
|
| ||||||||||||
Commercial Real Estate
|
| | | $ | 34,552 | | | | | $ | 159,190 | | | | | $ | 210,345 | | | | | $ | 404,087 | | |
Residential Real Estate
|
| | | | 9,002 | | | | | | 41,972 | | | | | | 14,011 | | | | | | 64,985 | | |
Commercial
|
| | | | 37,269 | | | | | | 22,937 | | | | | | 12,696 | | | | | | 72,902 | | |
Construction and Development
|
| | | | 6,591 | | | | | | 12,122 | | | | | | — | | | | | | 18,713 | | |
Consumer and Other
|
| | | | 1,336 | | | | | | 885 | | | | | | 2,661 | | | | | | 4,882 | | |
Total loans
|
| | | $ | 88,750 | | | | | $ | 237,106 | | | | | $ | 239,713 | | | | | $ | 565,569 | | |
Amounts with fixed rates
|
| | | $ | 25,120 | | | | | $ | 148,367 | | | | | $ | 55,399 | | | | | $ | 228,886 | | |
Amounts with floating rates
|
| | | $ | 63,630 | | | | | $ | 88,739 | | | | | $ | 184,314 | | | | | $ | 336,683 | | |
| | |
September 30,
2019 |
| |
December 31,
|
| ||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
2018
|
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| |||||||||||||||||||||
Nonaccrual Loans | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Residential real estate
|
| | | | 110 | | | | | | 110 | | | | | | 2,100 | | | | | | — | | | | | | — | | | | | | 20 | | |
Commercial
|
| | | | — | | | | | | 294 | | | | | | 306 | | | | | | — | | | | | | — | | | | | | — | | |
Construction and development
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Consumer and other loans
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Accruing loans 90 or more days past due
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total nonperforming loans
|
| | | $ | 110 | | | | | $ | 404 | | | | | $ | 2,406 | | | | | $ | — | | | | | $ | — | | | | | $ | 20 | | |
Other real estate owned
|
| | | | 1,708 | | | | | | 1,708 | | | | | | — | | | | | | — | | | | | | 720 | | | | | | 743 | | |
Total nonperforming assets
|
| | | $ | 1,818 | | | | | $ | 2,112 | | | | | $ | 2,406 | | | | | $ | — | | | | | $ | 720 | | | | | $ | 763 | | |
Restructured loans – nonaccrual
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Restructured loans – accruing
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Ratio of nonperforming loans to total loans
|
| | | | 0.02% | | | | | | 0.07% | | | | | | 0.51% | | | | | | 0.00% | | | | | | 0.00% | | | | | | 0.01% | | |
Ratio of nonperforming assets to total assets
|
| | | | 0.27% | | | | | | 0.32% | | | | | | 0.45% | | | | | | 0.00% | | | | | | 0.21% | | | | | | 0.27% | | |
(Dollars in thousands)
|
| |
Pass
|
| |
Special
Mention |
| |
Substandard
|
| |
Doubtful
|
| |
Total
|
| |||||||||||||||
September 30, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate
|
| | | $ | 404,087 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 404,087 | | |
Residential real estate
|
| | | | 64,875 | | | | | | — | | | | | | 110 | | | | | | — | | | | | | 64,985 | | |
Commercial
|
| | | | 72,902 | | | | | | — | | | | | | — | | | | | | — | | | | | | 72,902 | | |
Construction and development
|
| | | | 18,713 | | | | | | — | | | | | | — | | | | | | — | | | | | | 18,713 | | |
Consumer
|
| | | | 4,882 | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,882 | | |
Total
|
| | | $ | 565,459 | | | | | $ | — | | | | | $ | 110 | | | | | $ | — | | | | | $ | 565,569 | | |
December 31, 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate
|
| | | $ | 384,697 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 384,697 | | |
Residential real estate
|
| | | | 69,458 | | | | | | — | | | | | | 110 | | | | | | — | | | | | | 69,568 | | |
Commercial
|
| | | | 80,172 | | | | | | — | | | | | | — | | | | | | — | | | | | | 80,172 | | |
Construction and development
|
| | | | 18,747 | | | | | | — | | | | | | — | | | | | | — | | | | | | 18,747 | | |
Consumer
|
| | | | 3,408 | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,408 | | |
Total
|
| | | $ | 556,482 | | | | | $ | — | | | | | $ | 110 | | | | | $ | — | | | | | $ | 556,592 | | |
December 31, 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate
|
| | | $ | 298,677 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 298,677 | | |
Residential real estate
|
| | | | 69,906 | | | | | | — | | | | | | 2,100 | | | | | | — | | | | | | 72,006 | | |
Commercial
|
| | | | 61,356 | | | | | | — | | | | | | 305 | | | | | | — | | | | | | 61,661 | | |
Construction and development
|
| | | | 28,629 | | | | | | — | | | | | | — | | | | | | — | | | | | | 28,629 | | |
Consumer
|
| | | | 2,210 | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,210 | | |
Total
|
| | | $ | 460,778 | | | | | $ | — | | | | | $ | 2,405 | | | | | $ | — | | | | | $ | 463,183 | | |
December 31, 2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate
|
| | | $ | 240,623 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 240,623 | | |
Residential real estate
|
| | | | 59,958 | | | | | | — | | | | | | 542 | | | | | | — | | | | | | 60,500 | | |
Commercial
|
| | | | 41,6956 | | | | | | 4,713 | | | | | | — | | | | | | — | | | | | | 46,408 | | |
Construction and development
|
| | | | 13,932 | | | | | | — | | | | | | — | | | | | | — | | | | | | 13,932 | | |
Consumer
|
| | | | 3,061 | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,061 | | |
Total
|
| | | $ | 359,269 | | | | | $ | 4,713 | | | | | $ | 542 | | | | | $ | — | | | | | $ | 364,524 | | |
|
| | |
Nine Months Ended September 30,
|
| |
Year Ended December 31,
|
| ||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
2019
|
| |
2018
|
| |
2018
|
| |
2017
|
| |
2016
|
| |
2015
|
| |
2014
|
| |||||||||||||||||||||
Balance at beginning of period
|
| | | $ | 4,863 | | | | | $ | 4,199 | | | | | $ | 4,199 | | | | | $ | 3,625 | | | | | $ | 3,000 | | | | | $ | 2,711 | | | | | $ | 2,541 | | |
Charge-offs | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 48 | | |
Residential real estate
|
| | | | — | | | | | | — | | | | | | 491 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commercial
|
| | | | — | | | | | | — | | | | | | — | | | | | | 310 | | | | | | — | | | | | | — | | | | | | — | | |
Construction and development
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Consumer and other
|
| | | | — | | | | | | — | | | | | | — | | | | | | 41 | | | | | | 16 | | | | | | 9 | | | | | | — | | |
Total Charge-offs
|
| | | | — | | | | | | — | | | | | | 491 | | | | | | 351 | | | | | | 16 | | | | | | 9 | | | | | | 48 | | |
Recoveries | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Residential real estate
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commercial
|
| | | | 60 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 14 | | |
Construction and development
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Consumer and other
|
| | | | 4 | | | | | | 3 | | | | | | 6 | | | | | | 3 | | | | | | 1 | | | | | | — | | | | | | — | | |
Total recoveries
|
| | | | 64 | | | | | | 3 | | | | | | 6 | | | | | | 3 | | | | | | 1 | | | | | | — | | | | | | 14 | | |
Net charge-offs
(recoveries) |
| | | | (64) | | | | | | (3) | | | | | | 485 | | | | | | 348 | | | | | | 15 | | | | | | 9 | | | | | | 34 | | |
Provision for loan losses
|
| | | | 367 | | | | | | 712 | | | | | | 1,149 | | | | | | 922 | | | | | | 640 | | | | | | 298 | | | | | | 204 | | |
Balance at end of period
|
| | | $ | 5,294 | | | | | $ | 4,914 | | | | | $ | 4,863 | | | | | $ | 4,199 | | | | | $ | 3,625 | | | | | $ | 3,000 | | | | | $ | 2,711 | | |
Ratio of net charge-offs to average loans
|
| | | | (0.01)% | | | | | | 0.00% | | | | | | 0.09% | | | | | | 0.08% | | | | | | 0.00% | | | | | | 0.00% | | | | | | 0.02% | | |
ALLL as a percentage of
loans at end of period |
| | | | 0.94% | | | | | | 0.91% | | | | | | 0.87% | | | | | | 0.91% | | | | | | 0.99% | | | | | | 1.04% | | | | | | 1.33% | | |
ALLL as a multiple of net charge-offs
|
| | | | (82.72) | | | | | | (1,638.00) | | | | | | 10.03 | | | | | | 12.07 | | | | | | 241.67 | | | | | | 333.33 | | | | | | 79.74 | | |
ALLL as a percentage of nonperforming loans
|
| | | | 4812.73% | | | | | | 204.41% | | | | | | 1203.71% | | | | | | 174.52% | | | | | | 668.82% | | | | | | N/A | | | | | | 13555.00% | | |
| | |
September 30, 2019
|
| |
December 31, 2018
|
| |
December 31, 2017
|
| |
December 31, 2016
|
| |
December 31, 2015
|
| |
December 31, 2014
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Allowance
|
| |
Percent
|
| |
Allowance
|
| |
Percent
|
| |
Allowance
|
| |
Percent
|
| |
Allowance
|
| |
Percent
|
| |
Allowance
|
| |
Percent
|
| |
Allowance
|
| |
Percent
|
| ||||||||||||||||||||||||||||||||||||
Commercial real estate
|
| | | $ | 3,577 | | | | | | 67.57% | | | | | $ | 3,082 | | | | | | 63.38% | | | | | $ | 2,758 | | | | | | 65.68% | | | | | $ | 2,314 | | | | | | 63.83% | | | | | $ | 2,009 | | | | | | 66.97% | | | | | $ | 1,860 | | | | | | 68.61% | | |
Residential real estate
|
| | | | 708 | | | | | | 13.37% | | | | | | 687 | | | | | | 14.13% | | | | | | 600 | | | | | | 14.29% | | | | | | 652 | | | | | | 17.99% | | | | | | 553 | | | | | | 18.43% | | | | | | 572 | | | | | | 21.10% | | |
Commercial
|
| | | | 758 | | | | | | 14.32% | | | | | | 846 | | | | | | 17.40% | | | | | | 568 | | | | | | 13.53% | | | | | | 506 | | | | | | 13.96% | | | | | | 412 | | | | | | 13.73% | | | | | | 215 | | | | | | 7.97% | | |
Construction and development
|
| | | | 192 | | | | | | 3.63% | | | | | | 216 | | | | | | 4.44% | | | | | | 236 | | | | | | 5.62% | | | | | | 125 | | | | | | 3.45% | | | | | | 3 | | | | | | 0.10% | | | | | | 28 | | | | | | 1.03% | | |
Consumer and other
|
| | | | 59 | | | | | | 1.11% | | | | | | 32 | | | | | | 0.66% | | | | | | 37 | | | | | | 0.88% | | | | | | 28 | | | | | | 0.77% | | | | | | 24 | | | | | | 0.77% | | | | | | 35 | | | | | | 1.29% | | |
Total allowance for loan losses
|
| | | $ | 5,294 | | | | | | 100.0% | | | | | $ | 4,863 | | | | | | 100.0% | | | | | $ | 4,199 | | | | | | 100.0% | | | | | $ | 3,625 | | | | | | 100.0% | | | | | $ | 3,001 | | | | | | 100.0% | | | | | $ | 2,710 | | | | | | 100.0% | | |
|
| | |
For the Nine Months Ended
September 30, 2019 |
| |
For the Year Ended December 31
|
| ||||||||||||||||||||||||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Average
Balance |
| |
Average
Rate |
| |
Average
Balance |
| |
Average
Rate |
| |
Average
Balance |
| |
Average
Rate |
| |
Average
Balance |
| |
Average
Rate |
| ||||||||||||||||||||||||
NOW accounts
|
| | | $ | 19,583 | | | | | | 0.05% | | | | | $ | 20,097 | | | | | | 0.05% | | | | | $ | 14,342 | | | | | | 0.05% | | | | | $ | 14,348 | | | | | | 0.06% | | |
Money market accounts
|
| | | | 128,256 | | | | | | 1.36% | | | | | | 138,225 | | | | | | 0.98% | | | | | | 135,475 | | | | | | 0.82% | | | | | | 116,650 | | | | | | 0.76% | | |
Savings accounts
|
| | | | 3,801 | | | | | | 0.20% | | | | | | 4,278 | | | | | | 0.20% | | | | | | 2,859 | | | | | | 0.20% | | | | | | 2,872 | | | | | | 0.20% | | |
Certificates of deposit
|
| | | | 275,244 | | | | | | 2.46% | | | | | | 215,511 | | | | | | 1.90% | | | | | | 137,180 | | | | | | 1.30% | | | | | | 121,097 | | | | | | 1.17% | | |
Total interest-bearing deposits
|
| | | | 426,884 | | | | | | 2.00% | | | | | | 378,111 | | | | | | 1.45% | | | | | | 289,856 | | | | | | 1.00% | | | | | | 254,967 | | | | | | 0.91% | | |
Noninterest-bearing deposits
|
| | | | 130,521 | | | | | | 0.00% | | | | | | 122,571 | | | | | | 0.00% | | | | | | 116,049 | | | | | | 0.00% | | | | | | 85,944 | | | | | | 0.00% | | |
Total deposits
|
| | | $ | 557,405 | | | | | | 1.53% | | | | | $ | 500,682 | | | | | | 1.09% | | | | | $ | 405,905 | | | | | | 0.72% | | | | | $ | 340,911 | | | | | | 0.68% | | |
| | |
For the Nine Months Ended
September 30, 2019 |
| |
For the Year Ended December 31
|
| ||||||||||||||||||||||||||||||||||||||||||
| | |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Ending
Balance |
| |
% of
Total |
| |
Ending
Balance |
| |
% of
Total |
| |
Ending
Balance |
| |
% of
Total |
| |
Ending
Balance |
| |
% of
Total |
| ||||||||||||||||||||||||
NOW accounts
|
| | | $ | 17,654 | | | | | | 3.05% | | | | | $ | 15,196 | | | | | | 2.90% | | | | | $ | 14,330 | | | | | | 3.23% | | | | | $ | 10,100 | | | | | | 2.91% | | |
Money market accounts
|
| | | | 166,184 | | | | | | 28.76% | | | | | | 105,969 | | | | | | 20.21% | | | | | | 156,768 | | | | | | 35.31% | | | | | | 117,716 | | | | | | 33.91% | | |
Savings accounts
|
| | | | 3,549 | | | | | | 0.61% | | | | | | 3,751 | | | | | | 0.72% | | | | | | 3,067 | | | | | | 0.69% | | | | | | 2,810 | | | | | | 0.81% | | |
Certificates of deposit
|
| | | | 243,211 | | | | | | 42.08% | | | | | | 282,321 | | | | | | 53.85% | | | | | | 163,000 | | | | | | 36.71% | | | | | | 123,711 | | | | | | 35.64% | | |
Total interest-bearing deposits
|
| | | | 430,598 | | | | | | 74.50% | | | | | | 407,237 | | | | | | 77.68% | | | | | | 337,165 | | | | | | 75.94% | | | | | | 254,337 | | | | | | 73.27% | | |
Noninterest-bearing deposits
|
| | | | 147,308 | | | | | | 25.50% | | | | | | 116,995 | | | | | | 22.32% | | | | | | 106,800 | | | | | | 24.06% | | | | | | 92,790 | | | | | | 26.73% | | |
Total deposits
|
| | | $ | 577,906 | | | | | | 100.00% | | | | | $ | 524,232 | | | | | | 100.00% | | | | | $ | 443,965 | | | | | | 100.00% | | | | | $ | 347,127 | | | | | | 100.00% | | |
(Dollars in thousands)
|
| |
Three
Months or Less |
| |
Over
Three Through Nine Months |
| |
Over
Nine Months Through 12 Months |
| |
Over
12 Months |
| |
Total
|
| |||||||||||||||
$100,000 or more
|
| | | $ | 69,558 | | | | | $ | 52,287 | | | | | $ | 50,455 | | | | | $ | 55,270 | | | | | $ | 227,570 | | |
Less than $100,000
|
| | | | 3,883 | | | | | | 1,843 | | | | | | 4,012 | | | | | | 5,903 | | | | | | 15,641 | | |
Total
|
| | | $ | 73,441 | | | | | $ | 54,130 | | | | | $ | 54,467 | | | | | $ | 61,173 | | | | | $ | 243,211 | | |
| | |
Nine Months
Ended September 30, 2019 |
| |
Years Ended December 31,
|
| ||||||||||||||||||
(Dollars in thousands)
|
| |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||
Amount outstanding at period-end
|
| | | $ | 30,000 | | | | | $ | 75,000 | | | | | $ | 39,000 | | | | | $ | 36,000 | | |
Weighted average interest rate at period-end
|
| | | | 2.09% | | | | | | 2.63% | | | | | | 1.44% | | | | | | 0.87% | | |
Maximum month-end balance during period
|
| | | $ | 56,000 | | | | | $ | 75,000 | | | | | $ | 39,000 | | | | | $ | 36,000 | | |
Average balance outstanding during period
|
| | | | 35,630 | | | | | | 42,663 | | | | | | 28,674 | | | | | | 22,213 | | |
Weighted average interest rate during period
|
| | | | 2.65% | | | | | | 1.95% | | | | | | 1.11% | | | | | | 0.83% | | |
| | |
Actual
|
| |
Minimum for capital adequacy
|
| |
Minimum to be well capitalized
|
| |||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| ||||||||||||||||||
September 30, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total capital ratio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bank
|
| | | $ | 70,920 | | | | | | 12.2% | | | | | $ | 46,619 | | | | | | 8.0% | | | | | $ | 58,274 | | | | | | 10.0% | | |
Company
|
| | | | 71,839 | | | | | | 12.3% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Tier 1 capital ratio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bank
|
| | | | 65,188 | | | | | | 11.2% | | | | | | 34,964 | | | | | | 6.0% | | | | | | 46,619 | | | | | | 8.0% | | |
Company
|
| | | | 56,397 | | | | | | 9.7% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Tier1 leverage ratio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bank
|
| | | | 65,188 | | | | | | 9.7% | | | | | | 26,838 | | | | | | 4.0% | | | | | | 33,548 | | | | | | 5.0% | | |
Company
|
| | | | 56,397 | | | | | | 8.4% | | | | | | N/A | | | | | | N/A% | | | | | | N/A | | | | | | N/A | | |
Common equity tier 1 capital ratio
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bank
|
| | | | 65,188 | | | | | | 11.2% | | | | | | 26,223 | | | | | | 4.5% | | | | | | 37,878 | | | | | | 6.5% | | |
Company
|
| | | | 56,397 | | | | | | 9.7% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
December 31, 2018 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total capital ratio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bank
|
| | | $ | 65,167 | | | | | | 11.4% | | | | | $ | 45,768 | | | | | | 8.0% | | | | | $ | 57,210 | | | | | | 10.0% | | |
Company
|
| | | | 65,980 | | | | | | 11.5% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Tier 1 capital ratio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bank
|
| | | | 59,885 | | | | | | 10.5% | | | | | | 34,326 | | | | | | 6.0% | | | | | | 45,768 | | | | | | 8.0% | | |
Company
|
| | | | 51,028 | | | | | | 8.9% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Tier1 leverage ratio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bank
|
| | | | 59,885 | | | | | | 9.5% | | | | | | 25,251 | | | | | | 4.0% | | | | | | 31,564 | | | | | | 5.0% | | |
Company
|
| | | | 51,028 | | | | | | 8.1% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Common equity tier 1 capital ratio
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bank
|
| | | | 59,885 | | | | | | 10.5% | | | | | | 25,744 | | | | | | 4.5% | | | | | | 37,186 | | | | | | 6.5% | | |
Company
|
| | | | 51,028 | | | | | | 8.9% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
December 31, 2017 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total capital ratio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bank
|
| | | $ | 55,528 | | | | | | 11.8% | | | | | $ | 37,620 | | | | | | 8.0% | | | | | $ | 47,025 | | | | | | 10.0% | | |
Company
|
| | | | 57,400 | | | | | | 12.2% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Tier 1 capital ratio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bank
|
| | | | 50,995 | | | | | | 10.8% | | | | | | 28,215 | | | | | | 6.0% | | | | | | 37,620 | | | | | | 8.0% | | |
Company
|
| | | | 43,254 | | | | | | 9.2% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Tier1 leverage ratio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bank
|
| | | | 50,995 | | | | | | 9.7% | | | | | | 20,983 | | | | | | 4.0% | | | | | | 26,229 | | | | | | 5.0% | | |
Company
|
| | | | 43,254 | | | | | | 8.2% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Common equity tier 1 capital ratio
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bank
|
| | | | 50,995 | | | | | | 10.8% | | | | | | 21,161 | | | | | | 4.5% | | | | | | 30,566 | | | | | | 6.5% | | |
Company
|
| | | | 43,254 | | | | | | 9.2% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
December 31, 2016 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total capital ratio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bank
|
| | | $ | 50,303 | | | | | | 13.7% | | | | | $ | 29,410 | | | | | | 8.0% | | | | | $ | 36,763 | | | | | | 10.0% | | |
Company
|
| | | | 51,856 | | | | | | 14.2% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Tier 1 capital ratio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bank
|
| | | | 46,678 | | | | | | 12.7% | | | | | | 22,058 | | | | | | 6.0% | | | | | | 29,410 | | | | | | 8.0% | | |
Company
|
| | | | 38,678 | | | | | | 10.6% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Tier1 leverage ratio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bank
|
| | | | 46,678 | | | | | | 11.1% | | | | | | 16,847 | | | | | | 4.0% | | | | | | 21,059 | | | | | | 5.0% | | |
Company
|
| | | | 38,678 | | | | | | 9.4% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Common equity tier 1 capital ratio
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bank
|
| | | | 46,678 | | | | | | 12.8% | | | | | | 16,543 | | | | | | 4.5% | | | | | | 23,896 | | | | | | 6.5% | | |
Company
|
| | | | 38,678 | | | | | | 10.6% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
(Dollars in thousands)
|
| |
Due in
One Year or Less |
| |
Due after
One Through Three Years |
| |
Due After
Three Through Five Years |
| |
Due After
Five Years |
| |
Total
|
| |||||||||||||||
FHLB Advances
|
| | | $ | 30,000 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 30,000 | | |
Certificates of deposit $100,000 or more
|
| | | | 172,300 | | | | | | 54,411 | | | | | | 859 | | | | | | — | | | | | | 227,570 | | |
Certificates of deposit less than $100,000
|
| | | | 9,738 | | | | | | 5,822 | | | | | | 81 | | | | | | — | | | | | | 15,641 | | |
Operating leases
|
| | | | 710 | | | | | | 1,161 | | | | | | 125 | | | | | | — | | | | | | 1,996 | | |
Total
|
| | | $ | 212,748 | | | | | $ | 61,394 | | | | | $ | 1,065 | | | | | $ | — | | | | | $ | 275,207 | | |
| | |
As of
September 30, 2019 |
| |
As of December 31,
|
| ||||||||||||||||||
(Dollars in thousands)
|
| |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||
Unfunded lines of credit
|
| | | $ | 129,063 | | | | | $ | 119,327 | | | | | $ | 113,150 | | | | | $ | 73,405 | | |
Commitments to extend credit
|
| | | | 22,718 | | | | | | 27,017 | | | | | | 37,687 | | | | | | 34,987 | | |
Letters of credit
|
| | | | 2,010 | | | | | | 1,502 | | | | | | 2,568 | | | | | | 4,076 | | |
Total credit extension commitments
|
| | | $ | 153,791 | | | | | $ | 147,846 | | | | | $ | 153,405 | | | | | $ | 112,468 | | |
| | |
Nine Months
Ended September 30, 2019 |
| |
Years Ended December 31
|
| ||||||||||||||||||
(Dollars in thousands)
|
| |
2018
|
| |
2017
|
| |
2016
|
| |||||||||||||||
Return on Average Assets(1)
|
| | | | 1.11% | | | | | | 1.13% | | | | | | 0.81% | | | | | | 0.86% | | |
Return on Average Equity(1)
|
| | | | 13.53% | | | | | | 14.48% | | | | | | 9.59% | | | | | | 9.15% | | |
Average Equity to Average Assets
|
| | | | 8.19% | | | | | | 7.81% | | | | | | 8.47% | | | | | | 9.40% | | |
September 30, 2019 (Dollars in thousands) |
| |
Within
One Month |
| |
After
One Month Through Three Months |
| |
After Three
Months Through 12 Months |
| |
Within
One Year |
| |
Greater than
One Year or Nonsensitive |
| |
Total
|
| ||||||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest earning assets
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans(1)
|
| | | $ | 184,853 | | | | | $ | 19,118 | | | | | $ | 89,477 | | | | | $ | 293,448 | | | | | $ | 266,527 | | | | | $ | 559,975 | | |
Securities
|
| | | | 3,386 | | | | | | 2,597 | | | | | | 9,093 | | | | | | 15,076 | | | | | | 12,593 | | | | | | 27,669 | | |
Interest-bearing deposits at other financial institutions
|
| | | | 67,235 | | | | | | — | | | | | | — | | | | | | 67,235 | | | | | | — | | | | | | 67,235 | | |
Federal funds sold
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total interest earning assets
|
| | | $ | 255,474 | | | | | $ | 21,715 | | | | | $ | 98,570 | | | | | $ | 375,759 | | | | | $ | 279,120 | | | | | $ | 654,879 | | |
Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | $ | 3,133 | | | | | $ | 184,254 | | | | | $ | — | | | | | $ | 187,387 | | | | | $ | — | | | | | $ | 187,387 | | |
Time deposits
|
| | | | 8,456 | | | | | | 66,738 | | | | | | 109,447 | | | | | | 184,641 | | | | | | 58,570 | | | | | | 243,211 | | |
Total interest-bearing deposits
|
| | | | 11,589 | | | | | | 250,992 | | | | | | 109,447 | | | | | | 372,028 | | | | | | 58,570 | | | | | | 430,598 | | |
Securities sold under agreements to
repurchase |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
FHLB Advances
|
| | | | — | | | | | | 10,000 | | | | | | 20,000 | | | | | | — | | | | | | — | | | | | | 30,000 | | |
Other borrowed funds
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 9,710 | | | | | | 9,710 | | |
Total interest-bearing liabilities
|
| | | $ | 11,589 | | | | | $ | 260,992 | | | | | $ | 129,447 | | | | | $ | 402,028 | | | | | $ | 68,280 | | | | | $ | 470,308 | | |
Period gap
|
| | | $ | 243,885 | | | | | $ | (239,277) | | | | | $ | (30,877) | | | | | $ | (26,269) | | | | | $ | 210,840 | | | | | | | | |
Cumulative gap
|
| | | $ | 243,885 | | | | | $ | 4,608 | | | | | $ | (26,269) | | | | | $ | (26,269) | | | | | $ | 184,571 | | | | | | | | |
Ratio of cumulative gap to total earning
assets |
| | | | 95.46% | | | | | | 21.22% | | | | | | (26.65)% | | | | | | (6.99)% | | | | | | 66.13% | | | | | | | | |
Ratio of cumulative gap to cumulative total earning assets
|
| | | | 95.46% | | | | | | 1.66% | | | | | | (6.99)% | | | | | | (6.99)% | | | | | | 28.18% | | | | | | | | |
September 30, 2019 (Dollars in thousands) |
| |
Within
One Month |
| |
After
One Month Through Three Months |
| |
After
Three Months Through 12 Months |
| |
Within
One Year |
| |
Greater than
One Year or Nonsensitive |
| |
Total
|
| ||||||||||||||||||
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest earning assets
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans(1)
|
| | | $ | 4,880 | | | | | $ | 15,469 | | | | | $ | 61,034 | | | | | $ | 81,383 | | | | | $ | 478,592 | | | | | $ | 559,975 | | |
Securities
|
| | | | — | | | | | | — | | | | | | 1,003 | | | | | | 1,003 | | | | | | 26,666 | | | | | | 27,669 | | |
Interest-bearing deposits at other financial institutions
|
| | | | 67,235 | | | | | | — | | | | | | — | | | | | | 67,235 | | | | | | — | | | | | | 67,235 | | |
Federal funds sold
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total interest earning assets
|
| | | $ | 72,115 | | | | | $ | 15,469 | | | | | $ | 62,037 | | | | | $ | 149,621 | | | | | $ | 505,258 | | | | | $ | 654,879 | | |
Liabilities | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing liabilities
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Interest-bearing deposits
|
| | | $ | 187,387 | | | | | $ | — | | | | | $ | — | | | | | $ | 187,387 | | | | | $ | — | | | | | $ | 187,387 | | |
Time deposits
|
| | | | 7,330 | | | | | | 66,110 | | | | | | 103,533 | | | | | | 176,973 | | | | | | 66,238 | | | | | | 243,211 | | |
Total interest-bearing
deposits |
| | | | 194,717 | | | | | | 66,110 | | | | | | 103,533 | | | | | | 364,360 | | | | | | 66,238 | | | | | | 430,598 | | |
Securities sold under agreements to
repurchase |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
FHLB Advances
|
| | | | — | | | | | | 10,000 | | | | | | 20,000 | | | | | | 30,000 | | | | | | — | | | | | | 30,000 | | |
Other borrowed funds
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 9,710 | | | | | | 9,710 | | |
Total interest-bearing
liabilities |
| | | $ | 194,717 | | | | | $ | 76,110 | | | | | $ | 123,533 | | | | | $ | 394,360 | | | | | $ | 75,948 | | | | | $ | 470,308 | | |
Period gap
|
| | | $ | (122,602) | | | | | $ | (60,641) | | | | | $ | (61,496) | | | | | $ | (244,739) | | | | | $ | 429,310 | | | | | | | | |
Cumulative gap
|
| | | $ | (122,602) | | | | | $ | (183,243) | | | | | $ | (244,739) | | | | | $ | (244,739) | | | | | $ | 184,571 | | | | | | | | |
Ratio of cumulative gap to total earning
assets |
| | | | (170.01)% | | | | | | (1,184.58)% | | | | | | (394.50)% | | | | | | (163.57)% | | | | | | 36.53% | | | | | | | | |
Net Interest Income at Risk – 12 months
|
| |
-300bps
|
| |
-200bps
|
| |
-100bps
|
| |
Flat
|
| |
+100bps
|
| |
+200bps
|
| |
+300bps
|
| |
+400bps
|
| ||||||||||||||||||||||||
Policy Limit
|
| | | | (20.00)% | | | | | | (15.00)% | | | | | | (10.00)% | | | | | | N/A | | | | | | 10.00% | | | | | | 15.00% | | | | | | 30.00% | | | | | | 40.00% | | |
September 30, 2019
|
| | | | (15.15)% | | | | | | (14.22)% | | | | | | (5.97)% | | | | | | N/A | | | | | | 5.31% | | | | | | 10.41% | | | | | | 15.40% | | | | | | 20.54% | | |
December 31, 2018
|
| | | | (18.65)% | | | | | | (13.45)% | | | | | | (4.79)% | | | | | | N/A | | | | | | 3.26% | | | | | | 6.29% | | | | | | 9.22% | | | | | | 12.35% | | |
December 31, 2017
|
| | | | (13.44)% | | | | | | (12.05)% | | | | | | (7.31)% | | | | | | N/A | | | | | | 6.69% | | | | | | 13.24% | | | | | | 19.58% | | | | | | 26.02% | | |
Net Interest Income at Risk – 24 months
|
| |
-300bps
|
| |
-200bps
|
| |
-100bps
|
| |
Flat
|
| |
+100bps
|
| |
+200bps
|
| |
+300bps
|
| |
+400bps
|
| ||||||||||||||||||||||||
Policy Limit
|
| | | | (20.00)% | | | | | | (15.00)% | | | | | | (10.00)% | | | | | | N/A | | | | | | 10.00% | | | | | | 15.00% | | | | | | 30.00% | | | | | | 40.00% | | |
September 30, 2019
|
| | | | (17.40)% | | | | | | (16.13)% | | | | | | (5.89)% | | | | | | N/A | | | | | | 4.74% | | | | | | 9.09% | | | | | | 13.19% | | | | | | 17.75% | | |
December 31, 2018
|
| | | | (19.37)% | | | | | | (12.48)% | | | | | | (1.86)% | | | | | | N/A | | | | | | (0.63)% | | | | | | (1.48)% | | | | | | (2.73)% | | | | | | (3.76)% | | |
December 31, 2017
|
| | | | (16.13)% | | | | | | (13.72)% | | | | | | (6.96)% | | | | | | N/A | | | | | | 5.82% | | | | | | 11.35% | | | | | | 16.48% | | | | | | 22.05% | | |
Economic Value of Equity as of
|
| |
-300bps
|
| |
-200bps
|
| |
-100bps
|
| |
Flat
|
| |
+100bps
|
| |
+200bps
|
| |
+300bps
|
| |
+400bps
|
| ||||||||||||||||||||||||
Policy Limit
|
| | | | (35.0)% | | | | | | (30.0)% | | | | | | (15.0)% | | | | | | N/A | | | | | | 15.00% | | | | | | 30.00% | | | | | | 35.00% | | | | | | 35.00% | | |
September 30, 2019
|
| | | | (15.27)% | | | | | | (13.99)% | | | | | | (8.23)% | | | | | | N/A | | | | | | 3.96% | | | | | | 5.88% | | | | | | 5.12% | | | | | | 2.72% | | |
December 31, 2018
|
| | | | (15.91)% | | | | | | (7.75)% | | | | | | (1.62)% | | | | | | N/A | | | | | | (2.00)% | | | | | | (5.67)% | | | | | | (11.22)% | | | | | | (18.80)% | | |
December 31, 2017
|
| | | | (28.58)% | | | | | | (22.08)% | | | | | | (7.78)% | | | | | | N/A | | | | | | 4.68% | | | | | | 7.08% | | | | | | 7.16% | | | | | | 3.90% | | |
Beneficial Owner(a)
|
| |
Number of shares of
Marquis Voting Stock Beneficially Owned |
| |
Percent of Outstanding
Shares of Marquis’s Voting Stock |
| ||||||
Directors: | | | | | | | | | | | | | |
Paul B. Chaplin
|
| | | | 60,847(b) | | | | | | 1.77% | | |
Norman S. Edelcup
|
| | | | 100,097(c) | | | | | | 2.90% | | |
Philip J. Feldman
|
| | | | 196,545(d) | | | | | | 5.64% | | |
Jarret L. Gross
|
| | | | 64,911(e) | | | | | | 1.86% | | |
Javier Holtz
|
| | | | 389,695(f) | | | | | | 10.87% | | |
Miriam Lopez
|
| | | | 126,170(g) | | | | | | 3.59% | | |
Jeffrey M. Perlow
|
| | | | 150,445(h) | | | | | | 4.32% | | |
Hillel Shohet
|
| | | | 247,272(i) | | | | | | 7.10% | | |
Executive Officers (not listed above):
|
| | | | | | | | | | | | |
Filip Feller
|
| | | | 9,167(j) | | | | | | 0.27% | | |
Philip Gassman
|
| | | | 46,001(k) | | | | | | 1.33% | | |
All Directors and Executive Officers as a group (10 individuals)
|
| | | | 1,391,151(l) | | | | | | 34.30% | | |
| | |
Actual
|
| |
Minimum for capital
adequacy |
| |
Minimum to be well
capitalized |
| |||||||||||||||||||||||||||
(Dollars in thousands)
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| ||||||||||||||||||
September 30, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total risk-based capital ratio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bank
|
| | | $ | 84,082 | | | | | | 12.4% | | | | | $ | 54,424 | | | | | | 8.0% | | | | | $ | 68,030 | | | | | | 10.0% | | |
Company
|
| | | | 85,091 | | | | | | 12.5% | | | | | | 54,424 | | | | | | 8.0% | | | | | | N/A | | | | | | N/A | | |
Tier 1 risk-based capital ratio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bank
|
| | | | 77,026 | | | | | | 11.3% | | | | | | 40,818 | | | | | | 6.0% | | | | | | 54,424 | | | | | | 8.0% | | |
Company
|
| | | | 78,036 | | | | | | 11.5% | | | | | | 40,818 | | | | | | 6.0% | | | | | | N/A | | | | | | N/A | | |
Tier1 leverage ratio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bank
|
| | | | 77,026 | | | | | | 8.3% | | | | | | 33,713 | | | | | | 4.0% | | | | | | 46,240 | | | | | | 5.0% | | |
Company
|
| | | | 78,036 | | | | | | 8.4% | | | | | | 33,713 | | | | | | 4.0% | | | | | | N/A | | | | | | N/A | | |
Common equity tier 1 capital ratio | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Bank
|
| | | | 77,026 | | | | | | 11.3% | | | | | | 30,614 | | | | | | 4.5% | | | | | | 44,220 | | | | | | 6.5% | | |
Company
|
| | | | 78,036 | | | | | | 11.5% | | | | | | 30,614 | | | | | | 4.5% | | | | | | N/A | | | | | | N/A | | |
| | | |
MARQUIS
|
| |
PROFESSIONAL
|
|
|
Capital Stock
|
| | Holders of Marquis capital stock are entitled to all the rights and obligations provided to capital shareholders under the FBCA and Marquis’s articles of incorporation and bylaws. | | | Holders of Professional capital stock are entitled to all the rights and obligations provided to capital shareholders under the FBCA and Professional’s articles of incorporation and bylaws. | |
|
Authorized
|
| | Marquis’s authorized capital stock consists of (i) 5,000,000 shares of common stock, par value $5.00 per share and (ii) 500,000 shares of preferred stock. | | | Professional’s authorized capital stock consists of (i) 50,000,000 shares of Class A common stock, par value $0.01 per share, (ii) 10,000,000 shares of Class B common stock, par value $0.01 per share, and (iii) 10,000,000 shares of preferred stock, par value $0.01 per share. | |
|
Outstanding
|
| | As of the record date, there were [ ] shares of Marquis common stock outstanding and no shares of Marquis preferred stock outstanding. | | | As of the record date, there were [ ] shares of Professional Class A common stock outstanding, [ ] shares of Professional Class B common stock outstanding and no shares of Professional preferred stock outstanding. | |
|
Voting Rights
|
| | Holders of Marquis common stock generally are entitled to one vote per share in the election of directors and on all other matters submitted to a vote at a meeting of shareholders. | | | Holders of Professional Class A common stock generally are entitled to one vote per share in the election of directors and on all other matters submitted to a vote at a meeting of shareholders. Holders of Professional Class B common stock are not entitled to vote on any matters submitted to a vote of shareholders, except as otherwise required by law. | |
|
Cumulative Voting
|
| | No shareholder has the right of cumulative voting in the election of directors. | | | No shareholder has the right of cumulative voting in the election of directors. | |
|
Number of Directors
|
| | Marquis’s bylaws provide that the number of directors serving on the Marquis board may not be less than five nor more than 25 and shall be fixed from time to time by the majority of the full Marquis board. | | | Professional’s bylaws provide that the number of directors serving on the Professional board of directors shall be such number as determined from time to time by the board of directors, but not less than one director. | |
| | | |
MARQUIS
|
| |
PROFESSIONAL
|
|
| | | |
The Marquis board is authorized to increase the number of directors by no more than two and to immediately appoint persons to fill the new director positions until the next annual shareholder meeting, at which meeting the new director positions are filled by a shareholder vote.
Marquis directors are elected annually and each director holds office for the term for which he or she is elected and until his or her successor is elected and qualified, subject to such director’s death, resignation or removal.
|
| | Professional’s board of directors is divided into three classes, with the members of each class of directors serving staggered three-year terms and with approximately one-third of the directors being elected each year. Each director holds office for the term for which he or she is elected and until his or her successor is elected and qualified, subject to such directors’ death, resignation or removal. | |
|
Election of Directors
|
| | Under the FBCA and Marquis’s bylaws, unless otherwise provided in the articles of incorporation, directors are elected by a plurality of the votes cast by the holders of the shares entitled to vote in an election of directors at a meeting at which a quorum is present. Marquis’s articles of incorporation do not otherwise provide for the vote required to elect directors. | | | Professional directors are similarly elected in accordance with the FBCA and its articles of incorporation do not otherwise provide for the vote required to elect directors. | |
|
Removal of Directors
|
| | Marquis’s bylaws provide that Marquis directors may be removed with or without cause by a majority of the shares entitled to vote or for cause by a majority vote of disinterested directors. The term “cause” means (i) an act of willful misconduct, self dealing, malfeasance, gross negligence, personal dishonesty, breach of fiduciary duty including personal profit, intentional failure to perform stated duties, or willful violation of any law, rule, or regulation (other than traffic violations or similar offenses); (ii) conduct which could negatively reflect on Marquis in its market area or in the banking or regulatory communities; (iii) act or failure to act which is inconsistent with an oral or written commitment made to the board and which jeopardizes Marquis’s financial condition, business opportunities or reputation in its market area or in the banking and regulatory communities; or (iv) failure to telephonically or personally attend any three consecutive Board meetings, failure to telephonically or personally attend any two consecutive meetings of any | | | Professional’s articles of incorporation and bylaws provide that directors may only be removed for cause by the affirmative vote of 662∕3% of the shares of Professional entitled to vote. The term “cause” means a conviction of a felony, declaration of unsound mind by a court order, adjudication of bankruptcy, or such director having been adjudged by a court of competent jurisdiction to be liable for negligence or misconduct in the performance of his or her duty to Professional in a matter of substantial importance to Professional and such adjudication is no longer subject to direct appeal. | |
| | | |
MARQUIS
|
| |
PROFESSIONAL
|
|
| | | | board committee on which that director serves, or failure to personally attend two-thirds of the board meetings in a calendar year. | | | | |
|
Vacancies on the Board of Directors
|
| | Marquis’s bylaws provide that vacancies in the Marquis board of directors may be filled by the affirmative vote of the majority of the remaining directors. | | | Professional’s bylaws provide that vacancies in the Professional board of directors may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the Professional board of directors, or by the shareholders. | |
|
Shareholder Action by Written Consent
|
| | Marquis’s bylaws provide that any action required or permitted to be taken by the shareholders of Marquis may be taken without a meeting if consent in writing, setting forth the action to be taken, and signed by such shareholders pursuant to the FBCA. | | | Professional’s articles of incorporation and bylaws prohibit shareholder action by written consent. | |
|
Advance Notice Requirements for Shareholder Nominations and Other Proposals
|
| | Marquis’s bylaws provide that any new business to be taken up at the annual shall be stated in writing and filed with Marquis at least 30 days before the date of the annual meeting. | | |
Professional’s bylaws provide that a shareholder who desires to nominate a person for election to the Professional board of directors at a meeting of shareholders must give written notice of the proposed nomination to the Secretary of Professional at the principal executive office of Professional not less than 120 nor more than 180 calendar days prior to the date of Professional’s notice of annual meeting provided with respect to the previous year’s annual meeting. However, if no annual meeting was held in the previous year or the date of the annual meeting has been changed to be more than 30 calendar days earlier than the date contemplated by the previous year’s statement, such notice by the shareholder to be timely must be received no later than the close of business on the 10th day following the date on which notice of the date of the annual meeting is given to shareholders or made public, whichever first occurs.
For a shareholder proposal (other than a director nomination) to be timely, a shareholder’s notice must be received by the Secretary of Professional as of the date set forth in Professional’s proxy statement relating to the annual meeting for the preceding year. However, if no such date is stated, then such date shall be 120 calendar days in advance of the date (with respect to the forthcoming annual
|
|
| | | |
MARQUIS
|
| |
PROFESSIONAL
|
|
| | | | | | | meeting) that Professional’s proxy statement was released to its shareholders in connection with the previous year’s annual meeting of security holders; and provided further that if no annual meeting was held in the previous year or the date of the annual meeting has been changed by more than 30 calendar days from the date contemplated at the time of the previous year’s proxy statement, a proposal shall be received by Professional no later than the close of business on the 10th day following the date on which notice of the date of the annual meeting is given to shareholders or made public, whichever first occurs. | |
|
Notice of Shareholder Meetings
|
| | Marquis’s bylaws provide that notice of each shareholder meeting must be mailed to each shareholder entitled to vote not less than 10, nor more than 60, days before the date of the meeting. | | | Professional’s bylaws have similar notice provisions. | |
|
Amendments to Articles of Incorporation
|
| |
Subject to certain requirements set forth in Section 607.1003 of the FBCA, amendments to a corporation’s articles of incorporation must be approved by a corporation’s board of directors and holders of a majority of the outstanding stock of a corporation entitled to vote thereon and, in cases in which class voting is required, by holders of a majority of the outstanding shares of such class. The board of directors must recommend the amendment to the shareholders, unless the board of directors determines that, because of a conflict of interest or other special circumstances, it should make no recommendation and communicates the basis for its determination to the shareholders with the amendment.
Section 607.1002 of the FBCA also allows the board of directors to amend the articles of incorporation without shareholder approval in certain discrete circumstances (for example, to change the par value for a class or series of shares).
|
| | Professional’s articles of incorporation provide that any amendments to the articles of incorporation that are (i) inconsistent with the bylaws or (i) contained in (a) Article IV(B) related to the designation of rights and authorized number of preferred stock, (b) Article V regarding action by shareholders without a meeting, (c) Article VI related to special meetings of shareholders, (d) Article VIII(B) regarding board vacancies, (e) Article VIII(C) related to the removal of directors, (f) Article IX regarding the power of amending the bylaws resting with the Professional Board, and (g) Article X regarding amending the articles of incorporation, would require approval by holders of at least 662∕3% of the voting power of all of the then outstanding shares of the capital stock then entitled to vote. | |
| | | |
MARQUIS
|
| |
PROFESSIONAL
|
|
|
Amendments to Bylaws
|
| | Marquis’s bylaws may be altered, amended or repealed in a manner consistent with the FBCA at any time by a majority of the full board of directors. Under the FBCA, Marquis’s shareholders have the power to adopt, amend or repeal the bylaws. | | | Professional’s bylaws may similarly be amended by the board of directors or the shareholders. | |
|
Special Meeting of Shareholders
|
| | Marquis’s bylaws provide that special meetings of the shareholders may be called by a majority of the authorized directors, the Chairman, the Chief Executive Officer or the President of Marquis or when requested in writing by the holders of at least 10% of the outstanding shares of Marquis. | | | Professional’s bylaws provide that special meetings of the shareholders shall be held when directed by the Chairman of the Board, the President or the board of directors, or when requested in writing by holders of not less than 50% of all the votes entitled to be cast on any issue proposed to be considered at the meeting. | |
|
Quorum
|
| | Marquis’s bylaws provide that a majority of the outstanding shares of Marquis entitled to vote constitutes a quorum at any shareholder meeting. | | | Professional’s bylaws have a similar provision. | |
|
Proxy
|
| | Under Marquis’s bylaws, a proxy is valid for no more than one year unless a longer period is expressly provided in the appointment form. | | | Under Professional’s bylaws, a proxy is valid for no more than 11 months unless a longer period is expressly provided in the appointment form. | |
|
Preemptive Rights
|
| | Marquis’s shareholders do not have preemptive rights. | | | Professional’s shareholders do not have preemptive rights. | |
|
Shareholder Rights Plan
|
| | Marquis does not currently have a shareholder rights plan in effect. | | | Professional does not currently have a shareholder rights plan in effect. | |
|
Indemnification of Directors and Officers
|
| | Marquis’s articles of incorporation and bylaws provide for indemnification coverage for its present and former directors, officers, employees and agents to the fullest extent permitted under law. Marquis’s bylaws also provide that Marquis shall advance expenses in connection with proceedings for which indemnification may be sought, provided that such director or officer undertakes to repay all amounts so advanced in the event that it is ultimately determined that such person is not entitled to be indemnified by Marquis. | | | Professional’s articles of incorporation and bylaws have similar provisions. | |
|
Certain Business Combination Restrictions
|
| | Control Share Acquisitions. Under FBCA Section 607.0902, unless there is a provision in the articles of incorporation or bylaws electing not to be governed by this provision, “control shares” (shares that would otherwise have voting power for the election of directors in certain ranges of ownership over 20%) of an “issuing public corporation” acquired in a control-share acquisition have the | | | Professional has not opted out of these provisions. | |
| | | |
MARQUIS
|
| |
PROFESSIONAL
|
|
| | | | same voting rights as were accorded to the shares before such acquisition only to the extent granted by a resolution approved by the majority of all the votes entitled to be cast by each class or series of the disinterested shareholders of the issuing corporation entitled to vote on the matter, subject to certain exceptions. | | | | |
| | | |
Affiliated Transactions. FBCA Section 607.0901 provides that, unless a specified exception is met (including approval by a majority of the corporation’s disinterested directors), an interested shareholder (i.e., a person beneficially owning 10% or more of a corporation’s outstanding voting stock) and its affiliates and associates may not engage in an affiliated transaction (including a merger or other significant corporate transactions) with a Florida corporation unless such transaction is approved by two-thirds of the voting shares of the corporation excluding the shares beneficially owned by the interested shareholder. However, during the 2019 legislative session, the Florida legislature passed a bill amending the FBCA, including the provisions thereof related to affiliated transactions. The amendments to the FBCA, which became effective on January 1, 2020, revise the definition of an “interested shareholder” to mean any person who is the beneficial owner of 15% or more of the outstanding voting shares of the corporation and also explicitly require the approval of the board of directors of an affiliated transaction.
Marquis has not opted out of these provisions.
|
| |
| Interim Financial Statements | | | |||||
| | | | | F-2 | | | |
| | | | | F-3 | | | |
| | | | | F-4 | | | |
| | | | | F-5 | | | |
| | | | | F-6 | | | |
| | | | | F-22 | | | |
| Annual Financial Statements | | | |||||
| | | | | F-23 | | | |
| | | | | F-24 | | | |
| | | | | F-25 | | | |
| | | | | F-26 | | | |
| | | | | F-27 | | |
| | |
September 30,
2019 |
| |
December 31,
2018 |
| ||||||
ASSETS | | | | | | | | | | | | | |
Cash and due from banks
|
| | | $ | 18,870 | | | | | $ | 10,451 | | |
Interest-bearing deposits
|
| | | | 85,227 | | | | | | 54,391 | | |
Federal funds sold
|
| | | | 26,398 | | | | | | 22,041 | | |
Cash and cash equivalents
|
| | | | 130,495 | | | | | | 86,883 | | |
Securities available for sale, at fair value
|
| | | | 28,236 | | | | | | 19,585 | | |
Securities held to maturity (fair value Sept 30, 2019 – $236; fair value
Dec 31, 2018 – $265) |
| | | | 224 | | | | | | 259 | | |
Equity securities
|
| | | | 975 | | | | | | 942 | | |
Loans, net of allowance of $6,449 and $5,685 as of September 30, 2019 and December 31, 2018, respectively
|
| | | | 764,663 | | | | | | 601,480 | | |
Federal Home Loan Bank stock, at cost
|
| | | | 2,782 | | | | | | 2,192 | | |
Federal Reserve Bank stock, at cost
|
| | | | 2,001 | | | | | | 1,472 | | |
Accrued interest receivable
|
| | | | 2,451 | | | | | | 1,979 | | |
Premises and equipment, net
|
| | | | 3,999 | | | | | | 3,349 | | |
Company owned life insurance
|
| | | | 16,728 | | | | | | 8,449 | | |
Deferred tax asset
|
| | | | 1,627 | | | | | | 1,750 | | |
Other assets
|
| | | | 9,012 | | | | | | 1,283 | | |
| | | | $ | 963,193 | | | | | $ | 729,625 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | |
Demand – non-interest bearing
|
| | | $ | 187,927 | | | | | $ | 130,245 | | |
Money market, NOW accounts, and savings accounts
|
| | | | 523,155 | | | | | | 379,479 | | |
Time deposits
|
| | | | 111,983 | | | | | | 93,578 | | |
Total deposits
|
| | | | 823,065 | | | | | | 603,302 | | |
Federal Home Loan Bank advances
|
| | | | 50,000 | | | | | | 40,000 | | |
Official checks
|
| | | | 2,178 | | | | | | 1,958 | | |
Income taxes payable
|
| | | | 144 | | | | | | 37 | | |
Accrued interest and other liabilities
|
| | | | 9,834 | | | | | | 4,647 | | |
Total liabilities
|
| | | | 885,221 | | | | | | 649,944 | | |
Commitments and contingent liabilities | | | | | | | | | | | | | |
Stockholders’ equity | | | | | | | | | | | | | |
Preferred stock, 10,000,000 shares authorized, none issued
|
| | | | — | | | | | | — | | |
Class A Voting Common stock, $0.01 par value; 50,000,000 shares authorized, 4,988,302 and 5,171,700 shares issued and outstanding as of September 30, 2019 and December 31, 2018
|
| | | | 53 | | | | | | 52 | | |
Class B Non-Voting Common stock, $0.01 par value; 10,000,000 shares authorized, 752,184 shares issued and outstanding as of September 30, 2019 and December 31, 2018
|
| | | | 7 | | | | | | 7 | | |
Treasury stock, at cost
|
| | | | (4,155) | | | | | | (220) | | |
Additional paid-in capital
|
| | | | 76,667 | | | | | | 76,152 | | |
Retained earnings
|
| | | | 5,463 | | | | | | 4,115 | | |
Accumulated other comprehensive loss
|
| | | | (63) | | | | | | (425) | | |
Total stockholders’ equity
|
| | | | 77,972 | | | | | | 79,681 | | |
| | | | $ | 963,193 | | | | | $ | 729,625 | | |
| | |
Three Months Ended
September 30, |
| |
Nine Months Ended
September 30, |
| ||||||||||||||||||
| | |
2019
|
| |
2018
|
| |
2019
|
| |
2018
|
| ||||||||||||
Interest income | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans, including fees
|
| | | $ | 9,502 | | | | | $ | 6,671 | | | | | $ | 26,289 | | | | | $ | 18,015 | | |
Taxable securities
|
| | | | 172 | | | | | | 160 | | | | | | 504 | | | | | | 463 | | |
Dividend income on restricted stock
|
| | | | 73 | | | | | | 70 | | | | | | 200 | | | | | | 156 | | |
Other
|
| | | | 583 | | | | | | 399 | | | | | | 1,607 | | | | | | 808 | | |
Total interest income
|
| | | | 10,330 | | | | | | 7,300 | | | | | | 28,600 | | | | | | 19,442 | | |
Interest expense | | | | | | | | | | | | | | | | | | | | | | | | | |
Deposits
|
| | | | 2,789 | | | | | | 1,392 | | | | | | 7,200 | | | | | | 3,332 | | |
Federal Home Loan Bank advances
|
| | | | 288 | | | | | | 225 | | | | | | 795 | | | | | | 503 | | |
Total interest expense
|
| | | | 3,077 | | | | | | 1,617 | | | | | | 7,995 | | | | | | 3,835 | | |
Net interest income
|
| | | | 7,253 | | | | | | 5,683 | | | | | | 20,605 | | | | | | 15,607 | | |
Provision for loan losses
|
| | | | 380 | | | | | | 300 | | | | | | 762 | | | | | | 790 | | |
Net interest income after provision for loan losses
|
| | | | 7,633 | | | | | | 5,383 | | | | | | 19,843 | | | | | | 14,817 | | |
Non-interest income | | | | | | | | | | | | | | | | | | | | | | | | | |
Service charges on deposit accounts
|
| | | | 399 | | | | | | 152 | | | | | | 542 | | | | | | 437 | | |
Income from Company owned life insurance
|
| | | | 136 | | | | | | 71 | | | | | | 278 | | | | | | 216 | | |
Gain on sale of securities
|
| | | | — | | | | | | — | | | | | | 3 | | | | | | — | | |
Other
|
| | | | 309 | | | | | | 191 | | | | | | 1,304 | | | | | | 665 | | |
Total non-interest income
|
| | | | 844 | | | | | | 414 | | | | | | 2,127 | | | | | | 1,318 | | |
Non-interest expense | | | | | | | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits
|
| | | | 4,662 | | | | | | 3,112 | | | | | | 13,534 | | | | | | 9,331 | | |
Occupancy and equipment
|
| | | | 701 | | | | | | 497 | | | | | | 1,824 | | | | | | 1,400 | | |
Data processing
|
| | | | 165 | | | | | | 153 | | | | | | 489 | | | | | | 466 | | |
Marketing
|
| | | | 128 | | | | | | 60 | | | | | | 400 | | | | | | 279 | | |
Professional fees
|
| | | | 524 | | | | | | 128 | | | | | | 1,106 | | | | | | 400 | | |
Regulatory assessments
|
| | | | 46 | | | | | | 149 | | | | | | 353 | | | | | | 402 | | |
Other
|
| | | | 815 | | | | | | 884 | | | | | | 2,382 | | | | | | 1,928 | | |
Total non-interest expense
|
| | | | 7,041 | | | | | | 4,983 | | | | | | 20,088 | | | | | | 14,206 | | |
Income before income taxes
|
| | | | 676 | | | | | | 814 | | | | | | 1,882 | | | | | | 1,929 | | |
Income tax provision
|
| | | | (182) | | | | | | (240) | | | | | | (534) | | | | | | (609) | | |
Net income
|
| | | | 494 | | | | | | 574 | | | | | | 1,348 | | | | | | 1,320 | | |
Other comprehensive income: | | | | | | | | | | | | | | | | | | | | | | | | | |
Unrealized holding gain (loss) on securities available for sale
|
| | | | 1 | | | | | | (22) | | | | | | 485 | | | | | | (224) | | |
Tax effect
|
| | | | — | | | | | | 6 | | | | | | (123) | | | | | | 57 | | |
Other comprehensive loss, net of tax
|
| | | | 1 | | | | | | (16) | | | | | | 362 | | | | | | (167) | | |
Comprehensive income
|
| | | $ | 495 | | | | | $ | 558 | | | | | $ | 1,710 | | | | | $ | 1,153 | | |
Earnings per share: | | | | | | | | | | | | | | | | | | | | | | | | | |
Basic
|
| | | $ | 0.09 | | | | | $ | 0.12 | | | | | $ | 0.23 | | | | | $ | 0.27 | | |
Diluted
|
| | | $ | 0.08 | | | | | $ | 0.11 | | | | | $ | 0.22 | | | | | $ | 0.26 | | |
| | |
Preferred Stock
|
| |
Common Stock
|
| |
Treasury
Stock |
| |
Additional
Paid-in Capital |
| |
Retained
Earnings |
| |
Accumulated
Other Comprehensive Loss |
| |
Total
|
| |||||||||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2019
|
| | | | — | | | | | $ | — | | | | | | 5,937,987 | | | | | $ | 60 | | | | | $ | (655) | | | | | $ | 76,612 | | | | | $ | 4,969 | | | | | $ | (64) | | | | | $ | 80,922 | | |
Issuance of Common Stock, net of cost
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Employee stock purchase
plan |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 30 | | | | | | — | | | | | | — | | | | | | 30 | | |
Repurchase Treasury Stock
|
| | | | — | | | | | | — | | | | | | (200,000) | | | | | | — | | | | | | (3,500) | | | | | | — | | | | | | — | | | | | | — | | | | | | (3,500) | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 494 | | | | | | — | | | | | | 494 | | |
Other comprehensive loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1 | | | | | | 1 | | |
Stock based compensation
|
| | | | — | | | | | | — | | | | | | 2,499 | | | | | | — | | | | | | — | | | | | | 25 | | | | | | — | | | | | | — | | | | | | 25 | | |
Balance at September 30,
2019 |
| | | | — | | | | | | — | | | | | | 5,740,486 | | | | | | 60 | | | | | | (4,155) | | | | | | 76,667 | | | | | | 5,463 | | | | | | (63) | | | | | | 77,972 | | |
Balance at June 30, 2018
|
| | | | — | | | | | $ | — | | | | | | 4,818,267 | | | | | $ | 48 | | | | | $ | (220) | | | | | $ | 56,025 | | | | | $ | 2,755 | | | | | $ | (353) | | | | | $ | 58,255 | | |
Issuance of Common Stock, net of cost
|
| | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| | | |
|
—
|
| |
Employee stock purchase
plan |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 27 | | | | | | — | | | | | | — | | | | | | 27 | | |
Repurchase Treasury Stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 574 | | | | | | — | | | | | | 574 | | |
Other comprehensive loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (16) | | | | | | (16) | | |
Stock based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 11 | | | | | | — | | | | | | — | | | | | | 11 | | |
Balance at September 30,
2018 |
| | | | — | | | | | $ | — | | | | | | 4,818,267 | | | | | $ | 48 | | | | | $ | (220) | | | | | $ | 56,063 | | | | | $ | 3,329 | | | | | $ | (369) | | | | | $ | 58,851 | | |
Balance at December 31,
2018 |
| | | | — | | | | | $ | — | | | | | | 5,923,884 | | | | | $ | 59 | | | | | $ | (220) | | | | | $ | 76,152 | | | | | $ | 4,115 | | | | | $ | (425) | | | | | $ | 79,681 | | |
Issuance of Common Stock, net of cost
|
| | | | — | | | | | | — | | | | | | 39,103 | | | | | | 1 | | | | | | — | | | | | | 385 | | | | | | — | | | | | | — | | | | | | 386 | | |
Employee stock purchase
plan |
| | | | — | | | | | | — | | | | | | 2,499 | | | | | | — | | | | | | — | | | | | | 130 | | | | | | — | | | | | | — | | | | | | 130 | | |
Repurchase Treasury Stock
|
| | | | — | | | | | | — | | | | | | (225,000) | | | | | | — | | | | | | (3,935) | | | | | | — | | | | | | — | | | | | | — | | | | | | (3,935) | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,348 | | | | | | — | | | | | | 1,348 | | |
Other comprehensive loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 362 | | | | | | 362 | | |
Stock based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Balance at September 30,
2019 |
| | | | — | | | | | | — | | | | | | 5,740,486 | | | | | | 60 | | | | | | (4,155) | | | | | | 76,667 | | | | | | 5,463 | | | | | | (63) | | | | | | 77,972 | | |
Balance at December 31,
2017 |
| | | | — | | | | | $ | — | | | | | | 4,818,267 | | | | | $ | 48 | | | | | $ | (220) | | | | | $ | 55,957 | | | | | $ | 2,009 | | | | | $ | (202) | | | | | $ | 57,592 | | |
Issuance of Common Stock, net of cost
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Employee stock purchase
plan |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 70 | | | | | | — | | | | | | — | | | | | | 70 | | |
Repurchase Treasury Stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,320 | | | | | | — | | | | | | 1,320 | | |
Other comprehensive loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (167) | | | | | | (167) | | |
Stock based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 36 | | | | | | — | | | | | | — | | | | | | 36 | | |
Balance at September 30,
2018 |
| | | | — | | | | | $ | — | | | | | | 4,818,267 | | | | | $ | 48 | | | | | $ | (220) | | | | | $ | 56,063 | | | | | $ | 3,329 | | | | | $ | (369) | | | | | $ | 58,851 | | |
| | |
Nine Months Ended
September 30, |
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Cash flows from operating activities | | | | | | | | | | | | | |
Net income
|
| | | $ | 1,348 | | | | | $ | 1,320 | | |
Adjustments to reconcile net income to net cash from operating activities
|
| | | | | | | | | | | | |
Provision for loan losses
|
| | | | 762 | | | | | | 790 | | |
Deferred income tax benefit
|
| | | | 199 | | | | | | 68 | | |
Depreciation and amortization
|
| | | | 948 | | | | | | 582 | | |
Gain on sale of securities
|
| | | | 3 | | | | | | — | | |
Change in fair value of equity securities
|
| | | | (33) | | | | | | 9 | | |
Net amortization of securities
|
| | | | (107) | | | | | | 409 | | |
Net amortization on deferred loan fees
|
| | | | 487 | | | | | | 478 | | |
Employee stock purchase plan
|
| | | | 87 | | | | | | — | | |
Stock compensation
|
| | | | — | | | | | | 36 | | |
Income from company owned life insurance
|
| | | | (279) | | | | | | (178) | | |
Changes in operating assets and liabilities:
|
| | | | | | | | | | | | |
Accrued interest receivable
|
| | | | (472) | | | | | | (491) | | |
Other assets
|
| | | | (656) | | | | | | (134) | | |
Official checks, accrued interest payable, and other liabilities
|
| | | | (1,557) | | | | | | 7,121 | | |
Net cash from operating activities
|
| | | | 730 | | | | | | 10,010 | | |
Cash flows from investing activities | | | | ||||||||||
Proceeds from maturities and paydowns of securities available for sale
|
| | | | 4,247 | | | | | | 4,835 | | |
Proceeds from paydowns of securities held to maturity
|
| | | | 34 | | | | | | 44 | | |
Purchase of securities available for sale
|
| | | | (17,008) | | | | | | — | | |
Sale of securities available for sale
|
| | | | 4,501 | | | | | | — | | |
Loans originations, net of principal repayments
|
| | | | (164,432) | | | | | | (123,245) | | |
Purchase of Federal Reserve Bank stock
|
| | | | (529) | | | | | | (345) | | |
Purchase of Federal Home Loan Bank Stock
|
| | | | (590) | | | | | | (996) | | |
Proceeds of Federal Home Loan Bank Stock
|
| | | | — | | | | | | 213 | | |
Purchase of company owned life insurance
|
| | | | (8,000) | | | | | | — | | |
Purchases of premises and equipment
|
| | | | (1,598) | | | | | | (1,445) | | |
Net cash used in investing activities
|
| | | | (183,375) | | | | | | (120,939) | | |
Cash flows from financing activities | | | | | | | | | | | | | |
Net increase in deposits
|
| | | | 219,763 | | | | | | 135,204 | | |
Proceeds from issuance of stock
|
| | | | 386 | | | | | | — | | |
Issuance costs of common stock
|
| | | | 43 | | | | | | 70 | | |
Purchase of treasury stock
|
| | | | (3,935) | | | | | | — | | |
Proceeds from Federal Home Loan Bank advances
|
| | | | 20,000 | | | | | | 20,000 | | |
Repayments of Federal Home Loan advances
|
| | | | (10,000) | | | | | | (5,000) | | |
Net cash provided by financing activities
|
| | | | 226,257 | | | | | | 150,274 | | |
Increase in cash and cash equivalents
|
| | | | 43,612 | | | | | | 39,345 | | |
Cash and cash equivalents at beginning of year
|
| | | | 86,883 | | | | | | 37,126 | | |
Cash and cash equivalents at end of year
|
| | | $ | 130,495 | | | | | $ | 76,471 | | |
Supplemental cash flow information: | | | | | | | | | | | | | |
Cash paid during the year for interest
|
| | | $ | 7,985 | | | | | $ | 3,678 | | |
Cash paid during the year for taxes
|
| | | $ | 637 | | | | | $ | 585 | | |
Supplemental noncash disclosures: | | | | | | | | | | | | | |
Other comprehensive loss – change in unrealized loss on securities available for sale, net
of tax |
| | | $ | 362 | | | | | $ | (168) | | |
Adoption of right of use asset – lease recognition standard
|
| | | $ | 5,673 | | | | | $ | — | | |
| ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) | | |||
| Description | | | In June 2016, FASB issued guidance to replace the incurred loss model with an expected loss model, which is referred to as the current expected credit loss (CECL) model. The CECL model is applicable to the measurement of credit losses on financial assets measured at amortized cost, including loan receivables and held to maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (i.e. loan commitments, standby letters of credit, financial guarantees and other similar instruments). | |
| Date of Adoption | | | For PBEs that are non-SEC filers and for SEC filers that are considered emerging growth companies, it is effective for January 1, 2023. | |
| Effect on the Consolidated Financial Statements | | | The Company’s management is in the process of evaluating and implementing changes to credit loss estimation models and related processes. Updates to business processes and the documentation of accounting policy decisions are ongoing. The company may recognize an increase in the allowance for credit losses upon adoption, recorded as a one-time cumulative adjustment to retained earnings. However, the magnitude of the impact on the Company’s consolidated financial statements has not yet been determined. The Company will adopt this accounting standard effective January 1, 2023. | |
| | |
Three Months Ended
September 30, |
| |
Nine Months Ended
September 30, |
| ||||||||||||||||||
| | |
2019
|
| |
2018
|
| |
2019
|
| |
2018
|
| ||||||||||||
Basic earnings per share: | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Income
|
| | | $ | 494 | | | | | $ | 574 | | | | | $ | 1,348 | | | | | $ | 1,320 | | |
Total weighted average common stock outstanding
|
| | | | 5,807 | | | | | | 4,818 | | | | | | 5,883 | | | | | | 4,818 | | |
Net income per share
|
| | | $ | 0.09 | | | | | $ | 0.12 | | | | | $ | 0.23 | | | | | $ | 0.27 | | |
Diluted earnings per share: | | | | | | | | | | | | | | | | | | | | | | | | | |
Net Income
|
| | | $ | 494 | | | | | $ | 574 | | | | | $ | 1,348 | | | | | $ | 1,320 | | |
Total weighted average common stock outstanding
|
| | | | 5,807 | | | | | | 4,818 | | | | | | 5,883 | | | | | | 4,818 | | |
Add: Dilutive effect of employee stock options
|
| | | | 181 | | | | | | 219 | | | | | | 202 | | | | | | 219 | | |
Total weighted average diluted stock outstanding
|
| | | | 5,988 | | | | | | 5,037 | | | | | | 6,085 | | | | | | 5,037 | | |
Net income per share
|
| | | $ | 0.08 | | | | | $ | 0.11 | | | | | $ | 0.22 | | | | | $ | 0.26 | | |
|
September 30, 2019
|
| |
Amortized
Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized Losses |
| |
Fair
Value |
| ||||||||||||
Available-for-sale | | | | | | | | | | | | | | | | | | | | | | | | | |
Small Business Administration loan pools
|
| | | $ | 16,139 | | | | | $ | 18 | | | | | $ | (133) | | | | | $ | 16,024 | | |
Mortgage-backed securities
|
| | | | 5,688 | | | | | | 3 | | | | | | (63) | | | | | | 5,628 | | |
US Agency Securities
|
| | | | 4,493 | | | | | | 92 | | | | | | — | | | | | | 4,585 | | |
Corporate bonds
|
| | | | 2,000 | | | | | | — | | | | | | (1) | | | | | | 1,999 | | |
Total available-for-sale
|
| | | $ | 28,320 | | | | | $ | 113 | | | | | $ | (197) | | | | | $ | 28,236 | | |
|
| | |
Amortized
Cost |
| |
Gross
Unrecognized Gains |
| |
Gross
Unrecognized Losses |
| |
Fair
Value |
| ||||||||||||
Held-to-Maturity | | | | | | | | | | | | | | | | | | | | | | | | | |
Mortgage-backed securities
|
| | | $ | 224 | | | | | $ | 12 | | | | | $ | — | | | | | $ | 236 | | |
Total Held-to-Maturity
|
| | | $ | 224 | | | | | $ | 12 | | | | | $ | — | | | | | $ | 236 | | |
|
December 31,2018
|
| |
Amortized
Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized Losses |
| |
Fair
Value |
| ||||||||||||
Available-for-sale | | | | | | | | | | | | | | | | | | | | | | | | | |
Small Business Administration loan pools
|
| | | $ | 7,563 | | | | | $ | — | | | | | $ | (114) | | | | | $ | 7,449 | | |
Mortgage-backed securities
|
| | | | 6,533 | | | | | | 2 | | | | | | (227) | | | | | | 6,308 | | |
US Agency Securities
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Corporate bonds
|
| | | | 6,000 | | | | | | 21 | | | | | | (193) | | | | | | 5,828 | | |
Total available-for-sale
|
| | | $ | 20,096 | | | | | $ | 23 | | | | | $ | (534) | | | | | $ | 19,585 | | |
|
| | |
Amortized
Cost |
| |
Gross
Unrecognized Gains |
| |
Gross
Unrecognized Losses |
| |
Fair
Value |
| ||||||||||||
Held-to-Maturity | | | | | | | | | | | | | | | | | | | | | | | | | |
Mortgage-backed securities
|
| | | $ | 259 | | | | | $ | 6 | | | | | $ | — | | | | | $ | 265 | | |
Total Held-to-Maturity
|
| | | $ | 259 | | | | | $ | 6 | | | | | $ | — | | | | | $ | 265 | | |
| | |
September 30, 2019
|
| |||||||||
| | |
Amortized
Cost |
| |
Fair
Value |
| ||||||
Available-for-sale | | | | | | | | | | | | | |
Due in one year or less
|
| | | $ | — | | | | | $ | — | | |
Due after one year through five years
|
| | | | 5,808 | | | | | | 5,844 | | |
Due after five years through ten years
|
| | | | 13,163 | | | | | | 13,140 | | |
Due after ten years
|
| | | | 3,661 | | | | | | 3,679 | | |
Mortgage backed securities
|
| | | | 5,688 | | | | | | 5,573 | | |
Total
|
| | | $ | 28,320 | | | | | $ | 28,236 | | |
Held-to-maturity | | | | | | | | | | | | | |
Mortgage-backed securities
|
| | | $ | 224 | | | | | $ | 236 | | |
Total
|
| | | $ | 224 | | | | | $ | 236 | | |
| | |
Less Than 12 Months
|
| |
12 Months or Longer
|
| |
Total
|
| |||||||||||||||||||||||||||
September 30, 2019
|
| |
Fair
Value |
| |
Unrealized
Losses |
| |
Fair
Value |
| |
Unrealized
Losses |
| |
Fair
Value |
| |
Unrealized
Losses |
| ||||||||||||||||||
Available-for-sale | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA loan pools
|
| | | $ | 14,651 | | | | | $ | (101) | | | | | $ | 1,373 | | | | | $ | (32) | | | | | $ | 16,024 | | | | | $ | (133) | | |
Mortgage-backed
|
| | | | — | | | | | | — | | | | | | 4,597 | | | | | | (63) | | | | | | 4,597 | | | | | | (63) | | |
US Agency Securities
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Corporate bonds
|
| | | | 1,499 | | | | | | (1) | | | | | | 500 | | | | | | — | | | | | | 1,999 | | | | | | (1) | | |
Total available-for-sale
|
| | | $ | 16,150 | | | | | $ | (102) | | | | | $ | 6,470 | | | | | $ | (95) | | | | | $ | 22,620 | | | | | $ | (197) | | |
|
| | |
Less Than 12 Months
|
| |
12 Months or Longer
|
| |
Total
|
| |||||||||||||||||||||||||||
December 31, 2018
|
| |
Fair
Value |
| |
Unrealized
Losses |
| |
Fair
Value |
| |
Unrealized
Losses |
| |
Fair
Value |
| |
Unrealized
Losses |
| ||||||||||||||||||
Available-for-sale | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA loan pools
|
| | | $ | 1,212 | | | | | $ | (16) | | | | | $ | 5,934 | | | | | $ | (98) | | | | | $ | 7,146 | | | | | $ | (114) | | |
Mortgage-backed
|
| | | | — | | | | | | — | | | | | | 5,964 | | | | | | (227) | | | | | | 5,964 | | | | | | (227) | | |
US Agency Securities
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Corporate bonds
|
| | | | 1,812 | | | | | | (188) | | | | | | 495 | | | | | | (5) | | | | | | 2,307 | | | | | | (193) | | |
Total available-for-sale
|
| | | $ | 3,024 | | | | | $ | (204) | | | | | $ | 12,393 | | | | | $ | (330) | | | | | $ | 15,417 | | | | | $ | (534) | | |
|
| | |
September 30, 2019
|
| |
December 31, 2018
|
| ||||||
Commercial real estate
|
| | | $ | 262,761 | | | | | $ | 191,930 | | |
Residential real estate
|
| | | | 349,306 | | | | | | 311,404 | | |
Commercial
|
| | | | 114,003 | | | | | | 83,276 | | |
Construction and development
|
| | | | 37,925 | | | | | | 17,608 | | |
Consumer and other loans
|
| | | | 7,900 | | | | | | 3,244 | | |
| | | | | 771,895 | | | | | | 607,462 | | |
Less –
|
| | | | | | | | | | | | |
Unearned loan origination fees (costs), net
|
| | | | (783) | | | | | | (297) | | |
Allowance for loan losses
|
| | | | (6,449) | | | | | | (5,685) | | |
| | | | $ | 764,663 | | | | | $ | 601,480 | | |
September 30, 2019
|
| |
30 – 59
Days Past Due |
| |
60 – 89
Days Past Due |
| |
Greater
than 89 Days Past Due |
| |
Nonaccrual
|
| |
Total
Past Due |
| |
Total
Loans Not Past Due |
| |
Total
|
| |||||||||||||||||||||
Commercial real estate
|
| | | $ | — | | | | | $ | — | | | | | $ | 2,446 | | | | | $ | — | | | | | $ | 2,446 | | | | | $ | 260,315 | | | | | $ | 262,761 | | |
Residential real estate
|
| | | | — | | | | | | — | | | | | | — | | | | | | 487 | | | | | | 487 | | | | | | 348,819 | | | | | | 349,306 | | |
Commercial
|
| | | | 98 | | | | | | 138 | | | | | | 728 | | | | | | 1,068 | | | | | | 2,032 | | | | | | 111,971 | | | | | | 114,003 | | |
Construction and land dev
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 37,925 | | | | | | 37,925 | | |
Consumer and other
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,900 | | | | | | 7,900 | | |
Total
|
| | | $ | 98 | | | | | $ | 138 | | | | | $ | 3,174 | | | | | $ | 1,555 | | | | | $ | 4,965 | | | | | $ | 766,930 | | | | | $ | 771,895 | | |
December 31, 2018
|
| |
30 – 59
Days Past Due |
| |
60 – 89
Days Past Due |
| |
Greater
than 89 Days Past Due |
| |
Nonaccrual
|
| |
Total
Past Due |
| |
Total
Loans Not Past Due |
| |
Total
|
| |||||||||||||||||||||
Commercial real estate
|
| | | $ | 2,478 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 2,478 | | | | | $ | 189,452 | | | | | $ | 191,930 | | |
Residential real estate
|
| | | | 257 | | | | | | — | | | | | | — | | | | | | — | | | | | | 257 | | | | | | 311,147 | | | | | | 311,404 | | |
Commercial
|
| | | | 1,081 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,081 | | | | | | 82,195 | | | | | | 83,276 | | |
Construction and land dev
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 17,608 | | | | | | 17,608 | | |
Consumer and other
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,244 | | | | | | 3,244 | | |
Total
|
| | | $ | 3,816 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 3,816 | | | | | $ | 603,646 | | | | | $ | 607,462 | | |
September 30, 2019
|
| |
Pass
|
| |
Special
Mention |
| |
Substandard
|
| |
Doubtful
|
| |
Total
|
| |||||||||||||||
Commercial real estate
|
| | | $ | 258,569 | | | | | $ | 1,746 | | | | | $ | 2,446 | | | | | $ | — | | | | | $ | 262,761 | | |
Residential real estate
|
| | | | 348,549 | | | | | | 757 | | | | | | — | | | | | | — | | | | | | 349,306 | | |
Commercial
|
| | | | 111,774 | | | | | | 432 | | | | | | 1,797 | | | | | | — | | | | | | 114,003 | | |
Construction and land development
|
| | | | 37,925 | | | | | | — | | | | | | — | | | | | | — | | | | | | 37,925 | | |
Consumer
|
| | | | 7,900 | | | | | | — | | | | | | — | | | | | | — | | | | | | 7,900 | | |
Total
|
| | | $ | 764,717 | | | | | $ | 2,935 | | | | | $ | 4,243 | | | | | $ | — | | | | | $ | 771,895 | | |
|
December 31, 2018
|
| |
Pass
|
| |
Special
Mention |
| |
Substandard
|
| |
Doubtful
|
| |
Total
|
| |||||||||||||||
Commercial real estate
|
| | | $ | 189,228 | | | | | $ | 2,702 | | | | | $ | — | | | | | $ | — | | | | | $ | 191,930 | | |
Residential real estate
|
| | | | 311,013 | | | | | | 391 | | | | | | — | | | | | | — | | | | | | 311,404 | | |
Commercial
|
| | | | 82,668 | | | | | | 577 | | | | | | 31 | | | | | | — | | | | | | 83,276 | | |
Construction and land development
|
| | | | 17,608 | | | | | | — | | | | | | — | | | | | | — | | | | | | 17,608 | | |
Consumer
|
| | | | 3,244 | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,244 | | |
Total
|
| | | $ | 603,761 | | | | | $ | 3,670 | | | | | $ | 31 | | | | | $ | — | | | | | $ | 607,462 | | |
| | |
Commercial
Real Estate |
| |
Residential
Real Estate |
| |
Commercial
|
| |
Construction
and land Development |
| |
Consumer
and Other |
| |
Total
|
| ||||||||||||||||||
Three months ended September 30, 2019:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance
|
| | | $ | 1,311 | | | | | $ | 2,659 | | | | | $ | 1,578 | | | | | $ | 371 | | | | | $ | 150 | | | | | $ | 6,069 | | |
Provision for loan losses
|
| | | | 477 | | | | | | 633 | | | | | | (542) | | | | | | (116) | | | | | | (72) | | | | | | 380 | | |
Loans charged-off
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Recoveries
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total ending allowance balance
|
| | | $ | 1,788 | | | | | $ | 3,292 | | | | | $ | 1,036 | | | | | $ | 255 | | | | | $ | 78 | | | | | $ | 6,449 | | |
|
| | |
Commercial
Real Estate |
| |
Residential
Real Estate |
| |
Commercial
|
| |
Construction
and land Development |
| |
Consumer
and Other |
| |
Total
|
| ||||||||||||||||||
Three months ended September 30, 2018:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance
|
| | | $ | 1,158 | | | | | $ | 1,543 | | | | | $ | 2,039 | | | | | $ | 235 | | | | | $ | 50 | | | | | $ | 5,025 | | |
Provision for loan losses
|
| | | | 87 | | | | | | 71 | | | | | | 145 | | | | | | (2) | | | | | | (1) | | | | | | 300 | | |
Loans charged-off
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Recoveries
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total ending allowance balance
|
| | | $ | 1,245 | | | | | $ | 1,614 | | | | | $ | 2,184 | | | | | $ | 233 | | | | | $ | 49 | | | | | $ | 5,325 | | |
|
| | |
Commercial
Real Estate |
| |
Residential
Real Estate |
| |
Commercial
|
| |
Construction
and land Development |
| |
Consumer
and Other |
| |
Total
|
| ||||||||||||||||||
Nine months ended September 30, 2019:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance
|
| | | $ | 1,435 | | | | | $ | 1,822 | | | | | $ | 2,106 | | | | | $ | 262 | | | | | $ | 60 | | | | | $ | 5,685 | | |
Provision for loan losses
|
| | | | 353 | | | | | | 1,470 | | | | | | (1,070) | | | | | | (7) | | | | | | 16 | | | | | | 762 | | |
Loans charged-off
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Recoveries
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2 | | | | | | 2 | | |
Total ending allowance balance
|
| | | $ | 1,788 | | | | | $ | 3,292 | | | | | $ | 1,036 | | | | | $ | 255 | | | | | $ | 78 | | | | | $ | 6,449 | | |
|
| | |
Commercial
Real Estate |
| |
Residential
Real Estate |
| |
Commercial
|
| |
Construction
and land Development |
| |
Consumer
and Other |
| |
Total
|
| ||||||||||||||||||
Nine months ended September 30, 2018:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance
|
| | | $ | 1,275 | | | | | $ | 1,590 | | | | | $ | 1,170 | | | | | $ | 452 | | | | | $ | 48 | | | | | $ | 4,535 | | |
Provision for loan losses
|
| | | | (30) | | | | | | 24 | | | | | | 1,014 | | | | | | (219) | | | | | | 1 | | | | | | 790 | | |
Loans charged-off
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Recoveries
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total ending allowance balance
|
| | | $ | 1,245 | | | | | $ | 1,614 | | | | | $ | 2,184 | | | | | $ | 233 | | | | | $ | 49 | | | | | $ | 5,325 | | |
|
| | |
Commercial
Real Estate |
| |
Residential
Real Estate |
| |
Commercial
|
| |
Construction
and Land Development |
| |
Consumer
and Other |
| |
Total
|
| ||||||||||||||||||
September 30, 2019: | | | | | | | | ||||||||||||||||||||||||||||||
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending allowance balance attributable to loans
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment
|
| | | $ | — | | | | | $ | — | | | | | $ | 619 | | | | | $ | — | | | | | $ | — | | | | | $ | 619 | | |
Collectively evaluated for impairment
|
| | | | 1,788 | | | | | | 3,292 | | | | | | 417 | | | | | | 255 | | | | | | 78 | | | | | | 5,830 | | |
Total ending allowance
balance |
| | | $ | 1,788 | | | | | $ | 3,292 | | | | | $ | 1,036 | | | | | $ | 255 | | | | | $ | 78 | | | | | $ | 6,449 | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans individually evaluated for impairment
|
| | | $ | 2,446 | | | | | $ | 863 | | | | | $ | 1,797 | | | | | $ | — | | | | | $ | — | | | | | $ | 5,106 | | |
Loans collectively evaluated for impairment
|
| | | | 260,331 | | | | | | 348,443 | | | | | | 112,313 | | | | | | 37,925 | | | | | | 7,777 | | | | | | 766,789 | | |
Total ending loans balance
|
| | | $ | 262,777 | | | | | $ | 349,306 | | | | | $ | 114,110 | | | | | $ | 37,925 | | | | | $ | 7,777 | | | | | $ | 771,895 | | |
December 31, 2018: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending allowance balance attributableto loans
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for impairment
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Collectively evaluated for impairment
|
| | | | 1,435 | | | | | | 1,822 | | | | | | 2,106 | | | | | | 262 | | | | | | 60 | | | | | | 5,685 | | |
Total ending allowance
balance |
| | | $ | 1,435 | | | | | $ | 1,822 | | | | | $ | 2,106 | | | | | $ | 262 | | | | | $ | 60 | | | | | $ | 5,685 | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans individually evaluated for
impairment |
| | | $ | — | | | | | $ | 357 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 357 | | |
Loans collectively evaluated for impairment
|
| | | | 191,930 | | | | | | 311,047 | | | | | | 83,276 | | | | | | 17,608 | | | | | | 3,244 | | | | | | 607,105 | | |
Total ending loans balance
|
| | | $ | 191,930 | | | | | $ | 311,404 | | | | | $ | 83,276 | | | | | $ | 17,608 | | | | | $ | 3,244 | | | | | $ | 607,462 | | |
| | | | | | | | |
Fair Value Measurements
at September 30, 2019 Using: |
| |||||||||||||||
September 30, 2019
|
| |
Fair
Value |
| |
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| ||||||||||||
Securities available for sale | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA loans pools
|
| | | $ | 16,024 | | | | | $ | — | | | | | $ | 16,024 | | | | | $ | — | | |
Mortgage backed securities
|
| | | | 5,628 | | | | | | — | | | | | | 5,628 | | | | | | — | | |
US Agency Securities
|
| | | | 4,585 | | | | | | — | | | | | | 4,585 | | | | | | — | | |
Corporate bonds
|
| | | | 1,999 | | | | | | — | | | | | | 1,999 | | | | | | — | | |
Total
|
| | | $ | 28,236 | | | | | $ | — | | | | | $ | 28,236 | | | | | $ | — | | |
Equity Securities | | | | | | | | | | | | | | | | | | | | | | | | | |
Mutual funds
|
| | | $ | 975 | | | | | | — | | | | | $ | 975 | | | | | | — | | |
Total
|
| | | $ | 975 | | | | | $ | — | | | | | $ | 975 | | | | | $ | — | | |
| | | | | | | | |
Fair Value Measurements
at December 31, 2018 Using: |
| |||||||||||||||
December 31, 2018
|
| |
Fair Value
|
| |
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| ||||||||||||
Securities available for sale | | | | | | | | | | | | | | | | | | | | | | | | | |
SBA loans pools
|
| | | $ | 7,449 | | | | | $ | — | | | | | $ | 7,449 | | | | | $ | — | | |
Mortgage backed securities
|
| | | | 6,308 | | | | | | — | | | | | | 6,308 | | | | | | — | | |
Corporate bonds
|
| | | | 5,828 | | | | | | — | | | | | | 5,828 | | | | | | — | | |
Total
|
| | | $ | 19,585 | | | | | $ | — | | | | | $ | 19,585 | | | | | $ | — | | |
Equity Securities | | | | | | | | | | | | | | | | | | | | | | | | | |
Mutual funds
|
| | | $ | 942 | | | | | | — | | | | | $ | 942 | | | | | | — | | |
Total
|
| | | $ | 942 | | | | | $ | — | | | | | $ | 942 | | | | | $ | — | | |
| | | | | | | | |
Fair Value Measurements
at September 30, 2019 Using: |
| |||||||||||||||||||||
(Dollars in thousands)
|
| |
Total at
September 30, 2019 |
| |
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| |
Total Gains
(Losses) for the nine months ended September 30, 2019 |
| |||||||||||||||
Impaired Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Residential real estate
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commercial
|
| | | | 450 | | | | | | — | | | | | | — | | | | | | 450 | | | | | | (619) | | |
Construction and land
development |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Consumer and other
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total
|
| | | $ | 450 | | | | | $ | — | | | | | $ | — | | | | | $ | 450 | | | | | $ | (619) | | |
| | | | | | | | |
Fair Value Measurements
at December 31, 2018 Using: |
| |||||||||||||||||||||
(Dollars in thousands)
|
| |
Total at
December 31, 2018 |
| |
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| |
Total Gains
(Losses) |
| |||||||||||||||
Impaired Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Commercial real estate
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Residential real estate
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Commercial
|
| | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | — | | |
Construction and land
development |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | | | |
Consumer and other
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
September 30, 2019
|
| |
Carrying Amount
|
| |
Fair Value
|
| |
FairValue
Hierarchy |
| ||||||
Financial Assets: | | | | | | | | | | | | | | | | |
Cash & Due from Banks, including interest bearing deposits
|
| | | $ | 104,097 | | | | | $ | 104,097 | | | |
Level 1
|
|
Federal Funds Sold
|
| | | | 26,398 | | | | | | 26,398 | | | |
Level 1
|
|
Securities, Available for Sale
|
| | | | 28,236 | | | | | | 28,236 | | | |
Level 2
|
|
Securities, Held to Maturity
|
| | | | 224 | | | | | | 236 | | | |
Level 2
|
|
Equity securities
|
| | | | 975 | | | | | | 975 | | | |
Level 2
|
|
Loans, net
|
| | | | 764,663 | | | | | | 784,899 | | | |
Level 3
|
|
Federal Home Loan Bank Stock
|
| | | | 2,782 | | | | | | N/A | | | |
N/A
|
|
Federal Reserve Bank Stock
|
| | | | 2,001 | | | | | | N/A | | | |
N/A
|
|
Company Owned Life Insurance
|
| | | | 16,728 | | | | | | 16,728 | | | |
Level 2
|
|
Accrued Interest Receivable
|
| | | | 2,451 | | | | | | 2,451 | | | |
Level 3
|
|
Financial Liabilities: | | | | | | | | | | | | | | | | |
Deposits
|
| | | | 823,065 | | | | | | 803,018 | | | |
Level 2
|
|
Federal Home Loan Bank Advances
|
| | | | 50,000 | | | | | | 49,359 | | | |
Level 2
|
|
Accrued Interest Payable
|
| | | | 353 | | | | | | 353 | | | |
Level 2
|
|
December 31, 2018
|
| |
Carrying Amount
|
| |
Fair Value
|
| |
FairValue
Hierarchy |
| ||||||
Financial Assets: | | | | | | | | | | | | | | | | |
Cash & Due from Banks, including interest bearing deposits
|
| | | $ | 64,842 | | | | | $ | 64,842 | | | |
Level 1
|
|
Federal Funds Sold
|
| | | | 22,041 | | | | | | 22,041 | | | |
Level 1
|
|
Securities, Available for Sale
|
| | | | 19,585 | | | | | | 19,585 | | | |
Level 2
|
|
Securities, Held to Maturity
|
| | | | 259 | | | | | | 265 | | | |
Level 2
|
|
Equity securities
|
| | | | 942 | | | | | | 942 | | | |
Level 2
|
|
Loans, net
|
| | | | 601,480 | | | | | | 606,838 | | | |
Level 3
|
|
Federal Home Loan Bank Stock
|
| | | | 2,192 | | | | | | N/A | | | |
N/A
|
|
Federal Reserve Bank Stock
|
| | | | 1,472 | | | | | | N/A | | | |
N/A
|
|
Company Owned Life Insurance
|
| | | | 8,449 | | | | | | 8,449 | | | |
Level 2
|
|
Accrued Interest Receivable
|
| | | | 1,979 | | | | | | 1,979 | | | |
Level 3
|
|
Financial Liabilities: | | | | | | | | | | | | | | | | |
Deposits
|
| | | | 603,302 | | | | | | 602,937 | | | |
Level 2
|
|
Federal Home Loan Bank Advances
|
| | | | 40,000 | | | | | | 39,834 | | | |
Level 2
|
|
Accrued Interest Payable
|
| | | | 342 | | | | | | 342 | | | |
Level 2
|
|
| | |
Three-month
period ended September 30, 2019 |
| |
Nine-month
period ended September 30, 2019 |
| ||||||
Operating Lease and Interest Cost
|
| | | | 282 | | | | | | 726 | | |
Variable Lease Cost
|
| | | | 92 | | | | | | 269 | | |
Total Lease Cost
|
| | | $ | 374 | | | | | $ | 995 | | |
| | |
Three-month
period ended September 30, 2019 |
| |
Nine-month
period ended September 30, 2019 |
| ||||||
Operating Lease – Operating Cash Flows (Fixed
Payments) |
| | | | 282 | | | | | | 726 | | |
Operating Lease – Operating Cash Flows (Liability Reduction)
|
| | | | 239 | | | | | | 442 | | |
New ROU Assets – Operating Leases
|
| | | | — | | | | | | 411 | | |
Weighted Average Lease Term (Years) – Operating Leases
|
| | | | | | | | | | 8.06 | | |
Weighted Average Discount Rate – Operating Leases
|
| | | | | | | | | | 3.82% | | |
| | |
September 30, 2019
|
| |||
Operating lease payments due: | | | | | | | |
Within one year
|
| | | $ | 1,060 | | |
After one but within two years
|
| | | | 1,064 | | |
After two but within three years
|
| | | | 1,083 | | |
After three but within four years
|
| | | | 1,115 | | |
After four years but within five years
|
| | | | 1,022 | | |
After five years
|
| | | | 2,218 | | |
Total undiscounted cash flows
|
| | | | 7,562 | | |
Discount on cash flows
|
| | | | (933) | | |
Total operating lease liabilities
|
| | | $ | 6,629 | | |
| | |
2018
|
| |
2017
|
| ||||||
ASSETS | | | | ||||||||||
Cash and due from banks
|
| | | $ | 10,451 | | | | | $ | 9,012 | | |
Interest-bearing deposits
|
| | | | 54,391 | | | | | | 11,824 | | |
Federal funds sold
|
| | | | 22,041 | | | | | | 16,290 | | |
Cash and cash equivalents
|
| | | | 86,883 | | | | | | 37,126 | | |
Securities available for sale, at fair value
|
| | | | 19,585 | | | | | | 26,720 | | |
Securities held to maturity (fair value 2018 – $265, 2017 – $325)
|
| | | | 259 | | | | | | 316 | | |
Equity securities
|
| | | | 942 | | | | | | — | | |
Loans, net of allowance of $5,685 and $4,535 as of December 31, 2018 and 2017,
respectively |
| | | | 601,480 | | | | | | 465,587 | | |
Federal Home Loan Bank stock, at cost
|
| | | | 2,192 | | | | | | 1,409 | | |
Federal Reserve Bank stock, at cost
|
| | | | 1,472 | | | | | | 1,127 | | |
Accrued interest receivable
|
| | | | 1,979 | | | | | | 1,407 | | |
Premises and equipment, net
|
| | | | 3,349 | | | | | | 2,282 | | |
Company owned life insurance
|
| | | | 8,449 | | | | | | 8,212 | | |
Deferred tax asset
|
| | | | 1,750 | | | | | | 1,447 | | |
Other assets
|
| | | | 1,283 | | | | | | 1,388 | | |
| | | | $ | 729,625 | | | | | $ | 547,021 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | ||||||||||
Deposits | | | | ||||||||||
Demand – non-interest bearing
|
| | | $ | 130,245 | | | | | $ | 100,847 | | |
Money market, NOW accounts, and savings accounts
|
| | | | 379,479 | | | | | | 283,025 | | |
Time deposits
|
| | | | 93,578 | | | | | | 75,302 | | |
Total deposits
|
| | | | 603,302 | | | | | | 459,174 | | |
Federal Home Loan Bank advances
|
| | | | 40,000 | | | | | | 25,000 | | |
Official checks
|
| | | | 1,958 | | | | | | 1,169 | | |
Income taxes payable
|
| | | | 37 | | | | | | 207 | | |
Accrued interest and other liabilities
|
| | | | 4,647 | | | | | | 3,879 | | |
Total liabilities
|
| | | | 649,944 | | | | | | 489,429 | | |
Commitments and contingent liabilities | | | | ||||||||||
Stockholders’ equity | | | | ||||||||||
Preferred stock, 10,000,000 shares authorized, none issued
|
| | | | — | | | | | | — | | |
Class A Voting Common stock, $0.01 par value; 50,000,000 shares authorized,
5,171,700 and 4,276,219 shares issued and outstanding as of December 31, 2018 and 2017 |
| | | | 52 | | | | | | 43 | | |
Class B Non-Voting Common stock, $0.01 par value; 10,000,000 shares authorized, 752,184 and 542,048 shares issued and outstanding as of December 31, 2018 and 2017
|
| | | | 7 | | | | | | 5 | | |
Treasury stock, at cost
|
| | | | (220) | | | | | | (220) | | |
Additional paid-in capital
|
| | | | 76,152 | | | | | | 55,957 | | |
Retained earnings
|
| | | | 4,115 | | | | | | 2,009 | | |
Accumulated other comprehensive loss
|
| | | | (425) | | | | | | (202) | | |
Total stockholders’ equity
|
| | | | 79,681 | | | | | | 57,592 | | |
| | | | $ | 729,625 | | | | | $ | 547,021 | | |
| | |
2018
|
| |
2017
|
| ||||||
Interest income | | | | ||||||||||
Loans, including fees
|
| | | $ | 25,633 | | | | | $ | 17,857 | | |
Taxable securities
|
| | | | 614 | | | | | | 605 | | |
Tax-exempt securities
|
| | | | — | | | | | | — | | |
Dividend income on restricted stock
|
| | | | 215 | | | | | | 118 | | |
Other
|
| | | | 1,288 | | | | | | 277 | | |
Total interest income
|
| | | | 27,750 | | | | | | 18,857 | | |
Interest expense | | | | ||||||||||
Deposits
|
| | | | 5,104 | | | | | | 2,634 | | |
Federal Home Loan Bank advances
|
| | | | 733 | | | | | | 235 | | |
Total interest expense
|
| | | | 5,837 | | | | | | 2,869 | | |
Net interest income
|
| | | | 21,913 | | | | | | 15,988 | | |
Provision for loan losses
|
| | | | 1,150 | | | | | | 991 | | |
Net interest income after provision for loan losses
|
| | | | 20,763 | | | | | | 14,997 | | |
Non-interest income | | | | ||||||||||
Service charges on deposit accounts
|
| | | | 283 | | | | | | 194 | | |
Income from Company owned life insurance
|
| | | | 288 | | | | | | 306 | | |
Other
|
| | | | 1,303 | | | | | | 1,286 | | |
Total non-interest income
|
| | | | 1,874 | | | | | | 1,786 | | |
Non-interest expense | | | | ||||||||||
Salaries and employee benefits
|
| | | | 13,538 | | | | | | 8,672 | | |
Occupancy and equipment
|
| | | | 1,872 | | | | | | 1,473 | | |
Data processing
|
| | | | 624 | | | | | | 524 | | |
Marketing
|
| | | | 430 | | | | | | 180 | | |
Professional fees
|
| | | | 693 | | | | | | 396 | | |
Regulatory assessments
|
| | | | 535 | | | | | | 385 | | |
Other
|
| | | | 2,170 | | | | | | 1,495 | | |
Total non-interest expense
|
| | | | 19,862 | | | | | | 13,125 | | |
Income before income taxes
|
| | | | 2,775 | | | | | | 3,658 | | |
Income tax provision
|
| | | | (669) | | | | | | (1,844) | | |
Net income
|
| | | | 2,106 | | | | | | 1,814 | | |
Earnings per share: | | | | ||||||||||
Basic
|
| | | $ | 0.43 | | | | | $ | 0.39 | | |
Diluted
|
| | | $ | 0.41 | | | | | $ | 0.37 | | |
Other comprehensive income: | | | | ||||||||||
Unrealized holding gain (loss) on securities available for sale
|
| | | | (299) | | | | | | 1 | | |
Tax effect
|
| | | | 76 | | | | | | (33) | | |
Other comprehensive loss, net of tax
|
| | | | (223) | | | | | | (32) | | |
Comprehensive income
|
| | | $ | 1,883 | | | | | $ | 1,782 | | |
| | |
Preferred Stock
|
| |
Common Stock
|
| |
Treasury
Stock |
| |
Additional
Paid-in Capital |
| |
Retained
Earnings |
| |
Accumulated
Other Comprehensive Loss |
| |
Total
|
| |||||||||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| ||||||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2017
|
| | | | — | | | | | $ | — | | | | | | 3,513,478 | | | | | $ | 35 | | | | | $ | (220) | | | | | $ | 37,066 | | | | | $ | 195 | | | | | $ | (170) | | | | | $ | 36,905 | | |
Issuance of common stock, net of Issuance cost
|
| | | | — | | | | | | — | | | | | | 1,300,266 | | | | | | 13 | | | | | | — | | | | | | 18,787 | | | | | | — | | | | | | — | | | | | | 18,880 | | |
Stock Grant
|
| | | | — | | | | | | — | | | | | | 600 | | | | | | — | | | | | | — | | | | | | 9 | | | | | | — | | | | | | — | | | | | | 9 | | |
Employee stock purchase plan
|
| | | | — | | | | | | — | | | | | | 3,923 | | | | | | — | | | | | | — | | | | | | 56 | | | | | | — | | | | | | — | | | | | | 56 | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,814 | | | | | | — | | | | | | 1,814 | | |
Other comprehensive loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (32) | | | | | | (32) | | |
Stock based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 40 | | | | | | — | | | | | | — | | | | | | 40 | | |
Balance at December 31, 2017
|
| | | | — | | | | | | — | | | | | | 4,818,267 | | | | | | 48 | | | | | | (220) | | | | | | 55,957 | | | | | | 2,009 | | | | | | (202) | | | | | | 57,592 | | |
Issuance of common stock, net of Issuance cost
|
| | | | — | | | | | | — | | | | | | 1,095,890 | | | | | | 11 | | | | | | — | | | | | | 19,987 | | | | | | — | | | | | | — | | | | | | 19,998 | | |
Stock Grant
|
| | | | — | | | | | | — | | | | | | 3,955 | | | | | | — | | | | | | — | | | | | | 72 | | | | | | — | | | | | | — | | | | | | 72 | | |
Employee stock purchase plan
|
| | | | — | | | | | | — | | | | | | 5,772 | | | | | | — | | | | | | — | | | | | | 96 | | | | | | — | | | | | | — | | | | | | 96 | | |
Net income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,106 | | | | | | — | | | | | | 2,106 | | |
Other comprehensive loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (223) | | | | | | (223) | | |
Stock based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 39 | | | | | | — | | | | | | — | | | | | | 39 | | |
Balance at December 31, 2018
|
| | | | — | | | | | $ | — | | | | | | 5,923,884 | | | | | $ | 59 | | | | | $ | (220) | | | | | $ | 76,152 | | | | | $ | 4,115 | | | | | $ | (425) | | | | | $ | 79,681 | | |
| | |
2018
|
| |
2017
|
| ||||||
Cash flows from operating activities | | | | ||||||||||
Net income
|
| | | $ | 2,106 | | | | | $ | 1814 | | |
Adjustments to reconcile net income to net cash from operating activities
|
| | | ||||||||||
Provision for loan losses
|
| | | | 1,150 | | | | | | 991 | | |
Deferred income tax benefit
|
| | | | (227) | | | | | | 532 | | |
Depreciation and amortization
|
| | | | 511 | | | | | | 417 | | |
Net amortization of securities
|
| | | | 238 | | | | | | 285 | | |
Net amortization on deferred loan fees
|
| | | | (361) | | | | | | 184 | | |
Stock compensation
|
| | | | 39 | | | | | | 40 | | |
Income from company owned life insurance
|
| | | | (237) | | | | | | (254) | | |
Changes in operating assets and liabilities:
|
| | | ||||||||||
Accrued interest receivable
|
| | | | (572) | | | | | | (403) | | |
Other assets
|
| | | | 105 | | | | | | 1,065 | | |
Official checks, accrued interest, interest payable and other liabilities
|
| | | | 1,386 | | | | | | 899 | | |
Net cash from operating activities
|
| | | | 4,138 | | | | | | 5,570 | | |
Cash flows from investing activities | | | | ||||||||||
Proceeds from maturities and paydowns of securities available for sale
|
| | | | 5,657 | | | | | | 3,766 | | |
Proceeds from paydowns of securities held to maturity
|
| | | | 55 | | | | | | 89 | | |
Purchase of securities available for sale
|
| | | | — | | | | | | — | | |
Loans originations, net of principal repayments
|
| | | | (136,682) | | | | | | (146,112) | | |
Purchase of Federal Reserve Bank stock
|
| | | | (345) | | | | | | (161) | | |
Purchase of Federal Home Loan Bank Stock
|
| | | | (783) | | | | | | (287) | | |
Purchases of premises and equipment
|
| | | | (1,578) | | | | | | (1,575) | | |
Net cash used in investing activities
|
| | | | (133,676) | | | | | | (144,280) | | |
Cash flows from financing activities | | | | ||||||||||
Net increase in deposits
|
| | | | 144,128 | | | | | | 135,252 | | |
Proceeds from issuance of stock
|
| | | | 20,169 | | | | | | 18,918 | | |
Issuance costs of common stock
|
| | | | (2) | | | | | | (54) | | |
Proceeds from Federal Home Loan Bank advances
|
| | | | 20,000 | | | | | | 20,000 | | |
Repayments of Federal Home Loan advances
|
| | | | (5,000) | | | | | | (15,000) | | |
Net cash provided by financing activities
|
| | | | 179,295 | | | | | | 159,116 | | |
Increase in cash and cash equivalents
|
| | | | 49,757 | | | | | | 20,406 | | |
Cash and cash equivalents at beginning of year
|
| | | | 37,126 | | | | | | 16,720 | | |
Cash and cash equivalents at end of year
|
| | | $ | 86,883 | | | | | $ | 37,126 | | |
Supplemental cash flow information: | | | | ||||||||||
Cash paid during the year for interest
|
| | | $ | 5,692 | | | | | $ | 2,560 | | |
Cash paid during the year for taxes
|
| | | | 885 | | | | | | 1,957 | | |
Supplemental noncash disclosures: | | | | ||||||||||
Other comprehensive loss – change in unrealized loss on securities available for
sale, net of tax |
| | | $ | (223) | | | | | $ | (32) | | |
| ASU 2016-02, Leases (Topic 842) | | |||
| Description | | |
In February 2016, the FASB amended existing guidance that requires lessees recognize the following for all leases (with the exception of short-term leases) at the commencement date:
1.
A lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis.
2.
A right-of-use specified asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.
Under the new guidance, lessor accounting is largely unchanged. Certain targeted improvements were made to align lessor accounting with the lessee accounting model and ASC Topic 606, Revenue from Contracts with Customers.
|
|
| Date of Adoption | | | This amendment is effective for public business entities for reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted. | |
| Effect on the Consolidated Financial Statements | | | The Company will adopt the new standard effective January 1, 2019. Upon adoption, the Company will record lease liabilities and right-of-use assets totaling approximately $6.2 million and $5.7 million, respectively. Adoption is not expected to be material to the Company’s consolidated results of operations or cash flows. | |
| ASU 2016-13, Financial Instruments — Credit Losses (Topic 326) | | |||
| Description | | | In June 2016, FASB issued guidance to replace the incurred loss model with an expected loss model, which is referred to as the current expected credit loss (CECL) model. The CECL model is applicable to the measurement of credit losses on financial assets measured at amortized cost, including loan receivables and held to maturity debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (i.e. loan commitments, standby letters of credit, financial guarantees and other similar instruments). | |
| Date of Adoption | | | For PBEs that meet the definition of an SEC filer, the standard will be effective for fiscal years beginning after December 15, 2019, including interim periods in those fiscal years. For calendar year-end SEC filers, it is effective for March 31, 2020 interim financial statements. For PBEs that are non-SEC filers and for SEC filers that are considered emerging growth companies, it is effective for January 1, 2021. | |
| Effect on the Consolidated Financial Statements | | | The Company’s management is in the process of evaluating and implementing changes to credit loss estimation models and related processes. Updates to business processes and the documentation of accounting policy decisions are ongoing. The company may recognize an increase in the allowance for credit losses upon adoption, recorded as a one-time cumulative adjustment to retained earnings. However, the magnitude of the impact on the Company’s consolidated financial statements has not yet been determined. The Company will adopt this accounting standard effective January 1, 2021. | |
| | |
Amortized
Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized Losses |
| |
Fair Value
|
| ||||||||||||
2018 | | | | | | ||||||||||||||||||||
Available-for-sale | | | | | | ||||||||||||||||||||
Small Business Administration loan pools
|
| | | $ | 7,563 | | | | | $ | — | | | | | $ | (114) | | | | | $ | 7,449 | | |
Mortgage-backed securities
|
| | | | 6,533 | | | | | | 2 | | | | | | (227) | | | | | | 6,308 | | |
Corporate bonds
|
| | | | 6,000 | | | | | | 21 | | | | | | (193) | | | | | | 5,828 | | |
Total available-for-sale
|
| | | $ | 20,096 | | | | | $ | 23 | | | | | $ | (534) | | | | | $ | 19,585 | | |
|
| | |
Amortized
Cost |
| |
Gross
Unrecognized Gains |
| |
Gross
Unrecognized Losses |
| |
Fair Value
|
| ||||||||||||
Held-to-Maturity | | | | | | ||||||||||||||||||||
Mortgage-backed securities
|
| | | $ | 259 | | | | | $ | 6 | | | | | $ | — | | | | | $ | 265 | | |
Total Held-to-Maturity
|
| | | $ | 259 | | | | | $ | 6 | | | | | $ | — | | | | | $ | 265 | | |
|
| | |
Amortized
Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized Losses |
| |
Fair
Value |
| ||||||||||||
2017 | | | | | | ||||||||||||||||||||
Available-for-sale | | | | | | ||||||||||||||||||||
Small Business Administration loan pools
|
| | | $ | 10,173 | | | | | $ | 7 | | | | | $ | (69) | | | | | $ | 10,111 | | |
Mortgage-backed securities
|
| | | | 7,827 | | | | | | 2 | | | | | | (203) | | | | | | 7,626 | | |
Mutual Funds
|
| | | | 1,000 | | | | | | — | | | | | | (37) | | | | | | 963 | | |
Corporate bonds
|
| | | | 7,990 | | | | | | 49 | | | | | | (19) | | | | | | 8,020 | | |
Total available-for-sale
|
| | | $ | 26,990 | | | | | $ | 58 | | | | | $ | (328) | | | | | $ | 26,720 | | |
|
| | |
Amortized
Cost |
| |
Gross
Unrecognized Gains |
| |
Gross
Unrecognized Losses |
| |
Fair
Value |
| ||||||||||||
Held-to-Maturity | | | | | | ||||||||||||||||||||
Mortgage-backed securities
|
| | | $ | 316 | | | | | $ | 9 | | | | | $ | — | | | | | $ | 325 | | |
Total Held-to-Maturity
|
| | | $ | 316 | | | | | $ | 9 | | | | | $ | — | | | | | $ | 325 | | |
| | |
December 31, 2018
|
| |||||||||
| | |
Amortized
Cost |
| |
Fair
Value |
| ||||||
Available-for-sale | | | | ||||||||||
Small Business Administration loan pools
|
| | | $ | 7,563 | | | | | $ | 7,449 | | |
Mortgage-backed securities
|
| | | | 6,533 | | | | | | 6,308 | | |
Corporate Bonds, One to Five Year Maturity
|
| | | | 6,000 | | | | | | 5,828 | | |
Total
|
| | | $ | 20,096 | | | | | $ | 19,585 | | |
Held-to-maturity | | | | ||||||||||
Mortgage-backed securities
|
| | | $ | 259 | | | | | $ | 265 | | |
Total
|
| | | $ | 259 | | | | | $ | 265 | | |
| | |
Less Than 12 Months
|
| |
12 Months or Longer
|
| |
Total
|
| |||||||||||||||||||||||||||
| | |
Fair
Value |
| |
Unrealized
Losses |
| |
Fair
Value |
| |
Unrealized
Losses |
| |
Fair
Value |
| |
Unrealized
Losses |
| ||||||||||||||||||
December 31, 2018 | | | | | | | | ||||||||||||||||||||||||||||||
Available-for-sale | | | | | | | | ||||||||||||||||||||||||||||||
SBA loan pools
|
| | | $ | 1,212 | | | | | $ | — | | | | | $ | 5,934 | | | | | $ | (98) | | | | | $ | 7,146 | | | | | $ | (114) | | |
Mortgage-backed
|
| | | | — | | | | | | (16) | | | | | | 5,964 | | | | | | (227) | | | | | | 5,964 | | | | | | (227) | | |
Corporate bonds
|
| | | | 1,812 | | | | | | (188) | | | | | | 495 | | | | | | (5) | | | | | | 2,307 | | | | | | (193) | | |
Total available-for-sale
|
| | | $ | 3,024 | | | | | $ | (204) | | | | | $ | 12,393 | | | | | $ | (330) | | | | | $ | 15,417 | | | | | $ | (534) | | |
December 31, 2017 | | | | | | | | ||||||||||||||||||||||||||||||
Available-for-sale | | | | | | | | ||||||||||||||||||||||||||||||
SBA loan pools
|
| | | $ | 5,372 | | | | | $ | (34) | | | | | $ | 2,819 | | | | | $ | (35) | | | | | $ | 8,191 | | | | | $ | (69) | | |
Mortgage-backed
|
| | | | — | | | | | | — | | | | | | 7,198 | | | | | | (203) | | | | | | 7,198 | | | | | | (203) | | |
Mutual Funds
|
| | | | — | | | | | | — | | | | | | 963 | | | | | | (37) | | | | | | 963 | | | | | | (37) | | |
Corporate bonds
|
| | | | — | | | | | | — | | | | | | 3,981 | | | | | | (19) | | | | | | 3,981 | | | | | | (19) | | |
Total available-for-sale
|
| | | $ | 5,372 | | | | | $ | (34) | | | | | $ | 14,961 | | | | | $ | (294) | | | | | $ | 20,333 | | | | | $ | (328) | | |
| | |
2018
|
| |
2017
|
| ||||||
Commercial real estate
|
| | | $ | 191,930 | | | | | $ | 156,720 | | |
Residential real estate
|
| | | | 311,404 | | | | | | 224,246 | | |
Commercial
|
| | | | 83,276 | | | | | | 59,065 | | |
Construction and development
|
| | | | 17,608 | | | | | | 28,272 | | |
Consumer and other loans
|
| | | | 3,244 | | | | | | 1,755 | | |
| | | | | 607,462 | | | | | | 470,058 | | |
Less – | | | | ||||||||||
Unearned loan origination fees (costs), net
|
| | | | (297) | | | | | | 64 | | |
Allowance for loan losses
|
| | | | (5,685) | | | | | | (4,535) | | |
| | | | $ | 601,480 | | | | | $ | 465,587 | | |
|
| | |
Commercial
Real Estate |
| |
Residential
Real Estate |
| |
Commercial
|
| |
Construction
and land Development |
| |
Consumer
and Other |
| |
Total
|
| ||||||||||||||||||
December 31, 2018 | | | | | | | | ||||||||||||||||||||||||||||||
Allowance for loan losses: | | | | | | | | ||||||||||||||||||||||||||||||
Beginning balance
|
| | | $ | 1,275 | | | | | $ | 1,590 | | | | | $ | 1,170 | | | | | $ | 452 | | | | | $ | 48 | | | | | $ | 4,535 | | |
Provision for loan losses
|
| | | | 160 | | | | | | 232 | | | | | | 936 | | | | | | (190) | | | | | | 12 | | | | | | 1,150 | | |
Loans charged-off
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Recoveries
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Total ending allowance balance
|
| | | $ | 1,435 | | | | | $ | 1,822 | | | | | $ | 2,106 | | | | | $ | 262 | | | | | $ | 60 | | | | | $ | 5,685 | | |
|
| | |
Commercial
|
| |
Residential
Real Estate |
| |
Commercial
Real Estate |
| |
Construction
and land Development |
| |
Consumer
and Other |
| |
Total
|
| ||||||||||||||||||
December 31, 2017 | | | | | | | | ||||||||||||||||||||||||||||||
Allowance for loan losses: | | | | | | | | ||||||||||||||||||||||||||||||
Beginning balance
|
| | | $ | 838 | | | | | $ | 1,281 | | | | | $ | 648 | | | | | $ | 742 | | | | | $ | 23 | | | | | $ | 3,532 | | |
Provision (credit) for loan losses
|
| | | | 437 | | | | | | 309 | | | | | | 510 | | | | | | (290) | | | | | | 25 | | | | | | 991 | | |
Loans charged-off
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Recoveries
|
| | | | — | | | | | | — | | | | | | 12 | | | | | | — | | | | | | — | | | | | | 12 | | |
Total ending allowance balance
|
| | | $ | 1,275 | | | | | $ | 1,590 | | | | | $ | 1,170 | | | | | $ | 452 | | | | | $ | 48 | | | | | $ | 4,535 | | |
| | |
Commercial
Real Estate |
| |
Residential
Real Estate |
| |
Commercial
|
| |
Construction
and Land Development |
| |
Consumer
and Other |
| |
Total
|
| ||||||||||||||||||
December 31, 2018 | | | | | | | | ||||||||||||||||||||||||||||||
Allowance for loan losses: | | | | | | | | ||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans
|
| | | | | | | ||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Collectively evaluated for impairment
|
| | | | 1,435 | | | | | | 1,822 | | | | | | 2,106 | | | | | | 262 | | | | | | 60 | | | | | | 5,685 | | |
Total ending allowance balance
|
| | | $ | 1,435 | | | | | $ | 1,822 | | | | | $ | 2,106 | | | | | $ | 262 | | | | | $ | 60 | | | | | $ | 5,685 | | |
Loans: | | | | | | | | ||||||||||||||||||||||||||||||
Loans individually evaluated for
impairment |
| | | $ | — | | | | | $ | 357 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 357 | | |
Loans collectively evaluated for impairment
|
| | | | 191,930 | | | | | | 311,047 | | | | | | 83,276 | | | | | | 17,608 | | | | | | 3,244 | | | | | | 607,105 | | |
Total ending loans balance
|
| | | $ | 191,930 | | | | | $ | 311,404 | | | | | $ | 83,276 | | | | | $ | 17,608 | | | | | $ | 3,244 | | | | | $ | 607,462 | | |
December 31, 2017 | | | | | | | | ||||||||||||||||||||||||||||||
Allowance for loan losses: | | | | | | | | ||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans
|
| | | | | | | ||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Collectively evaluated for impairment
|
| | | | 1,275 | | | | | | 1,590 | | | | | | 1,170 | | | | | | 452 | | | | | | 48 | | | | | | 4,535 | | |
Total ending allowance balance
|
| | | $ | 1,275 | | | | | $ | 1,590 | | | | | $ | 1,170 | | | | | $ | 452 | | | | | $ | 48 | | | | | $ | 4,535 | | |
Loans: | | | | | | | | ||||||||||||||||||||||||||||||
Loans individually evaluated for
impairment |
| | | $ | — | | | | | $ | 378 | | | | | $ | 31 | | | | | $ | — | | | | | $ | — | | | | | $ | 409 | | |
Loans collectively evaluated for impairment
|
| | | | 156,720 | | | | | | 223,868 | | | | | | 59,034 | | | | | | 28,272 | | | | | | 1,755 | | | | | | 469,649 | | |
Total ending loans balance
|
| | | $ | 156,720 | | | | | $ | 224,246 | | | | | $ | 59,065 | | | | | $ | 28,272 | | | | | $ | 1,755 | | | | | $ | 470,058 | | |
| | |
30 - 59
Days Past Due |
| |
60 - 89
Days Past Due |
| |
Greater than
89 Days Past Due |
| |
Total
Past Due |
| |
Loans Not
Past Due |
| |
Total
|
| ||||||||||||||||||
December 31, 2018 | | | | | | | | ||||||||||||||||||||||||||||||
Commercial real estate
|
| | | $ | 2,478 | | | | | $ | — | | | | | $ | — | | | | | $ | 2,478 | | | | | $ | 189,452 | | | | | $ | 191,930 | | |
Residential real estate
|
| | | | 257 | | | | | | — | | | | | | — | | | | | | 257 | | | | | | 311,147 | | | | | | 311,404 | | |
Commercial
|
| | | | 1,081 | | | | | | — | | | | | | — | | | | | | 1,081 | | | | | | 82,195 | | | | | | 83,276 | | |
Construction and land dev
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 17,608 | | | | | | 17,608 | | |
Consumer and other
|
| | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 3,244 | | | | | | 3,244 | | |
Total
|
| | | $ | 3,816 | | | | | $ | — | | | | | $ | — | | | | | $ | 3,816 | | | | | $ | 603,646 | | | | | $ | 607,462 | | |
|
| | |
30 - 59
Days Past Due |
| |
60 - 89
Days Past Due |
| |
Greater than
89 Days Past Due |
| |
Total
Past Due |
| |
Loans Not
Past Due |
| |
Total
|
| ||||||||||||||||||
December 31, 2017 | | | | | | | | ||||||||||||||||||||||||||||||
Commercial real estate
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 156,720 | | | | | $ | 156,720 | | |
Residential real estate
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 224,246 | | | | | | 224,246 | | |
Commercial
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 59,065 | | | | | | 59,065 | | |
Construction and land dev
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 28,272 | | | | | | 28,272 | | |
Consumer and other
|
| | | | — | | | | | | — | | | | | | — | | | | | | | | | | | | 1,755 | | | | | | 1,755 | | |
Total
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 470,058 | | | | | $ | 470,058 | | |
| | |
Pass
|
| |
Special
Mention |
| |
Substandard
|
| |
Doubtful
|
| |
Total
|
| |||||||||||||||
December 31, 2018 | | | | | | | |||||||||||||||||||||||||
Commercial real estate
|
| | | $ | 189,228 | | | | | $ | 2,702 | | | | | $ | — | | | | | $ | — | | | | | $ | 191,930 | | |
Residential real estate
|
| | | | 311,013 | | | | | | 391 | | | | | | — | | | | | | — | | | | | | 311,404 | | |
Commercial
|
| | | | 82,668 | | | | | | 577 | | | | | | 31 | | | | | | — | | | | | | 83,276 | | |
Construction and land development
|
| | | | 17,608 | | | | | | — | | | | | | — | | | | | | — | | | | | | 17,608 | | |
Consumer
|
| | | | 3,244 | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,244 | | |
Total
|
| | | $ | 603,761 | | | | | $ | 3,670 | | | | | $ | 31 | | | | | $ | — | | | | | $ | 607,462 | | |
December 31, 2017 | | | | | | | |||||||||||||||||||||||||
Commercial real estate
|
| | | $ | 155,671 | | | | | $ | 1,049 | | | | | $ | — | | | | | $ | — | | | | | $ | 156,720 | | |
Residential real estate
|
| | | | 224,246 | | | | | | — | | | | | | — | | | | | | — | | | | | | 224,246 | | |
Commercial
|
| | | | 58,936 | | | | | | 98 | | | | | | 31 | | | | | | — | | | | | | 59,065 | | |
Construction and land development
|
| | | | 28,272 | | | | | | — | | | | | | — | | | | | | — | | | | | | 28,272 | | |
Consumer
|
| | | | 1,755 | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,755 | | |
Total
|
| | | $ | 468,880 | | | | | $ | 1,147 | | | | | $ | 31 | | | | | $ | — | | | | | $ | 470,058 | | |
| | |
2018
|
| |
2017
|
| |
Estimated
Useful Lives (In Years) |
| ||||||
Furniture, fixture, and equipment
|
| | | $ | 800 | | | | | $ | 723 | | | |
5-7 years
|
|
Computer hardware and software
|
| | | | 1,321 | | | | | | 1,131 | | | |
3-5 years
|
|
Leasehold improvements
|
| | | | 2,161 | | | | | | 2,021 | | | |
10-12 years
|
|
Corporate Branding
|
| | | | 117 | | | | | | — | | | |
3-5 years
|
|
| | | | | 4,399 | | | | | | 3,875 | | | | ||
Accumulated depreciation and amortization
|
| | | | (1,050) | | | | | | (1,593) | | | | ||
| | | | $ | 3,349 | | | | | $ | 2,282 | | | | ||
|
|
2019
|
| | | $ | 976 | | |
|
2020
|
| | | | 937 | | |
|
2021
|
| | | | 922 | | |
|
2022
|
| | | | 922 | | |
|
2023
|
| | | | 922 | | |
|
Thereafter
|
| | | | 2,797 | | |
| | | | | $ | 7,476 | | |
Year ending December 31
|
| |
Amount
|
| |||
2019
|
| | | $ | 79,722 | | |
2020
|
| | | | 8,344 | | |
2021
|
| | | | 4,867 | | |
2022
|
| | | | 515 | | |
2023
|
| | | | 130 | | |
| | | | $ | 93,578 | | |
| | |
2018
|
| |
2017
|
| ||||||
Maturities of 2018, fixed rate of 1.08%
|
| | | $ | — | | | | | $ | 5,000 | | |
Maturities of 2019, fixed rates of 1.58%
|
| | | | 5,000 | | | | | | 5,000 | | |
Maturities of 2019, fixed rate hybrid of 2.42%
|
| | | | 10,000 | | | | | | — | | |
Maturities of 2020, fixed rates of 1.67%
|
| | | | 5,000 | | | | | | 5,000 | | |
Maturities of 2020, adjustable rates from 2.52% to 2.53% as of 12/31/18
|
| | | | 20,000 | | | | | | 10,000 | | |
| | | | $ | 40,000 | | | | | $ | 25,000 | | |
|
2019
|
| | | $ | 15,000 | | |
|
2020
|
| | | | 25,000 | | |
| | |
2018
|
| |
2017
|
| ||||||
Current provision | | | | ||||||||||
Federal
|
| | | $ | 660 | | | | | $ | 1,066 | | |
State
|
| | | | 236 | | | | | | 215 | | |
Deferred provision | | | | ||||||||||
Federal
|
| | | | (172) | | | | | | (217) | | |
Adjustment for enacted tax rate
|
| | | | — | | | | | | 697 | | |
State
|
| | | | (55) | | | | | | 83 | | |
| | | | $ | 669 | | | | | $ | 1,844 | | |
| | |
2018
|
| |
2017
|
| ||||||
Federal statutory rate times financial statement income
|
| | | | 21.0% | | | | | | 34.0% | | |
Effect of: | | | | ||||||||||
Tax-exempt income
|
| | | | 0.0% | | | | | | 0.0% | | |
State taxes, net of federal benefit
|
| | | | 4.3% | | | | | | 3.5% | | |
Earnings from company owned life insurance
|
| | | | -1.8% | | | | | | -2.4% | | |
Other permanent differences
|
| | | | 0.8% | | | | | | 0.9% | | |
Change in rate
|
| | | | 0.0% | | | | | | 19.1% | | |
Other, net
|
| | | | -0.2% | | | | | | -4.5% | | |
| | | | | 24.1% | | | | | | 50.4% | | |
| | |
2018
|
| |
2017
|
| ||||||
Deferred Tax assets: | | | | ||||||||||
Allowance for loan losses
|
| | | $ | 1,463 | | | | | $ | 1,172 | | |
Preopening expenses
|
| | | | 70 | | | | | | 82 | | |
Stock-based compensation
|
| | | | 89 | | | | | | 89 | | |
Deferred loan fees
|
| | | | 75 | | | | | | (16) | | |
Deferred rent
|
| | | | 70 | | | | | | 55 | | |
Unrealized loss on securities available for sale
|
| | | | 144 | | | | | | 68 | | |
Other
|
| | | | 14 | | | | | | 16 | | |
| | | | | 1,926 | | | | | | 1,483 | | |
Deferred Tax liabilities: | | | | ||||||||||
Property and equipment
|
| | | | (176) | | | | | | (19) | | |
Deferred Loan fees
|
| | | | — | | | | | | (16) | | |
| | | | | (176) | | | | | | (35) | | |
Net deferred tax asset
|
| | | $ | 1,750 | | | | | $ | 1,447 | | |
| | |
2018
|
| |
2017
|
| ||||||
Balance at January 1, 2018
|
| | | $ | 4,660 | | | | | $ | 5,206 | | |
New loans
|
| | | | — | | | | | | — | | |
Effect of changes in composition of related parties
|
| | | | — | | | | | | (323) | | |
Repayments
|
| | | | (184) | | | | | | (223) | | |
Balance at December 31, 2018
|
| | | $ | 4,476 | | | | | $ | 4,660 | | |
| | | | | | | | |
Fair Value Measurements
at December 31, 2018 Using: |
| |||||||||||||||
2018
|
| |
Fair
Value |
| |
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| ||||||||||||
Securities available for sale | | | | | | ||||||||||||||||||||
SBA loans pools
|
| | | $ | 7,449 | | | | | $ | — | | | | | $ | 7,449 | | | | | $ | — | | |
Mortgage backed securities
|
| | | | 6,308 | | | | | | — | | | | | | 6,308 | | | | | | — | | |
Corporate bonds
|
| | | | 5,828 | | | | | | — | | | | | | 5,828 | | | | | | — | | |
Total
|
| | | $ | 19,585 | | | | | $ | — | | | | | $ | 19,585 | | | | | $ | — | | |
Equity Securities | | | | | | ||||||||||||||||||||
Mutual funds
|
| | | $ | 942 | | | | | $ | — | | | | | $ | 942 | | | | | $ | — | | |
Total
|
| | | $ | 942 | | | | | $ | — | | | | | $ | 942 | | | | | $ | — | | |
| | | | | | | | |
Fair Value Measurements
at December 31, 2017 Using: |
| |||||||||||||||
2017
|
| |
Fair
Value |
| |
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| ||||||||||||
Securities available for sale | | | | | | ||||||||||||||||||||
SBA loans pools
|
| | | $ | 10,110 | | | | | $ | — | | | | | $ | 10,110 | | | | | $ | — | | |
Mortgage backed securities
|
| | | | 7,626 | | | | | | — | | | | | | 7,626 | | | | | | — | | |
Mutual Funds
|
| | | | 963 | | | | | | — | | | | | | 963 | | | | | | — | | |
Corporate bonds
|
| | | | 8,021 | | | | | | — | | | | | | 8,021 | | | | | | — | | |
Total
|
| | | $ | 26,720 | | | | | $ | — | | | | | $ | 26,720 | | | | | $ | — | | |
| | |
2018
|
| ||||||||||||
| | |
Carrying
Amount |
| |
Fair
Value |
| |
Fair Value
Hierarchy |
| ||||||
Financial Assets: | | | | | ||||||||||||
Cash & Due from Banks, including interest bearing deposits
|
| | | $ | 64,842 | | | | | $ | 64,842 | | | |
Level 1
|
|
Federal Funds Sold
|
| | | | 22,041 | | | | | | 22,041 | | | |
Level 1
|
|
Securities, Available for Sale
|
| | | | 19,585 | | | | | | 19,585 | | | |
Level 2
|
|
Securities, Held to Maturity
|
| | | | 259 | | | | | | 265 | | | |
Level 2
|
|
Equity Securities
|
| | | | 942 | | | | | | 942 | | | |
Level 2
|
|
Loans, net
|
| | | | 601,480 | | | | | | 606,838 | | | |
Level 3
|
|
Federal Home Loan Bank Stock
|
| | | | 2,192 | | | | | | N/A | | | |
N/A
|
|
Federal Reserve Bank Stock
|
| | | | 1,472 | | | | | | N/A | | | |
N/A
|
|
Company Owned Life Insurance
|
| | | | 8,449 | | | | | | 8,449 | | | |
Level 2
|
|
Accrued Interest Receivable
|
| | | | 1,979 | | | | | | 1,979 | | | |
Level 3
|
|
Financial Liabilities: | | | | | ||||||||||||
Deposits
|
| | | | 603,302 | | | | | | 602,937 | | | |
Level 2
|
|
Federal Home Loan Bank Advances
|
| | | | 40,000 | | | | | | 39,834 | | | |
Level 2
|
|
Accrued Interest Payable
|
| | | | 342 | | | | | | 342 | | | |
Level 2
|
|
| | |
2017
|
| ||||||||||||
| | |
Carrying
Amount |
| |
Fair
Value |
| |
Fair Value
Hierarchy |
| ||||||
Financial Assets: | | | | | ||||||||||||
Cash & Due from Banks, including interest bearing deposits
|
| | | $ | 20,836 | | | | | $ | 20,836 | | | |
Level 1
|
|
Federal Funds Sold
|
| | | | 16,290 | | | | | | 16,290 | | | |
Level 1
|
|
Securities, Available for Sale
|
| | | | 26,720 | | | | | | 26,720 | | | |
Level 2
|
|
Securities, Held to Maturity
|
| | | | 316 | | | | | | 325 | | | |
Level 2
|
|
Loans, net
|
| | | | 465,587 | | | | | | 465,232 | | | |
Level 2
|
|
Federal Home Loan Bank Stock
|
| | | | 1,409 | | | | | | N/A | | | |
N/A
|
|
Federal Reserve Bank Stock
|
| | | | 1,127 | | | | | | N/A | | | |
N/A
|
|
Company Owned Life Insurance
|
| | | | 8,212 | | | | | | 8,207 | | | |
Level 2
|
|
Accrued Interest Receivable
|
| | | | 1,407 | | | | | | 1,407 | | | |
Level 2
|
|
Financial Liabilities: | | | | | ||||||||||||
Deposits
|
| | | | 459,174 | | | | | | 444,574 | | | |
Level 2
|
|
Federal Home Loan Bank Advances
|
| | | | 25,000 | | | | | | 24,494 | | | |
Level 2
|
|
Accrued Interest Payable
|
| | | | 162 | | | | | | 162 | | | |
Level 2
|
|
| | |
2018
|
| |
2017
|
| ||||||
Available lines of credit
|
| | | $ | 106,866 | | | | | $ | 75,791 | | |
Unfunded loan commitments – fixed
|
| | | | 20,243 | | | | | | 5,210 | | |
Unfunded loan commitments – variable
|
| | | | 10,356 | | | | | | 37,599 | | |
Standby letters of credit
|
| | | | 8,670 | | | | | | 8,084 | | |
Commercial letters of credit
|
| | | | 1,747 | | | | | | 2,462 | | |
| | |
Actual
|
| |
Required
for Capital Adequacy Purposes |
| |
Well Capitalized
Prompt Corrective Action Regulations |
| |||||||||||||||||||||||||||
| | |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| ||||||||||||||||||
2018 | | | | | | | | ||||||||||||||||||||||||||||||
Total Capital ratio | | | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | $ | 68,427 | | | | | | 13.4% | | | | | $ | 40,731 | | | | | | 8.0% | | | | | $ | 50,914 | | | | | | 10.0% | | |
Corporation
|
| | | | 86,014 | | | | | | 16.9 | | | | | | 40,731 | | | | | | 8.0 | | | | | | N/A | | | | | | N/A | | |
Tier 1 Capital ratio | | | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | | 62,519 | | | | | | 12.3 | | | | | | 30,549 | | | | | | 6.0 | | | | | | 40,731 | | | | | | 8.0 | | |
Corporation
|
| | | | 80,107 | | | | | | 15.7 | | | | | | 30,549 | | | | | | 6.0 | | | | | | N/A | | | | | | N/A | | |
Tier 1 Leverage ratio | | | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | | 62,519 | | | | | | 8.6 | | | | | | 29,129 | | | | | | 4.0 | | | | | | 36,411 | | | | | | 5.0 | | |
Corporation
|
| | | | 80,107 | | | | | | 11.0 | | | | | | 29,129 | | | | | | 4.0 | | | | | | N/A | | | | | | N/A | | |
Common Equity Tier 1 | | | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | | 62,519 | | | | | | 12.3 | | | | | | 22,911 | | | | | | 4.5 | | | | | | 33,094 | | | | | | 6.5 | | |
Corporation
|
| | | | 80,107 | | | | | | 15.7 | | | | | | 22,911 | | | | | | 4.5 | | | | | | N/A | | | | | | N/A | | |
2017 | | | | | | | | ||||||||||||||||||||||||||||||
Total Capital ratio | | | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | $ | 49,234 | | | | | | 12.0% | | | | | $ | 32,866 | | | | | | 8.0% | | | | | $ | 41,083 | | | | | | 10.0% | | |
Corporation
|
| | | | 62,649 | | | | | | 15.2 | | | | | | 32,866 | | | | | | 8.0 | | | | | | N/A | | | | | | N/A | | |
Tier 1 Capital ratio | | | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | | 44,476 | | | | | | 10.8 | | | | | | 24,650 | | | | | | 6.0 | | | | | | 32,866 | | | | | | 8.0 | | |
Corporation
|
| | | | 57,892 | | | | | | 14.1 | | | | | | 24,650 | | | | | | 6.0 | | | | | | N/A | | | | | | N/A | | |
Tier 1 Leverage ratio | | | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | | 44,476 | | | | | | 8.7 | | | | | | 20,513 | | | | | | 4.0 | | | | | | 25,641 | | | | | | 5.0 | | |
Corporation
|
| | | | 57,892 | | | | | | 11.3 | | | | | | 20,513 | | | | | | 4.0 | | | | | | N/A | | | | | | N/A | | |
Common Equity Tier 1 | | | | | | | | ||||||||||||||||||||||||||||||
Bank
|
| | | | 44,476 | | | | | | 10.8 | | | | | | 18,487 | | | | | | 4.5 | | | | | | 26,704 | | | | | | 6.5 | | |
Corporation
|
| | | | 57,892 | | | | | | 14.1 | | | | | | 18,487 | | | | | | 4.5 | | | | | | N/A | | | | | | N/A | | |
| | |
2018
|
| |
2017
|
|
Expected volatility
|
| |
27.49%
|
| |
23.46%
|
|
Risk-free interest rate
|
| |
2.59%
|
| |
2.33%
|
|
Expected life
|
| |
7 years
|
| |
7 years
|
|
Expected dividends
|
| |
—
|
| |
—
|
|
| | |
Stock
Options |
| |
Weighted-
Average Exercise Price |
| |
Weighted-
Average Remaining Contractual Term |
| |
Aggregate
Intrinsic Value |
| ||||||||||||
Balance at January 1, 2018
|
| | | | 219,483 | | | | | $ | 11.46 | | | | | | | | | | | | | | |
Granted
|
| | | | 15,750 | | | | | | 18.25 | | | | | | | | | | | | | | |
Exercised
|
| | | | (8,750) | | | | | | 10.00 | | | | | | | | | | | | | | |
Expired
|
| | | | (2,750) | | | | | | 10.00 | | | | | | | | | | | | | | |
Forfeited
|
| | | | (1,400) | | | | | | 14.20 | | | | | | — | | | | | | | | |
Balance at December 31, 2018
|
| | | | 222,333 | | | | | | 12.00 | | | | | | 2.84 | | | | | $ | 1,390 | | |
Exercisable at December 31, 2018
|
| | | | 194,783 | | | | | $ | 11.31 | | | | | | 2.31 | | | | | $ | 1,352 | | |
| | |
2018
|
| |
2017
|
| ||||||
Basic earnings per share: | | | | ||||||||||
Net Income
|
| | | $ | 2,106 | | | | | $ | 1,814 | | |
Total weighted average common stock outstanding
|
| | | | 4,910 | | | | | | 4,706 | | |
Net income per share
|
| | | $ | 0.43 | | | | | $ | 0.39 | | |
Diluted earnings per share: | | | | ||||||||||
Net Income
|
| | | $ | 2,106 | | | | | $ | 1,814 | | |
Total weighted average common stock outstanding
|
| | | | 4,910 | | | | | | 4,706 | | |
Add: Dilutive effect of employee stock options
|
| | | | 219 | | | | | | 208 | | |
Total weighted average diluted stock outstanding
|
| | | | 5,129 | | | | | | 4,914 | | |
Net income per share
|
| | | $ | 0.41 | | | | | $ | 0.37 | | |
(In thousands)
|
| |
2018
|
| |
2017
|
| ||||||
Assets | | | | ||||||||||
Cash
|
| | | $ | 17,798 | | | | | $ | 13,265 | | |
Investment in Subsidiaries
|
| | | | 62,087 | | | | | | 44,280 | | |
Other Assets
|
| | | | — | | | | | | 50 | | |
| | | | $ | 79,885 | | | | | $ | 57,595 | | |
Liabilities and Shareholders’ Equity | | | | ||||||||||
Other Liabilities
|
| | | | 204 | | | | | | 3 | | |
Shareholders’ equity
|
| | | | 79,681 | | | | | | 57,592 | | |
| | | | $ | 79,885 | | | | | $ | 57,595 | | |
| | |
2018
|
| |
2017
|
| ||||||
(In thousands)
|
| | | ||||||||||
Income
|
| | | $ | — | | | | | $ | — | | |
Interest Expenses
|
| | | | — | | | | | | — | | |
Non-interest expenses
|
| | | | 897 | | | | | | 272 | | |
Income (loss) before income taxes and equity in undistributed income of subsidiaries
|
| | | $ | (897) | | | | | $ | (272) | | |
Income tax provision (benefit)
|
| | | | — | | | | | | — | | |
Income (loss) before equity in undistributed income of subsidiaries
|
| | | | (897) | | | | | | (272) | | |
Equity in undistributed income of subsidiaries
|
| | | | 3,003 | | | | | | 2,086 | | |
Net Income
|
| | | $ | 2,106 | | | | | $ | 1,814 | | |
|
| Cash flows from operating activities | | | | ||||||||||
|
Adjustments to reconcile net income to net cash from operating activities:
|
| | | ||||||||||
|
Net income (loss)
|
| | | $ | 2,106 | | | | | $ | 1,814 | | |
|
Equity in undistributed income of subsidiaries
|
| | | | (3,003) | | | | | | (2,086) | | |
|
Net (increase) decrease in other assets
|
| | | | 50 | | | | | | 12 | | |
|
Net increase (decrease) in other liabilities
|
| | | | 200 | | | | | | — | | |
|
Net cash used in operating activities
|
| | | | (647) | | | | | | (260) | | |
| Cash flows from investing activities | | | | ||||||||||
|
Investment in subsidiaries
|
| | | | (14,986) | | | | | | (9,350) | | |
|
Net cash used in investing activities
|
| | | | (14,986) | | | | | | (9,350) | | |
| Cash flows from financing activities | | | | ||||||||||
|
Issuance of commons stock, net of related expense
|
| | | | 19,998 | | | | | | 18,880 | | |
|
Stock based employment benefit plans
|
| | | | 168 | | | | | | 105 | | |
|
Net cash provided by financing activities
|
| | | | 20,166 | | | | | | 18,905 | | |
|
Increase in cash and cash equivalents
|
| | | | 4,533 | | | | | | 9,295 | | |
|
Cash and cash equivalents at beginning of year
|
| | | | 13,265 | | | | | | 3,970 | | |
|
Cash and cash equivalents at end of year
|
| | | $ | 17,798 | | | | | $ | 13,265 | | |
| Supplemental cash flow information: | | | | ||||||||||
|
Cash paid during the year for taxes
|
| | | $ | 1,005 | | | | | $ | 1,800 | | |
| Interim Financial Statements | | | |||||
| | | | | F-56 | | | |
| | | | | F-57 | | | |
| | | | | F-58 | | | |
| | | | | F-59 | | | |
| | | | | F-61 | | | |
| | | | | F-62 | | | |
| | | | | F-81 | | | |
| Annual Financial Statements | | | |||||
| | | | | F-82 | | | |
| | | | | F-83 | | | |
| | | | | F-85 | | | |
| | | | | F-86 | | | |
| | | | | F-87 | | |
| | |
September 30,
2019 |
| |
December 31,
2018 |
| ||||||
ASSETS | | | | ||||||||||
Cash on hand and due from financial institutions
|
| | | $ | 13,554,073 | | | | | $ | 16,720,631 | | |
Interest-bearing balances with financial institutions
|
| | | | 67,235,456 | | | | | | 49,907,408 | | |
Cash and cash equivalents
|
| | | | 80,789,529 | | | | | | 66,628,039 | | |
Securities available for sale, at fair value
|
| | | | 26,170,629 | | | | | | 31,970,846 | | |
Securities held to maturity, (fair value 2019 – $1,493,318 and 2018 − $1,533,969)
|
| | | | 1,497,746 | | | | | | 1,548,778 | | |
Loans, net of allowance of $5,293,897 in 2019 and $4,862,807 in 2018
|
| | | | 559,975,268 | | | | | | 551,363,715 | | |
Premises and equipment, net
|
| | | | 1,000,300 | | | | | | 1,048,857 | | |
Federal Home Loan Bank stock, at cost
|
| | | | 1,871,100 | | | | | | 3,672,800 | | |
Accrued interest receivable
|
| | | | 1,712,194 | | | | | | 1,920,074 | | |
Other real estate owned
|
| | | | 1,707,825 | | | | | | 1,707,825 | | |
Deferred tax asset, net
|
| | | | 1,594,075 | | | | | | 1,566,932 | | |
Other assets
|
| | | | 500,522 | | | | | | 896,040 | | |
| | | | $ | 676,819,188 | | | | | $ | 662,323,906 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | | | | | | |
Deposits | | | | | | | | | | | | | |
Non-interest bearing
|
| | | $ | 147,307,791 | | | | | $ | 116,994,924 | | |
Interest bearing
|
| | | | 430,597,770 | | | | | | 407,236,543 | | |
Total deposits
|
| | | | 577,905,561 | | | | | | 524,231,467 | | |
Federal Home Loan Bank advances
|
| | | | 30,000,000 | | | | | | 75,000,000 | | |
Subordinated notes payable, net
|
| | | | 9,709,728 | | | | | | 9,669,735 | | |
Accrued interest payable
|
| | | | 689,083 | | | | | | 559,962 | | |
Other liabilities
|
| | | | 2,070,601 | | | | | | 2,057,930 | | |
Total liabilities
|
| | | | 620,374,973 | | | | | | 611,519,094 | | |
Stockholders’ equity | | | | | | | | | | | | | |
Common stock, $5 par value, 5,000,000 shares authorized; issued and outstanding 3,419,188 shares in 2019; 3,411,946 shares in 2018
|
| | | | 17,095,940 | | | | | | 17,059,730 | | |
Additional paid-in capital
|
| | | | 19,000,454 | | | | | | 18,377,169 | | |
Retained earnings
|
| | | | 20,300,502 | | | | | | 15,591,404 | | |
Accumulated other comprehensive gain (loss)
|
| | | | 47,319 | | | | | | (223,491) | | |
Total stockholders’ equity
|
| | | | 56,444,215 | | | | | | 50,804,812 | | |
| | | | $ | 676,819,188 | | | | | $ | 662,323,906 | | |
| | |
2019
|
| |
2018
|
| ||||||
Interest income
|
| | | | | | | | | | | | |
Loans, including fees
|
| | | $ | 22,848,987 | | | | | $ | 19,379,470 | | |
Investment securities
|
| | | | 608,814 | | | | | | 453,831 | | |
Interest bearing accounts in other financial institutions
|
| | | | 859,423 | | | | | | 604,379 | | |
| | | | | 24,317,224 | | | | | | 20,437,680 | | |
Interest expense
|
| | | | | | | | | | | | |
Deposits
|
| | | | 6,386,713 | | | | | | 3,757,781 | | |
Borrowings
|
| | | | 1,277,683 | | | | | | 1,133,557 | | |
| | | | | 7,664,396 | | | | | | 4,891,338 | | |
Net interest income
|
| | | | 16,652,828 | | | | | | 15,546,342 | | |
Provision for loan losses
|
| | | | 367,000 | | | | | | 712,000 | | |
Net interest income after provision for loan losses
|
| | | | 16,285,828 | | | | | | 14,834,342 | | |
Noninterest income
|
| | | | | | | | | | | | |
Service charges on deposit accounts
|
| | | | 592,831 | | | | | | 554,059 | | |
Gain on sale of loans
|
| | | | 312,121 | | | | | | 115,729 | | |
Other income
|
| | | | 235,439 | | | | | | 160,678 | | |
| | | | | 1,140,391 | | | | | | 830,466 | | |
Noninterest expense
|
| | | | | | | | | | | | |
Salaries and employee benefits
|
| | | | 6,154,529 | | | | | | 5,531,266 | | |
Occupancy and equipment
|
| | | | 1,111,261 | | | | | | 1,010,011 | | |
Telecommunication expense
|
| | | | 111,805 | | | | | | 83,509 | | |
Data processing
|
| | | | 456,013 | | | | | | 403,174 | | |
Other real estate owned expense
|
| | | | 107,448 | | | | | | — | | |
Professional fees
|
| | | | 516,424 | | | | | | 336,542 | | |
Printing and supplies
|
| | | | 60,548 | | | | | | 69,353 | | |
Regulatory assessments
|
| | | | 199,414 | | | | | | 342,433 | | |
Directors’ compensation
|
| | | | 756,165 | | | | | | 692,960 | | |
Marketing
|
| | | | 96,061 | | | | | | 147,316 | | |
Other
|
| | | | 551,364 | | | | | | 437,714 | | |
| | | | | 10,121,032 | | | | | | 9,054,278 | | |
Income before income taxes
|
| | | | 7,305,187 | | | | | | 6,610,530 | | |
Income tax expense
|
| | | | 1,843,887 | | | | | | 1,736,561 | | |
Net Income
|
| | | $ | 5,461,300 | | | | | $ | 4,873,969 | | |
Earnings per share:
|
| | | | | | | | | | | | |
Basic
|
| | | $ | 1.60 | | | | | $ | 1.43 | | |
Diluted
|
| | | $ | 1.43 | | | | | $ | 1.37 | | |
| | |
2019
|
| |
2018
|
| ||||||
Net income
|
| | | $ | 5,461,300 | | | | | $ | 4,873,969 | | |
Other comprehensive gain (loss):
|
| | | | | | | | | | | | |
Unrealized gains (losses) on securities available for sale:
|
| | | | | | | | | | | | |
Unrealized holding gain (loss) arising during the period
|
| | | | 362,748 | | | | | | (476,361) | | |
Tax effect
|
| | | | (91,938) | | | | | | 120,734 | | |
Total other comprehensive gain (loss)
|
| | | | 270,810 | | | | | | (355,627) | | |
Comprehensive income
|
| | | $ | 5,732,110 | | | | | $ | 4,518,342 | | |
| | |
Preferred
Shares |
| |
Preferred
Stock |
| |
Common
Shares |
| |
Common
Stock |
| |
Additional
Paid in Capital |
| |
Retained
Earnings |
| |
Accumulated
Other Comprehensive Loss |
| |
Total
|
| ||||||||||||||||||||||||
Balance at January 1, 2018
|
| | | | — | | | | | $ | — | | | | | | 3,394,690 | | | | | $ | 16,973,450 | | | | | $ | 17,497,406 | | | | | $ | 8,783,421 | | | | | $ | (106,991) | | | | | $ | 43,147,286 | | |
Common stock issuance
|
| | |
|
—
|
| | | | | — | | | | | | 8,226 | | | | | | 41,130 | | | | | | 58,199 | | | | | | — | | | | | | — | | | | | | 99,329 | | |
Stock based compensation
|
| | |
|
—
|
| | | | | — | | | | | | — | | | | | | — | | | | | | 170,546 | | | | | | — | | | | | | — | | | | | | 170,546 | | |
Net Income
|
| | |
|
—
|
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,579,788 | | | | | | — | | | | | | 1,579,788 | | |
Total other comprehensive loss
|
| | |
|
—
|
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (164,852) | | | | | | (164,852) | | |
Balance at March 31, 2018
|
| | |
|
—
|
| | | | $ | — | | | | | | 3,402,916 | | | | | $ | 17,014,580 | | | | | $ | 17,726,151 | | | | | $ | 10,363,209 | | | | | $ | (271,843) | | | | | $ | 44,832,097 | | |
Common stock issuance
|
| | |
|
—
|
| | | | | — | | | | | | 1,495 | | | | | | 7,475 | | | | | | 11,960 | | | | | | — | | | | | | — | | | | | | 19,435 | | |
Stock based compensation
|
| | |
|
—
|
| | | | | — | | | | | | — | | | | | | — | | | | | | 174,969 | | | | | | — | | | | | | — | | | | | | 174,969 | | |
Net Income
|
| | |
|
—
|
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,642,142 | | | | | | — | | | | | | 1,642,142 | | |
Total other comprehensive loss
|
| | |
|
—
|
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (52,340) | | | | | | (52,340) | | |
Balance at June 30, 2018
|
| | |
|
—
|
| | | | $ | — | | | | | | 3,404,411 | | | | | $ | 17,022,055 | | | | | $ | 17,913,080 | | | | | $ | 12,005,351 | | | | | $ | (324,183) | | | | | $ | 46,616,303 | | |
Common stock issuance
|
| | |
|
—
|
| | | | | — | | | | | | 7,535 | | | | | | 37,675 | | | | | | 22,605 | | | | | | — | | | | | | — | | | | | | 60,280 | | |
Stock based compensation
|
| | |
|
—
|
| | | | | — | | | | | | — | | | | | | — | | | | | | 210,855 | | | | | | — | | | | | | — | | | | | | 210,855 | | |
Net Income
|
| | |
|
—
|
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,652,038 | | | | | | — | | | | | | 1,652,038 | | |
Total other comprehensive loss
|
| | |
|
—
|
| | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (138,435) | | | | | | (138,435) | | |
Balance at September 30, 2018
|
| | |
|
—
|
| | | | $ | — | | | | | | 3,411,946 | | | | | $ | 17,059,730 | | | | | $ | 18,146,540 | | | | | $ | 13,657,389 | | | | | $ | (462,618) | | | | | $ | 48,401,041 | | |
|
| | |
Preferred
Shares |
| |
Preferred
Stock |
| |
Common
Shares |
| |
Common
Stock |
| |
Additional
Paid in Capital |
| |
Retained
Earnings |
| |
Accumulated
Other Comprehensive Income (Loss) |
| |
Total
|
| ||||||||||||||||||||||||
Balance at January 1, 2019
|
| | | | — | | | | | $ | — | | | | | | 3,411,946 | | | | | $ | 17,059,730 | | | | | $ | 18,377,169 | | | | | $ | 15,591,404 | | | | | $ | (223,491) | | | | | $ | 50,804,812 | | |
Stock based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 198,465 | | | | | | — | | | | | | — | | | | | | 198,465 | | |
Net Income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,912,011 | | | | | | — | | | | | | 1,912,011 | | |
Total other comprehensive income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 102,215 | | | | | | 102,215 | | |
Balance at March 31, 2019
|
| | | | — | | | | | $ | — | | | | | | 3,411,946 | | | | | $ | 17,059,730 | | | | | $ | 18,575,634 | | | | | $ | 17,503,415 | | | | | $ | (121,276) | | | | | $ | 53,017,503 | | |
Common stock issuance
|
| | | | — | | | | | | — | | | | | | 7,142 | | | | | | 35,710 | | | | | | 27,997 | | | | | | — | | | | | | — | | | | | | 63,707 | | |
Stock based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 199,505 | | | | | | — | | | | | | — | | | | | | 199,505 | | |
Cash dividend declared ($0.11 per share)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (376,100) | | | | | | — | | | | | | (376,100) | | |
Net Income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 1,499,942 | | | | | | — | | | | | | 1,499,942 | | |
Total other comprehensive income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 187,777 | | | | | | 187,777 | | |
Balance at June 30, 2019
|
| | | | — | | | | | $ | — | | | | | | 3,419,088 | | | | | $ | 17,095,440 | | | | | $ | 18,803,136 | | | | | $ | 18,627,257 | | | | | $ | 66,501 | | | | | $ | 54,592,334 | | |
Common stock issuance
|
| | | | — | | | | | | — | | | | | | 100 | | | | | | 500 | | | | | | 300 | | | | | | — | | | | | | — | | | | | | 800 | | |
Stock based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 197,018 | | | | | | — | | | | | | — | | | | | | 197,018 | | |
Cash dividend declared ($0.11 per share)
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (376,100) | | | | | | — | | | | | | (376,100) | | |
Net Income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,049,345 | | | | | | — | | | | | | 2,049,345 | | |
Total other comprehensive loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (19,182) | | | | | | (19,182) | | |
Balance at September 30, 2019
|
| | | | — | | | | | $ | — | | | | | | 3,419,188 | | | | | $ | 17,095,940 | | | | | $ | 19,000,454 | | | | | $ | 20,300,502 | | | | | $ | 47,319 | | | | | $ | 56,444,215 | | |
|
| | |
2019
|
| |
2018
|
| ||||||
Cash flows from operating activities | | | | | | | | | | | | | |
Net income
|
| | | $ | 5,461,300 | | | | | $ | 4,873,969 | | |
Adjustments to reconcile net income to net cash
|
| | | | | | | | | | | | |
From operating activities
|
| | | | | | | | | | | | |
Provision for loan losses
|
| | | | 367,000 | | | | | | 712,000 | | |
Loans originated held for sale
|
| | | | (534,000) | | | | | | (1,486,000) | | |
Proceeds from sales of loans held for sale
|
| | | | 534,000 | | | | | | 1,486,000 | | |
Net gain on sale of loans
|
| | | | (312,121) | | | | | | (115,729) | | |
Increase of deferred income tax
|
| | | | (119,082) | | | | | | (422,548) | | |
Depreciation and amortization
|
| | | | 253,357 | | | | | | 225,972 | | |
Shared based compensation
|
| | | | 594,988 | | | | | | 556,370 | | |
Provision for off – balance sheet items
|
| | | | 18,633 | | | | | | 85,628 | | |
Net amortization of premium and discount on securities
|
| | | | 119,820 | | | | | | 143,522 | | |
Amortization of subordinated note payable discount and debt issuance costs
|
| | | | 39,993 | | | | | | 42,885 | | |
Net change in:
|
| | | | | | | | | | | | |
Accrued interest receivable and other assets
|
| | | | 603,399 | | | | | | (661,772) | | |
Accrued interest payable and other liabilities
|
| | | | 123,159 | | | | | | (992,573) | | |
Net cash from operating activities
|
| | | | 7,150,446 | | | | | | 4,447,724 | | |
Cash flows from investing activities | | | | | | | | | | | | | |
Redemption of time deposits with financial institutions
|
| | | | — | | | | | | 1,406,983 | | |
Purchase of securities available for sale
|
| | | | (3,648,132) | | | | | | (19,497,576) | | |
Purchase of securities held to maturity
|
| | | | (1,201,259) | | | | | | — | | |
Proceeds from maturities and calls of securities available for sale
|
| | | | 4,200,000 | | | | | | — | | |
Proceeds from repayment of securities available for sale
|
| | | | 5,494,516 | | | | | | 2,054,585 | | |
Proceeds from repayment on securities held to maturity
|
| | | | 49,050 | | | | | | 52,299 | | |
Proceeds from maturities on securities held to maturity
|
| | | | 1,200,000 | | | | | | — | | |
Purchase of Federal Home Loan Bank stock
|
| | | | (5,380,800) | | | | | | (4,515,700) | | |
Proceeds from sale of Federal Home Loan Bank stock
|
| | | | 7,182,500 | | | | | | 3,527,500 | | |
Loan originations and payments, net
|
| | | | (8,666,432) | | | | | | (75,691,484) | | |
Capital expenditures
|
| | | | (204,800) | | | | | | (81,130) | | |
Net cash from investing activities
|
| | | | (975,357) | | | | | | (92,744,523) | | |
Cash flows from financing activities | | | | | | | | | | | | | |
Net increase in deposits
|
| | | | 53,674,094 | | | | | | 78,995,491 | | |
Proceeds from Federal Home Loan Bank Advances
|
| | | | 124,000,000 | | | | | | 110,000,000 | | |
Repayment of Federal Home Loan Bank Advances
|
| | | | (169,000,000) | | | | | | (89,000,000) | | |
Cash dividends to shareholders
|
| | | | (752,200) | | | | | | — | | |
Proceeds from issuance of common stock
|
| | | | 64,507 | | | | | | 179,044 | | |
Net cash from financing activities
|
| | | | 7,986,401 | | | | | | 100,174,535 | | |
Net change in cash and cash equivalents
|
| | | | 14,161,490 | | | | | | 11,877,736 | | |
Beginning cash and cash equivalents
|
| | | | 66,628,039 | | | | | | 54,609,504 | | |
Ending cash and cash equivalents
|
| | | $ | 80,789,529 | | | | | $ | 66,487,240 | | |
Supplemental cash flow information: | | | | | | | | | | | | | |
Interest paid
|
| | | | 7,535,275 | | | | | | 4,502,389 | | |
Income taxes paid
|
| | | | 1,815,000 | | | | | | 2,380,000 | | |
September 30, 2019
|
| |
Amortized
Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized Losses |
| |
Fair
Value |
| ||||||||||||
Available for Sale | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government agencies
|
| | | $ | 3,266,627 | | | | | $ | — | | | | | $ | (86,567) | | | | | $ | 3,180,060 | | |
U.S. government sponsored entities
|
| | | | 20,791,487 | | | | | | 158,302 | | | | | | (39,782) | | | | | | 20,910,007 | | |
State, county and municipal bonds
|
| | | | 1,048,860 | | | | | | 26,166 | | | | | | — | | | | | | 1,075,026 | | |
Corporate bonds
|
| | | | 1,000,271 | | | | | | 5,265 | | | | | | — | | | | | | 1,005,536 | | |
Total Available for Sale
|
| | | $ | 26,107,245 | | | | | $ | 189,733 | | | | | $ | (126,349) | | | | | $ | 26,170,629 | | |
|
| | |
Amortized
Cost |
| |
Gross
Unrecognized Gains |
| |
Gross
Unrecognized Losses |
| |
Fair
Value |
| ||||||||||||
Held to Maturity | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. treasuries
|
| | | $ | 201,059 | | | | | $ | 160 | | | | | $ | — | | | | | $ | 201,219 | | |
U.S. government sponsored entities
|
| | | | 296,687 | | | | | | 117 | | | | | | (5,115) | | | | | | 291,689 | | |
Foreign Sovereign (Israel)
|
| | | | 1,000,000 | | | | | | 410 | | | | | | — | | | | | | 1,000,410 | | |
Total Held to Maturity
|
| | | $ | 1,497,746 | | | | | $ | 687 | | | | | $ | (5,115) | | | | | $ | 1,493,318 | | |
|
December 31, 2018
|
| |
Amortized
Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized Losses |
| |
Fair
Value |
| ||||||||||||
Available for Sale | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. government agencies
|
| | | $ | 4,181,794 | | | | | $ | — | | | | | $ | (107,668) | | | | | $ | 4,074,126 | | |
U.S. government sponsored entities
|
| | | | 25,533,218 | | | | | | 35,662 | | | | | | (220,639) | | | | | | 25,348,241 | | |
State, county and municipal bonds
|
| | | | 1,054,225 | | | | | | — | | | | | | (15,169) | | | | | | 1,039,056 | | |
Corporate bonds
|
| | | | 1,500,973 | | | | | | 8,450 | | | | | | — | | | | | | 1,509,423 | | |
Total Available for Sale
|
| | | $ | 32,270,210 | | | | | $ | 44,112 | | | | | $ | (343,476) | | | | | $ | 31,970,846 | | |
|
| | |
Amortized
Cost |
| |
Gross
Unrecognized Gains |
| |
Gross
Unrecognized Losses |
| |
Fair
Value |
| ||||||||||||
Held to Maturity | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. treasuries
|
| | | $ | 199,912 | | | | | $ | — | | | | | $ | (1,162) | | | | | $ | 198,750 | | |
U.S. government sponsored entities
|
| | | | 348,866 | | | | | | 148 | | | | | | (13,795) | | | | | | 335,219 | | |
Foreign Sovereign (Israel)
|
| | | | 1,000,000 | | | | | | — | | | | | | — | | | | | | 1,000,000 | | |
Total Held to Maturity
|
| | | $ | 1,548,778 | | | | | $ | 148 | | | | | $ | (14,957) | | | | | $ | 1,533,969 | | |
| | |
September 30, 2019
|
| |||||||||
| | |
Amortized
Cost |
| |
Fair
Value |
| ||||||
Available for Sale | | | | ||||||||||
Within one year
|
| | | $ | 2,501,397 | | | | | $ | 2,499,217 | | |
One to five years
|
| | | | 7,498,747 | | | | | | 7,541,971 | | |
Over five to ten years
|
| | | | 8,664,626 | | | | | | 8,741,732 | | |
Over ten years
|
| | | | 7,442,475 | | | | | | 7,387,709 | | |
Total
|
| | | $ | 26,107,245 | | | | | $ | 26,170,629 | | |
Held to Maturity | | | | | | | | | | | | | |
Within one year
|
| | | $ | 2,948 | | | | | $ | 3,065 | | |
One to five years
|
| | | | 1,201,059 | | | | | | 1,201,629 | | |
Over five to ten years
|
| | | | — | | | | | | — | | |
Over ten years
|
| | | | 293,739 | | | | | | 288,624 | | |
Total
|
| | | $ | 1,497,746 | | | | | $ | 1,493,318 | | |
|
| | |
December 31, 2018
|
| |||||||||
| | |
Amortized
Cost |
| |
Fair
Value |
| ||||||
Available for Sale | | | | ||||||||||
Within one year
|
| | | $ | 500,000 | | | | | $ | 500,353 | | |
One to five years
|
| | | | 16,684,471 | | | | | | 16,627,417 | | |
Over five to ten years
|
| | | | 9,416,578 | | | | | | 9,315,487 | | |
Over ten years
|
| | | | 5,669,161 | | | | | | 5,527,589 | | |
Total
|
| | | $ | 32,270,210 | | | | | $ | 31,970,846 | | |
Held to Maturity | | | | | | | | | | | | | |
Within one year
|
| | | $ | 1,199,912 | | | | | $ | 1,198,750 | | |
One to five years
|
| | | | 5,538 | | | | | | 5,686 | | |
Over five to ten years
|
| | | | — | | | | | | — | | |
Over ten years
|
| | | | 343,328 | | | | | | 329,533 | | |
Total
|
| | | $ | 1,548,778 | | | | | $ | 1,533,969 | | |
| | |
Less Than 12 Months
|
| |
12 Months or Longer
|
| |
Total
|
| |||||||||||||||||||||||||||
September 30, 2019
|
| |
Fair
Value |
| |
Unrealized
Losses |
| |
Fair
Value |
| |
Unrealized
Losses |
| |
Fair
Value |
| |
Unrealized
Losses |
| ||||||||||||||||||
Available for Sale | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Gov. Agencies
|
| | | $ | — | | | | | $ | — | | | | | $ | 3,180,060 | | | | | $ | (86,567) | | | | | $ | 3,180,060 | | | | | $ | (86,567) | | |
U.S. Government sponsored entities
|
| | | | 6,377,814 | | | | | | (14,811) | | | | | | 3,485,318 | | | | | | (24,971) | | | | | | 9,863,132 | | | | | | (39,782) | | |
Total Available for Sale
|
| | | $ | 6,377,814 | | | | | $ | (14,811) | | | | | $ | 6,665,378 | | | | | $ | (111,538) | | | | | $ | 13,043,192 | | | | | $ | (126,349) | | |
|
| | |
Less Than 12 Months
|
| |
12 Months or Longer
|
| |
Total
|
| |||||||||||||||||||||||||||
September 30, 2019
|
| |
Fair
Value |
| |
Unrecognized
Losses |
| |
Fair
Value |
| |
Unrecognized
Losses |
| |
Fair
Value |
| |
Unrecognized
Losses |
| ||||||||||||||||||
Held to Maturity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Government sponsored entities
|
| | | $ | — | | | | | $ | — | | | | | $ | 288,624 | | | | | $ | (5,115) | | | | | $ | 288,624 | | | | | $ | (5,115) | | |
Total Held to Maturity
|
| | | $ | — | | | | | $ | — | | | | | $ | 288,624 | | | | | $ | (5,115) | | | | | $ | 288,624 | | | | | $ | (5,115) | | |
|
| | |
Less Than 12 Months
|
| |
12 Months or Longer
|
| |
Total
|
| |||||||||||||||||||||||||||
December 31, 2018
|
| |
Fair
Value |
| |
Unrealized
Losses |
| |
Fair
Value |
| |
Unrealized
Losses |
| |
Fair
Value |
| |
Unrealized
Losses |
| ||||||||||||||||||
Available for Sale | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Gov. Agencies
|
| | | $ | 402,429 | | | | | $ | (5,560) | | | | | $ | 3,671,697 | | | | | $ | (102,108) | | | | | $ | 4,074,126 | | | | | $ | (107,668) | | |
U.S. Government sponsored entities
|
| | | | 5,033,957 | | | | | | (36,305) | | | | | | 8,804,943 | | | | | | (184,334) | | | | | | 13,838,900 | | | | | | (220,639) | | |
State, county and municipal bonds
|
| | | | 525,225 | | | | | | (718) | | | | | | 513,831 | | | | | | (14,451) | | | | | | 1,039,056 | | | | | | (15,169) | | |
Total Available for Sale
|
| | | $ | 5,961,611 | | | | | $ | (42,583) | | | | | $ | 12,990,471 | | | | | $ | (300,893) | | | | | $ | 18,952,082 | | | | | $ | (343,476) | | |
|
| | |
Less Than 12 Months
|
| |
12 Months or Longer
|
| |
Total
|
| |||||||||||||||||||||||||||
December 31, 2018
|
| |
Fair
Value |
| |
Unrecognized
Losses |
| |
Fair
Value |
| |
Unrecognized
Losses |
| |
Fair
Value |
| |
Unrecognized
Losses |
| ||||||||||||||||||
Held to Maturity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Gov. Agencies
|
| | | $ | — | | | | | $ | — | | | | | $ | 198,750 | | | | | $ | (1,162) | | | | | $ | 198,750 | | | | | $ | (1,162) | | |
U.S. Government sponsored entities
|
| | | | — | | | | | | — | | | | | | 329,533 | | | | | | (13,795) | | | | | | 329,533 | | | | | | (13,795) | | |
Total Held to Maturity
|
| | | $ | — | | | | | $ | — | | | | | $ | 528,283 | | | | | $ | (14,957) | | | | | $ | 528,283 | | | | | $ | (14,957) | | |
| | |
2019
|
| |
2018
|
| ||||||
Commercial
|
| | | $ | 72,902,412 | | | | | $ | 80,171,846 | | |
Real Estate:
|
| | | | | | | | | | | | |
Residential
|
| | | | 3,514,674 | | | | | | 3,769,129 | | |
Commercial
|
| | | | 422,799,372 | | | | | | 403,444,475 | | |
Home equity lines of credit (HELOC)
|
| | | | 61,470,715 | | | | | | 65,798,734 | | |
Consumer and other
|
| | | | 4,882,104 | | | | | | 3,408,497 | | |
| | | | | 565,569,277 | | | | | | 556,592,681 | | |
Plus (Less): Fees and Costs
|
| | | | (300,112) | | | | | | (366,159) | | |
Less: Allowance for loan losses
|
| | | | (5,293,897) | | | | | | (4,862,807) | | |
Loans, net
|
| | | $ | 559,975,268 | | | | | $ | 551,363,715 | | |
| | | | | | | | |
Real Estate
|
| | | | | | | | | | | | | | | | | | | |||||||||||||||
| | |
Commercial
|
| |
Residential
|
| |
Commercial
|
| |
HELOC
|
| |
Consumer &
Other |
| |
Unallocated
|
| |
Total
|
| |||||||||||||||||||||
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance
|
| | | $ | 846,485 | | | | | $ | 26,384 | | | | | $ | 3,298,020 | | | | | $ | 660,331 | | | | | $ | 31,587 | | | | | $ | — | | | | | $ | 4,862,807 | | |
Provision for loan losses
|
| | | | (148,126) | | | | | | (1,781) | | | | | | 469,957 | | | | | | 23,435 | | | | | | 3,275 | | | | | | 20,240 | | | | | | 367,000 | | |
Charge-offs
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | (777) | | | | | | | | | | | | (777) | | |
Recoveries
|
| | | | 59,867 | | | | | | | | | | | | | | | | | | | | | | | | 5,000 | | | | | | | | | | | | 64,867 | | |
Ending balance
|
| | | $ | 758,226 | | | | | $ | 24,603 | | | | | $ | 3,767,977 | | | | | $ | 683,766 | | | | | $ | 39,085 | | | | | $ | 20,240 | | | | | $ | 5,293,897 | | |
| | | | | | | | |
Real Estate
|
| | | | | | | | | | | | | | | | | | | |||||||||||||||
| | |
Commercial
|
| |
Residential
|
| |
Commercial
|
| |
HELOC
|
| |
Consumer &
Other |
| |
Unallocated
|
| |
Total
|
| |||||||||||||||||||||
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Beginning balance
|
| | | $ | 567,669 | | | | | $ | 22,733 | | | | | $ | 2,994,235 | | | | | $ | 577,204 | | | | | $ | 37,111 | | | | | $ | — | | | | | $ | 4,198,952 | | |
Provision for loan losses
|
| | | | 215,874 | | | | | | (4,137) | | | | | | 218,847 | | | | | | 127,043 | | | | | | 5,458 | | | | | | 148,915 | | | | | | 712,000 | | |
Charge-offs
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | |
Recoveries
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,298 | | | | | | — | | | | | | 3,298 | | |
Ending balance
|
| | | $ | 783,543 | | | | | $ | 18,596 | | | | | $ | 3,213,082 | | | | | $ | 704,247 | | | | | $ | 45,867 | | | | | $ | 148,915 | | | | | $ | 4,914,250 | | |
|
| | | | | | | | |
Real Estate
|
| |
Consumer &
Other |
| | | | | | | | | | | | | ||||||||||||||||||
| | |
Commercial
|
| |
Residential
|
| |
Commercial
|
| |
HELOC
|
| |
Unallocated
|
| |
Total
|
| ||||||||||||||||||||||||
Allowance for loan losses:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending allowance balance
attributable to loans: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for
impairment |
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Collectively evaluated for
impairment |
| | | | 758,226 | | | | | | 24,603 | | | | | | 3,767,977 | | | | | | 683,766 | | | | | | 39,085 | | | | | | 20,240 | | | | | | 5,293,897 | | |
Total ending balance
|
| | | $ | 758,226 | | | | | $ | 24,603 | | | | | $ | 3,767,977 | | | | | $ | 683,766 | | | | | $ | 39,085 | | | | | $ | 20,240 | | | | | $ | 5,293,897 | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans individually evaluated for impairment
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 110,199 | | | | | $ | — | | | | | $ | — | | | | | $ | 110,199 | | |
Loans collectively evaluated for impairment
|
| | | | 72,902,412 | | | | | | 3,514,674 | | | | | | 422,799,372 | | | | | | 61,360,516 | | | | | | 4,882,104 | | | | | | — | | | | | | 565,459,078 | | |
Total ending loans balance
|
| | | $ | 72,902,412 | | | | | $ | 3,514,674 | | | | | $ | 422,799,372 | | | | | $ | 61,470,715 | | | | | $ | 4,882,104 | | | | | $ | — | | | | | $ | 565,569,277 | | |
| | | | | | | | |
Real Estate
|
| |
Consumer &
Other |
| | | | | | | | | | | | | ||||||||||||||||||
December 31, 2018
|
| |
Commercial
|
| |
Residential
|
| |
Commercial
|
| |
HELOC
|
| |
Unallocated
|
| |
Total
|
| ||||||||||||||||||||||||
Allowance for loan losses:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Ending allowance balance
attributable to loans: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Individually evaluated for
impairment |
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 69,134 | | | | | $ | — | | | | | $ | — | | | | | $ | 69,134 | | |
Collectively evaluated for
impairment |
| | | | 846,485 | | | | | | 26,384 | | | | | | 3,298,020 | | | | | | 591,197 | | | | | | 31,587 | | | | | | — | | | | | | 4,793,673 | | |
Total ending balance
|
| | | $ | 846,485 | | | | | $ | 26,384 | | | | | $ | 3,298,020 | | | | | $ | 660,331 | | | | | $ | 31,587 | | | | | $ | — | | | | | $ | 4,862,807 | | |
Loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loans individually evaluated for impairment
|
| | | $ | 294,245 | | | | | $ | — | | | | | $ | — | | | | | $ | 110,199 | | | | | $ | — | | | | | $ | — | | | | | $ | 404,444 | | |
Loans collectively evaluated for impairment
|
| | | | 79,877,601 | | | | | | 3,769,129 | | | | | | 403,444,475 | | | | | | 65,688,535 | | | | | | 3,408,497 | | | | | | — | | | | | | 556,188,237 | | |
Total ending loans balance
|
| | | $ | 80,171,846 | | | | | $ | 3,769,129 | | | | | $ | 403,444,475 | | | | | $ | 65,798,734 | | | | | $ | 3,408,497 | | | | | $ | — | | | | | $ | 556,592,681 | | |
| | |
2019
|
| |
2018
|
| ||||||
Average of individually impaired loans during year
|
| | | $ | 208,642 | | | | | $ | 404,444 | | |
Interest income recognized during impairment
|
| | | | — | | | | | | 61,015 | | |
Cash-basis interest income recognized
|
| | | | — | | | | | | — | | |
2019
|
| |
Pass
|
| |
Special
Mention |
| |
Substandard
|
| |
Doubtful
|
| |
Total
|
| |||||||||||||||
Commercial
|
| | | $ | 72,902,412 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 72,902,412 | | |
Real Estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential
|
| | | | 3,514,674 | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,514,674 | | |
Commercial
|
| | | | 422,799,372 | | | | | | — | | | | | | — | | | | | | — | | | | | | 422,799,372 | | |
Home Equity Line of Credit
|
| | | | 61,360,516 | | | | | | — | | | | | | 110,199 | | | | | | — | | | | | | 61,470,715 | | |
Consumer and other
|
| | | | 4,882,104 | | | | | | — | | | | | | — | | | | | | — | | | | | | 4,882,104 | | |
Total
|
| | | $ | 565,459,078 | | | | | $ | — | | | | | $ | 110,199 | | | | | $ | — | | | | | $ | 565,569,277 | | |
|
2018
|
| |
Pass
|
| |
Special
Mention |
| |
Substandard
|
| |
Doubtful
|
| |
Total
|
| |||||||||||||||
Commercial
|
| | | $ | 79,877,601 | | | | | $ | — | | | | | $ | 294,245 | | | | | $ | — | | | | | $ | 80,171,846 | | |
Real Estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Residential
|
| | | | 3,769,129 | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,769,129 | | |
Commercial
|
| | | | 403,444,475 | | | | | | — | | | | | | — | | | | | | — | | | | | | 403,444,475 | | |
Home Equity Line of Credit
|
| | | | 65,688,535 | | | | | | — | | | | | | 110,199 | | | | | | — | | | | | | 65,798,734 | | |
Consumer and other
|
| | | | 3,408,497 | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,408,497 | | |
Total
|
| | | $ | 556,188,237 | | | | | $ | — | | | | | $ | 404,444 | | | | | $ | — | | | | | $ | 556,592,681 | | |
| | |
September 30,
2019 |
| |
December 31,
2018 |
| ||||||
Leasehold improvements
|
| | | $ | 1,161,544 | | | | | $ | 1,110,252 | | |
Furniture and equipment
|
| | | | 1,528,311 | | | | | | 1,374,803 | | |
| | | | | 2,689,855 | | | | | | 2,485,055 | | |
Less: Accumulated depreciation
|
| | | | (1,689,555) | | | | | | (1,436,198) | | |
| | | | $ | 1,000,300 | | | | | $ | 1,048,857 | | |
|
October 1 – December 31, 2019
|
| | | $ | 176,253 | | |
|
2020
|
| | | | 699,851 | | |
|
2021
|
| | | | 677,658 | | |
|
2022
|
| | | | 340,683 | | |
|
2023
|
| | | | 100,887 | | |
|
Thereafter
|
| | | | — | | |
| | | | | $ | 1,995,332 | | |
|
2019
|
| | | $ | 73,440,672 | | |
|
2020
|
| | | | 132,634,984 | | |
|
2021
|
| | | | 14,655,234 | | |
|
2022
|
| | | | 21,541,109 | | |
|
2023
|
| | | | 300,000 | | |
|
2024
|
| | | | 639,422 | | |
| | | | | $ | 243,211,421 | | |
|
2019
|
| |||
|
Amount
|
| |
Rate
|
|
| $30,000,000 | | |
2.04% to 2.16%
|
|
|
2018
|
| |||
|
Amount
|
| |
Rate
|
|
| $75,000,000 | | |
2.35% to 2.82%
|
|
| | |
Nine Months Ended
September 30, |
| |||||||||
| | |
2019
|
| |
2018
|
| ||||||
Basic | | | | ||||||||||
Net income
|
| | | $ | 5,461,300 | | | | | $ | 4,873,969 | | |
Weighted average common shares outstanding
|
| | | | 3,416,730 | | | | | | 3,406,258 | | |
Basic earnings per common share
|
| | | $ | 1.60 | | | | | $ | 1.43 | | |
| | |
2019
|
| |
2018
|
| ||||||
Diluted | | | | ||||||||||
Net income
|
| | | $ | 5,461,300 | | | | | $ | 4,873,969 | | |
Weighted average common shares outstanding for basic earnings per
common share |
| | | | 3,416,730 | | | | | | 3,406,258 | | |
Add: Dilutive effects of assumed exercises of stock options
|
| | | | 394,308 | | | | | | 150,041 | | |
Average shares
|
| | | | 3,811,038 | | | | | | 3,556,299 | | |
Diluted
|
| | | $ | 1.43 | | | | | $ | 1.37 | | |
| | |
2019
|
| |
2018
|
| ||||||
Current
|
| | | $ | 1,962,969 | | | | | $ | 2,159,109 | | |
Deferred
|
| | | | (119,082) | | | | | | (422,548) | | |
Total
|
| | | $ | 1,843,887 | | | | | $ | 1,736,561 | | |
|
| | |
2019
|
| |
2018
|
| ||||||
Deferred tax assets | | | | ||||||||||
Organizational and start-up expenses
|
| | | $ | 33,193 | | | | | $ | 41,980 | | |
Capital losses
|
| | | | 25,345 | | | | | | 25,345 | | |
Stock option expense
|
| | | | 444,259 | | | | | | 341,731 | | |
Allowance for loan losses
|
| | | | 1,341,738 | | | | | | 1,232,478 | | |
Securities available for sale
|
| | | | (16,065) | | | | | | 75,874 | | |
Accrued expenses
|
| | | | 281,850 | | | | | | 247,812 | | |
Other
|
| | | | 2,172 | | | | | | 414 | | |
| | | | | 2,112,492 | | | | | | 1,965,634 | | |
Deferred tax liabilities | | | | ||||||||||
Accumulated depreciation
|
| | | | 197,996 | | | | | | 65,721 | | |
Deferred loan fees
|
| | | | 263,944 | | | | | | 265,557 | | |
Other
|
| | | | 31,132 | | | | | | 42,079 | | |
| | | | | 493,072 | | | | | | 373,357 | | |
Valuation allowance
|
| | | | 25,345 | | | | | | 25,345 | | |
Net deferred tax asset
|
| | | $ | 1,594,075 | | | | | $ | 1,566,932 | | |
| | |
2019
|
| |
2018
|
| ||||||
Federal statutory rate times financial statement income
|
| | | $ | 1,534,089 | | | | | $ | 1,388,211 | | |
Effect of state income tax (net of federal benefit)
|
| | | | 264,423 | | | | | | 293,148 | | |
Stock compensation
|
| | | | 29,959 | | | | | | 33,137 | | |
Other
|
| | | | 15,416 | | | | | | 22,065 | | |
| | | | $ | 1,843,887 | | | | | $ | 1,736,561 | | |
| | |
2019
|
| |
2018
|
| ||||||||||||||||||
| | |
Principal
|
| |
Unamortized
Discount and Debt Issuance Costs |
| |
Principal
|
| |
Unamortized
Discount and Debt Issuance Costs |
| ||||||||||||
7.0% subordinated debentures, due 2026 (discount is based on imputed interest rate of 7.458%)
|
| | | $ | 10,000,000 | | | | | $ | (290,272) | | | | | $ | 10,000,000 | | | | | $ | (330,265) | | |
Total
|
| | | $ | 10,000,000 | | | | | $ | (290,272) | | | | | $ | 10,000,000 | | | | | $ | (330,265) | | |
| | |
2018
|
|
Risk-free interest rate
|
| |
2.59% – 2.78%
|
|
Expected life
|
| |
6 years
|
|
Expected volatility
|
| |
30%
|
|
Dividend yield
|
| |
0%
|
|
| | |
Shares
|
| |
Weighted
Average Exercise Price |
| |
Weighted
Average Remaining Contractual Term |
| ||||||
Outstanding January 1, 2019
|
| | | | 977,128 | | | | | $ | 11.88 | | | |
6.6 years
|
|
Granted
|
| | | | — | | | | | | — | | | | | |
Exercised
|
| | | | (7,242) | | | | | | 8.91 | | | | | |
Forfeited/Expired
|
| | | | (5,500) | | | | | | 12.15 | | | | | |
Outstanding September 30, 2019
|
| | | | 964,386 | | | | | $ | 11.90 | | | |
5.8 years
|
|
Options vested and exercisable at period end
|
| | | | 686,329 | | | | | $ | 10.82 | | | |
4.8 years
|
|
Options not vested
|
| | | | 278,057 | | | | | $ | 14.58 | | | |
8.3 years
|
|
| | |
Shares
|
| |
Weighted
Average Exercise Price |
| |
Weighted
Average Remaining Contractual Term |
| ||||||
Outstanding January 1, 2018
|
| | | | 638,602 | | | | | $ | 10.17 | | | |
6 years
|
|
Granted
|
| | | | 358,332 | | | | | | 14.85 | | | | | |
Exercised
|
| | | | (17,256) | | | | | | 10.38 | | | | | |
Forfeited/Expired
|
| | | | (2,550) | | | | | | 9.65 | | | | | |
Outstanding December 31, 2018
|
| | | | 977,128 | | | | | $ | 11.88 | | | |
6.6 years
|
|
Options vested and exercisable at end of year
|
| | | | 502,439 | | | | | $ | 9.60 | | | |
4.4 years
|
|
Options not vested
|
| | | | 474,689 | | | | | $ | 14.31 | | | |
8.9 years
|
|
| | |
Actual
|
| |
Minimum Required To Be
Adequately Capitalized Plus Conservation Buffer |
| |
Minimum Required
To Be Well Capitalized |
| |||||||||||||||||||||||||||
September 30, 2019
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| ||||||||||||||||||
Total Capital to risk weighted assets | | | | | | | | ||||||||||||||||||||||||||||||
Consolidated
|
| | | $ | 71,838,702 | | | | | | 12.33% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Bank
|
| | | $ | 70,919,672 | | | | | | 12.17% | | | | | $ | 61,187,805 | | | | | | 10.50% | | | | | $ | 58,274,100 | | | | | | 10.00% | | |
Tier 1 (Core) Capital to risk
weighted assets |
| | | | | | | ||||||||||||||||||||||||||||||
Consolidated
|
| | | $ | 56,396,899 | | | | | | 9.68% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Bank
|
| | | $ | 65,187,597 | | | | | | 11.19% | | | | | $ | 49,532,985 | | | | | | 8.50% | | | | | $ | 46,619,280 | | | | | | 8.00% | | |
Common Tier 1 (CET 1) | | | | | | | | ||||||||||||||||||||||||||||||
Consolidated
|
| | | $ | 56,396,899 | | | | | | 9.68% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Bank
|
| | | $ | 65,187,597 | | | | | | 11.19% | | | | | $ | 40,791,870 | | | | | | 7.00% | | | | | $ | 37,878,165 | | | | | | 6.50% | | |
Tier 1 (Core) Capital to average assets
|
| | | | | | | ||||||||||||||||||||||||||||||
Consolidated
|
| | | $ | 56,396,899 | | | | | | 8.41% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Bank
|
| | | $ | 65,187,597 | | | | | | 9.72% | | | | | $ | 26,838,502 | | | | | | 4.00% | | | | | $ | 33,548,128 | | | | | | 5.00% | | |
| | |
Actual
|
| |
Minimum Required To Be
Adequately Capitalized Plus Conservation Buffer |
| |
Minimum Required
To Be Well Capitalized |
| |||||||||||||||||||||||||||
December 31, 2018
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| ||||||||||||||||||
Total Capital to risk weighted assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consolidated
|
| | | $ | 65,980,388 | | | | | | 11.53% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Bank
|
| | | $ | 65,167,154 | | | | | | 11.39% | | | | | $ | 56,494,381 | | | | | | 9.875% | | | | | $ | 57,209,500 | | | | | | 10.00% | | |
Tier 1 (Core) Capital to risk weighted assets
|
| | | | | | | ||||||||||||||||||||||||||||||
Consolidated
|
| | | $ | 51,028,303 | | | | | | 8.92% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Bank
|
| | | $ | 59,884,803 | | | | | | 10.47% | | | | | $ | 45,052,481 | | | | | | 7.875% | | | | | $ | 45,767,600 | | | | | | 8.00% | | |
Common Tier 1 (CET 1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consolidated
|
| | | $ | 51,028,303 | | | | | | 8.92% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Bank
|
| | | $ | 59,884,803 | | | | | | 10.47% | | | | | $ | 36,471,056 | | | | | | 6.375% | | | | | $ | 37,186,175 | | | | | | 6.50% | | |
Tier 1 (Core) Capital to average assets
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Consolidated
|
| | | $ | 51,028,303 | | | | | | 8.08% | | | | | | N/A | | | | | | N/A | | | | | | N/A | | | | | | N/A | | |
Bank
|
| | | $ | 59,884,803 | | | | | | 9.49% | | | | | $ | 25,251,000 | | | | | | 4.000% | | | | | $ | 31,563,750 | | | | | | 5.00% | | |
| | | | | | | | |
Fair Value Measurements using:
|
| |||||||||||||||
| | |
Fair Value
|
| |
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| ||||||||||||
September 30, 2019 | | | | | | ||||||||||||||||||||
Assets | | | | | | ||||||||||||||||||||
U.S. government agencies
|
| | | $ | 3,180,060 | | | | | $ | — | | | | | $ | 3,180,060 | | | | | $ | — | | |
U.S. government sponsored entities
|
| | | | 20,910,007 | | | | | | — | | | | | | 20,910,007 | | | | | | — | | |
State, County and Municipal bonds
|
| | | | 1,075,026 | | | | | | — | | | | | | 1,075,026 | | | | | | — | | |
Corporate Bonds
|
| | | | 1,005,536 | | | | | | — | | | | | | 1,005,536 | | | | | | — | | |
Total securities available for sale
|
| | | $ | 26,170,629 | | | | | $ | — | | | | | $ | 26,170,629 | | | | | $ | — | | |
December 31, 2018 | | | | | | ||||||||||||||||||||
Assets | | | | | | ||||||||||||||||||||
U.S. government agencies
|
| | | $ | 4,074,126 | | | | | $ | — | | | | | $ | 4,074,126 | | | | | $ | — | | |
U.S. government sponsored entities
|
| | | | 25,348,241 | | | | | | — | | | | | | 25,348,241 | | | | | | — | | |
State, County and Municipal bonds
|
| | | | 1,039,056 | | | | | | — | | | | | | 1,039,056 | | | | | | — | | |
Corporate Bonds
|
| | | | 1,509,423 | | | | | | — | | | | | | 1,509,423 | | | | | | — | | |
Total securities available for sale
|
| | | $ | 31,970,846 | | | | | $ | — | | | | | $ | 31,970,846 | | | | | $ | — | | |
| | | | | | | | |
Fair Value Measurements using:
|
| |||||||||||||||
| | |
Fair Value
|
| |
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
| |
Significant Other
Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| ||||||||||||
September 30, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired Loan (Home Equity)
|
| | | $ | 110,199 | | | | | $ | — | | | | | $ | — | | | | | $ | 110,199 | | |
Other Real Estate Owned (Residential)
|
| | | | 1,707,825 | | | | | | — | | | | | | 1,707,825 | | | | | | — | | |
December 31, 2018 | | | | | | | | | | | | | | | | | | | | | | | | | |
Impaired Loan (Home Equity)
|
| | | $ | 110,199 | | | | | $ | — | | | | | $ | — | | | | | $ | 110,199 | | |
Impaired Loan (Commercial Line)
|
| | | | 294,245 | | | | | | — | | | | | | — | | | | | | 294,245 | | |
Other Real Estate Owned (Residential)
|
| | | | 1,707,825 | | | | | | — | | | | | | 1,707,825 | | | | | | — | | |
| | | | | F-81 | | | |
| CONSOLIDATED FINANCIAL STATEMENTS | | | |||||
| | | | | F-82 | | | |
| | | | | F-83 | | | |
| | | | | F-84 | | | |
| | | | | F-85 | | | |
| | | | | F-86 | | | |
| | | | | F-87 | | |
| | | |
|
|
| | | | Crowe LLP | |
| | |
2018
|
| |
2017
|
| ||||||
ASSETS | | | | ||||||||||
Cash on hand and due from financial institutions
|
| | | $ | 16,720,631 | | | | | $ | 12,514,224 | | |
Interest-bearing balances with financial institutions
|
| | | | 49,907,408 | | | | | | 42,095,280 | | |
Cash and cash equivalents
|
| | | | 66,628,039 | | | | | | 54,609,504 | | |
Interest-bearing time deposits
|
| | | | — | | | | | | 1,406,983 | | |
Securities available for sale, at fair value
|
| | | | 31,970,846 | | | | | | 16,645,207 | | |
Securities held to maturity, (fair value 2018 – $1,533,969 and 2017 – $1,609,876)
|
| | | | 1,548,778 | | | | | | 1,619,395 | | |
Loans, net of allowance of $4,862,807 in 2018 and $4,198,952 in 2017
|
| | | | 551,363,715 | | | | | | 458,868,998 | | |
Premises and equipment, net
|
| | | | 1,048,857 | | | | | | 881,863 | | |
Federal Home Loan Bank stock, at cost
|
| | | | 3,672,800 | | | | | | 2,047,100 | | |
Accrued interest receivable
|
| | | | 1,920,074 | | | | | | 1,355,786 | | |
Other real estate owned
|
| | | | 1,707,825 | | | | | | — | | |
Deferred tax asset, net
|
| | | | 1,566,932 | | | | | | 1,144,724 | | |
Other assets
|
| | | | 896,040 | | | | | | 604,814 | | |
| | | | $ | 662,323,906 | | | | | $ | 539,184,374 | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | ||||||||||
Deposits | | | | ||||||||||
Non-interest bearing
|
| | | $ | 116,994,924 | | | | | $ | 106,799,889 | | |
Interest bearing
|
| | | | 407,236,543 | | | | | | 337,165,005 | | |
Total deposits
|
| | | | 524,231,467 | | | | | | 443,964,894 | | |
Federal Home Loan Bank advances
|
| | | | 75,000,000 | | | | | | 39,000,000 | | |
Subordinated notes payable, net
|
| | | | 9,669,735 | | | | | | 9,613,047 | | |
Accrued interest payable
|
| | | | 559,962 | | | | | | 227,462 | | |
Other liabilities
|
| | | | 2,057,930 | | | | | | 3,231,685 | | |
Total liabilities
|
| | | | 611,519,094 | | | | | | 496,037,088 | | |
Stockholders’ equity | | | | ||||||||||
Common stock, $5 par value, 5,000,000 shares authorized; issued and outstanding 3,411,946 shares in 2018; 3,394,690 shares in 2017
|
| | | | 17,059,730 | | | | | | 16,973,450 | | |
Additional paid-in capital
|
| | | | 18,377,169 | | | | | | 17,497,406 | | |
Retained earnings
|
| | | | 15,591,404 | | | | | | 8,783,421 | | |
Accumulated other comprehensive loss
|
| | | | (223,491) | | | | | | (106,991) | | |
Total stockholders’ equity
|
| | | | 50,804,812 | | | | | | 43,147,286 | | |
| | | | $ | 662,323,906 | | | | | $ | 539,184,374 | | |
| | |
2018
|
| |
2017
|
| ||||||
Interest income | | | | ||||||||||
Loans, including fees
|
| | | $ | 26,797,356 | | | | | $ | 20,520,930 | | |
Investment securities
|
| | | | 663,805 | | | | | | 298,991 | | |
Interest bearing accounts in other financial institutions
|
| | | | 778,764 | | | | | | 483,326 | | |
| | | | | 28,239,925 | | | | | | 21,303,247 | | |
Interest expense | | | | ||||||||||
Deposits
|
| | | | 5,473,234 | | | | | | 2,910,313 | | |
Borrowings
|
| | | | 1,599,823 | | | | | | 1,101,195 | | |
Net interest income
|
| | | | 7,073,057 | | | | | | 4,011,508 | | |
| | | | | 21,166,868 | | | | | | 17,291,739 | | |
Provision for loan losses
|
| | | | 1,148,865 | | | | | | 921,261 | | |
Net interest income after provision for loan losses
|
| | | | 20,018,003 | | | | | | 16,370,478 | | |
Noninterest income | | | | ||||||||||
Service charges on deposit accounts
|
| | | | 750,342 | | | | | | 614,540 | | |
Gain on sale of loans
|
| | | | 249,756 | | | | | | 526,573 | | |
Other income
|
| | | | 256,964 | | | | | | 167,497 | | |
| | | | | 1,257,062 | | | | | | 1,308,610 | | |
Noninterest expense | | | | ||||||||||
Salaries and employee benefits
|
| | | | 7,319,899 | | | | | | 6,275,276 | | |
Occupancy and equipment
|
| | | | 1,335,161 | | | | | | 1,110,152 | | |
Telecommunication expense
|
| | | | 113,352 | | | | | | 96,778 | | |
Data processing
|
| | | | 544,608 | | | | | | 499,081 | | |
Charitable contributions
|
| | | | 294,694 | | | | | | 300,702 | | |
Professional fees
|
| | | | 414,807 | | | | | | 432,147 | | |
Printing and supplies
|
| | | | 103,899 | | | | | | 79,314 | | |
Regulatory assessments
|
| | | | 442,271 | | | | | | 239,294 | | |
Directors’ compensation
|
| | | | 929,759 | | | | | | 737,504 | | |
Marketing
|
| | | | 193,034 | | | | | | 138,372 | | |
Other
|
| | | | 634,098 | | | | | | 728,095 | | |
| | | | | 12,325,582 | | | | | | 10,636,715 | | |
Net income before income taxes
|
| | | | 8,949,483 | | | | | | 7,042,373 | | |
Income tax expense
|
| | | | 2,141,500 | | | | | | 3,079,529 | | |
Net Income
|
| | | $ | 6,807,983 | | | | | $ | 3,962,844 | | |
Net income available to common stockholders
|
| | | $ | 6,807,983 | | | | | $ | 3,962,844 | | |
Earnings per share: | | | | ||||||||||
Basic
|
| | | $ | 2.00 | | | | | $ | 1.17 | | |
Diluted
|
| | | $ | 1.91 | | | | | $ | 1.14 | | |
| | |
2018
|
| |
2017
|
| ||||||
Net income
|
| | | $ | 6,807,983 | | | | | $ | 3,962,844 | | |
Other comprehensive loss:
|
| | | ||||||||||
Unrealized losses on securities available for sale:
|
| | | ||||||||||
Unrealized holding loss arising during the period
|
| | | | (156,050) | | | | | | (19,344) | | |
Tax effect
|
| | | | 39,550 | | | | | | 6,644 | | |
Total other comprehensive loss
|
| | | | (116,500) | | | | | | (12,700) | | |
Comprehensive income
|
| | | $ | 6,691,483 | | | | | $ | 3,950,144 | | |
| | |
Preferred
Shares |
| |
Preferred
Stock |
| |
Common
Shares |
| |
Common
Stock |
| |
Additional
Paid in Capital |
| |
Retained
Earnings |
| |
Accumulated
Other Comprehensive Loss |
| |
Total
|
| ||||||||||||||||||||||||
Balance at January 1, 2017
|
| | | | — | | | | | $ | — | | | | | | 3,376,759 | | | | | $ | 16,883,795 | | | | | $ | 16,991,251 | | | | | $ | 4,802,970 | | | | | $ | (76,684) | | | | | $ | 38,601,332 | | |
Common stock issuance
|
| | | | — | | | | | | — | | | | | | 17,931 | | | | | | 89,655 | | | | | | 76,151 | | | | | | — | | | | | | — | | | | | | 165,806 | | |
Stock based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 430,004 | | | | | | — | | | | | | — | | | | | | 430,004 | | |
Net Income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,962,844 | | | | | | — | | | | | | 3,962,844 | | |
Total other comprehensive
loss |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (12,700) | | | | | | (12,700) | | |
Reclassification due to new tax
laws enacted |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 17,607 | | | | | | (17,607) | | | | | | — | | |
Balance at December 31,
2017 |
| | | | — | | | | | $ | — | | | | | | 3,394,690 | | | | | $ | 16,973,450 | | | | | $ | 17,497,406 | | | | | $ | 8,783,421 | | | | | $ | (106,991) | | | | | $ | 43,147,286 | | |
Common stock issuance
|
| | | | — | | | | | | — | | | | | | 17,256 | | | | | | 86,280 | | | | | | 92,764 | | | | | | — | | | | | | — | | | | | | 179,044 | | |
Stock based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 786,999 | | | | | | — | | | | | | — | | | | | | 786,999 | | |
Net Income
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,807,983 | | | | | | — | | | | | | 6,807,983 | | |
Total other comprehensive
loss |
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (116,500) | | | | | | (116,500) | | |
Balance at December 31,
2018 |
| | | | — | | | | | $ | — | | | | | | 3,411,946 | | | | | $ | 17,059,730 | | | | | $ | 18,377,169 | | | | | $ | 15,591,404 | | | | | $ | (223,491) | | | | | $ | 50,804,812 | | |
|
| | |
2018
|
| |
2017
|
| ||||||
Cash flows from operating activities | | | | ||||||||||
Net income
|
| | | $ | 6,807,983 | | | | | $ | 3,962,844 | | |
Adjustments to reconcile net income to net cash
|
| | | ||||||||||
From operating activities
|
| | | ||||||||||
Provision for loan losses
|
| | | | 1,148,865 | | | | | | 921,261 | | |
Loans originated for sale
|
| | | | (1,486,000) | | | | | | (1,881,980) | | |
Proceeds from loan sales
|
| | | | 1,486,000 | | | | | | 4,841,603 | | |
Increase of deferred income tax
|
| | | | (382,657) | | | | | | (1,983) | | |
Depreciation and amortization
|
| | | | 294,990 | | | | | | 273,313 | | |
Shared based compensation
|
| | | | 786,999 | | | | | | 430,004 | | |
Provision for off-balance sheet items
|
| | | | 85,628 | | | | | | 331,666 | | |
Write-off of property and equipment
|
| | | | 294 | | | | | | — | | |
Net amortization of premium and discount on securities
|
| | | | 194,286 | | | | | | 175,476 | | |
Amortization of subordinated note payable discount and debt issuance costs
|
| | | | 56,688 | | | | | | 60,785 | | |
Net change in:
|
| | | ||||||||||
Accrued interest receivable and other assets
|
| | | | (855,514) | | | | | | (621,424) | | |
Accrued interest payable and other liabilities
|
| | | | (926,883) | | | | | | 1,595,614 | | |
Net cash from operating activities
|
| | | | 7,210,679 | | | | | | 10,087,179 | | |
Cash flows from investing activities | | | | ||||||||||
Increase in time deposits with financial institutions
|
| | | | — | | | | | | (3,764) | | |
Redemption of time deposits with financial institutions
|
| | | | 1,406,983 | | | | | | — | | |
Purchase of securities available for sale
|
| | | | (19,497,575) | | | | | | (6,161,965) | | |
Purchase of securities held to maturity
|
| | | | — | | | | | | (199,656) | | |
Proceeds from maturities and calls of securities available for sale
|
| | | | 1,000,000 | | | | | | 1,000,000 | | |
Proceeds from repayment of securities available for sale
|
| | | | 2,825,744 | | | | | | 1,626,280 | | |
Proceeds from repayment on securities held to maturity
|
| | | | 66,473 | | | | | | 78,032 | | |
Proceeds from maturities on securities held to maturity
|
| | | | — | | | | | | 200,000 | | |
Purchase of Federal Home Loan Bank stock
|
| | | | (1,625,700) | | | | | | (205,400) | | |
Loan originations and payments, net
|
| | | | (95,351,408) | | | | | | (98,754,729) | | |
Capital expenditures
|
| | | | (462,278) | | | | | | (272,501) | | |
Net cash from investing activities
|
| | | | (111,637,761) | | | | | | (102,693,703) | | |
Cash flows from financing activities | | | | ||||||||||
Net increase in deposits
|
| | | | 80,266,573 | | | | | | 96,837,683 | | |
Proceeds from Federal Home Loan Bank Advances
|
| | | | 206,000,000 | | | | | | 37,025,000 | | |
Repayment of Federal Home Loan Bank Advances
|
| | | | (170,000,000) | | | | | | (34,025,000) | | |
Proceeds from issuance of common stock
|
| | | | 179,044 | | | | | | 165,806 | | |
Net cash from financing activities
|
| | | | 116,445,617 | | | | | | 100,003,489 | | |
Net change in cash and cash equivalents
|
| | | | 12,018,535 | | | | | | 7,396,965 | | |
Beginning cash and cash equivalents
|
| | | | 54,609,504 | | | | | | 47,212,539 | | |
Ending cash and cash equivalents
|
| | | $ | 66,628,039 | | | | | $ | 54,609,504 | | |
Supplemental cash flow information: | | | | ||||||||||
Interest paid
|
| | | | 6,740,557 | | | | | | 3,974,839 | | |
Income taxes paid
|
| | | | 2,930,000 | | | | | | 2,965,000 | | |
Loans transferred to other real estate
|
| | | | 1,707,825 | | | | | | — | | |
2018
|
| |
Amortized
Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized Losses |
| |
Fair
Value |
| ||||||||||||
Available for Sale | | | | | | ||||||||||||||||||||
U.S. government agencies
|
| | | $ | 4,181,794 | | | | | $ | — | | | | | $ | (107,668) | | | | | $ | 4,074,126 | | |
U.S. government sponsored entities
|
| | | | 25,533,218 | | | | | | 35,662 | | | | | | (220,639) | | | | | | 25,348,241 | | |
State, county and municipal bonds
|
| | | | 1,054,225 | | | | | | — | | | | | | (15,169) | | | | | | 1,039,056 | | |
Corporate bonds
|
| | | | 1,500,973 | | | | | | 8,450 | | | | | | — | | | | | | 1,509,423 | | |
Total Available for Sale
|
| | | $ | 32,270,210 | | | | | $ | 44,112 | | | | | $ | (343,476) | | | | | $ | 31,970,846 | | |
|
| | |
Amortized
Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized Losses |
| |
Fair
Value |
| ||||||||||||
Held to Maturity | | | | | | ||||||||||||||||||||
U.S. treasuries
|
| | | $ | 199,912 | | | | | $ | — | | | | | $ | (1,162) | | | | | $ | 198,750 | | |
U.S. government sponsored entities
|
| | | | 348,866 | | | | | | 148 | | | | | | (13,795) | | | | | | 335,219 | | |
Foreign Sovereign (Israel)
|
| | | | 1,000,000 | | | | | | — | | | | | | — | | | | | | 1,000,000 | | |
Total Held to Maturity
|
| | | $ | 1,548,778 | | | | | $ | 148 | | | | | $ | (14,957) | | | | | $ | 1,533,969 | | |
|
2017
|
| |
Amortized
Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized Losses |
| |
Fair
Value |
| ||||||||||||
Available for Sale | | | | | | ||||||||||||||||||||
U.S. government agencies
|
| | | $ | 5,532,898 | | | | | $ | 709 | | | | | $ | (51,148) | | | | | $ | 5,482,459 | | |
U.S. government sponsored entities
|
| | | | 8,692,485 | | | | | | — | | | | | | (109,233) | | | | | | 8,583,252 | | |
State, county and municipal bonds
|
| | | | 1,061,228 | | | | | | 15,505 | | | | | | (7,598) | | | | | | 1,069,135 | | |
Corporate bonds
|
| | | | 1,501,910 | | | | | | 10,507 | | | | | | (2,056) | | | | | | 1,510,361 | | |
Total Available for Sale
|
| | | $ | 16,788,521 | | | | | $ | 26,721 | | | | | $ | (170,035) | | | | | $ | 16,645,207 | | |
|
| | |
Amortized
Cost |
| |
Gross
Unrealized Gains |
| |
Gross
Unrealized Losses |
| |
Fair
Value |
| ||||||||||||
Held to Maturity | | | | | | ||||||||||||||||||||
U.S. treasuries
|
| | | $ | 199,737 | | | | | $ | — | | | | | $ | (1,518) | | | | | $ | 198,219 | | |
U.S. government sponsored entities
|
| | | | 419,658 | | | | | | 233 | | | | | | (8,234) | | | | | | 411,657 | | |
Foreign Sovereign (Israel)
|
| | | | 1,000,000 | | | | | | — | | | | | | — | | | | | | 1,000,000 | | |
Total Held to Maturity
|
| | | $ | 1,619,395 | | | | | $ | 233 | | | | | $ | (9,752) | | | | | $ | 1,609,876 | | |
| | |
December 31, 2018
|
| |||||||||
| | |
Amortized
Cost |
| |
Fair
Value |
| ||||||
Available for Sale | | | | ||||||||||
Within one year
|
| | | $ | 500,000 | | | | | $ | 500,353 | | |
One to five years
|
| | | | 16,684,471 | | | | | | 16,627,417 | | |
Over five to ten years
|
| | | | 9,416,578 | | | | | | 9,315,487 | | |
Over ten years
|
| | | | 5,669,161 | | | | | | 5,527,589 | | |
Total
|
| | | $ | 32,270,210 | | | | | $ | 31,970,846 | | |
Held to Maturity | | | | ||||||||||
Within one year
|
| | | $ | 1,199,912 | | | | | $ | 1,198,750 | | |
One to five years
|
| | | | 5,538 | | | | | | 5,686 | | |
Over five to ten years
|
| | | | — | | | | | | — | | |
Over ten years
|
| | | | 343,328 | | | | | | 329,533 | | |
Total
|
| | | $ | 1,548,778 | | | | | $ | 1,533,969 | | |
|
| | |
December 31, 2017
|
| |||||||||
| | |
Amortized
Cost |
| |
Fair
Value |
| ||||||
Available for Sale | | | | ||||||||||
Within one year
|
| | | $ | 1,000,000 | | | | | $ | 993,567 | | |
One to five years
|
| | | | 5,501,240 | | | | | | 5,468,477 | | |
Over five to ten years
|
| | | | 3,973,544 | | | | | | 3,931,590 | | |
Over ten years
|
| | | | 6,313,737 | | | | | | 6,251,573 | | |
Total
|
| | | $ | 16,788,521 | | | | | $ | 16,645,207 | | |
Held to Maturity | | | | ||||||||||
Within one year
|
| | | $ | — | | | | | $ | — | | |
One to five years
|
| | | | 1,209,237 | | | | | | 1,207,952 | | |
Over five to ten years
|
| | | | — | | | | | | — | | |
Over ten years
|
| | | | 410,158 | | | | | | 401,925 | | |
Total
|
| | | $ | 1,619,395 | | | | | $ | 1,609,876 | | |
| | |
Less Than 12 Months
|
| |
12 Months or Longer
|
| |
Total
|
| |||||||||||||||||||||||||||
December 31, 2018
|
| |
Fair
Value |
| |
Unrealized
Losses |
| |
Fair
Value |
| |
Unrealized
Losses |
| |
Fair
Value |
| |
Unrealized
Losses |
| ||||||||||||||||||
Available for Sale | | | | | | | | ||||||||||||||||||||||||||||||
U.S. Gov. Agencies
|
| | | $ | 402,429 | | | | | $ | (5,560) | | | | | $ | 3,671,697 | | | | | $ | (102,108) | | | | | $ | 4,074,126 | | | | | $ | (107,668) | | |
U.S. Government sponsored entities
|
| | | | 5,033,957 | | | | | | (36,305) | | | | | | 8,804,943 | | | | | | (184,334) | | | | | | 13,838,900 | | | | | | (220,639) | | |
State, county and municipal bonds
|
| | | | 525,225 | | | | | | (718) | | | | | | 513,831 | | | | | | (14,451) | | | | | | 1,039,056 | | | | | | (15,169) | | |
Total Available for Sale
|
| | | $ | 5,961,611 | | | | | $ | (42,583) | | | | | $ | 12,990,471 | | | | | $ | (300,893) | | | | | $ | 18,952,082 | | | | | $ | (343,476) | | |
|
| | |
Less Than 12 Months
|
| |
12 Months or Longer
|
| |
Total
|
| |||||||||||||||||||||||||||
December 31, 2018
|
| |
Fair
Value |
| |
Unrealized
Losses |
| |
Fair
Value |
| |
Unrealized
Losses |
| |
Fair
Value |
| |
Unrealized
Losses |
| ||||||||||||||||||
Held to Maturity | | | | | | | | ||||||||||||||||||||||||||||||
U.S. Gov. Agencies
|
| | | $ | — | | | | | $ | — | | | | | $ | 198,750 | | | | | $ | (1,162) | | | | | $ | 198,750 | | | | | $ | (1,162) | | |
U.S. Government sponsored entities
|
| | | | — | | | | | | — | | | | | | 329,533 | | | | | | (13,795) | | | | | | 329,533 | | | | | | (13,795) | | |
Total Held to Maturity
|
| | | $ | — | | | | | $ | — | | | | | $ | 528,283 | | | | | $ | (14,957) | | | | | $ | 528,283 | | | | | $ | (14,957) | | |
|
| | |
Less Than 12 Months
|
| |
12 Months or Longer
|
| |
Total
|
| |||||||||||||||||||||||||||
December 31, 2017
|
| |
Fair
Value |
| |
Unrealized
Losses |
| |
Fair
Value |
| |
Unrealized
Losses |
| |
Fair
Value |
| |
Unrealized
Losses |
| ||||||||||||||||||
Available for Sale | | | | | | | | ||||||||||||||||||||||||||||||
U.S. Gov. Agencies
|
| | | $ | 3,430,696 | | | | | $ | (31,630) | | | | | $ | 1,482,444 | | | | | $ | (19,518) | | | | | $ | 4,913,140 | | | | | $ | (51,148) | | |
U.S. Government sponsored entities
|
| | | | 5,512,605 | | | | | | (60,445) | | | | | | 3,070,647 | | | | | | (48,788) | | | | | | 8,583,252 | | | | | | (109,233) | | |
State, county and municipal bonds
|
| | | | 497,943 | | | | | | (7,598) | | | | | | — | | | | | | — | | | | | | 497,943 | | | | | | (7,598) | | |
Corporate securities
|
| | | | 523,761 | | | | | | (2,056) | | | | | | — | | | | | | — | | | | | | 523,761 | | | | | | (2,056) | | |
Total Available for Sale
|
| | | $ | 9,965,005 | | | | | $ | (101,729) | | | | | $ | 4,553,091 | | | | | $ | (68,306) | | | | | $ | 14,518,096 | | | | | $ | (170,035) | | |
|
| | |
Less Than 12 Months
|
| |
12 Months or Longer
|
| |
Total
|
| |||||||||||||||||||||||||||
December 31, 2017
|
| |
Fair
Value |
| |
Unrecognized
Losses |
| |
Fair
Value |
| |
Unrecognized
Losses |
| |
Fair
Value |
| |
Unrecognized
Losses |
| ||||||||||||||||||
Held to Maturity | | | | | | | | ||||||||||||||||||||||||||||||
U.S. Gov. Agencies
|
| | | $ | 198,219 | | | | | $ | (1,518) | | | | | $ | — | | | | | $ | — | | | | | $ | 198,219 | | | | | $ | (1,518) | | |
U.S. Government sponsored entities
|
| | | | — | | | | | | — | | | | | | 401,925 | | | | | | (8,234) | | | | | | 401,925 | | | | | | (8,234) | | |
Total Held to Maturity
|
| | | $ | 198,219 | | | | | $ | (1,518) | | | | | $ | 401,925 | | | | | $ | (8,234) | | | | | $ | 600,144 | | | | | $ | (9,752) | | |
| | |
2018
|
| |
2017
|
| ||||||
Commercial
|
| | | $ | 80,171,846 | | | | | $ | 61,661,118 | | |
Real Estate:
|
| | | ||||||||||
Residential
|
| | | | 3,769,129 | | | | | | 5,772,633 | | |
Commercial
|
| | | | 403,444,475 | | | | | | 327,306,009 | | |
Home equity lines of credit (HELOC)
|
| | | | 65,798,734 | | | | | | 66,233,804 | | |
Consumer and other
|
| | | | 3,408,497 | | | | | | 2,209,565 | | |
| | | | | 556,592,681 | | | | | | 463,183,129 | | |
Less: Fees and Costs
|
| | | | (366,159) | | | | | | (115,179) | | |
Less: Allowance for loan losses
|
| | | | (4,862,807) | | | | | | (4,198,952) | | |
Loans, net
|
| | | $ | 551,363,715 | | | | | $ | 458,868,998 | | |
December 31, 2018
|
| |
Commercial
|
| |
Real Estate
|
| |
Consumer &
Other |
| |
Total
|
| ||||||||||||||||||||||||
|
Residential
|
| |
Commercial
|
| |
HELOC
|
| |||||||||||||||||||||||||||||
Allowance for loan losses: | | | | | | | | ||||||||||||||||||||||||||||||
Beginning balance
|
| | | $ | 567,669 | | | | | $ | 22,733 | | | | | $ | 2,994,235 | | | | | $ | 577,204 | | | | | $ | 37,111 | | | | | $ | 4,198,952 | | |
Provision for loan losses
|
| | | | 278,816 | | | | | | 3,651 | | | | | | 303,785 | | | | | | 574,335 | | | | | | (11,722) | | | | | | 1,148,865 | | |
Loans charged-off
|
| | | | — | | | | | | — | | | | | | — | | | | | | (491,208) | | | | | | — | | | | | | (491,208) | | |
Recoveries
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 6,198 | | | | | | 6,198 | | |
Total ending balance
|
| | | $ | 846,485 | | | | | $ | 26,384 | | | | | $ | 3,298,020 | | | | | $ | 660,331 | | | | | $ | 31,587 | | | | | $ | 4,862,807 | | |
December 31, 2017
|
| |
Commercial
|
| |
Real Estate
|
| |
Consumer &
Other |
| |
Total
|
| ||||||||||||||||||||||||
|
Residential
|
| |
Commercial
|
| |
HELOC
|
| |||||||||||||||||||||||||||||
Allowance for loan losses: | | | | | | | | ||||||||||||||||||||||||||||||
Beginning balance
|
| | | $ | 505,828 | | | | | $ | 76,277 | | | | | $ | 2,439,450 | | | | | $ | 576,082 | | | | | $ | 27,731 | | | | | $ | 3,625,368 | | |
Provision for loan losses
|
| | | | 372,140 | | | | | | (53,544) | | | | | | 554,785 | | | | | | 1,122 | | | | | | 46,758 | | | | | | 921,261 | | |
Loans charged-off
|
| | | | (310,299) | | | | | | — | | | | | | — | | | | | | — | | | | | | (40,611) | | | | | | (350,910) | | |
Recoveries
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,233 | | | | | | 3,233 | | |
Total ending balance
|
| | | $ | 567,669 | | | | | $ | 22,733 | | | | | $ | 2,994,235 | | | | | $ | 577,204 | | | | | $ | 37,111 | | | | | $ | 4,198,952 | | |
December 31, 2018
|
| |
Commercial
|
| |
Real Estate
|
| |
Consumer &
Other |
| |
Total
|
| ||||||||||||||||||||||||
|
Residential
|
| |
Commercial
|
| |
HELOC
|
| |||||||||||||||||||||||||||||
Allowance for loan losses: | | | | | | | | ||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans:
|
| | | | | | | ||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 69,134 | | | | | $ | — | | | | | $ | 69,134 | | |
Collectively evaluated for impairment
|
| | | | 846,485 | | | | | | 26,384 | | | | | | 3,298,020 | | | | | | 591,197 | | | | | | 31,587 | | | | | | 4,793,673 | | |
Total ending balance
|
| | | $ | 846,485 | | | | | $ | 26,384 | | | | | $ | 3,298,020 | | | | | $ | 660,331 | | | | | $ | 31,587 | | | | | $ | 4,862,807 | | |
Loans: | | | | | | | | ||||||||||||||||||||||||||||||
Loans individually evaluated for
impairment |
| | | $ | 294,245 | | | | | $ | — | | | | | $ | — | | | | | $ | 110,199 | | | | | $ | — | | | | | $ | 404,444 | | |
Loans collectively evaluated for impairment
|
| | | | 79,877,601 | | | | | | 3,769,129 | | | | | | 403,444,475 | | | | | | 65,688,535 | | | | | | 3,408,497 | | | | | | 556,188,237 | | |
Total ending loans balance
|
| | | $ | 80,171,846 | | | | | $ | 3,769,129 | | | | | $ | 403,444,475 | | | | | $ | 65,798,734 | | | | | $ | 3,408,497 | | | | | $ | 556,592,681 | | |
December 31, 2017
|
| |
Commercial
|
| |
Real Estate
|
| |
Consumer &
Other |
| |
Total
|
| ||||||||||||||||||||||||
|
Residential
|
| |
Commercial
|
| |
HELOC
|
| |||||||||||||||||||||||||||||
Allowance for loan losses: | | | | | | | | ||||||||||||||||||||||||||||||
Ending allowance balance attributable to loans:
|
| | | | | | | ||||||||||||||||||||||||||||||
Individually evaluated for impairment
|
| | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | |
Collectively evaluated for impairment
|
| | | | 567,669 | | | | | | 22,733 | | | | | | 2,994,235 | | | | | | 577,204 | | | | | | 37,111 | | | | | | 4,198,952 | | |
Total ending balance
|
| | | $ | 567,669 | | | | | $ | 22,733 | | | | | $ | 2,994,235 | | | | | $ | 577,204 | | | | | $ | 37,111 | | | | | $ | 4,198,952 | | |
Loans: | | | | | | | | ||||||||||||||||||||||||||||||
Loans individually evaluated for
impairment |
| | | $ | 305,544 | | | | | $ | — | | | | | $ | — | | | | | $ | 2,100,000 | | | | | $ | — | | | | | $ | 2,405,544 | | |
Loans collectively evaluated for impairment
|
| | | | 61,355,574 | | | | | | 5,772,633 | | | | | | 327,306,009 | | | | | | 64,133,804 | | | | | | 2,209,565 | | | | | | 460,777,585 | | |
Total ending loans balance
|
| | | $ | 61,661,118 | | | | | $ | 5,772,633 | | | | | $ | 327,306,009 | | | | | $ | 66,233,804 | | | | | $ | 2,209,565 | | | | | $ | 463,183,129 | | |
| | |
2018
|
| |
2017
|
| ||||||
Average of individually impaired loans during year
|
| | | $ | 404,444 | | | | | $ | 2,405,544 | | |
Interest income recognized during impairment
|
| | | | 61,015 | | | | | | 104,073 | | |
Cash-basis interest income recognized
|
| | | | — | | | | | | — | | |
2018
|
| |
Pass
|
| |
Special
Mention |
| |
Substandard
|
| |
Doubtful
|
| |
Total
|
| |||||||||||||||
Commercial
|
| | | $ | 79,877,601 | | | | | $ | — | | | | | $ | 294,245 | | | | | $ | — | | | | | $ | 80,171,846 | | |
Real Estate: | | | | | | | |||||||||||||||||||||||||
Residential
|
| | | | 3,769,129 | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,769,129 | | |
Commercial
|
| | | | 403,444,475 | | | | | | — | | | | | | — | | | | | | — | | | | | | 403,444,475 | | |
Home Equity Line of Credit
|
| | | | 65,688,535 | | | | | | — | | | | | | 110,199 | | | | | | — | | | | | | 65,798,734 | | |
Consumer and other
|
| | | | 3,408,497 | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,408,497 | | |
Total
|
| | | $ | 556,188,237 | | | | | $ | — | | | | | $ | 404,444 | | | | | $ | — | | | | | $ | 556,592,681 | | |
|
2017
|
| |
Pass
|
| |
Special
Mention |
| |
Substandard
|
| |
Doubtful
|
| |
Total
|
| |||||||||||||||
Commercial
|
| | | $ | 61,355,574 | | | | | $ | — | | | | | $ | 305,544 | | | | | $ | — | | | | | $ | 61,661,118 | | |
Real Estate: | | | | | | | |||||||||||||||||||||||||
Residential
|
| | | | 5,772,633 | | | | | | — | | | | | | — | | | | | | — | | | | | | 5,772,633 | | |
Commercial
|
| | | | 327,306,009 | | | | | | — | | | | | | — | | | | | | — | | | | | | 327,306,009 | | |
Home Equity Line of Credit
|
| | | | 64,133,804 | | | | | | — | | | | | | 2,100,000 | | | | | | — | | | | | | 66,233,804 | | |
Consumer and other
|
| | | | 2,209,565 | | | | | | — | | | | | | — | | | | | | — | | | | | | 2,209,565 | | |
Total
|
| | | $ | 460,777,585 | | | | | $ | — | | | | | $ | 2,405,544 | | | | | $ | — | | | | | $ | 463,183,129 | | |
| | |
2018
|
| |
2017
|
| ||||||
Leasehold improvements
|
| | | $ | 1,110,252 | | | | | $ | 859,859 | | |
Furniture and equipment
|
| | | | 1,374,803 | | | | | | 1,172,998 | | |
| | | | | 2,485,055 | | | | | | 2,032,857 | | |
Less: Accumulated depreciation
|
| | | | (1,436,198) | | | | | | (1,150,994) | | |
| | | | $ | 1,048,857 | | | | | $ | 881,863 | | |
|
2019
|
| | | | 699,323 | | |
|
2020
|
| | | | 699,851 | | |
|
2021
|
| | | | 677,658 | | |
|
2022
|
| | | | 340,683 | | |
|
2023
|
| | | | 100,887 | | |
|
Thereafter
|
| | | | — | | |
| | | | | $ | 2,518,402 | | |
|
2019
|
| | | | 266,916,257 | | |
|
2020
|
| | | | 13,834,430 | | |
|
2021
|
| | | | 500,038 | | |
|
2022
|
| | | | 1,069,884 | | |
|
2023
|
| | | | — | | |
| | | | | $ | 282,320,609 | | |
|
2018
|
| |||
|
Amount
|
| |
Rate
|
|
|
$75,000,000
|
| |
2.35% to 2.82%
|
|
|
2017
|
| |||
|
Amount
|
| |
Rate
|
|
|
$39,000,000
|
| |
0.88% to 1.79%
|
|
| | |
2018
|
| |
2017
|
| ||||||
Basic | | | | | | | | | | | | | |
Net Income
|
| | | $ | 6,807,983 | | | | | $ | 3,962,844 | | |
Weighted average common shares outstanding
|
| | | | 3,407,680 | | | | | | 3,390,525 | | |
Basic earnings per common share
|
| | | $ | 2.00 | | | | | $ | 1.17 | | |
| | |
2018
|
| |
2017
|
| ||||||
Diluted | | | | | | | | | | | | | |
Net Income
|
| | | $ | 6,807,983 | | | | | $ | 3,962,844 | | |
Weighted average common shares outstanding
for basic earnings per common share |
| | | | 3,407,680 | | | | | | 3,390,525 | | |
Add: Dilutive effects of assumed exercises of stock options
|
| | | | 155,001 | | | | | | 72,062 | | |
Average shares
|
| | | | 3,562,681 | | | | | | 3,462,587 | | |
Diluted
|
| | | $ | 1.91 | | | | | $ | 1.14 | | |
| | |
2017
|
| |||
Retained Earnings
|
| | | $ | 17,607 | | |
Accumulated Other Comprehensive Loss
|
| | | $ | (17,607) | | |
| | |
2018
|
| |
2017
|
| ||||||
Current
|
| | | $ | 2,524,157 | | | | | $ | 3,081,512 | | |
Deferred
|
| | | | (382,657) | | | | | | (1,983) | | |
Total
|
| | | $ | 2,141,500 | | | | | $ | 3,079,529 | | |
| | |
2018
|
| |
2017
|
| ||||||
Deferred tax assets | | | | ||||||||||
Organizational and start-up expenses
|
| | | $ | 41,980 | | | | | $ | 53,695 | | |
Capital losses
|
| | | | 25,345 | | | | | | 25,345 | | |
Stock option expense
|
| | | | 341,731 | | | | | | 199,916 | | |
Allowance for loan losses
|
| | | | 1,232,478 | | | | | | 1,034,485 | | |
Securities available for sale
|
| | | | 75,874 | | | | | | 36,323 | | |
Accrued expenses
|
| | | | 247,812 | | | | | | 176,434 | | |
Other
|
| | | | 414 | | | | | | — | | |
| | | | | 1,965,634 | | | | | | 1,526,198 | | |
Deferred tax liabilities | | | | ||||||||||
Accumulated depreciation
|
| | | | 65,721 | | | | | | 65,250 | | |
Deferred loan fees
|
| | | | 265,557 | | | | | | 289,191 | | |
Other
|
| | | | 42,079 | | | | | | 1,688 | | |
| | | | | 373,357 | | | | | | 356,129 | | |
Valuation allowance
|
| | | | 25,345 | | | | | | 25,345 | | |
Net deferred tax asset
|
| | | $ | 1,566,932 | | | | | $ | 1,144,724 | | |
| | |
2018
|
| |
2017
|
| ||||||
Federal statutory rate times financial statement income
|
| | | $ | 1,879,391 | | | | | $ | 2,394,407 | | |
Effect of state income tax (net of federal benefit)
|
| | | | 192,935 | | | | | | 92,159 | | |
Stock compensation
|
| | | | 47,749 | | | | | | 81,047 | | |
Other
|
| | | | 21,425 | | | | | | (40,199) | | |
Effect of tax rate change
|
| | | | — | | | | | | 552,115 | | |
| | | | $ | 2,141,500 | | | | | $ | 2,213,569 | | |
| | |
2018
|
| |
2017
|
| ||||||||||||||||||
| | |
Principal
|
| |
Unamortized
Discount and Debt Issuance Costs |
| |
Principal
|
| |
Unamortized
Discount and Debt Issuance Costs |
| ||||||||||||
7.0% subordinated debentures, due 2026 (discount is based on imputed interest rate of 7.458%)
|
| | | $ | 10,000,000 | | | | | $ | (330,265) | | | | | $ | 10,000,000 | | | | | $ | (386,953) | | |
Total
|
| | | $ | 10,000,000 | | | | | $ | (330,265) | | | | | $ | 10,000,000 | | | | | $ | (386,953) | | |
| | |
2018
|
| |
2017
|
|
Risk-free interest rate
|
| |
2.59% – 2.78%
|
| |
2.07% – 2.26%
|
|
Expected life
|
| |
6 years
|
| |
6 years
|
|
Expected volatility
|
| |
30%
|
| |
30%
|
|
Dividend yield
|
| |
0%
|
| |
0%
|
|
| | |
Shares
|
| |
Weighted
Average Exercise Price |
| |
Weighted
Average Remaining Contractual Term |
| ||||||
Outstanding January 1, 2018
|
| | | | 638,602 | | | | | $ | 10.17 | | | |
6 years
|
|
Granted
|
| | | | 357,332 | | | | | | 14.85 | | | | ||
Exercised
|
| | | | (17,256) | | | | | | 10.38 | | | | ||
Forfeited/Expired
|
| | | | (2,550) | | | | | | 9.65 | | | | ||
Outstanding December 31, 2018
|
| | | | 976,128 | | | | | $ | 11.88 | | | |
6.6 years
|
|
Options vested and exercisable at end of year
|
| | | | 502,439 | | | | | $ | 9.60 | | | |
4.4 years
|
|
Options not vested
|
| | | | 473,689 | | | | | $ | 14.31 | | | |
8.9 years
|
|
| | |
Shares
|
| |
Weighted
Average Exercise Price |
| |
Weighted
Average Remaining Contractual Term |
| ||||||
Outstanding January 1, 2017
|
| | | | 534,433 | | | | | $ | 9.49 | | | |
6.2 years
|
|
Granted
|
| | | | 123,000 | | | | | | 13.00 | | | | ||
Exercised
|
| | | | (17,931) | | | | | | 9.25 | | | | ||
Forfeited/Expired
|
| | | | (900) | | | | | | 11.66 | | | | ||
Outstanding December 31, 2017
|
| | | | 638,602 | | | | | $ | 10.17 | | | |
6 years
|
|
Options vested and exercisable at end of year
|
| | | | 414,455 | | | | | $ | 8.96 | | | |
4.7 years
|
|
Options not vested
|
| | | | 224,147 | | | | | $ | 12.41 | | | |
8.5 years
|
|
| | |
Actual
|
| |
Minimum Required To Be
Adequately Capitalized Plus Conservation Buffer |
| |
Minimum Required
To Be Well Capitalized |
| |||||||||||||||||||||||||||
2018
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| ||||||||||||||||||
Total Capital to risk weighted assets
|
| | | | | | | ||||||||||||||||||||||||||||||
Consolidated
|
| | | $ | 65,980,388 | | | | | | 11.53% | | | | | $ | 56,495,776 | | | | | | 9.875% | | | | | | N/A | | | | | | N/A | | |
Bank
|
| | | $ | 65,167,154 | | | | | | 11.39% | | | | | $ | 56,494,381 | | | | | | 9.875% | | | | | $ | 57,209,500 | | | | | | 10.00% | | |
Tier 1 (Core) Capital to risk weighted assets
|
| | | | | | | ||||||||||||||||||||||||||||||
Consolidated
|
| | | $ | 51,028,303 | | | | | | 8.92% | | | | | $ | 45,053,594 | | | | | | 7.875% | | | | | | N/A | | | | | | N/A | | |
Bank
|
| | | $ | 59,884,803 | | | | | | 10.47% | | | | | $ | 45,052,481 | | | | | | 7.875% | | | | | $ | 45,767,600 | | | | | | 8.00% | | |
| | |
Actual
|
| |
Minimum Required To Be
Adequately Capitalized Plus Conservation Buffer |
| |
Minimum Required
To Be Well Capitalized |
| |||||||||||||||||||||||||||
2018
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| ||||||||||||||||||
Common Tier 1 (CET 1) | | | | | | | | ||||||||||||||||||||||||||||||
Consolidated
|
| | | $ | 51,028,303 | | | | | | 8.92% | | | | | $ | 36,471,957 | | | | | | 6.375% | | | | | | N/A | | | | | | N/A | | |
Bank
|
| | | $ | 59,884,803 | | | | | | 10.47% | | | | | $ | 36,471,056 | | | | | | 6.375% | | | | | $ | 37,186,175 | | | | | | 6.50% | | |
Tier 1 (Core) Capital to average assets
|
| | | | | | | ||||||||||||||||||||||||||||||
Consolidated
|
| | | $ | 51,028,303 | | | | | | 8.08% | | | | | $ | 25,249,033 | | | | | | 4.000% | | | | | | N/A | | | | | | N/A | | |
Bank
|
| | | $ | 59,884,803 | | | | | | 9.49% | | | | | $ | 25,251,000 | | | | | | 4.000% | | | | | $ | 28,604,750 | | | | | | 5.00% | | |
| | |
Actual
|
| |
Minimum Required To Be
Adequately Capitalized Plus Conservation Buffer |
| |
Minimum Required
To Be Well Capitalized |
| |||||||||||||||||||||||||||
2017
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| |
Amount
|
| |
Ratio
|
| ||||||||||||||||||
Total Capital to risk weighted assets
|
| | | | | | | ||||||||||||||||||||||||||||||
Consolidated
|
| | | $ | 57,400,192 | | | | | | 12.21% | | | | | $ | 43,497,940 | | | | | | 9.25% | | | | | | N/A | | | | | | N/A | | |
Bank
|
| | | $ | 55,527,832 | | | | | | 11.81% | | | | | $ | 43,497,940 | | | | | | 9.25% | | | | | $ | 47,024,800 | | | | | | 10.00% | | |
Tier 1 (Core) Capital to risk weighted assets
|
| | | | | | | ||||||||||||||||||||||||||||||
Consolidated
|
| | | $ | 43,236,671 | | | | | | 9.19% | | | | | $ | 34,092,980 | | | | | | 7.25% | | | | | | N/A | | | | | | N/A | | |
Bank
|
| | | $ | 50,994,964 | | | | | | 10.84% | | | | | $ | 34,092,980 | | | | | | 7.25% | | | | | $ | 37,619,840 | | | | | | 8.00% | | |
Common Tier 1 (CET 1) | | | | | | | | ||||||||||||||||||||||||||||||
Consolidated
|
| | | $ | 43,236,671 | | | | | | 9.19% | | | | | $ | 27,039,260 | | | | | | 5.75% | | | | | | N/A | | | | | | N/A | | |
Bank
|
| | | $ | 50,994,964 | | | | | | 10.84% | | | | | $ | 27,039,260 | | | | | | 5.75% | | | | | $ | 30,566,120 | | | | | | 6.50% | | |
Tier 1 (Core) Capital to average assets
|
| | | | | | | ||||||||||||||||||||||||||||||
Consolidated
|
| | | $ | 43,236,671 | | | | | | 8.24% | | | | | $ | 20,983,080 | | | | | | 4.00% | | | | | | N/A | | | | | | N/A | | |
Bank
|
| | | $ | 50,994,964 | | | | | | 9.72% | | | | | $ | 20,983,080 | | | | | | 4.00% | | | | | $ | 23,512,400 | | | | | | 5.00% | | |
| | |
2018
|
| |
2017
|
| ||||||
Commitments to extend credit
|
| | | $ | 146,343,914 | | | | | $ | 150,836,945 | | |
Stand-by letters of credit
|
| | | | 1,501,541 | | | | | | 620,918 | | |
Commercial letters of credit
|
| | | | — | | | | | | 1,946,887 | | |
| | | | | | | | |
Fair Value Measurements at December 31 using:
|
| |||||||||||||||
| | |
Fair Value
|
| |
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| ||||||||||||
2018 | | | | | | ||||||||||||||||||||
Assets | | | | | | ||||||||||||||||||||
U.S. government agencies
|
| | | $ | 4,074,126 | | | | | $ | — | | | | | $ | 4,074,126 | | | | | $ | — | | |
U.S. government sponsored entities
|
| | | | 25,348,241 | | | | | | — | | | | | | 25,348,241 | | | | | | — | | |
State, County and Municipal bonds
|
| | | | 1,039,056 | | | | | | — | | | | | | 1,039,056 | | | | | | — | | |
Corporate Bonds
|
| | | | 1,509,423 | | | | | | — | | | | | | 1,509,423 | | | | | | — | | |
Total securities available for sale
|
| | | $ | 31,970,846 | | | | | $ | — | | | | | $ | 31,970,846 | | | | | $ | — | | |
2017 | | | | | | ||||||||||||||||||||
Assets | | | | | | ||||||||||||||||||||
U.S. government agencies
|
| | | $ | 5,482,459 | | | | | $ | — | | | | | $ | 5,482,459 | | | | | $ | — | | |
U.S. government sponsored entities
|
| | | | 8,583,252 | | | | | | — | | | | | | 8,583,252 | | | | | | — | | |
State, County and Municipal bonds
|
| | | | 1,069,135 | | | | | | — | | | | | | 1,069,135 | | | | | | — | | |
Corporate Bonds
|
| | | | 1,510,361 | | | | | | — | | | | | | 1,510,361 | | | | | | — | | |
Total securities available for sale
|
| | | $ | 16,645,207 | | | | | $ | — | | | | | $ | 16,645,207 | | | | | $ | — | | |
|
| | | | | | | | |
Fair Value Measurements at December 31 using:
|
| |||||||||||||||
| | |
Fair Value
|
| |
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
| |
Significant
Other Observable Inputs (Level 2) |
| |
Significant
Unobservable Inputs (Level 3) |
| ||||||||||||
2018 | | | | | | ||||||||||||||||||||
Impaired Loan (Home Equity)
|
| | | $ | 110,199 | | | | | $ | — | | | | | $ | — | | | | | $ | 110,199 | | |
Impaired Loan (Commercial Line)
|
| | | | 294,245 | | | | | | — | | | | | | — | | | | | | 294,245 | | |
Other Real Estate Owned (Residential)
|
| | | | 1,707,825 | | | | | | — | | | | | | 1,707,825 | | | | | | — | | |
2017 | | | | | | ||||||||||||||||||||
Impaired Loan (Home Equity)
|
| | | $ | 2,100,000 | | | | | $ | — | | | | | $ | — | | | | | $ | 2,100,000 | | |
Impaired Loan (Commercial Line)
|
| | | | 305,544 | | | | | | — | | | | | | — | | | | | | 305,544 | | |
| | |
Page
|
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|
Acquisition Proposal
|
| |
6.7(e)
|
|
|
Action
|
| |
3.15
|
|
|
Agreement
|
| |
Preamble
|
|
|
Articles of Merger
|
| |
1.2
|
|
|
Bank Merger
|
| |
1.8
|
|
|
Bank Merger Agreement
|
| |
1.8
|
|
|
Bankruptcy and Equity Exception
|
| |
3.3(a)
|
|
|
BHC Act
|
| |
3.8(a)
|
|
|
Book-Entry Shares
|
| |
1.4(d)
|
|
|
Business Day
|
| |
9.1
|
|
|
Cancelled Shares
|
| |
1.4(e)
|
|
|
Cash Payment
|
| |
2.2(f)
|
|
|
Certificate
|
| |
1.4(d)
|
|
|
Change in Recommendation
|
| |
6.7(c)
|
|
|
Claim
|
| |
6.6(a)
|
|
|
Closing
|
| |
9.1
|
|
|
Closing Date
|
| |
9.1
|
|
|
Code
|
| |
Recitals
|
|
|
Confidentiality Agreement
|
| |
6.2(c)
|
|
|
Continuation Period
|
| |
6.5(a)
|
|
|
Controlled Group Liability
|
| |
3.11(b)
|
|
|
Covered Employees
|
| |
6.5(a)
|
|
|
D&O Insurance
|
| |
6.6(c)
|
|
|
Derivative Transaction
|
| |
3.21(b)
|
|
|
Director Restrictive Covenant Agreements
|
| |
6.11
|
|
|
Disclosure Schedule
|
| |
9.11
|
|
|
Dissenting Shares
|
| |
1.4(f)
|
|
|
DPC Common Shares
|
| |
1.4(e)
|
|
|
Effective Time
|
| |
1.2
|
|
|
Environmental Law
|
| |
3.17(b)
|
|
|
ERISA
|
| |
3.11(b)
|
|
|
ERISA Affiliate
|
| |
3.11(d)
|
|
|
Exchange Agent
|
| |
2.1
|
|
|
Exchange Agent Agreement
|
| |
2.1
|
|
|
Exchange Ratio
|
| |
1.4(b)
|
|
|
Exchangeable Share
|
| |
1.4(b)
|
|
|
FBCA
|
| |
1.1
|
|
|
FDIC
|
| |
3.4
|
|
|
FHLB
|
| |
3.2(c)
|
|
|
Form S-4
|
| |
3.4
|
|
|
FRB
|
| |
3.4
|
|
|
GAAP
|
| |
3.1(c)
|
|
|
Governmental Entity
|
| |
3.4
|
|
|
Hazardous Substance
|
| |
3.17(c)
|
|
|
Indemnified Parties
|
| |
6.6(a)
|
|
|
Intellectual Property
|
| |
3.19(b)
|
|
|
Intervening Event
|
| |
6.7(e)
|
|
|
IRS
|
| |
3.11(a)
|
|
|
Letter of Transmittal
|
| |
2.2(a)
|
|
|
Liens
|
| |
3.2(c)
|
|
|
Loss-Share Agreement
|
| |
3.9(a)
|
|
|
Marquis Bank
|
| |
1.8
|
|
|
Material Adverse Effect
|
| |
3.7(a)
|
|
|
Materially Burdensome Regulatory Condition
|
| |
6.1(f)
|
|
|
Maximum D&O Tail Premium
|
| |
6.6(c)
|
|
|
MBI
|
| |
Preamble
|
|
|
MBI Benefit Plans
|
| |
3.11(a)
|
|
|
MBI Board Recommendation
|
| |
6.3(a)
|
|
|
MBI Bylaws
|
| |
3.1(b)
|
|
|
MBI Charter
|
| |
3.1(b)
|
|
|
MBI Confidential Information
|
| |
6.7(a)
|
|
|
MBI Equity Plans
|
| |
1.5
|
|
|
MBI Financial Statements
|
| |
3.6(a)
|
|
|
MBI Individuals
|
| |
6.7(a)
|
|
|
MBI Insurance Policies
|
| |
3.25
|
|
|
MBI Material Contract
|
| |
3.9(a)
|
|
|
MBI Notes
|
| |
6.14
|
|
|
MBI Regulatory Agreement
|
| |
3.8(b)
|
|
|
MBI Representatives
|
| |
6.7(a)
|
|
|
MBI Shareholder Approval
|
| |
3.3(a)
|
|
|
MBI Shareholder Meeting
|
| |
6.3(a)
|
|
|
MBI Shareholder Meeting Notice Date
|
| |
6.3(a)
|
|
|
MBI Stock Option
|
| |
1.5
|
|
|
MBI Voting Agreement
|
| |
Recitals
|
|
|
Merger
|
| |
Recitals
|
|
|
Merger Consideration
|
| |
1.4(b)
|
|
|
Multiemployer Plan
|
| |
3.11(d)
|
|
|
Nasdaq
|
| |
3.4
|
|
|
OFR
|
| |
6.1(c)
|
|
|
Parties
|
| |
Preamble
|
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Party
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Preamble
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PBGC
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3.11(e)
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Permits
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3.8(a)
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Person
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3.2(c)
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PHC
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Preamble
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PHC Benefit Plans
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4.11(a)
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PHC Board Recommendation
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6.3(b)
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PHC Bylaws
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4.1(b)
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PHC Charter
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4.1(b)
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PHC Common Stock
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1.4(a)
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PHC Equity Plans
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4.2(a)
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PHC Financial Statements
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4.6(a)
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PHC Insurance Policies
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4.25
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PHC Material Contract
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4.9(a)
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PHC Regulatory Agreement
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4.8(b)
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PHC Shareholder Approval
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4.3(a)
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PHC Shareholder Meeting
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6.3(b)
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PHC Shareholder Meeting Notice Date
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6.3(b)
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PHC Stock Issuance
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4.3(a)
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PHC Stock Option
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4.2(a), 1.5
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PHC Voting Agreement
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Recitals
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Previously Disclosed
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9.11
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Professional Bank
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1.8
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Proxy Statement
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3.4
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Regulatory Approvals
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3.4
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Requisite Regulatory Approvals
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7.1(e)
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Rights
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3.2(a)
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SEC
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3.4
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Securities Act
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3.2(a)
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SRO
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3.4
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Subsidiary
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3.1(c)
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Superior Proposal
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6.7(e)
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Surviving Bank
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1.8
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Surviving Company
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Recitals
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Tax Returns
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3.23(k)
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Taxes
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3.23(j)
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Termination Fee
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8.4(a)
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Trust Account Common Shares
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1.4(e)
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Voting Debt
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3.2(a)
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| Schedule 1.1: | | | Restrictive Covenant Agreement Counterparties | |
| Schedule 1.5: | | | Definition of Cause | |
| Schedule 1.7: | | | Directors of Surviving Company and Surviving Bank | |
| Exhibit A: | | | Shareholder Voting Agreement | |
| Exhibit B: | | | Shareholder Voting Agreement | |
| Exhibit C: | | | Plan of Merger and Merger Agreement | |
| Exhibit D: | | | Non-Competition and Non-Disclosure Agreement | |
| 23.3 | | | Consent of Wachtell, Lipton, Rosen & Katz (included in Exhibit 5.1). | |
| 23.4 | | | Consent of Wachtell, Lipton, Rosen & Katz (included in Exhibit 8.1). | |
| 23.5 | | | Consent of Crowe LLP (included in Exhibit 8.2). | |
| 24 | | | Power of Attorney (included with signature pages to this Registration Statement). | |
| 99.1* | | | Form of Proxy of Professional Holding Corp. | |
| 99.2* | | | Form of Proxy of Marquis Bancorp, Inc. | |
| 99.3 | | | Consent of Stephens Inc. | |
| 99.4 | | | Consent of Janney Montgomery Scott LLC. | |
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Signature
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Title
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/s/ Daniel R. Sheehan
Daniel R. Sheehan
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| | Chairman, Chief Executive Officer and Director (Principal executive officer) |
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/s/ Mary Usategui
Mary Usategui
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| | Chief Executive Officer (Principal financial officer and principal accounting officer) |
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/s/ Rolando DiGasbarro
Rolando DiGasbarro
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| | Director | |
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/s/ Carlos M. Garcia
Carlos M. Garcia
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| | Director | |
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/s/ Jon L. Gorney
Jon L. Gorney
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| | Director | |
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Abel L. Iglesias
Abel L. Iglesias
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| | Director | |
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Signature
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Title
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/s/ Herbert Martens, Jr.
Herbert Martens, Jr.
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| | Director | |
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/s/ Lawrence Schimmel, M.D.
Dr. Lawrence Schimmel, M.D.
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| | Director | |
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/s/ Anton V. Schutz
Anton V. Schutz
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| | Director | |
Exhibit 3.1
ARTICLES OF INCORPORATION
OF
PROFESSIONAL HOLDING CORP.
The undersigned incorporator, for the purpose of forming a corporation under and by virtue of the laws of the State of Florida, hereby adopts the following Articles of Incorporation of Professional Holding Corp., a Florida corporation (the “Company”):
ARTICLE
I
Name
The name of the Company is Professional Holding Corp.
ARTICLE
II
Duration
The Company shall exist perpetually.
ARTICLE
III
Purpose
The general purpose of the Company shall be the transaction of any and all lawful business for which corporations may be incorporated under the Florida Business Corporation Act (the “Act”). The Company shall have all of the powers enumerated in the Act and all such other powers as are not specifically prohibited to corporations for profit under the laws of the State of Florida.
ARTICLE
IV
Capital Stock
The maximum number of shares of capital stock that the Company is authorized to issue shall be 70,000,000 shares as follows:
A. Common Stock
The Company is authorized to issue up to (i) 50,000,000 shares of Class A Voting Common Stock with a par value of $0.01 per share (“Class A Common Stock”) and (ii) 10,000,000 shares of Class B Non-Voting Common Stock with a par value of $0.01 per share (“Class B Common Stock,” and collectively with the Class A Common Stock, the “Common Stock”). Each holder of shares of Class A Common Stock shall be entitled to one vote per share on all matters on which such holders are entitled to vote. Except as otherwise required by applicable law, holders of shares of Class B Common Stock shall not be entitled to any voting rights on any matter. Shares of Common Stock may not be voted cumulatively.
B. Preferred Stock
1. Number and Class of Shares Authorized. The Company is authorized to issue up to 10,000,000 shares of Preferred Stock (“Preferred Stock”), which constitutes a separate and single class of shares that may be issued in one or more series.
2. Rights, Preferences and Restrictions of Preferred Stock. The Board of Directors of the Company is vested with the authority to establish, in its discretion, the voting rights and other designations, preferences, rights, qualifications, limitations, and restrictions, if any, of each such series by the adoption and filing in accordance with the Act, before any such issuance of any shares of such series, of an amendment or amendments to these Articles of Incorporation determining the terms of such series, which amendment need not be approved by the shareholders or holders of any class or series of shares of capital stock except as provided by law. All shares of Preferred Stock of the same series shall be identical with each other in all respects.
C. No Preemptive Rights
Holders of Common Stock shall not have, as a matter of right, any preemptive or preferential right to subscribe for, purchase, receive or otherwise acquire any part of any new or additional issue of stock of any class, whether now or hereafter authorized, or of any bonds, debentures, notes or other securities of the Company, whether or not convertible into shares of stock of the Company.
ARTICLE
V
Action by Shareholders Without a Meeting
No action required or permitted to be taken at an annual meeting of the Company’s shareholders or at a special meeting of the Company’s shareholders may be taken without a meeting. The power of the shareholders of the Company to consent in writing, without a meeting, to the taking of any action is expressly denied hereby.
ARTICLE
VI
Special Meeting of Shareholders
The shareholders of the Company may not call a special meeting of shareholders unless the holders of at least fifty percent (50%) of all of the votes entitled to be cast on any issue proposed to be considered at the proposed special meeting sign, date and deliver to the Company’s secretary one or more written demands for the meeting describing the purpose or purposes for which it is to be held.
ARTICLE
VII
Registered Office and Agent; Principal Place of Business
The street address of the registered office of the Company shall be 396 Alhambra Circle, Suite 255, Coral Gables, Florida 33134, and the registered agent of the Company at such address shall be Raul Valdes-Fauli. The principal place of business and the mailing address of the Company shall be 396 Alhambra Circle, Suite 255, Coral Gables, Florida 33134. The Company may change its registered agent, the location of its registered office, its principal place of business, or its mailing address, or any of the foregoing, from time to time without amendment of these Articles of Incorporation.
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ARTICLE VIII
Directors
A. Number of Directors
The number of directors of the Company shall be the number from time to time fixed by the shareholders or by the directors, in accordance with the provisions of the bylaws of the Company, but at no time shall the number of directors be less than one.
B. Vacancies
Any vacancies in the Board of Directors resulting from death, resignation, retirement, removal from office, the creation of a new directorship by an increase in the authorized number of directors, or otherwise shall be filled by an affirmative vote of the majority of the directors then in office, even if such majority constitutes less than a quorum of the entire Board of Directors. Directors so chosen to fill any vacancy shall hold office for a term expiring at the Company’s next annual meeting of shareholders.
C. Removal of Directors
A director may only be removed for cause, which shall be defined for these purposes as a conviction of a felony, declaration of unsound mind by a court order, adjudication of bankruptcy, or such director having been adjudged by a court of competent jurisdiction to be liable for negligence or misconduct in the performance of his or her duty to the Company in a matter of substantial importance to this corporation and such adjudication is no longer subject to direct appeal. Removal for cause, as defined in this section, must be approved by a vote of at least sixty six and two-thirds percent (66 2/3%) of the shares of the Company then entitled to vote at an election for that director. Any action for the removal of a director must be brought within one (1) year of the date of such conviction, declaration or adjudication.
ARTICLE
IX
Bylaws
The power to adopt, alter, amend or repeal bylaws shall be vested in the Board of Directors.
ARTICLE
X
Amendment of Articles of Incorporation
These Articles of Incorporation may be amended in the manner from time to time provided by law and any right conferred upon the shareholders by any provision of these Articles of Incorporation is hereby made subject to this reservation. However, notwithstanding anything contained in these Articles of Incorporation to the contrary, the affirmative vote of the holders of at least sixty six and two thirds percent (66 2/3%) of the shares of the Company then entitled to vote shall be required to amend, alter or repeal, or to adopt any provision inconsistent with the Company’s Bylaws, or Article IV(B), V, VI, VIII(B), VIII(C), IX and X hereof.
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ARTICLE XI
Incorporator
The name and address of the incorporator is:
Daniel R. Sheehan
396 Alhambra Circle, Suite 255
Coral Gables, Florida 33134
IN WITNESS WHEREOF, the undersigned incorporator of the Company does hereby make and file these Articles of Incorporation declaring and certifying that the facts stated herein are true, and hereby subscribes thereto and hereunto sets his hand and seal this 22nd day of January, 2014.
/s/ Daniel R Sheehan | |
Daniel R. Sheehan | |
Incorporator |
CERTIFICATE OF REGISTERED AGENT
Having been named as registered agent and to accept service of process for the above-stated corporation at the place designated above, I hereby accept the appointment as registered agent and agree to act in this capacity. I further agree to comply with the provisions of all statutes relating to the proper and complete performance of my duties, and I am familiar with and accept the obligations of my position as registered agent as provided in Chapter 607, Florida Statutes.
Dated this 22nd day of January, 2014.
/s/ Raul Valdes-Fauli | |
Raul Valdes-Fauli | |
Registered Agent |
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Exhibit 3.2
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
PROFESSIONAL HOLDING CORP.
Professional Holding Corp., a Florida corporation (the “Company”), pursuant to the provisions of Section 607.1006, Florida Statutes, adopts these Articles of Amendment (“Amendment”) pursuant to the provisions of the Florida Business Corporation Act (the “Act”).
1. | The Company filed its Articles of Incorporation with the Florida Department of State on January 24, 2014, document number P14000007358. |
2. | ARTICLE XII is hereby added to the Company’s Articles of Incorporation and reads as follows: |
ARTICLE XII
Forum Selection
Unless the Company consents in writing to the selection of an alternative forum (an “Alternative Forum Consent”), the state and federal courts in or for Miami-Dade County, Florida or Palm Beach County, Florida will be the exclusive forums for (A) any action or proceeding asserting a claim for breach of a fiduciary duty owed by any current or former director, officer, employee, or agent of the Company to the Company or the Company’s shareholders; (B) any derivative action or proceeding brought on behalf of the Company; (C) any action or proceeding asserting a claim arising pursuant to any provision of the Florida Business Corporation Act, these Articles of Incorporation, or the Bylaws of the Company; or (D) any action or proceeding asserting a claim governed by the internal affairs doctrine that is not included in subsections (A)-(C) above; provided, however, that, in the event that the state and federal courts in and for Miami-Dade County, Florida or Palm Beach County, Florida lack personal or subject matter jurisdiction over any such action or proceeding, the sole and exclusive forum for such action or proceeding will be another state or federal court located within the State of Florida, in each such case, unless such state or federal court, as applicable, has dismissed a prior action by the same plaintiff asserting the same claims because such court lacked personal jurisdiction over an indispensable party named as a defendant therein. If any action, the subject matter of which is within the scope of this Article XII, is filed in a court other than the state and federal courts in and for Miami-Dade County, Florida or Palm Beach County, Florida (or any other state or federal court located within the State of Florida in accordance with this Article XII, as applicable) (a “Foreign Action”) by or in the name of any shareholder, such shareholder will be deemed to have consented to (i) the personal jurisdiction of the state and federal courts in and for Miami-Dade County, Florida and Palm Beach County, Florida (or such other state or federal court located within the State of Florida in accordance with this Article XII, as applicable) in connection with any action brought in any such court to enforce this Article XII; and (ii) having service of process made upon such shareholder in any such action by service upon such shareholder’s counsel in the Foreign Action as agent for such shareholder. The existence of any prior Alternative Forum Consent will not act as a waiver of the Company’s ongoing consent right as set forth above in this Article XII with respect to any current or future actions or claims. Any person purchasing or otherwise acquiring any interest in shares of capital stock of the Company will be deemed to have notice of and have consented to the provisions of this Article XII. Failure to enforce the foregoing provisions would cause the Company irreparable harm and the Company will be entitled to equitable relief, including, without limitation, injunctive relief and specific performance, to enforce the foregoing provisions.
3. | Except and to the extent modified by these Articles of Amendment, the provisions of the Company’s Articles of Incorporation shall remain in full force and effect. |
4. | The amendment was approved by the Company’s shareholders. The number of votes cast for the amendment was sufficient for approval. |
Signed this 19th day of April, 2019.
/s/ Daniel R. Sheehan | |
Daniel R. Sheehan | |
President and Chairman of the Board |
Exhibit 3.3
BYLAWS
OF
PROFESSIONAL HOLDING CORP.
As Amended and Restated by the Board of Directors on August 23, 2019.
ARTICLE I
MEETINGS OF SHAREHOLDERS
1.1 Annual Meeting. The annual meeting of the shareholders of Professional Holding Corp., a Florida corporation (the “Company”), shall be held at the time and place designated by the Board of Directors of the Company but no later than the end of the fourth (4th) month after the commencement of each fiscal year. Business transacted at the annual meeting shall include the election of directors of the Company and other business as may properly be brought.
1.2 Special Meetings. Special meetings of the shareholders shall be held when directed by the Chairman of the Board, the President or the Board of Directors, or when requested in writing by the one or more shareholders in accordance with the Company’s Articles of Incorporation. Such written request shall state the purpose or purposes of the meeting and shall be delivered at the main office of the Company addressed to the Chairman of the Board or the President. The call for the meeting shall be issued by the Secretary, unless the Chairman of the Board, the President, or the Board of Directors shall designate another person to do so. The shareholders of the Company may not call a special meeting of shareholders unless the holders of at least fifty percent (50%) of all of the votes entitled to be cast on any issue proposed to be considered at the proposed special meeting sign, date and deliver to the Company’s Secretary one or more written demands for the special meeting describing the purpose or purposes for which it is to be held.
1.3 Place. Meetings of shareholders may be held within or outside of the State of Florida. If no place is designated in the notice for a meeting of shareholders, the place of meeting shall be the principal office of the Company.
1.4 Notice. Except as provided in the Florida Business Corporation Act (the “Act”), written notice stating the place, day and hour of the meeting and, in the case of a special meeting or as otherwise provided by law, the purpose or purposes for which the meeting is called, shall be delivered to each shareholder of record entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting, either personally or by first class mail, by or at the direction of the President, the Secretary, or the officer or other persons calling the meeting. If the notice is mailed at least thirty (30) days before the date of the meeting, it may be done by a class of United States mail other than first class. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail addressed to the shareholder at the shareholder’s address as it appears in the current records of shareholders of the Company, with postage thereon prepaid.
1.5 Notice of Adjourned Meetings. When a meeting is adjourned to another time or place, it shall not be necessary to give any notice of the adjourned meeting if the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken, and at the adjourned meeting any business may be transacted that might have been transacted on the original date of the meeting. If, however, after the adjournment the Board of Directors fixes a new record date for the adjourned meeting, a notice of the adjourned meeting shall be given as provided in Section 1.4 to each shareholder of record on the new record date entitled to vote at such meeting.
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1.6 Waiver of Notice of Shareholders Meetings. Whenever any notice is required to be given to any shareholder, a waiver thereof in writing signed by the shareholder or shareholders entitled to such notice, whether before, during or after the time of the meeting stated therein and delivered to the Company for inclusion in the minutes or filing with the corporate records, shall be equivalent to the giving of such notice. Attendance by a shareholder at a meeting shall constitute a waiver of: (a) lack of notice or defective notice of such meeting, unless the shareholder at the beginning of the meeting objects to holding the meeting; or (b) lack of defective notice of a particular matter at a meeting that is not within the purpose or purposes described in the meeting notice, unless the person objects to considering that particular matter when it is presented. Unless otherwise required by the Articles of Incorporation, neither the business to be transacted at, nor the purpose of, any regular or special meeting of the shareholders need be specified in any written waiver of notice.
1.7 Record Date. For the purpose of determining shareholders entitled to notice of, or to vote at, any meeting of shareholders or any adjournment thereof, or to receive payment of any distribution, or in order to make a determination of shareholders for any other purpose, the Board of Directors may fix in advance a date as the record date for any determination of shareholders, such date in any case to be not more than seventy (70) days prior to the date on which the particular action requiring such determination of shareholders is to be taken. A determination of shareholders entitled to notice of, or to vote at, any meeting of shareholders shall apply to any adjournment thereof, unless the Board of Directors fixes a new record date for the adjourned meeting, which it must do if the meeting is adjourned to a date more than one hundred twenty (120) days after the date fixed for the original meeting.
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1.8 Shareholders’ List for Meeting. After fixing a record date for a meeting of shareholders, the Company shall prepare an alphabetical list of the names of all shareholders who are entitled to notice of such meeting, with the address of each shareholder and the number, class, and series, if any, of the shares held by each shareholder. The shareholders’ list must be available for inspection by any shareholder for a period of ten (10) days prior to the meeting or such shorter time as exists between the record date and the meeting and continuing through the meeting at the Company’s principal office, at a place identified in the meeting notice in the city where the meeting will be held, or at the office of the Company’s transfer agent or registrar. Any shareholder of the Company or his or her agent or attorney is entitled on written demand to inspect the shareholders’ list (subject to the requirements of the Act), during regular business hours and at his or her expense, during the period it is available for inspection. The Company shall make the shareholders’ list available at the meeting of shareholders, and any shareholder or his or her agent or attorney is entitled to inspect the list at any time during the meeting or any adjournment.
1.9 Shareholder Quorum and Voting. Except as otherwise provided in the Articles of Incorporation, the Act, or these Bylaws, a majority of the shares entitled to vote on a matter, represented in person or by proxy, shall constitute a quorum at any meeting of shareholders for action on that matter. If less than a majority of outstanding shares entitled to vote are represented at a meeting, a majority of the shares so represented may adjourn the meeting from time to time without further notice. After a quorum has been established at any shareholders’ meeting, the subsequent withdrawal of shareholders, so as to reduce the number of shares entitled to vote at the meeting below the number required for a quorum, shall not affect the validity of any action taken at the meeting or any adjournment thereof.
Once a share is represented for any purpose at a meeting, it is deemed present for quorum purposes for the remainder of the meeting and for any adjournment of that meeting, unless a new record date is or must be set for that adjourned meeting. When a specified item of business is required to be voted on by a class or series of stock, a majority of the shares of such class or series shall constitute a quorum for the transaction of such item of business by that class or series.
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1.10 Votes Per Share. Except as otherwise provided in the Articles of Incorporation or by the Act, each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a meeting of shareholders.
1.11 Manner of Action. If a quorum is present, action on a matter (other than the election of directors) is approved if the votes cast favoring the action exceed the votes cast opposing the action, unless a greater or lesser number of affirmative votes is required by the Articles of Incorporation, the Act, or these Bylaws. No action required or permitted to be taken at an annual meeting of the Company’s shareholders or at a special meeting of the Company’s shareholders may be taken without a meeting. The power of the shareholders of the Company to consent in writing, without a meeting, to the taking of any action is expressly denied hereby.
1.12 Voting for Directors. At each election for directors, every shareholder entitled to vote at such election shall have the right to vote, in person or by proxy, the number of shares owned by him or her for as many persons as there are directors to be elected at that time and for whose election he or she has a right to vote. Unless otherwise provided in the Articles of Incorporation, cumulative voting is not authorized and the directors shall be elected by a plurality of the votes cast by the shares entitled to vote in the election at a meeting at which a quorum is present.
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1.13 Voting of Shares. A shareholder may vote at any meeting of shareholders of the Company, either in person or by proxy.
Shares standing in the name of another entity, domestic or foreign, may be voted by the officer, agent or proxy designated by the bylaws or other organizational documents of such corporate shareholder or, in the absence of any applicable bylaw, by such person as the board of directors of the corporate shareholder may designate. Proof of such designation may be made by presentation of a certified copy of these Bylaws or other instrument of the corporate shareholder. In the absence of any such designation or, in the case of conflicting designation by the corporate shareholder, the chairman of the board, the chief executive officer, the president, any vice president, the secretary and the treasurer of the corporate shareholder shall be presumed to possess, in that order, authority to vote such shares.
Shares held by an administrator, executor, guardian, personal representative or conservator may be voted by him or her, either in person or by proxy, without a transfer of such shares into his or her name. Shares standing in the name of a trustee may be voted by him or her, either in person or by proxy, but no trustee shall be entitled to vote shares held by him or her without a transfer of such shares into his or her name or the name of his or her nominee.
Shares held by or under the control of a receiver, a trustee in a bankruptcy proceeding or an assignee for the benefit of creditors may be voted by such person without the transfer thereof into his or her name.
If shares stand of record in the names of two or more persons, whether fiduciaries, members of a partnership, joint tenants, tenants in common, tenants by the entirety or otherwise, or if two or more persons have the same fiduciary relationship with respect to the same shares, unless the Secretary of the Company is given notice to the contrary and is furnished with a copy of the instrument or order appointing them or creating the relationship wherein it is so provided, then acts with respect to voting shall have the following effect: (a) if only one votes, in person or by proxy, that act binds all; (b) if more than one votes, in person or by proxy, the act of the majority so voting binds all; (c) if more than one votes, in person or by proxy, but the vote is evenly split on any particular matter, each faction is entitled to vote the share or shares in question proportionally; or (d) if the instrument or order so filed shows that any such tenancy is held in unequal interest, a majority or a vote evenly split for purposes hereof shall be a majority or a vote evenly split in interest. The principles of this paragraph shall apply, insofar as possible, to execution of proxies, waivers, consents, or objections and for the purpose of ascertaining the presence of a quorum.
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1.14 Proxies. Any shareholder of the Company, other person entitled to vote on behalf of a shareholder pursuant to the Act, or attorney-in-fact for such persons, may vote the shareholder’s shares in person or by proxy. Any shareholder of the Company may appoint a proxy to vote or otherwise act for him or her by signing an appointment form, either personally or by an attorney-in-fact. A photographic, photostatic, or equivalent reproduction of an appointment form shall be deemed a sufficient appointment form.
An appointment of a proxy is effective when received by the Secretary of the Company or such other officer or agent which is authorized to tabulate votes, and shall be valid for up to eleven (11) months, unless a longer period is expressly provided in the appointment form.
The death or incapacity of the shareholder appointing a proxy does not affect the right of the Company to accept the proxy’s authority unless notice of the death or incapacity is received by the Secretary or other officer or agent authorized to tabulate votes before the proxy exercises his or her authority under the appointment.
An appointment of a proxy is revocable by the shareholder unless the appointment form conspicuously states that it is irrevocable and the appointment is coupled with an interest.
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1.15 Voting Trusts. One or more shareholders may create a voting trust, conferring on a trustee the right to vote or otherwise act for them, by signing an agreement setting out the provisions of the trust and transferring their shares to the trustee. When a voting trust agreement is signed, the trustee shall prepare a list of the names and addresses of all owners of beneficial interest in the trust, together with the number and class of shares each transferred to the trust, and deliver copies of the list and agreement to the Company’s principal office. After filing a copy of the list and agreement in the Company’s principal office, such copies shall be open to inspection by any shareholder of the Company, subject to the requirements of the Act, or to any beneficiary of the trust under the agreement during business hours.
1.16 Shareholders’ Agreements. Two or more shareholders may provide for the manner in which they will vote their shares, and providing for such other matters as are permitted by the Act, by signing an agreement for that purpose. When a shareholders’ agreement is signed, the shareholders who are parties thereto shall deliver copies of the agreement to the Company’s principal office. After filing a copy of the agreement in the Company’s principal office, such copies shall be open to inspection by any shareholder of the Company, subject to the requirements of the Act, or any party to the agreement during business hours.
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1.17 Nominations for Director. Nominations for election to the Board of Directors may be made by the Board of Directors or by any shareholder of any outstanding class of capital stock of the Company entitled to vote for the election of directors. Nominations, other than those made by or on behalf of the Board of Directors of the Company, shall be made in writing to the Secretary of the Company and shall be delivered to or mailed and received at the principal executive offices of the Company not less than one hundred twenty (120) days and not more than one hundred eighty (180) days prior to the date of the Company’s notice of annual meeting provided with respect to the previous year’s annual meeting; provided, however, that if no annual meeting was held in the previous year or the date of the annual meeting has been changed to be more than thirty (30) calendar days earlier than the date contemplated by the previous year’s statement, such notice by the shareholder to be timely must be received no later than the close of business on the tenth (10th) day following the date on which notice of the date of the annual meeting is given to shareholders or made public, whichever first occurs. Such notification shall contain the following information to the extent known to the notifying shareholder: (a) as to each person whom the shareholder proposes to nominate for election or re-election as a director at the annual meeting; (i) the name, age, business address and residence address of the proposed nominee, (ii) the principal occupation or employment of the proposed nominee, (iii) the class and number of shares of capital stock of the Company which are beneficially owned by the proposed nominee, and (iv) any other information relating to the proposed nominee that is required to be disclosed in solicitations for proxies for election of directors pursuant to Schedule 14A of Regulation 14A promulgated under Section 14(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); and (b) as to the shareholder giving the notice of nominees for election at the annual meeting, (i) the name and record address of the shareholder, and (ii) the class and number of shares of capital stock of the Company which are beneficially owned by the shareholder. The Company may require any proposed nominee for election at an annual or special meeting of shareholders to furnish such other information as may reasonably be required by the Company to determine the eligibility of such proposed nominee to serve as a director of the Company. No person shall be eligible for election as a director of the Company unless nominated in accordance with the procedures set forth herein. The Chairman of the meeting shall, if the facts warrant, determine and declare in the meeting that a nomination was not made in accordance with the requirements of the Articles of Incorporation and this Section, and if he or she should so determine, he or she shall so declare to the meeting and the defective nomination shall be disregarded.
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1.18 Shareholder Proposals. At an annual meeting of the shareholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (ii) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (iii) otherwise properly brought before the meeting by a shareholder in accordance with this Section and applicable law.
For business to be properly brought before an annual meeting by a shareholder, the Company must have received timely notice thereof in writing from such shareholder. To be timely, a shareholder’s notice must be received by the Secretary of the Company as of the date set forth in the Company’s proxy statement relating to the annual meeting for the preceding year; provided, however, that if no such date is stated, then such date shall be one hundred and twenty (120) calendar days in advance of the date (with respect to the forthcoming annual meeting) that the Company’s proxy statement was released to its shareholders in connection with the previous year’s annual meeting of security holders; and provided further that if no annual meeting was held in the previous year or the date of the annual meeting has been changed by more than thirty (30) calendar days from the date contemplated at the time of the previous year’s proxy statement, a proposal shall be received by the Company no later than the close of business on the tenth (10th) day following the date on which notice of the date of the annual meeting is given to shareholders or made public, whichever first occurs.
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A shareholder notification shall contain the following information as to each matter the shareholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting; (ii) the name and address, as they appear on the Company’s books, of the shareholder proposing such business; (iii) the class and number of shares of the Company which are beneficially owned, as such term is defined in Rule 13d-3 promulgated under the Exchange Act, by the shareholder; (iv) any substantial interest of the shareholder in such business; and (v) any other information required pursuant to the rules and regulations promulgated under the Exchange Act relating to shareholder proposals. For purposes of clause (iv) above, a “substantial interest of the shareholder in such business” shall be deemed to occur if such interest were reportable (assuming that the shareholder’s business was in fact brought before the annual meeting) pursuant to Schedule 14A promulgated under the Exchange Act.
Notwithstanding anything in these Bylaws to the contrary, no business shall be conducted at any annual meeting except in accordance with the procedures set forth in this Section and under applicable law.
This Section shall not apply to a shareholder proposal made pursuant to and in compliance with Rule 14a-4 or Rule 14a-8 under the Exchange Act.
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1.19 Inspectors of Election. Prior to each meeting of shareholders, the Board of Directors may appoint one or more Inspectors of Election. Upon his or her appointment, each such Inspector shall take and sign an oath to faithfully execute the duties of Inspector at such meeting with strict impartiality and to the best of his or her ability. Such Inspectors shall determine the number of shares outstanding, the number of shares present at the meeting and whether a quorum is present at such meeting. The Inspectors shall receive votes and ballots and shall determine all challenges and questions as to the right to vote and shall thereafter count and tabulate all votes and ballots and determine the result. Such Inspectors shall do such further acts as are proper to conduct the elections of directors and the vote on other matters with fairness to all shareholders. The Inspectors shall make a certificate of the results of the elections of directors and the vote on other matters. No Inspector shall be a candidate for election as a director of the Company.
ARTICLE II
DIRECTORS
2.1 Functions. Except as provided in the Articles of Incorporation or Bylaws, all corporate powers shall be exercised by or under the authority of, and the business and affairs of the Company shall be managed under the direction of, the Board of Directors.
2.2 Number. The Board of Directors of the Company shall consist of not less than one (1) person, the specific number of which shall be set from time to time by resolution of the Board of Directors. The number of directors may at any time and from time to time be increased or decreased by action of the Board of Directors, but no decrease in the number of directors shall have the effect of shortening the term of any incumbent director.
2.3 Classified Board, Term and Election. Commencing with the organizational meeting of shareholders, the directors shall be divided into three classes, designated Class I, Class II and Class III. Each Class shall consist, as nearly as may be possible, of one-third (1/3) of the full Board of Directors. Should the number of directors not be equally divisible by three, the excess director or directors shall be assigned to Classes I and II as follows: (i) if there shall be an excess of one directorship over a number equally divisible by three, such extra directorship shall be classified as Class I; and (ii) if there be an excess of two directorships over a number equally divisible by three, one shall be classified in Class I and the other in Class II. The term of the Class I directors shall terminate on the date of the 2014 annual meeting of shareholders, the term of the Class II directors shall terminate on the date of the 2015 annual meeting of shareholders and the term of the Class III directors shall terminate on the date of the 2016 annual meeting of shareholders. At each annual meeting of shareholders beginning in 2014, successors to the class of directors whose term expires at that annual meeting shall be elected for a three (3) year term. If the number of directors has changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any additional directors of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of that class, but in no case will a decrease in the number of directors shorten the term of any incumbent director.
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2.4 Qualifications. Except as otherwise provided by law, a director must be a natural person who is 18 years of age or older but need not be a resident of this state or a shareholder of this Company.
2.5 Term. Each director shall hold office until the annual meeting for the year in which his or her term expires and until a successor has been elected and qualified, subject, however, to the director’s earlier resignation, removal from office or death.
2.6 Resignation and Removal. Any director may resign at any time by delivering written notice to the Company, the Board of Directors or its Chairman. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date, in which event the Board of Directors may fill the pending vacancy before the effective date if the Board of Directors determines that the successor does not take office until the effective date.
A director may only be removed for cause, which shall be defined for these purposes as a conviction of a felony, declaration of unsound mind by a court order, adjudication of bankruptcy, or such director having been adjudged by a court of competent jurisdiction to be liable for negligence or misconduct in the performance of his or her duty to the Company in a matter of substantial importance to this Company and such adjudication is no longer subject to direct appeal. Removal for cause, as defined in this Section, must be approved by a vote of at least sixty six and two-thirds percent (66 2/3%) of the shares of the Company then entitled to vote at an election for that director. Any action for the removal of a director must be brought within one (1) year of the date of such conviction, declaration or adjudication.
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2.7 Vacancies. Subject to the provisions of the Articles of Incorporation, any vacancy occurring in the Board of Directors, including any vacancy created by reason of an increase in the number of directors, may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the Board of Directors, or by the shareholders. A director elected to fill a vacancy shall hold office only until the next meeting of the shareholders.
2.8 Regular Meetings. An annual regular meeting of the Board of Directors shall be held without notice promptly after the annual meeting of shareholders for the purpose of the election of officers and the transaction of such other business as may come before the meeting, and at such other time and place as may be determined by the Board of Directors. The Board of Directors may, at any time and from time to time, provide by resolution, the time and place, either within or outside of the State of Florida, for the holding of the annual regular meeting or additional regular meetings of the Board of Directors. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.
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2.9 Special Meetings. Special meetings of the Board of Directors may be called by the Chairman of the Board, the President or any two (2) directors.
The person or persons authorized to call special meetings of the Board of Directors may designate any place, either within or outside of the State of Florida, as the place for holding any special meeting of the Board of Directors called by them. If no designation is made, the place of meeting shall be the principal office of the Company in the State of Florida.
Notice of any special meeting of the Board of Directors may be given by any reasonable means, whether oral or written (including via electronic transmission), and at any reasonable time prior to such meeting. The reasonableness of any notice given in connection with any special meeting of the Board of Directors shall be determined in light of all of the pertinent circumstances. It shall be presumed that notice of any special meeting given at least two (2) days prior to such special meeting, either orally (by telephone or in person), or by written notice (including via electronic transmission) delivered personally or mailed to each director at his or her business or residence address (or delivered to his or her email address or facsimile number if being delivered via electronic transmission), is reasonable. If mailed, such notice of any special meeting shall be deemed to be delivered on the second day after it is deposited in the United States mail, so addressed, with postage thereon prepaid. If notice is given by telegram, such notice shall be deemed to be delivered when the telegram is delivered to the telegraph company. Neither the business to be transacted at, nor the purpose or purposes of, any special meetings of the Board of Directors need be specified in the notice or in any written waiver of notice of such meeting.
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2.10 Waiver of Notice of Meeting. Notice of a meeting of the Board of Directors need not be given to any director who signs a written waiver of notice before, during or after such meeting. Attendance of a director at a meeting shall constitute a waiver of notice of such meeting and waiver of any and all objections to the place of the meeting, the time of the meeting and the manner in which it has been called or convened, except when a director states, at the beginning of the meeting or promptly upon arrival at the meeting, any objection to the transaction of business because the meeting is not lawfully called or convened.
2.11 Quorum and Voting. A majority of the number of directors fixed in the manner provided by these Bylaws shall constitute a quorum for the transaction of business; provided however, that whenever, for any reason, a vacancy occurs in the Board of Directors, a quorum shall consist of a majority of the remaining directors until the vacancy has been filled. The act of the majority of the directors present at a meeting at which a quorum is present when the vote is taken shall be the act of the Board of Directors.
A majority of the directors present, whether or not a quorum exists, may adjourn any meeting of the Board of Directors to another time and place. Notice of any such adjourned meeting shall be given to the directors who were not present at the time of the adjournment and, unless the time and place of the adjourned meeting are announced at the time of the adjournment, to the other directors.
2.12 Presumption of Assent. A director of the Company who is present at a meeting of its Board of Directors, or a committee of the Board of Directors, at which action on any corporate matter is taken shall be presumed to have assented to the action taken, unless he or she (i) objects at the beginning of the meeting (or promptly upon his or her arrival) to holding the meeting or transacting specified business at the meeting, or (ii) votes against such action or abstains from the action taken.
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2.13 Meetings of the Board of Directors by Means of a Conference Telephone or Similar Communications. Members of the Board of Directors may participate in a meeting of such Board by means of a conference telephone or similar communications equipment if all persons participating in the meeting can hear each other at the same time. Participation by such means shall constitute presence in person at a meeting.
2.14 Action Without a Meeting. Any action required or permitted to be taken at a meeting of the Board of Directors or a committee thereof may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all of the directors of the Company, or all the members of the committee, as the case may be. Action taken under this Section is effective when the last director or member of the committee signs the consent, unless the consent specifies a different effective date. Such consent shall have the effect as a meeting vote and may be described as such in any document.
2.15 Compensation. Each director may be paid his or her expenses, if any, of attendance at each meeting of the Board of Directors and a committee thereof, and may be paid a stated salary as a director or a fixed sum for attendance at each meeting of the Board of Directors (or a committee thereof) or both, as may from time to time be determined by action of the Board of Directors. No such payment shall preclude any director from serving the Company in any other capacity and receiving compensation therefor.
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2.16 Director Conflicts of Interests. No contract or other transaction between the Company and one or more of its directors or any other entity, firm, association or entity in which one or more of the directors of the Company are directors or officers or are financially interested shall be either void or voidable because of such relationship or interest, or because such director or directors of the Company are present at the meeting of the Board of Directors or a committee thereof which authorizes, approves or ratifies such contract or transaction, or because his, her or their vote(s) are counted for such purpose, if:
(a) The fact of such relationship or interest is disclosed or known to the Board of Directors or committee which authorizes, approves or ratifies the contract or transaction by a vote or consent sufficient for the purpose without counting the vote(s) or written consent(s) of such interested director(s); or
(b) The fact of such relationship or interest is disclosed or known to the shareholders entitled to vote and they authorize, approve or ratify such contract or transaction by vote or written consent; or
(c) The contract or transaction is fair and reasonable as to the Company at the time it is authorized by the Board of Directors, a committee thereof or the shareholders.
Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or a committee thereof which authorizes, approves or ratifies such contract or transaction.
ARTICLE III
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors, by resolution adopted by a majority of the full Board of Directors, may designate from among its members an executive committee and one or more other committees each of which, to the extent provided in such resolution, shall have and may exercise all the authority of the Board of Directors, except as prohibited by the Act. Each committee must have two (2) or more members who serve at the pleasure of the Board of Directors. The Board of Directors, by resolution adopted in accordance with this Article, may designate one (1) or more directors as alternate members of any such committee who may act in the place and stead of any absent member or members at any meeting of such committee.
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ARTICLE IV
OFFICERS
4.1 Officers. If so appointed by the Board of Directors, the officers of the Company shall consist of a Chairman of the Board, a President, a Secretary and such other officers as appointed by the Board of Directors. Any two (2) or more offices may be held by the same person.
4.2 Appointment and Term of Office. The officers of the Company shall be appointed annually by the Board of Directors at the first meeting of the Board held after the shareholders’ annual meeting. If the appointment of officers does not occur at this meeting, the appointment shall occur as soon thereafter as practicable. Each officer shall hold office until a successor has been duly appointed and qualified, or until an earlier resignation, removal from office, or death.
4.3 Removal of Officers. Any officer of the Company may be removed from his or her office or position at any time, with or without cause, by the Board of Directors. Any officer or assistant officer, if appointed by another officer pursuant to authority, if any, received from the Board of Directors, may likewise be removed by such officer.
4.4 Resignation. Any officer of the Company may resign at any time from his or her office or position by delivering notice to the Company, the Board of Directors or its Chairman. Such resignation is effective when the notice is delivered unless the notice specifies a later effective date. If a resignation is made effective at a later date and the Company accepts the future effective date, the Board of Directors may fill the pending vacancy before the effective date if the Board provides that the successor does not take office until the effective date.
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4.5 Duties. If so appointed by the Board of Directors, the officers of the Company shall have the following duties:
The Chairman of the Board shall preside at all meetings of the shareholders, the Board of Directors and all committees of the Board of Directors on which he or she may serve. The Chairman of the Board shall also perform any and all other duties as are incident to the office or are properly required by the Board of Directors.
The President shall, subject to the control of the Board of Directors, in general, supervise and control all of the business and affairs of the Company. In addition, the President shall possess, and may exercise, such power and authority, and shall perform such duties, as may from time to time be assigned to him or her by the Board of Directors, and as are incident to the office of President.
Each Vice President shall possess, and may exercise, such power and authority, and shall perform such duties, as may from time to time be assigned to him or her by the Board of Directors or the President.
The Secretary shall have custody of, and maintain, all of the corporate records except the financial records, shall record the minutes of all meetings of the shareholders and Board of Directors, see that all notices of meetings are duly given, keep a register of the mailing address of each shareholder of the Company, be responsible for authenticating records of the Company and perform such other duties as may be prescribed by the Board of Directors or the President.
4.6 Other Officers, Employees, and Agents. Each and every other officer, employee, and agent of the Company shall possess, and may exercise, such power and authority, and shall perform such duties, as may from time to time be assigned to him or her by the Board of Directors, the officer appointing him or her, and such officer or officers who may from time to time be designated by the Board to exercise supervisory authority.
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ARTICLE V
INDEMNIFICATION
5.1 Insurance. The Board of Directors of the Company, in its discretion, shall have authority on behalf of the Company to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee, or agent of the Company, or is or was serving at the request of the Company as a director, partner, officer, employee or agent of another Company, partnership, joint venture, trust or other enterprise, against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his status as such, whether or not the Company would have the power to indemnify him or her against such liability under the provisions of this Article.
5.2 Action Against a Party Because of Company Position. The Company shall indemnify each director, officer, or employee, and may indemnify, in its sole discretion, any agent, of the Company who was or is a party, or is threatened to be made a party, to any threatened, pending, or completed claim, action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by, or in the right of, the Company) by reason of the fact that he or she is or was a director, officer, employee, or agent of the Company, as the case may be, or is or was serving at the request of the Company as a director, partner, officer, employee, or agent of another corporation, a partnership, joint venture, trust, or other enterprise against expenses (including attorneys' fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding, including any appeal thereof, if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the Company and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any claim, action, suit or proceeding by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent shall not, in and of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in, or not opposed to, the best interests of the Company or, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.
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5.3 Action by or in the Right of Company. The Company shall indemnify any director, officer, or employee, and may indemnify, in its sole discretion, any agent, of the Company who was or is a party, or is threatened to be made a party, to any threatened, pending, or completed claim, action or suit by or in the right of the Company to procure a judgment in its favor by reason of the fact that he or she is or was a director, officer, employee or agent of the Company, or is or was serving at the request of the Company as a director, partner, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection with the defense or settlement of such claim, action, or suit, including any appeal thereof, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Company, except that no indemnification shall be made in respect of any claim, issue, or matter as to which such person shall have been adjudged to be liable unless, and only to the extent that, the court in which such claim, action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which such court shall deem proper.
5.4 Reimbursement if Successful. To the extent that the director, officer, employee, or agent of the Company has been successful on the merits or otherwise in defense of any claim, action, suit, or proceeding referred to in Section 5.2 or Section 5.3 of these Bylaws, or in defense of any claim, issue, or matter therein, and is indemnified by the Company against expenses (including attorneys' fees) actually and reasonably incurred by him or her in connection therewith, he or she shall remain indemnified for such expenses, notwithstanding that he or she has not been successful (on the merits or otherwise) on any other claim, issue, or matter in any such claim, action, suit or proceeding.
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5.5 Authorization. Any indemnification under Section 5.2 or Section 5.3 of these Bylaws (unless ordered by a court of competent jurisdiction) shall be made by the Company only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent, as the case may be, is proper in the circumstances because he or she met the applicable standard of conduct set forth in Section 5.2 or Section 5.3 of these Bylaws. Such determination shall be made:
(a) By a majority vote of a quorum of the Board of Directors; however, for the purposes of this Subsection, a quorum shall consist of directors who are or were not parties to such action, suit or proceeding; or
(b) If such quorum is not obtainable, or even if obtainable, by the majority vote of a committee duly designated by the Board of Directors (in which directors who are parties may participate) consisting solely of two or more directors not at the time parties to the proceeding; or
(c) By independent legal counsel that is (i) selected by the Board of Directors as prescribed by Subsection 5.5(a) or by the committee as prescribed by Subsection 5.5(b), or (ii) if a quorum of the directors cannot be obtained in accordance with Subsection 5.5(a) hereof and a committee cannot be designated in accordance with Subsection 5.5(b), selected by majority vote of the full Board of Directors (including directors who are parties to the proceeding); or
(d) By the shareholders by a majority vote of a quorum consisting of shareholders who are or were not parties to such action, suit or proceeding, or if no such quorum is obtainable, by a majority vote of shareholders who were not parties to such proceeding.
5.6 Advance Reimbursement. Expenses, including attorneys' fees, incurred in defending a civil or criminal action, suit, or proceeding shall be paid by the Company to any officer, director, or employee, and may be paid, in its sole discretion, to any agent, in advance of the final disposition of such action, suit or proceeding, upon a preliminary determination, following one of the procedures set forth in Section 5.5 of these Bylaws, that the director, officer, employee or agent, as the case may be, met the applicable standard of conduct set forth in Section 5.2 or Section 5.3 of these Bylaws, or as authorized by the Board of Directors in the specific case and, in either event, upon receipt of a written commitment from or on behalf of the director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he or she is entitled to be indemnified by the Company as authorized in this Article.
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5.7 Further Indemnification. Indemnification as provided in this Article shall not be deemed exclusive. The Company may make any other further indemnification of any of its directors, officers, employees or agents that may be authorized under any statute, rule or law, provision of Articles of Incorporation, agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, provided, however, that indemnification or advancement of expenses shall not be made to or on behalf of any director, officer, employee or agent if a judgment or other final adjudication establishes that his or her actions, or omissions to act, were material to the cause of action so adjudicated and constitute:
(a) A violation of the criminal law, unless the director, officer, employee or agent had reasonable cause to believe his or her conduct was lawful or had no reasonable cause to believe his or her conduct was unlawful;
(b) A transaction from which the director, officer, employee or agent derived an improper personal benefit;
(c) In the case of a director, a circumstance under which the liability provisions of Section 607.0834 of the Act are applicable; or
(d) Willful misconduct or a conscious disregard for the best interests of the Company in a proceeding by or in the right of the Company to procure a judgment in its favor or in a proceeding by or in the right of a shareholder of the Company.
Where such other provision provides broader rights of indemnification than these Bylaws, such other provision shall control.
5.8 Continuing Right of Indemnification. Indemnification as provided in this Article shall continue as to a person who has ceased to be a director, officer, employee, or agent, and shall inure to the benefit of the heirs, executors, and administrators of such a person.
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5.9 Limitation on Indemnity and Reimbursement. Notwithstanding any other provisions of this Article, in the event that the Board of Directors determines that the action giving rise to a claim for indemnity or expense reimbursement is the result of action enumerated in any of the provisions set forth in Subsection 5.7(a)-5.7(d) of these Bylaws upon the part of the claimant, no such indemnity or expense reimbursement shall be provided by the Company. Further, the Company’s obligation, if any, to indemnify any person who was or is serving at its request as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, enterprise, or nonprofit entity will be reduced by any amount such person may collect as indemnification from such other corporation, partnership, joint venture, trust, nonprofit entity, or other enterprise.
5.10 Indemnity Not Exclusive. The right conferred on any person by this Article will not be exclusive of any other rights which such person may have or hereafter acquire under any applicable law, provision of the Articles of Incorporation, these Bylaws, agreement, vote of shareholders or disinterested directors, or otherwise.
5.11 Conflicts. No indemnification or advance will be made under this Article, except where such indemnification or advance is mandated by applicable law or the order, judgment, or decree of any court of competent jurisdiction, in any circumstance where a court of competent jurisdiction determines:
(a) That it would be inconsistent with a provision of the Articles of Incorporation, these Bylaws, a resolution of the shareholders or an agreement in effect at the time of the accrual of the alleged cause of the action asserted in the proceeding in which the expenses were incurred or other amounts were paid, which prohibits or otherwise limits indemnification; or
(b) That it would be inconsistent with any condition expressly imposed by a court in approving a settlement.
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ARTICLE VI
STOCK CERTIFICATES
6.1 Certificates for Shares. The Board of Directors shall determine whether shares of the Company shall be uncertificated or certificated. If certificated shares are issued, certificates representing shares in the Company shall be signed (either manually or by facsimile) by the Chairman of the Board or President and the Secretary or an Assistant Secretary and may be sealed with the seal of the Company or a facsimile thereof. A certificate which has been signed by an officer or officers who later shall have ceased to be such officer when the certificate is issued shall nevertheless be valid. No certificate shall be issued for any share until such share is fully paid. Upon receipt of the consideration for which the Board of Directors has authorized for the issuance of the shares, such shares so issued shall be fully paid and nonassessable.
Each share certificate representing shares shall state upon the face thereof: (a) the name of the Company; (b) that the Company is organized under the laws of the State of Florida; (c) the name of the person or persons to whom issued; (d) the number and class of shares, and the designation of the series, if any, which such certificate represents; and (e) if different classes of shares or different series within a class are authorized, a summary of the designation, relative rights, preferences, and limitations applicable to each class and the variations in rights, preferences, and limitations determined for each series (and the authority of the Board of Directors to determine variations for future series), or in the alternative, that the Company will provide the shareholder with a full statement of this information on request and without charge. If the share is uncertificated, the Company shall, within a reasonable time after the issue or transfer of such share, send the shareholder a written statement of the information required to be placed on a certificate as above set forth.
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6.2 Transfer of Shares; Ownership of Shares. Transfers of shares of stock of the Company shall be made only on the stock transfer books of the Company, and only after the surrender to the Company of the certificates representing such shares, if any. Except as provided by the Act, the person in whose name the shares stand on the books of the Company shall be deemed by the Company to be the owner thereof for all purposes and the Company shall not be bound to recognize any equitable or other claim to, or interest in, such shares on the part of any other person, whether or not it shall have express or other notice thereof.
6.3 Lost, Stolen or Destroyed Certificates. The Company shall issue a new stock certificate in the place of any certificate previously issued if the holder of record of the certificate: (a) makes proof in affidavit form that it has been lost, destroyed or wrongfully taken; (b) requests the issuance of a new certificate before the Company has notice that the certificate has been acquired by a purchaser for value in good faith and without notice of any adverse claim; (c) at the discretion of the Board of Directors, gives bond in such form and amount as the Company may require, to indemnify the Company, the transfer agent and registrar against any claim that may be made on account of the alleged loss, destruction or theft of such certificate; and (d) satisfies any other reasonable requirements imposed by the Company.
ARTICLE VII
ACTIONS WITH RESPECT TO SECURITIES OF OTHER ENTITIES
Unless otherwise directed by the Board of Directors, the Chairman or a designee of the Chairman shall have the power to vote and to otherwise act on behalf of the Company, in person or by proxy, at any meeting of shareholders on, or with respect to, any action of shareholders of any other entity in which the Company may hold securities, including but not limited to any subsidiary bank of the Company, and to otherwise exercise any and all rights and powers which the Company may possess by reason of its ownership of securities in other entities.
ARTICLE VIII
CORPORATE SEAL
The Board of Directors shall provide for a corporate seal which may be facsimile, engraved, printed or an impression seal which shall be circular in form and shall have inscribed thereon the name of the Company, the words “seal” and “Florida” and the year of incorporation.
ARTICLE IX
AMENDMENTS
The Board of Directors shall have the exclusive authority to adopt or amend these Bylaws. These Bylaws shall be for the governance of the Company, subordinate only to the Articles of Incorporation and the laws of the United States and of Florida.
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Exhibit 4.1
. ZQ|CERT#|COY|CLS|RGSTRY|ACCT#|TRANSTYPE|RUN#|TRANS# CLASS A VOTING COMMON STOCK CLASS A VOTING COMMON STOCK Authorized Stock: 50,000,000 Shares of Class A Voting Common Stock, Par Value $.01 10,000,000 Shares of Class B Non-Voting Common Stock, Par Value $.01 10,000,000 Shares of Preferred Stock PO BOX 43004, Providence, RI 02940-3004 MR A SAMPLE DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 Certificate Number ZQ00000000 THIS CERTIFIES THAT Is the record holder of (HOLDING COMPANY FOR PROFESSIONAL BANK) INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA ** Mr. Alexander David Sample MR. SAMPLE & MRS. SAMPLE SEE REVERSE FOR CERTAIN DEFINITIONS CUSIP 743139107 THIS CERTIFICATE IS TRANSFERABLE IN CITIES DESIGNATED BY THE TRANSFER AGENT, AVAILABLE ONLINE AT www.computershare.com FULLY PAID AND NON-ASSESSABLE SHARES OF PROFESSIONAL HOLDING CORP. CLASS “A” VOTING COMMON STOCK transferable on the books of the Corporation in person or by attorney upon surrender of this certificate duly endorsed or assigned. This certificate and the shares represented hereby are subject to the laws of the State of Florida, and to the Articles of Incorporation and Bylaws of the Corporation, as now or hereafter amended. In Witness Whereof, the said Corporation has caused this Certificate to be signed by its duly authorized officers, and its Corporate Seal to be hereunto affixed. DATED DD-MMM-YYYY COUNTERSIGNED AND REGISTERED: COMPUTERSHARE TRUST COMPANY, N.A. TRANSFER AGENT AND REGISTRAR, President and Chief Executive Officer By Secretary AUTHORIZED SIGNATURE CUSIPHolder ID Insurance Value Number of Shares DTC Certificate Numbers 1234567890/12345678901234567890/12345678901234567890/12345678901234567890/12345678901234567890/12345678901234567890/1234567890 Total Transaction XXXXXXXXXXXXXXXXX 1,000,000.00123456 12345678 123456789012345 Num/No. Denom. Total 1 1 1 2 2 2 3 3 3 4 4 4 5 5 5 6 6 6
PROFESSIONAL HOLDING CORP. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM -as tenants in common UNIF GIFT MIN ACT -Custodian (Cust) (Minor) TEN ENT -as tenants by the entireties under Uniform Gifts to Minors Act (State) JT TEN -as joint tenants with right of survivorship UNIF TRF MIN ACT -.Custodian (until age) and not as tenants in common (Cust) under Uniform Transfers to Minors Act (Minor) (State) Additional abbreviations may also be used though not in the above list. PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE For value received, hereby sell, assign and transfer unto (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE) Shares of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint Attorney to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises. Dated: 20 Signature(s) Guaranteed: Medallion Guarantee StampTHE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15. Signature: Signature: Notice: The signature to this assignment must correspond with the name as written upon the face of the certificate, in every particular, without alteration or enlargement, or any change whatever. The IRS requires that the named transfer agent (“we”) report the cost basis of certain shares or units acquired after January 1, 2011. If your shares or units are covered by the legislation, and you requested to sell or transfer the shares or units using a specific cost basis calculation method, then we have processed as you requested. If you did not specify a cost basis calculation method, then we have defaulted to the first in, first out (FIFO) method. Please consult your tax advisor if you need additional information about cost basis. If you do not keep in contact with the issuer or do not have any activity in your account for the time period specified by state law, your property may become subject to state unclaimed property laws and transferred to the appropriate state.
Exhibit 4.2
. ZQ|CERT#|COY|CLS|RGSTRY|ACCT#|TRANSTYPE|RUN#|TRANS# CLASS B NON-VOTING COMMON STOCK CLASS B NON-VOTING COMMON STOCK Authorized Stock: 50,000,000 Shares of Class A Voting Common Stock, Par Value $.01 10,000,000 Shares of Class B Non-Voting Common Stock, Par Value $.01 10,000,000 Shares of Preferred Stock Certificate Number ZQ00000000 THIS CERTIFIES THAT Is the record holder of (HOLDING COMPANY FOR PROFESSIONAL BANK) INCORPORATED UNDER THE LAWS OF THE STATE OF FLORIDA MR. SAMPLE & MRS. SAMPLE & ZERO HUNDRED AND ZERO*** THIS CERTIFICATE IS TRANSFERABLE IN CANTON, MA, JERSEY CITY, NJ AND COLLEGE STATION, TX Shares SEE REVERSE FOR CERTAIN DEFINITIONS PO BOX 43004, Providence, RI 02940-3004 DESIGNATION (IF ANY) ADD 1 ADD 2 ADD 3 ADD 4 CUSIPHolder IDInsurance Value Number of SharesDTC Certificate Numbers 1234567890/12345678901234567890/12345678901234567890/12345678901234567890/12345678901234567890/12345678901234567890/1234567890 Total Transaction XXXXXX XX XXXXXXXXXXX 1,000,000.00123456 12345678 123456789012345 Num/No. Denom. Total 1 1 1 2 2 2 3 3 3 4 4 4 5 5 5 6 6 6 7 FULLY PAID AND NON-ASSESSABLE SHARES OF PROFESSIONAL HOLDING CORP. CLASS “B” VOTING COMMON STOCK transferable on the books of the Corporation in person or by attorney upon surrender of this certificate duly endorsed or assigned. This certificate and the shares represented hereby are subject to the laws of the State of Florida, and to the Articles of Incorporation and Bylaws of the Corporation, as now or hereafter amended. In Witness Whereof, the said Corporation has caused this Certificate to be signed by its duly authorized officers, and its Corporate Seal to be hereunto affixed. DATED DD-MMM-YYYY COUNTERSIGNED AND REGISTERED: COMPUTERSHARE TRUST COMPANY, N.A. TRANSFER AGENT AND REGISTRAR, President and Chief Executive Officer By Secretary AUTHORIZED SIGNATURE
PROFESSIONAL HOLDING CORP. The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM -as tenants in common UNIF GIFT MIN ACT -Custodian (Cust) (Minor) TEN ENT -as tenants by the entireties under Uniform Gifts to Minors Act (State) JT TEN -as joint tenants with right of survivorship UNIF TRF MIN ACT -Custodian (until age.) and not as tenants in common (Cust) under Uniform Transfers to Minors Act (Minor) (State) Additional abbreviations may also be used though not in the above list. PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE For value received, hereby sell, assign and transfer unto (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE) Shares of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint Attorney to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises. Dated: 20 Signature(s) Guaranteed: Medallion Guarantee StampTHE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks, Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15. Signature: Signature: Notice: The signature to this assignment must correspond with the name as written upon the face of the certificate, in every particular, without alteration or enlargement, or any change whatever. The IRS requires that the named transfer agent (“we”) report the cost basis of certain shares or units acquired after January 1, 2011. If your shares or units are covered by the legislation, and you requested to sell or transfer the shares or units using a specific cost basis calculation method, then we have processed as you requested. If you did not specify a cost basis calculation method, then we have defaulted to the first in, first out (FIFO) method. Please consult your tax advisor if you need additional information about cost basis. If you do not keep in contact with the issuer or do not have any activity in your account for the time period specified by state law, your property may become subject to state unclaimed property laws and transferred to the appropriate state.
Exhibit 10.1
Strictly Confidential
EMPLOYMENT AGREEMENT
This Employment Agreement (this “Agreement”) is made as of this 2nd day of May, 2018 (the “Effective Date”), by and among Professional Holding Corp., a Florida corporation (the “Parent”), Professional Bank, a Florida state-chartered commercial bank (the “Bank”), and Daniel R. Sheehan (the “Executive”).
WITNESSETH:
WHEREAS, the Parent and the Bank desire to retain the services of and employ the Executive, and the Executive desires to provide services to the Parent and the Bank, pursuant to the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the promises and of the covenants and agreements herein contained, the Parent, the Bank and the Executive covenant and agree as follows:
1. Employment. Pursuant to the terms and conditions of this Agreement, the Parent and the Bank agree to employ the Executive and the Executive agrees to render services to the Parent and the Bank as set forth herein. Upon signing this Agreement, the Executive represents and warrants to the Parent and the Bank that the Executive has the full right and authority to perform all services required of the Executive during the Term (as defined below) and that such service by the Executive to the Parent and the Bank does not constitute a breach of any contract or legal obligation that the Executive may have to any other party.
2. Position and Duties. During the Term, the Executive shall serve as Chairman and Chief Executive Officer of the Parent and the Chairman of the Bank, shall at all times report solely to the Board of Directors of the Parent (the “Board”) and the Board of Directors of the Bank (as applicable), and shall undertake such duties, consistent with such titles and positions, as may be assigned to him from time to time by the Board, including serving on committees of the Parent and the Bank as required in the Parent’s or the Bank’s bylaws and as appointed from time to time by the Board, keeping the Board informed of industry and regulatory developments regarding the Parent or the Bank, and coordinating with Bank personnel and third parties to the extent necessary to further the strategic plan of the Parent and the Bank. In addition, the Board and/or its Compensation Committee (the “Compensation Committee”) shall provide the Executive with annual goals and responsibilities, as outlined in a "performance evaluation," after consulting with the Executive about the goals and responsibilities, and it is the Executive's responsibility to meet or exceed these goals as reasonably determined by the Board and/or Compensation Committee. The Executive will be based at the Bank's facility currently located in Palm Beach Gardens, Florida, subject to customary travel and business requirements, including the potential need to spend several days per week at one of the Bank’s other facilities. While the Executive is employed under this Agreement, the Board shall nominate the Executive as a member of the Board at each annual shareholders’ meeting during the Term, including any extension thereof; the Executive shall serve on the Board without additional compensation. In performing duties pursuant to this Agreement, the Executive shall devote his full business time, energy, skill and best efforts to promote the Parent and the Bank and their business and affairs; provided that, subject to Sections 10, 12 and 13 of this Agreement, the Executive shall have the right to serve on boards of directors (or equivalent bodies) of commercial entities fully disclosed in writing by the Executive to, and acknowledged in writing by, the Compensation Committee, manage and pursue personal and family interests, make passive investments in securities, real estate, and other assets, and also to participate in charitable and community activities and organizations, so long as such activities do not adversely affect the performance by the Executive of his duties and obligations to the Parent and/or the Bank and/or their subsidiaries (collectively, the “Bank Group”).
3. Term.
(a) Subject to the provisions of Section 8 of this Agreement, the initial term of employment pursuant to this Agreement shall be for a period of three (3) years, commencing on the Effective Date and expiring (unless sooner terminated as provided in this Agreement) on the third anniversary of the Effective Date; provided that the term of this Agreement shall be automatically extended for additional successive one (1) year renewal terms on each anniversary of the Effective Date unless at least three (3) months prior to such anniversary of the Effective Date, the Parent or the Executive shall have given written notice to the other party that this Agreement shall not be extended beyond the then current term (the initial term and any renewal term, the “Term”).
(b) In the event that the Executive’s employment with the Parent ceases at the end of the Term because the Executive (and not the Parent) has given a non-renewal notice set forth in Section 3(a) above, and not as a result of the occurrence of Good Reason pursuant to Section 8(b) below, then such termination of employment shall be treated as a voluntary termination by the Executive without Good Reason upon the last day of the Term.
4. Compensation. During the Term, the Parent shall pay or provide to the Executive as compensation for the services of the Executive set forth in Section 1 of this Agreement:
(a) Annual Base Salary. An annual base salary (the “Annual Base Salary”) of no less than $400,000.00, which shall be payable in accordance with the Bank’s regular payroll practices. The Annual Base Salary may be increased (but not decreased) during the Term, and the Board or the Compensation Committee shall consider, on an annual basis, the appropriateness, nature and extent, if any, of an increase in the Annual Base Salary in its sole discretion.
(b) Annual Bonus.
(i) The Executive shall have the opportunity to earn, for each fiscal year of the Parent during the Term, an annual bonus (the “Annual Bonus”) pursuant to the terms of an annual incentive plan for senior executives of the Bank Group, as in effect from time to time. The Executive’s target Annual Bonus opportunity shall be no less than thirty percent (30%) of the Annual Base Salary on the last day of the applicable fiscal year (the “Target Bonus”). The actual amount of the Annual Bonus will be determined by the Board or the Compensation Committee in its discretion based on the achievement of performance goals established by the Board or the Compensation Committee in consultation with the Executive.
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(ii) The Annual Bonus shall be paid in the form of cash on or prior to the January 15 immediately following the end of each fiscal year to which it relates.
(iii) The Target Bonus may be increased (but not decreased) during the Term, and the Board or the Compensation Committee shall consider, on an annual basis, the appropriateness, nature and extent, if any, of an increase in the Target Bonus in its sole discretion.
(c) Long-Term Incentive Awards. With respect to each fiscal year of the Parent during the Term, the Executive shall be granted equity awards, as of no later than January 15 following the end of such fiscal year, for the applicable fiscal year. If such equity awards are granted after the Effective Date in the form of options to purchase common stock of the Parent (“Stock Options”), they shall vest in four (4) equal installments commencing on the last business day of each fiscal year following the fiscal year to which the Stock Option relates (for example, if a Stock Option in respect of fiscal year 2018 is granted on January 15, 2019, the first tranche would vest on December 31, 2019), subject to accelerated vesting upon a Change in Control (as defined below) and termination of employment without Cause or for Good Reason (each as defined below), have a ten (10)-year term from the date of grant and be exercisable on a net settlement basis with respect to both exercise price and tax withholding. If such equity awards are in the form of awards of restricted common stock of Parent (“Restricted Stock Awards”), they shall have the same vesting schedule and terms as set forth in the immediately preceding sentence with respect to the Stock Options. If such equity awards are in the form of awards of stock appreciation rights in respect of the common stock of the Parent (“SARs”), they shall be on the terms established by the Parent’s Board or Compensation Committee at the time of each grant.
(d) Payroll and Tax Withholding. The Annual Base Salary, the Annual Bonus, the other incentive payments, and all other payments and compensation to the Executive for his services to the Bank Group shall be subject to all tax withholding and deductions required by federal, state or other law (including those authorized by the Executive but not otherwise required by law), including but not limited to state, federal and local income taxes, unemployment tax, Medicare and FICA, together with such deductions as the Executive may from time to time specifically authorize under any employee benefit program that may be adopted by the Bank Group for the benefit of its senior executives or the Executive.
5. Benefits and Insurance.
(a) Generally. The Bank Group shall provide to the Executive such medical, disability, and life insurance, as well as any other benefits or perquisites, as the Bank Group shall provide from time to time to its other senior executives. As to health insurance, the Bank Group shall provide family health insurance coverage. The Executive understands that eligibility for the Bank’s benefit plans is contingent upon the Executive qualifying for eligibility under such plans. Subject to the terms of this Agreement, the Bank reserves the right to modify, suspend or terminate the benefit plans of the Bank Group at any time and from time to time. Once every five (5) years during the Term, the Bank Group shall pay or reimburse the Executive for any reasonable out-of-pocket cost that the foregoing insurance does not cover for annual physicals for the Executive.
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(b) Key Employee Insurance. The Bank Group shall have the right to obtain on the life of the Executive, pay all premium amounts related to, and maintain, “key employee” insurance naming any of the Bank Group as beneficiary. Selection of such insurance policy shall be in the sole and absolute discretion of the Board. The Executive shall, to the extent reasonably practicable, cooperate fully with the Bank Group and the insurer in applying for, obtaining and maintaining such life insurance, by executing and delivering such further and other documents as the Bank Group and/or the insurer may request from time to time, and doing all matters and things which may be convenient or necessary to obtain such insurance, including, without limitation, submitting to any physical examinations and providing any medical information required by the insurer. The Bank Group shall pay or reimburse the Executive for any reasonable costs he incurs in connection with his commitments under this Section 5(b).
(c) Supplemental Disability and Life Insurance. The Bank Group shall provide supplemental disability and life insurance for the benefit of the Executive or his estate (as the case may be) in such reasonable amount to cover the estimated difference between the “Unit Appreciation Payment” (as defined in the Parent’s 2014 Share Appreciation Plan) in respect of outstanding SARs as provided in Section 8(e)(ii) and a Liquidity Event (as defined in the Parent’s 2014 Share Appreciation Rights Plan) that may occur following the Executive’s termination of employment due to death or Disability. The disability and life insurance provided for in this Section 5(c) shall be in addition to any other disability and life insurance that the Bank Group may provide to the Executive.
6. Vacation. During the twelve (12)-month period commencing on the date of this Agreement and each twelve (12)-month period thereafter, the Executive may take four (4) weeks of paid vacation time at such periods during each year as the Board and the Executive shall determine from time to time. Any unused vacation time will not roll over to the next twelve (12)-month period unless otherwise authorized by the Board. The Executive shall be entitled to full compensation during such vacation periods.
7. Reimbursement of Expenses. The Bank Group shall reimburse the Executive for reasonable expenses incurred in connection with his employment hereunder, subject to guidelines issued from time to time by the Board and upon submission of documentation in conformity with applicable requirements of federal income tax laws and regulations supporting reimbursement of such expenses. The Executive also shall be entitled to receive a monthly automobile allowance of $500.
8. Termination. The employment of the Executive may be terminated as follows:
(a) Cause. By the Parent for Cause.
(i) For purposes of this Agreement, any one or more of the following conditions shall constitute grounds for termination of the employment of the Executive for “Cause” under this Section 8(a):
(1) The Executive’s willful failure or refusal to comply with the obligations required of him as set forth in this Agreement or comply with the material written policies of the Bank Group established from time to time or fail to perform the duties assigned to the Executive by the Board (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness);
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(2) The Executive’s willful engaging in conduct involving fraud (other than good faith expense account disputes), deceit, personal dishonesty, or breach of fiduciary duty that has or would have if generally known adversely affected the business of the Bank Group;
(3) The Executive’s violation of any law or regulation, memorandum of understanding, cease and desist order, or other agreement with any regulatory agency having jurisdiction over any of the Bank Group;
(4) The Executive’s having become subject to continuing intemperance in the use of alcohol or drugs which has adversely affected, or may adversely affect, the business or reputation of the Bank or the Parent, or if the Executive reported to work under the influence of alcohol or any controlled substance;
(5) The Executive’s having filed, or had filed against him, any petition under the federal bankruptcy laws or any state insolvency laws;
(6) The Executive’s conviction of, or the entering by the Executive of a plea of guilty or nolo contendere with respect to, a criminal offense constituting a felony or involving moral turpitude;
(7) The Executive having engaged in the unlawful harassment of employees or customers of any of the Bank Group, or conduct relating to creation of a hostile work environment, or violent acts or threats of violence;
(8) The Executive having exposed the Bank Group to criminal liability substantially caused by the Executive which results in an adverse effect on the business, financial condition, prospects or results of operations of the Bank Group; or
(9) The Executive being in material breach of any provision of this Agreement.
No act or failure to act, on the part of the Executive, shall be considered “willful” unless it is done, or omitted to be done, in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Bank Group. Any determination of Cause by the Parent shall be made by a resolution approved by two-thirds majority of the members of the Board, provided that no such determination may be made until the Executive has been given written notice detailing the specific event constituting such Cause and a period of thirty (30) days following receipt of such notice to cure such event (if susceptible to cure), and, if such event is not curable or is not cured, an opportunity to appear before the Board (with legal counsel if so requested in writing by the Executive) to discuss the specific circumstances alleged to give rise to the Cause event. Subject to the Executive’s right to cure and/or appear before the Board, if the Executive’s employment is terminated for Cause, the termination shall take effect on the effective date of such termination as specified in the written notice of such termination delivered to the Executive.
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(ii) In the event of termination for Cause, the Executive shall be entitled to receive only:
(1) payment for all accrued but unpaid Annual Base Salary and accrued but unused vacation as of the date of the Executive’s termination of employment;
(2) reimbursement for expenses incurred by the Executive pursuant to Section 7 hereof up to and including the date on which employment is terminated;
(3) any earned or vested compensation or benefits to which the Executive may be entitled as of the date of termination pursuant to the terms of any compensation or benefit plans, including any vested benefits under retirement plans (with the payments described in subsections (1) through (3) above collectively called the “Accrued Obligations”); and
(4) all of the Executive’s equity awards (including SARs) that are outstanding and vested as of the effective date of termination (provided, however, that in the case of equity awards which are not vested because they are subject to “cliff” vesting which has not yet occurred, a pro rata portion of such equity awards shall be deemed vested based on the total number of full months that have transpired as of the effective date of termination since the date of grant, divided by the total number of months required to satisfy the “cliff” vesting as provided in the grant) shall remain outstanding, in the case of SARs until the Liquidity Event (provided, however, that the “Unit Appreciation Payment” (as defined in the Parent’s 2014 Share Appreciation Rights Plan) in respect of such SARs would be deemed to be equal to the amount determined as of the effective date of termination), and in the case of any Stock Options (whether or not granted pursuant to this Agreement), until the earlier of (x) the 30th day following the date of termination (or any later expiration date specified in the applicable award agreement) and (y) the expiration of the full remaining term (the “Vested Equity Benefits”).
The payments contemplated by subsections (1) and (2) shall be paid within thirty (30) days following the date of the Executive’s termination of employment, and the payments or benefits contemplated by subsection (3) shall be paid in accordance with the terms of the applicable benefit plan.
(b) Good Reason. By the Executive for Good Reason.
(i) For purposes of this Agreement, any one or more of the following conditions shall constitute grounds for the Executive’s resignation for “Good Reason” under this Section 8(b):
(1) the assignment to the Executive of duties materially inconsistent with his positions as Chairman and Chief Executive Officer of the Parent and the Chairman of the Bank (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by this Agreement, or a material diminution in such position, authority, duties or responsibilities (provided, however, that any assignment, reduction or diminution shall not be considered “Good Reason” if due to (A) the Executive's illness or Disability, (B) an order from any regulatory authority having jurisdiction over any of the Bank Group, or (C) the temporary suspensions of the Executive's duties, responsibilities, authority or title pending results of any Board commissioned investigation as to potential Cause for termination of the Executive's employment);
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(2) a requirement that the Executive report to an officer or employee instead of reporting directly to the Board;
(3) a reduction in the Annual Base Salary or the Target Bonus, or any material reduction in the aggregate benefits provided under Section 5(a) (except if the Board reduces any such benefits for all senior executives);
(4) the Bank Group’s requiring Executive to be based permanently at any office or location other than as provided in Section 2 of this Agreement resulting in an increase in his commute to and from his primary residence by thirty-five (35) miles or more;
(5) the Board’s provision of notice of non-renewal of the Term; or
(6) any other action or inaction that constitutes a material breach by the Bank Group of this Agreement.
In order to invoke a termination for Good Reason, the Executive shall provide written notice to the Parent of the existence of one or more of the conditions described in subsection (1) through (6) within sixty (60) days following the Executive first becoming aware of the existence of such condition or conditions, specifying in reasonable detail the conditions constituting Good Reason, and the Bank Group shall have thirty (30) days following receipt of such written notice (the “Cure Period”) during which it may remedy the condition. In the event that the Bank Group fails to remedy the condition constituting Good Reason during the applicable Cure Period, the Executive’s “separation from service” (within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (together with any regulations or other guidance promulgated thereunder, the “Code”)) must occur, if at all, within thirty (30) days following such Cure Period in order for such termination as a result of such condition to constitute a termination for Good Reason.
(ii) If the Executive’s employment is terminated by the Executive for Good Reason, then the Executive shall be entitled only to:
(1) the Accrued Obligations;
(2) a separation allowance, payable in equal installments in accordance with normal payroll practices over the eighteen (18)-month period beginning immediately following the date of termination, equal to the product of (x) one and one-half (1.5) multiplied by (y) the sum of (A) the Annual Base Salary as of immediately prior to the date of termination and (B) the Target Bonus as of immediately prior to the date of termination (or, if none has been established, the Target Bonus in respect of the fiscal year completed prior to the date of termination);
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(3) any unpaid Annual Bonus earned by the Executive in respect of the fiscal year of the Parent that was completed on or prior to the date of termination (the “Unpaid Annual Bonus”), which Unpaid Annual Bonus shall be paid in a lump sum in cash within thirty (30) days following the date of termination (or any later date as may be required by Section 409A of the Code);
(4) a prorated Annual Bonus in respect of the fiscal year of the Parent in which the date of termination occurs, with such amount to equal the product of (A) the portion of the Target Bonus for the fiscal year in which the date of termination occurs, such portion to be based on the Executive’s actual performance achieved for such fiscal year as measured against his performance goals for that fiscal year, as determined by the Compensation Committee; and (B) a fraction, (I) the numerator of which is the number of days in the fiscal year of the Parent in which the date of termination occurs through the date of termination, and (II) the denominator of which is 365 (the “Prorated Annual Bonus”), which Prorated Annual Bonus shall be paid in a lump sum in cash within thirty (30) days following the date of termination (or any later date as may be required by Section 409A of the Code);
(5) the Parent and the Bank shall arrange and pay all costs for the Executive to continue to participate (through reimbursement by the Bank to the Executive for COBRA payments, insurance premiums, or otherwise) on substantially the same terms and conditions as in effect for the Executive immediately prior to such termination, in the medical, dental, vision, disability and life insurance programs provided to the Executive pursuant to Section 5(a) of this Agreement until the earlier of (i) the end of the eighteen (18) month period beginning on the effective date of the termination of the Executive’s employment hereunder, or (ii) such time as the Executive is eligible to be covered by comparable benefit(s) of a subsequent employer, with the Executive to notify the Parent promptly upon eligibility for any such comparable coverage; and
(6) all of the Executive’s equity awards, including SARs, Stock Options and Restricted Stock, whether or not granted pursuant to this Agreement, that are outstanding as of the date of termination shall fully vest, with the vesting of any performance-based awards to be determined based on the actual performance measured as of the latest practicable date prior to the date of termination. Any Stock Options held by the Executive shall remain exercisable for the full remaining term to the same extent as if the Executive had remained actively employed by the Bank Group, and any SARs will remain outstanding through the Liquidity Event. The “Unit Appreciation Payment” (as defined in the Parent’s 2014 Share Appreciation Rights Plan) in respect of outstanding SARs would be deemed to be equal to the amount determined as of the Liquidity Event (as defined in the Parent’s 2014 Share Appreciation Rights Plan) and be paid at the time set forth in such plan. Awards (other than SARs, Stock Options and Restricted Stock Awards) shall be settled as soon as reasonably practicable following the date of termination (but not later than thirty (30) days following the termination date) or such later date as is required by 409A of the Code. For the avoidance of doubt, the terms of this Section 8(b)(ii)(6) (including the definitions of “Cause,” “Disability,” “Good Reason” and “Change in Control” set forth in this Agreement) shall supersede any different terms set forth in the plans or award agreements governing equity awards held by the Executive.
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(c) Resignation without Good Reason. By the Executive upon the lapse of sixty (60) days following written notice by the Executive to the Board of his resignation from the Bank Group for other than Good Reason; provided, however, that the Parent, in its discretion, may cause such termination to be effective at any time during such thirty (30)-day period. If the Executive’s employment is terminated because of the Executive’s resignation, without Good Reason, the Executive will be entitled only to the Accrued Obligations and the Vested Equity Benefits.
(d) Without Cause. If the Executive’s employment is terminated by the Parent without Cause at any time, the Executive shall be entitled only to the payments and benefits specified in Sections 8(b)(ii)(1) – 8(b)(ii)(6).
(e) Death or Disability. In the event of the Executive’s death, the Executive’s employment shall automatically cease and terminate as of the date of death. If the Executive becomes Disabled, the Parent may terminate the Executive’s employment upon thirty (30) days written notice to the Executive.
(i) For purposes of this Agreement, the terms “Disabled” or “Disability” means the Executive’s inability, because of physical or mental illness or injury, substantially to perform his duties hereunder as a result of physical incapacity for a continuous period of at least four (4) months, and any dispute as to the Executive’s incapacitation shall be resolved by an independent physician selected by the Board and reasonably acceptable to the Executive, whose determination shall be final and binding upon both the Executive and the Parent.
(ii) In the event of the Executive’s termination of employment due to his death or Disability, the Executive or his estate or legal representatives shall be entitled to only the compensation and benefits set forth in Sections 8(b)(ii)(1), (3), and (4) and the Vested Equity Benefits (provided, however, that (A) all SARs that are outstanding as of the date of death or Disability shall fully vest, and (B) the “Unit Appreciation Payment” (as defined in the Parent’s 2014 Share Appreciation Rights Plan) in respect of outstanding SARs would be determined and made pursuant to the terms of the Parent’s 2014 Share Appreciation Rights Plan).
(f) Change in Control.
(i) For purposes of this Agreement, the term “Change in Control” shall mean the occurrence of any of the following events:
(1) An acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934) of more than fifty percent (50%) of either (A) the then outstanding shares of common stock of the Parent (the “Outstanding Parent Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Parent entitled to vote generally in the election of directors (the “Outstanding Parent Voting Securities”); provided, however, that for purposes of this subsection (1), the following acquisitions shall not constitute a Change in Control: (W) any acquisition directly from the Parent, (X) any acquisition by the Parent, (Y) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Parent or any entity controlled by the Parent, or (Z) any acquisition by any entity pursuant to a transaction that complies with clauses (A), (B) and (C) of subsection (3) of this Section 8(f)(i);
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(2) A change in the composition of the Board such that the individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that, for purposes of this Section 8(f)(i), any individual who becomes a member of the Board subsequent to the Effective Date whose election, or nomination for election by the Parent’s shareholders, was approved by a vote of at least a majority of those individuals who are members of the then Board shall be considered as though such individual were a member of the Incumbent Board; provided further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be considered as a member of the Incumbent Board;
(3) The consummation of a reorganization, merger, statutory share exchange or consolidation or similar transaction involving the Parent or any of its subsidiaries or sale or other disposition of all or substantially all of the assets of the Parent, or the acquisition of assets or securities of another entity by the Parent or any of its subsidiaries (a “Business Combination”), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Parent Common Stock and Outstanding Parent Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of, respectively, the then outstanding shares of common stock (or, for a noncorporate entity, equivalent securities) and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors (or, for a noncorporate entity, equivalent securities), as the case may be, of the entity resulting from such Business Combination (including an entity that, as a result of such transaction, owns the Parent or all or substantially all of the Parent’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination of the Outstanding Parent Common Stock and Outstanding Parent Voting Securities, as the case may be; (B) no Person (excluding any entity resulting from such Business Combination or any employee benefit plan (or related trust) of the Parent or such entity resulting from such Business Combination) beneficially owns, directly or indirectly, more than fifty percent (50%) or more of, respectively, the then outstanding shares of common stock (or, for a noncorporate entity, equivalent securities) of the entity resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such entity except to the extent that such ownership existed prior to the Business Combination; and (C) at least a majority of the members of the board of directors (or, for a noncorporate entity, equivalent body or committee) of the entity resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
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(4) The approval by the shareholders of the Parent of a complete liquidation or dissolution of the Parent.
(ii) In the event of the Executive’s termination of employment without Cause or for Good Reason within twelve (12) months following a Change in Control, the Executive shall be entitled to only the payments and benefits specified in Sections 8(b)(ii)(1) – 8(b)(ii)(6); provided, however, that the payments contemplated by Section 8(b)(ii)(2) shall be paid in a lump sum within thirty (30) days following the date of termination to the extent permitted by Section 409A of the Code.
(g) Expiration. In the event of the termination of the Executive’s employment following the expiration of the Term, the Executive shall be entitled only to the Accrued Obligations and the Vested Equity Benefits.
(h) Release. Notwithstanding anything in this Agreement to the contrary, as a condition to receipt by the Executive of the payments due from the Bank pursuant to the applicable provision in this Section 8 in connection with a termination or expiration of his employment, the Executive shall execute and deliver to the Bank within twenty-two (22) days of the effective date of his termination of employment a general release of claims in the form attached as Exhibit A.
(i) Resignation from Other Positions. Any termination or expiration of the Executive’s employment for any reason shall require that the Executive resign all other positions (including as director) the Executive may then be holding with the Bank Group or as trustee of any of their benefit plans, unless the Board and the Executive agree to the contrary.
(j) Regulatory Restrictions. The parties acknowledge and agree that the compensation and benefits set forth in this Section 8 as being payable upon termination or expiration of this Agreement constitute liquidated damages upon the termination or expiration of this Agreement, and the parties hereto have agreed that such compensation and benefits are reasonable. The parties further acknowledge and agree that the Bank Group shall not be required to pay any compensation or benefits under this Section 8 to the extent prohibited by 12 C.F.R. Part 359 or any successor regulations regarding employee compensation promulgated by any regulatory agency having jurisdiction over any of the Bank Group.
9. Notice. All notices permitted or required to be given to either party under this Agreement shall be in writing and shall be deemed to have been given (a) in the case of delivery, when addressed to the other party as set forth at the end of this Agreement and delivered to said address, (b) in the case of mailing, three (3) days after the same has been mailed by certified mail, return receipt requested, and deposited postage prepaid in the U.S. Mails, addressed to the other party at the address as set forth at the end of this Agreement, and (c) in any other case, when actually received by the other party. Either party may change the address at which said notice is to be given by delivering notice of such to the other party to this Agreement in the manner set forth herein.
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10. Confidential Matters.
(a) The Executive is aware and acknowledges that the Executive shall have access to Confidential Information by virtue of his employment. The Executive agrees that, during the period of time the Executive is retained to provide services to the Bank Group, and thereafter subsequent to the termination or expiration of the Executive’s services to the Bank Group for any reason whatsoever, the Executive will not, directly or indirectly, use, release or divulge any Confidential Information whatsoever relating to any of the Bank Group or their business, to any other person or entity without the prior written consent of the Parent. During the Term, the Executive shall take all steps reasonably necessary and/or requested by the Board to ensure that the Bank Group’s Confidential Information is kept confidential pursuant to this Agreement. “Confidential Information” shall include the various confidential, trade secret and/or proprietary information of any of the Bank Group and of their clients and customers, including, without limitation, ideas, concepts, plans, designs, marketing techniques, sales techniques, forecasts, projections, products, technology, methods, procedures, pricing, costs, cost reports, customers, customer lists, customer identification, customer prospects, designs, computer systems, passwords, computer software, procedures, methods, formulae, financial statements, assets, liabilities, revenues, business methods, marketing information, marketing methods, acquisition plans, contract terms, contract negotiations, compensation information, structures and plans, employee responsibilities and duties, copyrights, trademarks, patents and other proprietary information. Confidential Information does not include information that is available to the public or which becomes available to the public other than through a breach of this Agreement on the part of the Executive. Also, the Executive shall not be precluded from disclosing Confidential Information in furtherance of the performance of his services to the Bank Group or to the extent required by any legal proceeding. The Executive also agrees that all files, records, documents, equipment and similar items and technological information whether maintained in hard copy or by electronic means relating to the Bank Group’s business, whether prepared by the Executive or others, shall remain the exclusive property of the Bank Group. Upon the termination of Executive’s employment, or at any earlier time requested by the Parent, the Executive will promptly return to the Parent all copies and manifestations of all Confidential Information as well as any other property of any of the Bank Group, which is in the Executive’s possession or under the Executive’s control. The Executive agrees not to delete, modify or copy any work file or Confidential Information prior to or subsequent to termination or expiration of employment. For the avoidance of doubt, the parties agree that each of the terms of this Agreement shall be considered “Confidential Information” within the meaning of this Section 10, and may be disclosed by the Executive only to the limited extent permitted by the terms of this Section 10, to his spouse, and to his advisors; without limiting the generality of the foregoing, they may not be disclosed by the Executive to any other employees of any of the Bank Group other than anyone designated in writing by the Board.
(b) In the event the Executive is requested pursuant to, or required by, applicable law or regulation or by legal process to disclose any Confidential Information, the Executive agrees to provide the Bank Group with prompt notice of such request or requirement to enable the Bank Group to seek an appropriate protective order, waive compliance with the provisions of this Agreement or take other appropriate action. The Executive agrees to use the Executive’s best efforts in such event to assist the Bank Group in obtaining a protective order. If, in the absence of a protective order or the receipt of a waiver under this Agreement, the Executive is nonetheless, in the written opinion of the Executive’s counsel, compelled to disclose the Confidential Information to any tribunal, the Executive, after notice to the Bank Group, may disclose to such tribunal only such Confidential Information that the Executive is compelled to disclose. The Executive shall not be liable for the disclosure of Confidential Information to a tribunal compelling such disclosure unless such disclosure was caused or resulted from a previous disclosure by the Executive not permitted under this Agreement.
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(c) Notwithstanding anything in this Agreement to the contrary, nothing in this Agreement shall impair the Executive’s rights under the whistleblower provisions of any applicable federal law or regulation or, for the avoidance of doubt, limit the Executive’s right to receive an award for information provided to any government authority under such law or regulation.
11. Injunction without Bond. The Bank Group has entered into this Agreement in order to obtain the benefit of the Executive’s unique skills, talent, and experience. The parties enter into this Agreement with the understanding that the base salary and all other compensation and benefits to be paid to the Executive pursuant to this Agreement have been based in part on the value to the Bank Group of each of the provisions of this Agreement. The Executive acknowledges and agrees that any breach or threatened breach of this Agreement will result in irreparable damage to the Bank Group and, accordingly, any of the Bank Group may obtain injunctive relief, a decree of specific performance and/or any other equitable relief for any breach or threatened breach of this Agreement in addition to any other remedies available to the Bank Group, without being required to show any actual damage, or to post an injunction bond, and the prevailing party in any such proceeding will be entitled to reimbursement for all costs and expenses, including reasonable attorneys' fees in connection therewith. Nothing herein shall be construed as prohibiting the Bank Group from pursuing such other remedies available to it for any such breach or threatened breach including recovery of damages from the Executive.
12. Legitimate Business Interests; Noncompetition.
(a) Legitimate Business Interests. The Executive acknowledges and agrees that in the performance of his duties of employment with the Bank Group he will be in contact with customers, potential customers and/or information about customers or potential customers of the Bank Group either in person, through the mails, by telephone or by other electronic means. The Executive also acknowledges and agrees that trade secrets and confidential information of the Bank Group that will be gained by the Executive during his employment with the Bank Group, have been developed by the Bank Group through substantial expenditures of time, effort and financial resources and constitute valuable and unique property of the Bank Group. The Executive further understands, acknowledges and agrees that the foregoing makes it necessary for the protection of the Bank Group’s businesses that the Executive not divert business or customers from the Bank Group and that the Executive maintain the confidentiality and integrity of the Confidential Information as provided in this Agreement.
(b) Noncompetition. Notwithstanding anything in this Agreement to the contrary, the Executive agrees that during the period of time the Executive is retained to provide services to the Bank, and thereafter for a period of one (1) year subsequent to the termination or expiration of the Executive’s services to the Bank Group for any reasons whatsoever, the Executive will not enter the employ of, or have any interest in, directly or indirectly (either as executive, partner, director, officer, consultant, principal, agent, employee or investor), any other bank or financial institution or any entity which accepts deposits, makes loans (whether presently existing or subsequently established) similar to the types of loans made by the Bank (or for which the Bank plans on making based on a then-existing plan to do so) as of the date of the Executive’s termination, or engages in any other business being conducted by the Bank (or for which the Bank plans on conducting based on a then-existing agreement to do so) as of the date of the Executive’s termination, and/or any holding company or other affiliate for or of any of the foregoing, and which has an office located within a radius of fifty (50) miles of any office of the Bank as of the date of Executive’s termination; provided, however, that the foregoing shall not preclude any ownership by the Executive of an amount not to exceed five percent (5%) of the equity securities of any entity which is subject to the periodic reporting requirements of the 1934 Act (so long as the Executive has no active participation in the business of such entity and does not have, other than in his capacity as a common shareholder, the right to elect or appoint a member to the board of directors or comparable governing body of such entity or of any of its affiliates) and the shares of the Parent’s common stock owned by the Executive at the time of termination or expiration of employment.
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13. Nonsolicitation; Noninterference; Non-Disparagement.
(a) The Executive agrees that during the period of time the Executive is retained to provide services to the Bank Group, and thereafter for a period of twelve (12) months subsequent to the termination or expiration of the Executive's services to the Bank Group for any reason whatsoever, the Executive will not, directly or indirectly through any other person or entity, (i) solicit for employment by the Executive, or anyone else, or employ (directly or indirectly) any employee of the Bank Group or any person who was an employee of the Bank Group within twelve (12) months prior to such proposed employment or solicitation of employment; (ii) induce, or attempt to induce, any employee of the Bank Group to terminate such employee’s employment; (iii) induce, or attempt to induce, anyone having a business relationship with the Bank Group to terminate or curtail such relationship or enter into a similar relationship with another financial institution or financial services company or, on behalf of himself or anyone else, compete with the Bank Group; (iv) knowingly make any untrue statement concerning the Bank Group or their directors or officers to anyone; or (v) permit anyone controlled by the Executive, or any person acting on behalf of the Executive or anyone controlled by an employee of the Executive, to do any of the foregoing.
(b) The Executive agrees not to hold himself out in any manner as a director, officer, employee, agent or in any other manner as a representative of Parent, the Bank or any of their respective direct or indirect affiliates from and after the termination or expiration of the Term and going forward.
14. Remedies. The Executive agrees that the restrictions set forth in this Agreement are fair and reasonable. The covenants set forth in this Agreement are not dependent covenants and any claim against the Bank Group, whether arising out of this Agreement or any other agreement or contract between any of the Bank Group and the Executive, shall not be a defense to a claim against the Executive for a breach or alleged breach of any of the covenants of the Executive contained in this Agreement. It is expressly understood by and between the parties hereto that the covenants contained in this Agreement shall be deemed to be a series of separate covenants. The Executive understands and agrees that if any of the separate covenants are judicially held invalid or unenforceable, such holding shall not release the Executive from the Executive’s obligations under the remaining covenants of this Agreement. If in any judicial proceedings, a court shall refuse to enforce any or all of the separate covenants because taken together they are more extensive (whether as to geographic area, duration, scope of business or otherwise) than necessary to protect the business and goodwill of the Bank Group, it is expressly understood and agreed between the parties hereto that those separate covenants which, if eliminated or restricted, would permit the remaining separate covenants or the restricted separate covenant to be enforced in such proceeding shall, for the purposes of such proceeding, be eliminated from the provisions of this Agreement or restriction, as the case may be.
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15. Invalid Provision. In the event any provision should be or become invalid or unenforceable, such facts shall not affect the validity and enforceability of any other provision of this Agreement. Similarly, if the scope of any restriction or covenant contained herein should be or become too broad or extensive to permit enforcement thereof to its full extent, then any such restriction or covenant shall be enforced to the maximum extent permitted by law, and the Executive hereby consents and agrees that the scope of any such restriction or covenant may be modified accordingly in any judicial proceeding brought to enforce such restriction or covenant.
16. Governing Law; Venue. This Agreement shall be construed in accordance with and shall be governed by the laws of the State of Florida. The sole and exclusive venue for any action arising out of this Agreement shall be a state court situated in Palm Beach County, Florida, and the parties to this Agreement agree to be subject to the personal jurisdiction of such Court and that service on each party shall be valid if served by certified mail, return receipt requested or hand delivery. Notwithstanding anything to the contrary in this Agreement, each of the parties agrees that prior to commencing any claims for breach of this Agreement (except to pursue injunctive or other equitable relief) to submit, for a period of sixty (60) days, to voluntary mediation before a jointly selected neutral third party mediator under the auspices of JAMS, Miami, Florida, Resolutions Center (or any successor location), pursuant to the procedures of JAMS Mediation Rules conducted in the State of Florida (however, such mediation or obligation to mediate shall not suspend or otherwise delay any termination or other action of the Bank Group or affect the Bank Group’s other rights). The Bank Group shall be responsible for the costs of the mediator and the related mediation costs, provided that each party shall be responsible for its or his attorneys’ fees and costs.
17. Attorneys’ Fees and Costs. In the event a dispute arises between the parties under this Agreement and suit is instituted, the prevailing party shall be entitled to recover his or its costs and attorneys’ fees from the nonprevailing party. As used herein, costs and attorneys’ fees include any costs and attorneys’ fees in any appellate proceeding.
18. Binding Effect. The rights and obligations of the parties under this Agreement shall inure to the benefit of and shall be binding upon the successors, assigns and legal representatives of the Bank Group and the heirs and legal representatives of the Executive.
19. Effect on Other Agreements. This Agreement and the termination or expiration thereof shall not affect any other agreement between the Executive and the Bank Group, and the receipt by the Executive of benefits thereunder.
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20. Miscellaneous. The rights and duties of the parties hereunder are personal and may not be assigned or delegated without the prior written consent of the other party to this Agreement; provided, however, that the Executive’s rights to payments or benefits hereunder may be transferred only by will or the laws of descent and distribution or to the Executive’s representative in the event of his disability; and provided further, that the rights and obligations of the Bank Group under this Agreement may be assigned in the case of a consolidation or merger with, or a transfer of all or substantially all of the assets of the Bank Group to, another entity which prior to the consummation of such combination transaction expressly assumes all of the Bank Group’s obligations to the Executive hereunder (for the avoidance of doubt, the foregoing proviso shall not affect the Bank Group’s and the Executive’s rights set forth in Section 8(f) of this Agreement). The captions used herein are solely for the convenience of the parties and are not used in construing this Agreement. Time is of the essence of this Agreement and the performance by each party of its or his duties and obligations hereunder.
21. Compliance with Section 409A.
(a) General. It is intended that payments and benefits made or provided under this Agreement shall not result in penalty taxes or accelerated taxation pursuant to Section 409A of the Code. Any payments that qualify for the “short-term deferral” exception, the separation pay exception or another exception under Section 409A of the Code shall be paid under the applicable exception. For purposes of the limitations on nonqualified deferred compensation under Section 409A of the Code, each payment of compensation under this Agreement shall be treated as a separate payment of compensation. All payments to be made upon a termination of employment under this Agreement may only be made upon a “separation from service” under Section 409A of the Code to the extent necessary in order to avoid the imposition of penalty taxes on the Executive pursuant to Section 409A of the Code. In no event may the Executive, directly or indirectly, designate the calendar year of any payment under this Agreement, and to the extent required by Section 409A of the Code, any payment that may be paid in more than one taxable year (depending on the time that the Executive executes the Release) shall be paid in the later taxable year. With respect to any compensation that constitutes nonqualified deferred compensation within the meaning of Section 409A of the Code, to the extent necessary to comply with Section 409A of the Code, a Change in Control (whether alone or with any other event) shall not constitute a payment or distribution event, or an event that otherwise changes the timing of payment or distribution, unless the Change in Control also constitutes an event described in Section 409A(a)(2)(v) of the Code and the regulations promulgated thereunder (a “Section 409A CIC”); provided, however, that whether or not a Change in Control is a Section 409A CIC, such Change in Control shall result in the accelerated vesting of any compensation to the extent provided by the terms thereof or this Agreement.
(b) Reimbursements and In-Kind Benefits. Notwithstanding anything to the contrary in this Agreement, all reimbursements and in-kind benefits provided under this Agreement that are subject to Section 409A of the Code shall be made in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during the Executive’s lifetime (or during a shorter period of time specified in this Agreement); (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; (iii) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred; and (iv) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.
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(c) Delay of Payments. Notwithstanding any other provision of this Agreement to the contrary, if the Executive is considered a “specified employee” for purposes of Section 409A of the Code (as determined in accordance with the methodology established by the Bank Group as in effect on the date of termination), any payment that constitutes nonqualified deferred compensation within the meaning of Section 409A of the Code that is otherwise due to the Executive under this Agreement during the six (6)-month period immediately following the Executive’s separation from service (as determined in accordance with Section 409A of the Code) on account of the Executive’s separation from service shall be accumulated and paid to the Executive on the first business day of the seventh (7th) month following his separation from service (the “Delayed Payment Date”), to the extent necessary to prevent the imposition of tax penalties on the Executive under Section 409A of the Code. If the Executive dies during the postponement period, the amounts and entitlements delayed on account of Section 409A of the Code shall be paid to the personal representative of his estate on the first to occur of the Delayed Payment Date or thirty (30) days after the date of the Executive’s death.
22. Limitation on Parachute Payments. In the event that the payments and other benefits provided for in this Agreement or otherwise payable to the Executive (such payments and benefits, the “280G Payments”) (a) constitute "parachute payments" within the meaning of Section 280G of the Code and (b) but for this Section 22, would be subject to the excise tax imposed by Section 4999 of the Code, then, subject to the immediately following sentence, the 280G Payments under this Agreement will be reduced to the extent such reduction would result in no portion of the 280G Payments being subject to excise tax under Section 4999 of the Code. Notwithstanding the foregoing, the reduction contemplated by this Section 22 shall be made only if the Accountants (as defined below) determine that such reduction would result in the Executive retaining a greater amount of the 280G Payments on a net after-tax basis than if no reduction were made.
Any reduction in 280G Payments pursuant to this Section 22 will occur in the following order: (i) cash payments that may not be valued under Treas. Reg. § 1.280G-1, Q&A-24(c) (“24(c)”), (ii) equity-based payments that may not be valued under 24(c), (iii) cash payments that may be valued under 24(c), (iv) equity-based payments that may be valued under 24(c) and (v) other types of benefits. Within any such category of 280G Payments (that is, (i), (ii), (iii), (iv) or (v)), a reduction shall occur first with respect to amounts that are not deferred payments and then with respect to amounts that are. In the event that acceleration of vesting of equity award compensation is to be reduced, such acceleration of vesting will be cancelled in the reverse order of the date of grant of the Executive's equity awards.
To the extent requested by the Executive, the Bank Group shall cooperate with the Executive in good faith in valuing, and the Accountants shall take into account the value of, services provided or to be provided by the Executive (including, without limitation, the Executive’s agreeing to refrain from performing services pursuant to a covenant not to compete or similar covenant, before, on or after the date of a change in ownership or control of the Bank Group (within the meaning of Q&A-2(b) of the final regulations under Section 280G of the Code), such that payments in respect of such services may be considered reasonable compensation within the meaning of Q&A-9 and Q&A-40 to Q&A-44 of the final regulations under Section 280G of the Code and/or exempt from the definition of the term “parachute payment” within the meaning of Q&A-2(a) of the final regulations under Section 280G of the Code in accordance with Q&A-5(a) of the final regulations under Section 280G of the Code.
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Any determination required under this Section 22 will be made in writing by the Parent's independent public accountants engaged by the Parent for general audit purposes immediately prior to the Change of Control (the "Accountants"), whose good faith determination will be conclusive and binding upon the Executive and the Bank Group for all purposes. If the independent registered public accounting firm so engaged by the Parent is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, or if such firm otherwise cannot perform the calculations, the Parent shall appoint a nationally recognized independent registered public accounting firm or other professional organization that is a certified public accounting firm recognized as an expert in determinations and calculations for purposes of Section 280G of the Code to make the determinations required hereunder and to act as the Accountants. For purposes of making the calculations required by this Section 22, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code. The Bank Group and the Executive will furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section. The Parent will bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section.
23. Regulatory Actions. Notwithstanding any other provision of this Agreement to the contrary, any amounts paid or payable to the Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with Sections 18(k) and 32(a) of the Federal Deposit Insurance Act (“FDIA”) and Part 359 of the FDIC’s rules and regulations, and any regulations promulgated under the FDIA, and also are subject to and conditioned upon compliance by the Bank Group with any Memorandum of Understanding, Consent Order, or other agreement between any of the Bank Group and the FDIC and/or the Florida Office of Financial Regulation. In the event that any provision of this Agreement is found to be inconsistent with such regulations, the parties shall cooperate to reform such provisions to preserve their original intentions in executing this Agreement to the maximum extent possible.
24. Complete Agreement. This Agreement constitutes the complete agreement between the parties hereto and incorporates all prior discussions, agreements and representations made in regard to the matters set forth herein. The covenants concerning confidential matters, noncompetition, nonsolicitation and nondisparagement set forth in Sections 10 through 15 of this Agreement shall supersede any similar provisions set forth in any contract, agreement or arrangement between the Executive and any member of the Bank Group, and shall be the exclusive covenants applicable to the Executive while employed by the Bank Group. This Agreement may not be amended, modified or changed except by a writing signed by the party to be charged by said amendment, change or modification.
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25. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Confirmation of execution by electronic transmission of a facsimile signature page shall be binding on a party so confirming.
26. Indemnification.
(a) The Bank Group shall jointly and severally indemnify, defend and hold the Executive harmless, to the maximum extent permitted by law (and subject to any mandatory exclusion of indemnification under Florida law), against all judgments, fines, amounts paid in settlement and all reasonable expenses, including reasonable attorneys’ fees and costs incurred by the Executive, in connection with the defense of, or as a result of, any action or proceeding (or any appeal from any action or proceeding) in which the Executive is made or is threatened to be made a party by reason of the fact that the Executive is or was an officer or director of the Bank Group, regardless of whether such action or proceeding is one brought by or in the right of any of the Bank Group, except that the foregoing shall not apply if the action or proceeding is one brought by or in the right of the Bank Group if the Executive has been terminated for “Cause” as defined in this Agreement. Each of the parties hereto shall give prompt notice to the other of any action or proceeding from which the Bank Group is obligated to indemnify, defend and hold harmless the Executive of which it or he (as the case may be) gains knowledge.
(b) The Parent agrees that, during the Executive’s employment and through all applicable statutes of limitations, the Parent shall use its best efforts to cause the Executive to be covered and insured up to the full limits provided by all directors’ and officers’ insurance which the Bank Group then maintains to indemnify its directors and officers (and to indemnify the Bank Group for any obligations which it incurs as a result of its undertaking to indemnify its officers and directors), subject to applicable deductibles and to the terms and conditions of such policies.
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27. JURY WAIVER. IN ANY CIVIL ACTION, COUNTERCLAIM, OR PROCEEDING, WHETHER AT LAW OR IN EQUITY, WHICH ARISES OUT OF CONCERNS, OR RELATES TO THIS AGREEMENT, ANY AND ALL TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE PERFORMANCE OF THIS AGREEMENT, OR THE RELATIONSHIP CREATED BY THIS AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE, TRIAL SHALL BE TO A COURT OF COMPETENT JURISDICTION AND NOT TO A JURY. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY. ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT, AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THIS AGREEMENT OF THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. NEITHER PARTY HAS MADE OR RELIED UPON ANY ORAL REPRESENTATIONS TO OR BY ANY OTHER PARTY REGARDING THE ENFORCEABILITY OF THIS PROVISION. EACH PARTY HAS READ AND UNDERSTANDS THE EFFECT OF THIS JURY WAIVER PROVISION. EACH PARTY ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY ITS OWN COUNSEL WITH RESPECT TO THE TRANSACTION GOVERNED BY THIS AGREEMENT AND SPECIFICALLY WITH RESPECT TO THE TERMS OF THIS SECTION 27.
28. Survivability. The provisions of this Agreement that by their terms call for performance subsequent to the termination of either the Executive’s employment or this Agreement (including the terms of Sections 8 through 27) shall so survive such termination.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
PROFESSIONAL HOLDING CORP. | ||
By: | /s/ Herb Martens | |
Name: | Herb Martens | |
Title: | Director | |
PROFESSIONAL BANK | ||
By: | /s/ Herb Martens | |
Name: | Herb Martens | |
Title: | Director |
EXECUTIVE | |
/s/ Daniel R. Sheehan | |
Print Name: Daniel R. Sheehan | |
Address: 11814 Lake Shore Place North Palm Beach, FL 33408 |
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Exhibit A
GENERAL RELEASE OF CLAIMS
This General Release of Claims (this “Agreement”) is entered into on [●], 201[●], by and among Professional Holding Corp., a Florida corporation (the “Parent”), Professional Bank, a Florida state-chartered commercial bank (the “Bank”), and Daniel R. Sheehan (the “Executive”).
1. General Release and Waiver of Claims.
(a) Release. In consideration of the payments and benefits provided under the Employment Agreement, dated as of [●], by and among the Parent, the Bank and the Executive (the “Employment Agreement”), and after consultation with counsel, the Executive and each of the Executive’s respective heirs, executors, administrators, representatives, agents, successors and assigns (collectively, the “Releasors”) hereby irrevocably and unconditionally release and forever discharge the Bank Group (as defined in the Employment Agreement) and its officers, employees, directors and agents (“Releasees”) from any and all claims, actions, causes of action, rights, judgments, obligations, damages, demands, accountings or liabilities of whatever kind or character (collectively, “Claims”) that the Releasors may have arising out of the Executive’s employment relationship with and service as an employee, officer or director of the Bank Group, and the termination of any such relationship or service, in each case up to and including the Executive’s date of termination; provided, however, that notwithstanding anything contained herein to the contrary, this Agreement shall not affect: (i) the obligations of the Bank Group set forth in the Employment Agreement which survive termination or expiration, including without limitation under Sections 8, 20 and 26, or under any other benefit plan, agreement, arrangement or policy of the Bank Group that is applicable to the Executive that, in each case, by its terms, contains obligations that are to be performed after the date hereof by the Bank Group; (ii) any indemnification or similar rights the Executive has as a current or former officer, director, employee or agent of the Bank Group, including, without limitation, any and all rights thereto under applicable law, the Parent’s or the Bank’s bylaws or other governance documents, or any rights with respect to coverage under any directors’ and officers’ insurance policies and/or indemnification agreements; (iii) benefits or the right to seek benefits under applicable workers’ compensation and/or unemployment compensation statutes; and (iv) any Claims that may arise in the future from events or actions occurring after the date of the Executive’s execution of this General Release of Claims or that the Executive may not by law release through an agreement such as this.
(b) Specific Release of ADEA Claims. In further consideration of the payments and benefits provided to the Executive under the Agreement, the Releasors hereby unconditionally release and forever discharge the Releasees from any and all Claims that the Releasors may have as of the date the Executive signs this Agreement arising under the Federal Age Discrimination in Employment Act of 1967, as amended, and the applicable rules and regulations promulgated thereunder (“ADEA”). By signing this Agreement, the Executive hereby acknowledges and confirms the following: (i) the Executive was advised by the Parent in connection with the Executive’s termination of employment to consult with an attorney of the Executive’s choice prior to signing this Agreement and to have such attorney explain to the Executive the terms of this Agreement, including, without limitation, the terms relating to the Executive’s release of claims arising under ADEA, and the Executive has in fact consulted with an attorney; (ii) the Executive was given a period of not fewer than [twenty-one (21)] [forty-five (45)] calendar days to consider the terms of this Agreement and to consult with an attorney of the Executive’s choosing with respect thereto; and (iii) the Executive knowingly and voluntarily accepts the terms of this Agreement. The Executive also understands that the Executive has seven (7) calendar days following the date on which the Executive signs this Agreement within which to revoke the release contained in this Section 1(b), by providing the Parent a written notice of the Executive’s revocation of the release and waiver contained in this Section 1(b).
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(c) No Assignment. The Executive represents and warrants that the Executive has not assigned any of the Claims being released under this Agreement.
2. Proceedings. The Executive has not filed, and agrees not to initiate or cause to be initiated on the Executive’s behalf, any complaint, charge, claim or proceeding against the Releasees with respect to any Claims released under Section 1(a) or (b) before any local, state or federal agency, court or other body (each, individually, a “Proceeding”), and agrees not to participate voluntarily in any Proceeding involving such Claims. The Executive waives any right the Executive may have to benefit in any manner from any relief (whether monetary or otherwise) arising out of any Proceeding involving such Claims. To the maximum extent permitted by law, the Executive waives any right he may have to benefit in any manner from any relief (whether monetary or otherwise) arising out of any Proceeding, provided that the foregoing shall not apply to any legally protected whistleblower rights (including under Rule 21F under the Securities Exchange Act of 1934).
3. Severability Clause. In the event any provision or part of this Agreement is found to be invalid or unenforceable, only that particular provision or part so found, and not the entire Agreement, will be inoperative.
4. No Admission. Nothing contained in this Agreement will be deemed or construed as an admission of wrongdoing or liability on the part of the Bank Group.
5. Governing Law and Venue. All matters affecting this Agreement, including the validity thereof, are to be governed by, and interpreted and construed in accordance with, the laws of the State of Florida applicable to contracts executed in and to be performed therein. The parties acknowledge that a substantial portion of the negotiations, anticipated performance and execution of this Agreement occurred or shall occur in Palm Beach County, Florida. Any civil action or legal proceeding arising out of or relating to this Agreement shall be brought in the courts of record of the State of Florida in Palm Beach County or the United States District Court, Southern District of Florida. Each party consents to the jurisdiction of such Florida court in any such civil action or legal proceeding and waives any objection to the laying of venue of any such civil action or legal proceeding in such Florida court. Service of any court paper may be effected on such party by mail, as provided in this Agreement, or in such other manner as may be provided under applicable laws, rules of procedure or local rules.
6. Counterparts. This Agreement may be executed in counterparts and each counterpart will be deemed an original.
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7. Notices. All notices, requests, demands or other communications under this Agreement shall be in writing and shall be deemed to have been duly given when delivered in person or deposited in the United States mail, postage prepaid, by registered or certified mail, return receipt requested, to the party to whom such notice is being given as follows:
As to the Executive: | the Executive’s last address on the books and records of the Parent | |
As to the Parent: |
[●] Attention: General Counsel [ADDRESS] |
Any party may change his, her or its address or the name of the person to whose attention the notice or other communication shall be directed from time to time by serving notice thereof upon the other party as provided herein.
THE EXECUTIVE ACKNOWLEDGES THAT THE EXECUTIVE HAS READ THIS AGREEMENT AND THAT THE EXECUTIVE FULLY KNOWS, UNDERSTANDS AND APPRECIATES ITS CONTENTS, AND THAT THE EXECUTIVE HEREBY EXECUTES THE SAME AND MAKES THIS AGREEMENT AND THE RELEASE PROVIDED FOR HEREIN VOLUNTARILY AND OF THE EXECUTIVE’S OWN FREE WILL.
IN WITNESS WHEREOF, the Executive has executed this Agreement on the date set forth below.
_______________________________________
Dated as of: _____________________________
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Exhibit 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made as of this 16th day of July, 2019, by and between Professional Bank, a Florida state-chartered commercial bank (the "Bank"), and Abel L. Iglesias (the "Executive").
WITNESSETH:
WHEREAS, the Bank desires to continue retaining the services of and employing the Executive, and the Executive desires to continue providing services to the Bank, pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the promises and of the covenants and agreements herein contained, the Bank and the Executive covenant and agree as follows:
1. Employment. Pursuant to the terms and conditions of this Agreement, the Bank agrees to employ the Executive and the Executive agrees to render services to the Bank as set forth herein. Upon signing this Agreement, the Executive represents and warrants to the Bank that the Executive has the full right and authority to perform all services required of the Executive during the term of this Agreement and that such service by the Executive to the Bank does not and will not constitute a breach of any contract or legal obligation that the Executive may have to any other party.
2. Position and Duties. During the term of this Agreement, the Executive shall serve as President and Chief Operating Officer of the Bank and shall undertake such duties as are consistent with such positions and titles. Executive shall also undertake such duties, consistent with Executive’s positions and titles, as may be assigned to him from time to time by the Chairman of the Board of Directors of the Bank ("Chairman"), including management of Bank personnel who report to the Executive as determined by the Chairman from time to time, serving on Bank committees as required in the Bank's Bylaws and as appointed from time to time by the Board of Directors of the Bank ("Board") or the Chairman, keeping the Chairman and Board informed of industry and regulatory developments regarding the Bank, coordinating with Bank personnel and third parties to the extent necessary to further the profitability and business of the Bank, and assisting in keeping the Bank in compliance with applicable laws and regulations. In addition, the Chairman shall provide the Executive with annual goals and responsibilities agreed to by the Executive, as outlined in a "performance evaluation," and it is the Executive's responsibility to meet or exceed these goals as reasonably determined by the Board and/or its Compensation Committee. In performing duties pursuant to this Agreement, the Executive shall devote his full business time, energy, skill and reasonable best efforts to promote the Bank and its business and affairs; provided that, subject to Sections 10, 12 and 13 of this Agreement, the Executive shall have the right to manage and pursue personal and family interests, and make passive investments in securities, real estate, and other assets, and also to participate in charitable and community activities and organizations, so long as such activities do not adversely affect the performance by Executive of his duties and obligations to the Bank and/or Professional Holding Corp, ("Parent") and/or their subsidiaries (collectively, the "Bank Group").
3. Term. Subject to the provisions of Section 8 of this Agreement, the initial term of employment pursuant to this Agreement shall be for a period of three years, commencing on the date set forth above and expiring (unless sooner terminated as otherwise provided in this Agreement or unless otherwise renewed or extended as set forth herein) on the third anniversary of the date of this Agreement, which date, including any earlier date of termination or any extended expiration date, shall be referred to as the "Expiration Date". Subject to the provisions of Section 8 of this Agreement, the term of this Agreement and the employment of the Executive by the Bank hereunder shall be deemed to continue thereafter until terminated in accordance with Section 8 of this Agreement. After termination of the employment of the Executive for any reason whatsoever, or the expiration of this Agreement, the Executive will continue to be subject to the provisions of Sections 10 through 27, inclusive, of this Agreement subject to the terms thereof.
4. Compensation. During the term of this Agreement, the Bank shall pay or provide to the Executive as compensation for the services of the Executive set forth in Section 2 hereof:
(a) A base annual salary of $380,000; such base annual salary may be increased thereafter in the discretion of the Board but may not be decreased; and
(b) Such incentive bonuses as may be authorized by the Board from time to time.
Within five (5) business days after the execution of this Agreement, the Bank shall pay to the Executive a $40,000 signing bonus, fifty percent (50%) of which shall be in cash and fifty percent (50%) of which shall be in the form of a grant of restricted stock of the Parent (the shares of which shall be valued at "Fair Market Value" as defined in the Parent's 2019 Equity Incentive Plan).
The base salary, the bonuses, and all other payments and compensation to Executive for his services to the Bank shall be subject to all withholding and deductions required by federal, state or other law (including those authorized by the Executive but not otherwise required by law), including but not limited to state, federal and local income taxes, unemployment tax, Medicare and FICA, together with such deductions as the Executive may from time to time specifically authorize under any employee benefit program that may be adopted by the Bank for the benefit of its senior executives or the Executive.
5. Benefits and Insurance.
(a) The Executive shall be eligible to participate in all medical, dental, disability, life insurance (for an amount not less than the then base salary being received by the Executive) and other fringe benefits generally provided to other employees, as the Board shall determine from time to time. As to health insurance, the Bank shall provide family health insurance coverage. The Bank also shall reimburse the Executive for medical insurance coverage under COBRA until the earlier of 90 days following the date of this Agreement or the eligibility of the Executive for enrollment in the Bank's medical insurance plan. The Executive understands that eligibility for the Bank's benefit plans is contingent upon the Executive qualifying for eligibility under such plans. The Bank reserves the right to modify, suspend or terminate the Bank benefit plans at any time and from time to time. The Executive also shall be entitled to participate in the 2014 Share Appreciation Rights Plan (the "SAR Plan") of Parent, to the extent units are granted to the Executive by the Parent, all subject to the terms and conditions of the SAR Plan.
(b) The Bank shall have the right to obtain on the life of the Executive, pay all premium amounts related to, and maintain, "key employee" insurance naming any of the Bank Group as beneficiary. Selection of such insurance policy shall be in the sole and absolute discretion of the Board. The Executive shall cooperate fully with the Bank Group and the insurer in applying for, obtaining and maintaining such life insurance, by executing and delivering such further and other documents as the Bank Group and/or the insurer may request from time to time, and doing all matters and things which may be convenient or necessary to obtain such insurance, including, without limitation, submitting to any physical examinations and providing any medical information required by the insurer.
6. Vacation. During each 12-month period during the term of this Agreement, the Executive may take four weeks of paid vacation time at such periods during each year as the Chairman and the Executive shall determine from time to time. Any unused vacation time will not roll over to the next 12-month period unless otherwise authorized by the Chairman. The Executive shall be entitled to full compensation during such vacation periods.
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7. Reimbursement of Expenses. The Bank shall reimburse the Executive for reasonable expenses incurred in connection with his employment hereunder subject to guidelines issued from time to time by the Board and upon submission of documentation in conformity with applicable requirements of federal income tax laws and regulations supporting reimbursement of such expenses. The Executive also shall be entitled to receive a monthly automobile allowance of $1,000.
8. Termination. The employment of the Executive may be terminated as follows:
(a) By the Bank, by action taken by the Board, at any time and immediately upon written notice to the Executive if said discharge is for Cause (as defined below). In the notice of termination furnished to the Executive under this Section 8(a), the specific reason or reasons for said termination shall be reasonably described and, if no reason or reasons are given for said termination, said termination shall be deemed to be without Cause and therefore termination pursuant to Section 8(f). Any one or more of the following conditions shall be deemed to be grounds for termination of the employment of the Executive for Cause under this Section 8(a):
(i) If the Executive shall fail or refuse to comply with the obligations required of him as set forth in this Agreement or comply with the policies of the Bank Group established from time to time or fail to perform the duties assigned to the Executive by the Board from time to time or fails to use his best efforts to perform his mutually agreed upon duties as set forth in the annual document entitled "executive performance evaluation" (as reasonably determined by the Board); provided, however, that for the first such failure or refusal, the Executive shall be given a written warning (providing at least a 30 day period for an opportunity to cure), and the second failure or refusal shall be grounds for termination for Cause:
(ii) If the Executive shall have engaged in conduct involving fraud, deceit, personal dishonesty, or breach of fiduciary duty, or any other conduct, which in any such case has adversely affected, or may adversely affect, the business or reputation of the Bank Group;
(iii) If the Executive shall have violated (A) any law or regulation, memorandum of understanding, cease and desist order, or other agreement with any regulatory agency having jurisdiction over any of the Bank Group or (B) any rules and regulations of any regulatory agency having jurisdiction over the Bank Group by reason of any person within the Bank Group becoming a public reporting company under Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the "1934 Act");
(iv) If the Executive shall have become subject to continuing intemperance in the use of alcohol or any controlled substance which has adversely affected, or may adversely affect, the business or reputation of the Bank or the Parent;
(v) If after the date of this Agreement, the Executive shall have filed, or had filed against him, any petition under the federal bankruptcy laws or any state insolvency laws;
(vi) If the Executive has been convicted of, or the entering by the Executive of a plea of nolo contendere with respect to, a criminal offense constituting a felony or involving moral turpitude;
(vii) If the Executive engaged in the unlawful harassment of employees or customers of any of the Bank Group;
(viii) If the Executive exposed the Bank Group to criminal liability substantially caused by the Executive which results in an adverse effect on the business, financial condition, prospects or results of operations of the Bank Group; or
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(ix) If the Executive is in material breach of any provision of this Agreement.
In the event of termination for Cause, the Bank shall pay the Executive only salary, vacation, and bonus amounts accrued and unpaid as of the effective date of termination.
(b) By the Executive upon the lapse of 30 days following written notice by the Executive to the Bank of termination of his employment hereunder for Good Reason (as defined below), which notice shall reasonably describe the Good Reason for which the Executive's employment is being terminated; provided, however, that the Bank shall have the opportunity to cure such Good Reason, during such 30 day period, and the Executive's employment shall continue in effect during such time. If such Good Reason shall be cured by the Bank during such time to the reasonable satisfaction of the Executive, the Executive's employment and the obligations of the Bank hereunder shall not terminate as a result of the notice which has been given with respect to such Good Reason. Cure of any Good Reason with or without notice from the Executive shall not relieve the Bank from any obligations to the Executive under this Agreement or otherwise and shall not affect the Executive's rights upon the reoccurrence of the same, or the occurrence of any other, Good Reason, For purposes of this Agreement, the term "Good Reason" shall mean any material breach by the Bank of any provision of this Agreement, or any significant reduction, without the Executive's prior written consent, in the duties, responsibilities, authority or title of the Executive as an officer of the Bank, except for any reduction in duties, responsibilities, authority or title due to (i) the Executive's illness or disability, (ii) an order from any regulatory authority having jurisdiction over any of the Bank Group, (iii) the temporary suspensions (not to exceed 120 days) of the Executive's duties, responsibilities, authority or title pending results of any Board commissioned investigation as to potential Cause for termination of the Executive's employment, (iv) the appointment of market presidents or other positions created by the Bank Group, or (v) the Executive no longer serving as Chief Operating Officer of the Bank provided Executive is appointed Chief Administrative Officer of the Bank on or about that time. Good Reason shall also include requiring the Executive to be permanently based anywhere other than within thirty-five (35) miles of the Executive's current job location.
If the Executive's employment is terminated by the Executive for Good Reason, the Bank shall, for a period of six (6) months after said termination, continue to pay to the Executive the base annual salary in effect under Section 4(a) on the date of said termination (or, if greater, the highest annual salary in effect for the Executive within the thirty-six (36) month period prior to said termination).
(c) By the Executive upon the lapse of ninety (90) days following written notice by the Executive to the Bank of his resignation from the Bank for other than Good Reason; provided, however, that the Bank, in its discretion, may cause such termination to be effective at any time during such 30-day period. If the Executive's employment is terminated because of the Executive's resignation, the Bank shall be obligated to pay to the Executive any salary, vacation, and bonus amounts that would have been accrued and unpaid through the end of 30-day period.
(d) If the Executive's employment is terminated by the death or disability (i.e., the Executive is unable to perform the essential functions of his position for at least 180 days) of the Executive, this Agreement shall automatically terminate effective immediately, and the Bank shall be obligated to pay to the Executive or the Executive's estate any salary, vacation, and bonus amounts accrued and unpaid at the date of disability or death.
(e) By the Bank or the Executive within twelve (12) months of the closing of a Change of Control, in which event the Bank shall pay to the Executive, on the Bank's regular payroll payment date next following the thirtieth (30th) day after the effective date of termination, an amount equal to one times the average base annual salary received by the Executive during the three-year period prior to such termination. For purposes of this Agreement, a Change of Control shall mean a merger or acquisition in which the Parent or the Bank is not the surviving entity, or the acquisition by any individual or group of beneficial ownership of more than 50% of the outstanding shares of the Parent's or the Bank's common stock. The term "group" and the concept of beneficial ownership shall have such meanings ascribed thereto as set forth in the Securities Exchange Act of 1934, as amended (the "1934 Act"), and the regulations and rules thereunder. If the provisions of this Section 8(e) are triggered by the Bank or the Executive, the provisions of this Section 8(e) shall override and supersede the provisions of Sections 8(b), (c), (d) and (f), as applicable (for the avoidance of doubt, no duplicative compensation).
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(f) By the Bank at any time if said discharge is without Cause (but excluding the expiration of this Agreement as provided in Section 8(g)). If the Executive's employment is terminated by the Bank without Cause, the Bank shall, for a period of six (6) months after said termination continue to pay to the Executive at the base annual salary rate in effect under Section 4(a) on the date of said termination (or, if greater, the highest annual salary rate in effect for the Executive within the thirty-six (36) month period prior to said termination).
(g) Upon the expiration of this Agreement on the third anniversary of the date of this Agreement (or on such later Expiration Date which has been extended specifically by written agreement of the parties), the Bank shall be obligated to pay to the Executive only any salary, vacation, and bonus amounts accrued and unpaid through the effective date of the expiration, plus reimbursements for any business expenses incurred by the Executive prior to the Expiration Date (subject to the terms of the Bank's reimbursement policies).
(h) Any amounts payable by the Bank to the Executive pursuant to this Section 8 shall be reduced by any amounts owed to the Bank by the Executive.
(i) Notwithstanding anything in this Agreement to the contrary, as a condition to receipt by the Executive of the payments due from the Bank pursuant to the applicable provision in this Section 8 in connection with termination or expiration of his employment, the Executive shall execute and deliver to the Bank within twenty-two (22) days of the effective date of the termination or expiration of his employment, a general release of all claims the Executive may have against the Bank Group and their respective officers and Boards of Directors with respect to the subject matter of this Agreement (other than any obligations of the Bank under this Agreement or any severance agreement which by their terms survive) in a form reasonably acceptable to the Bank and/or its counsel, and such release shall not have been revoked by the Executive.
(j) Any termination of the Executive's employment for any reason shall require that the Executive resign all other positions (including as director) Executive may then be holding with the Bank Group or as trustee of any of their benefit plans, unless the Board or Chairman and the Executive agree to the contrary.
(k) The parties acknowledge and agree that the compensation and benefits set forth in this Section 8 as being payable upon termination or expiration of this Agreement constitute liquidated damages upon the termination or expiration of this Agreement, and the parties hereto have agreed that such compensation and benefits are reasonable.
9. Notice. All notices permitted or required to be given to either party under this Agreement shall be in writing and shall be deemed to have been given (a) in the case of delivery, when addressed to the other party as set forth at the end of this Agreement and delivered to said address, (b) in the case of mailing, three days after the same has been mailed by certified mail, return receipt requested, and deposited postage prepaid in the U.S. Mails, addressed to the other party at the address as set forth at the end of this Agreement, and (c) in any other case, when actually received by the other party. Either party may change the address at which said notice is to be given by delivering notice of such to the other party to this Agreement in the manner set forth herein.
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10. Confidential Matters.
(a) The Executive is aware and acknowledges that the Executive shall have access to confidential information by virtue of his employment. The Executive agrees that, during the period of time the Executive is retained to provide services to the Bank, and thereafter subsequent to the termination of Executive's services to the Bank for any reason whatsoever, the Executive will not release or divulge any confidential information whatsoever relating to any of the Bank Group or its business, to any other person or entity without the prior written consent of the Bank, including, without limitation, during any "quiet period" or related to an offering of securities by the Bank Group. Confidential information does not include information that is available to the public or which becomes available to the public other than through a breach of this Agreement on the part of the Executive. Also, the Executive shall not be precluded from disclosing confidential information in furtherance of the performance of his services to the Bank or to the extent required by any legal proceeding. The Executive also agrees that all files, records, documents, equipment and similar items and technological information whether maintained in hard copy or by electronic means relating to the Bank's business, whether prepared by the Executive or others, shall remain the exclusive property of the Bank. Upon termination or expiration of employment, or at any earlier time requested by the Bank, the Executive will promptly return to the Bank all confidential information as well as any other property of the Bank, which is in the Executive's possession or under the Executive's control. The Executive agrees not to delete, modify, or copy any work file or confidential information prior to or subsequent to termination or expiration of employment. For the avoidance of doubt, the parties agree that each of the terms of this Agreement shall be considered "confidential information" within the meaning of this Section 10, and may be disclosed by the Executive only to the limited extent permitted by the terms of this Section 10, to his spouse, and to his advisors solely to the extent necessary; without limiting the generality of the foregoing, they may not be disclosed by the Executive to any other employees of the Bank other than its Chairman or to anyone else designated in writing by the Chairman.
(b) Notwithstanding anything to the contrary in this Agreement, in the event the Executive is requested pursuant to, or required by, applicable law or regulation or by legal process to disclose any confidential information of the Bank Group, the Executive agrees, if permitted by applicable laws or regulations, to provide the Bank Group with prompt notice of such request or requirement to enable the Bank Group to seek an appropriate protective order, waive compliance with the provisions of this Agreement or take other appropriate action. The Executive agrees to use the Executive’s best efforts in such event to assist the Bank Group in obtaining a protective order, and the Bank shall be responsible for any reasonable third party costs incurred by the Executive in providing that assistance. If, in the absence of a protective order or the receipt of a waiver under this Agreement, the Executive is nonetheless, in the written opinion of the Executive’s counsel, compelled to disclose such confidential information to any tribunal or else stand liable for contempt or suffer other censure or significant penalty, the Executive, after notice to the Bank Group, may disclose to such tribunal only such confidential information that the Executive is compelled to disclose.
(c) The Executive acknowledges that the Bank or its holding company may, in the future, become a public reporting company pursuant to Section 13 or 15(d) of the 1934 Act and the Executive will comply with all laws, rules and regulations applicable to the Executive by reason of the Bank or its holding company becoming a public reporting company. Without limiting the generality of the foregoing, the Executive acknowledges that in the course of Executive’s employment, with the Bank the Executive may become aware of material nonpublic information relating to the Bank Group or third parties with whom the Bank Group does business and under federal and state securities laws, it may be illegal for the Executive to buy or sell securities at a time when the Executive possesses such material nonpublic information. Therefore, the Executive agrees to comply with all laws related to trading in securities on the basis of material nonpublic information and the requirements of any insider trading policy that may be adopted from time to time by the Bank Group.
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11. Legitimate Business Interests; Noncompetition.
(a) Legitimate Business Interests. The Executive acknowledges and agrees that in the performance of his duties of employment with the Bank he will be in contact with customers, potential customers and/or information about customers or potential customers of the Bank Group either in person, through the mails, by telephone or by other electronic means. The Executive also acknowledges and agrees that trade secrets and confidential information of the Bank Group that will be gained by Executive during his employment with the Bank, have been developed by the Bank Group through substantial expenditures of time, effort and financial resources and constitute valuable and unique property of the Bank Group. The Executive further understands, acknowledges and agrees that the foregoing makes it necessary for the protection of the Bank Group's businesses that the Executive not divert business or customers from the Bank Group and that the Executive maintain the confidentiality and integrity of the confidential information as provided in this Agreement.
(b) Non-competition.
(i) Notwithstanding anything in this Agreement to the contrary, the Executive agrees that during the period of time the Executive is retained to provide services to the Bank, and thereafter for a period of one (1) year subsequent to the termination of the Executive's services to the Bank for any of the reasons set forth in Section 8(c), the Executive will not enter the employ of, or have any interest in, directly or indirectly (either as executive, partner, director, officer, consultant, principal, agent or employee), any other bank or financial institution or any entity which either accepts deposits or makes loans (whether presently existing or subsequently established) and which has an office located within a radius of 50 miles of any office of the Bank, provided, however, that the foregoing shall not preclude any ownership by the Executive of an amount not to exceed 5% of the equity securities of any entity which is subject to the periodic reporting requirements of the 1934 Act and the shares of the Parent's common stock owned by the Executive at the time of termination of employment.
(ii) Notwithstanding anything in this Agreement to the contrary, if the Executive's employment is terminated or expires for any of the reasons set forth in Sections 8(a), 8(b), 8(d), 8(e), 8(f), and/or 8(g), then for a period of ninety (90) days subsequent to the effective date of such termination pursuant to Section 8(a), 8(b), 8(d), 8(e), and/or 8(f), and/or for a period of sixty (60) days subsequent to the effective date of an expiration pursuant to Section 8(g), of Executive's services to the Bank, the Executive will not enter the employ of, or have any interest in, directly or indirectly (either as executive, partner, director, officer, consultant, principal, agent or employee), any other bank or financial institution or any entity which either accepts deposits or makes loans (whether presently existing or subsequently established) and which has an office located within a radius of 50 miles of any office of the Bank, provided, however, that the foregoing shall not preclude any ownership by the Executive of an amount not to exceed 5% of the equity securities of any entity which is subject to the periodic reporting requirements of the 1934 Act and the shares of the Parent's common stock owned by the Executive at the time of termination of employment.
12. Nonsolicitation; Noninterference; Non-Disparagement.
(a) The Executive agrees that during the period of time the Executive is retained to provide services to the Bank, and thereafter for a period of one (1) year subsequent to the termination or expiration of Executive's services to the Bank for any reason whatsoever, the Executive will not (a) solicit for employment by Executive, or anyone else, any employee of the Bank Group or any person who was an employee of the Bank Group within 12 months prior to such solicitation of employment; (b) induce, or attempt to induce, any employee of the Bank Group to terminate such employee's employment; (c) induce, or attempt to induce, anyone having a business relationship with the Bank Group to terminate or curtail such relationship or, on behalf of himself or anyone else, compete with the Bank Group; (d) knowingly make any untrue statement concerning the Bank Group or their directors or officers to anyone; or (e) permit anyone controlled by the Executive, or any person acting on behalf of the Executive or anyone controlled by an employee of the Executive, to do any of the foregoing.
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(b) The Executive shall not, during his employment by the Bank or at any time thereafter, directly or indirectly, in any communications in any media, criticize, ridicule or make (or cause or permit others to criticize, ridicule or make) any statement which disparages or is derogatory of any of the Bank Group, their products or services, or any of the Bank Group's present, former or future shareholders, officers, directors, employees, affiliates and/or subsidiaries.
13. Equitable Relief. The Executive acknowledges and agrees that any breach or threatened breach of Sections 10, 11 or 12 of this Agreement will result in irreparable damage to the Bank Group and, accordingly, any of the Bank Group may obtain injunctive relief, a decree of specific performance and/or any other equitable relief for any breach or threatened breach of such Sections of this Agreement in addition to any other remedies available to the Bank Group, without being required to show any actual damage, or to post an injunction bond, and the prevailing party in any such proceeding will be entitled to reimbursement for all costs and expenses, including reasonable attorneys’ fees and expenses in connection therewith. Nothing herein shall be construed as prohibiting the Bank Group from pursuing such other remedies available to it for any such breach or threatened breach including recovery of damages from the Executive.
14. Remedies. The Executive agrees that the restrictions set forth in this Agreement are fair and reasonable. The covenants set forth in this Agreement are not dependent covenants and any claim against the Bank Group, whether arising out of this Agreement or any other agreement or contract between the Bank and Executive, shall not be a defense to a claim against Executive for a breach or alleged breach of any of the covenants of Executive contained in this Agreement. It is expressly understood by and between the parties hereto that the covenants contained in this Agreement shall be deemed to be a series of separate covenants. The Executive understands and agrees that if any of the separate covenants are judicially held invalid or unenforceable, such holding shall not release Executive from Executive's obligations under the remaining covenants of this Agreement. If in any judicial proceedings, a court shall refuse to enforce any or all of the separate covenants because taken together they are more extensive (whether as to geographic area, duration, scope of business or otherwise) than necessary to protect the business and goodwill of the Bank Group, it is expressly understood and agreed between the parties hereto that those separate covenants which, if eliminated or restricted, would permit the remaining separate covenants or the restricted separate covenant to be enforced in such proceeding shall, for the purposes of such proceeding, be eliminated from the provisions of this Agreement or restriction, as the ease may be.
15. Invalid Provision. In the event any provision should be or become invalid or unenforceable, such facts shall not affect the validity and enforceability of any other provision of this Agreement. Similarly, if the scope of any restriction or covenant contained herein should be or become too broad or extensive to permit enforcement thereof to its full extent, then any such restriction or covenant shall be enforced to the maximum extent permitted by law, and Executive hereby consents and agrees that the scope of any such restriction or covenant may be modified accordingly in any judicial proceeding brought to enforce such restriction or covenant.
16. Governing Law; Venue. This Agreement shall be construed in accordance with and shall be governed by the laws of the State of Florida. The sole and exclusive venue for any action arising out of this Agreement shall be a state court situated in Miami-Dade County, Florida, and the parties to this Agreement agree to be subject to the personal jurisdiction of such Court and that service on each party shall be valid if served by certified mail, return receipt requested or hand delivery.
17. Attorneys' Fees and Costs. In the event a dispute arises between the parties under this Agreement and suit is instituted, the prevailing party shall be entitled to recover his or its costs and attorneys' fees from the nonprevailing party. As used herein, costs and attorneys' fees include any costs and attorneys' fees in any appellate proceeding.
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18. Binding Effect. The rights and obligations of the parties under this Agreement shall inure to the benefit of and shall be binding upon the successors, assigns and legal representatives of the Bank Group and the heirs and legal representatives of the Executive.
19. Effect on Other• Agreements. This Agreement and the termination thereof shall not affect any other agreement between the Executive and the Bank Group, and the receipt by the Executive of benefits thereunder.
20. Miscellaneous. The captions used herein are solely for the convenience of the parties and are not used in construing this Agreement. Time is of the essence of this Agreement and the performance by each party of its or his duties and obligations hereunder.
21. Compliance with Section 409A. Notwithstanding anything herein to the contrary, if it is determined by the Bank or the Executive, in good faith, at the time of the Executive's termination of employment that the Executive is a "specified employee" within the meaning of Section 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended (the "Code") and that payments to be made to the Executive hereunder, if made earlier than as required under Section 409A(a)(2)(B)(i) of the Code would result in the requirement for the Executive to pay additional interest and taxes to be imposed in accordance with Section 409A(a)(I)(B) of the Code, then any payments to be made in accordance with this Agreement shall be made as of the date that is 184 calendar days from the date of the Executive's termination of employment, or immediately upon the death of the Executive, if earlier. The provisions of this Section 21 shall survive the expiration of this Agreement.
22. Regulatory Actions. Notwithstanding any other provision of this Agreement to the contrary, any amounts paid or payable to the Executive pursuant to this Agreement, or otherwise, arc subject to and conditioned upon their compliance with Sections 18(k) and 32(a) of the Federal Deposit Insurance Act ("FDIA") and Part 359 of the FDIC’s rules and regulations, and any regulations promulgated under the FDIA, and also are subject to and conditioned upon compliance by the Bank with any Memorandum of Understanding, Consent Order, or other agreement between the Bank and the FDIC and/or the Florida Office of Financial Regulation.
23. Complete Agreement. This Agreement constitutes the complete agreement between the parties hereto and incorporates all prior discussions, agreements and representations made in regard to the matters set forth herein, including, without limitation, that it replaces and supersedes in all respects those certain previous employment agreements between the Bank and the Executive dated April 10, 2013, December 31, 2015, and November 15, 2016 (collectively, "Prior Employment Agreements"). This Agreement may not be amended, modified or changed except by a writing signed by the party to be charged by said amendment, change or modification.
24. Waiver and Acknowledgement by Executive. The Executive waives any and all claims pursuant to the Prior Employment Agreements. For the avoidance of doubt, the Executive acknowledges and agrees he has no right to any payments, including, without limitation, payments of severance, under Section 8 of the Prior Employment Agreement dated November 15, 2016.
25. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Confirmation of execution by electronic transmission of a facsimile signature page shall be binding on a party so confirming.
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26. Assignability. The Executive’s rights and obligations hereunder are personal and may not be assigned by the Executive (other than his rights to payments or benefits hereunder, which may be transferred only by will or the laws of descent and distribution or to the Executive’s representative in the event of his disability); provided, however, in the event of the Executive’s death or disability, the Executive’s representative may also exercise any unexercised stock options or stock appreciation rights, if any, to the extent permitted by the relevant option or stock appreciation rights plan agreement or this Agreement. As used in this Agreement, “Bank” and “Bank Group” shall mean the entities as hereinbefore defined and any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the equity, business and/or assets of the Bank Group or that otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.
27. JURY WAIVER. IN ANY CIVIL ACTION, COUNTERCLAIM, OR PROCEEDING, WHETHER AT LAW OR IN EQUITY, WHICH ARISES OUT OF CONCERNS, OR RELATES TO THIS AGREEMENT, ANY AND ALL TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE PERFORMANCE OF THIS AGREEMENT, OR THE RELATIONSHIP CREATED BY THIS AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE, TRIAL SHALL BE TO A COURT OF COMPETENT JURISDICTION AND NOT TO A JURY. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY. ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT, AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THIS AGREEMENT OF THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. NEITHER PARTY HAS MADE OR RELIED UPON ANY ORAL REPRESENTATIONS TO OR BY ANY OTHER PARTY REGARDING THE ENFORCEABILITY OF THIS PROVISION. EACH PARTY HAS READ AND UNDERSTANDS THE EFFECT OF THIS JURY WAIVER PROVISION. EACH PARTY ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY ITS OWN COUNSEL WITH RESPECT TO THE TRANSACTION GOVERNED BY THIS AGREEMENT AND SPECIFICALLY WITH RESPECT TO THE TERMS OF THIS SECTION.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
PROFESSIONAL BANK | ||
By: | /s/ Daniel R. Sheehan | |
Name: | Daniel R. Sheehan | |
Title: | Chairman | |
“EXECUTIVE” | ||
/s/ Abel L. Iglesias | ||
Print Name: Abel L. Iglesias | ||
Address: | 1533 Mantua Avenue | |
Coral Gables, FL 33146 |
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Exhibit 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made as of this 31 day of December, 2017, by and between Professional Bank, a Florida state-chartered commercial bank (the "Bank"), and Mary Usategui (the "Executive").
WITNESSETH:
WHEREAS, the Bank desires to retain the services of and employ the Executive, and the Executive desires to provide services to the Bank, pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the promises and of the covenants and agreements herein contained, the Bank and the Executive covenant and agree as follows:
1. Employment. Pursuant to the terms and conditions of this Agreement, the Bank agrees to employ the Executive and the Executive agrees to render services to the Bank as set forth herein. Upon signing this Agreement, the Executive represents and warrants to the Bank that the Executive has the full right and authority to perform all services required of the Executive during the term of this Agreement and that such service by the Executive to the Bank does not and will not constitute a breach of any contract or legal obligation that the Executive may have to any other party.
2. Position and Duties. During the term of this Agreement, the Executive shall serve as Chief Financial Officer of the Bank, and shall undertake such duties, consistent with such titles, as may be assigned to him or her from time to time by the Board of Directors of the Bank (referred to as the "Board") and/or the President and Chief Executive Officer of the Bank (the "CEO"), including serving on Board committees appointed from time to time by the Board or the CEO, keeping the CEO informed of industry and regulatory developments regarding the Bank, and assisting in keeping the Bank in compliance with applicable laws and regulations. In performing duties pursuant to this Agreement, the Executive shall devote his or her full business time, energy, skill and best efforts to promote the Bank and its business and affairs; provided that, subject to Sections 10, 12 and 13 of this Agreement, the Executive shall have the right to manage and pursue personal and family interests, and make passive investments in securities, real estate, and other assets, and also to participate in charitable and community activities and organizations, so long as such activities do not adversely affect the performance by Executive of his or her duties and obligations to the Bank.
3. Term. Subject to the provisions of Section 8 of this Agreement, the initial term of employment pursuant to this Agreement shall be for a period of five years, commencing on the date set forth above and expiring (unless sooner terminated as otherwise provided in this Agreement or unless otherwise renewed or extended as set forth herein) on the fifth anniversary of the date of this Agreement, which date, including any earlier date of termination or any extended expiration date, shall be referred to as the "Expiration Date". Subject to the provisions of Section 8 of this Agreement, the term of this Agreement and the employment of the Executive by the Bank hereunder shall be deemed to continue thereafter until terminated in accordance with Section 8 of this Agreement. After termination of the employment of the Executive for any reason whatsoever, or the expiration of this Agreement, the Executive will continue to be subject to the provisions of Sections 10 through 25, inclusive, of this Agreement subject to the terms thereof.
4. Compensation. During the term of this Agreement, the Bank shall pay or provide to the Executive as compensation for the services of the Executive set forth in Section 2 hereof:
(a) A base annual salary of $200,000, such base annual salary and such base may be increased thereafter in the discretion of the Board or the CEO; and
(b) Such incentive bonuses as may be authorized by the Board from time to time.
5. Benefits and Insurance. The Bank shall provide to the Executive such medical, disability, and life insurance (for an amount not less than the then base salary being received by the Executive) as well as any other benefits as the Board shall determine from time to time. As to health insurance, the Bank shall provide family health insurance coverage. The Bank also shall reimburse the Executive for medical insurance coverage under COBRA until the earlier of 90 days following the date of this Agreement or the eligibility of the Executive for enrollment in the Bank's medical insurance plan. The Executive understands that eligibility for the Bank's benefit plans is contingent upon the Executive qualifying for eligibility under such plans, The Bank reserves the right to modify, suspend or terminate the Bank benefit plans at any time and from time to time. The Executive also shall be entitled to participate in the 2014 Share Appreciation Rights Plan (the "SAR Plan") of Professional Holding Corp., the sole shareholder of the Bank ("Parent"), to the extent units are granted to the Executive by the Parent, all subject to the terms and conditions of the SAR Plan.
6. Vacation. Commencing six months following the date of this Agreement, and during each 12-month period thereafter, the Executive may take four weeks of paid vacation time as authorized by the CEO and at such periods during each year as the CEO and the Executive shall determine from time to time. Any unused vacation time will not roll over to the next 12-month period unless otherwise authorized by the CEO. The Executive shall be entitled to full compensation during such vacation periods.
7. Reimbursement of Expenses. The Bank shall reimburse the Executive for reasonable expenses incurred in connection with his or her employment hereunder subject to guidelines issued from time to time by the Board and upon submission of documentation inconformity with applicable requirements of federal income tax laws and regulations supporting reimbursement of such expenses. The Executive also shall be entitled to receive a monthly automobile allowance of $500 and $200 monthly cell phone allowance
8. Termination. The employment of the Executive may be terminated as follows:
(a) By the Bank, by action taken by the CEO, at any time and immediately upon written notice to the Executive if said discharge is for cause. In the notice of termination furnished to the Executive under this Section 8(a), the reason or reasons for said termination shall be given and, if no reason or reasons are given for said termination, said termination shall be deemed to be without cause and therefore termination pursuant to Section 8(f). Any one or more of the following conditions shall be deemed to be grounds for termination of the employment of the Executive for cause under this Section 8(a):
(i) If the Executive shall fail or refuse to comply with the obligations required of him or her as set forth in this Agreement or comply with the policies of the Bank established by the Board or CEO from time to time or fail to perform the duties assigned to the Executive by the Board or CEO from time to time; provided, however, that for the first such failure or refusal, the Executive shall be given a written warning (providing at least a 30 day period for an opportunity to cure), and the second failure or refusal shall be grounds for termination for cause;
(ii) If the Executive shall have engaged in conduct involving fraud, deceit, personal dishonesty, or breach of fiduciary duty, or any other conduct, which in any such case has adversely affected, or may adversely affect, the business or reputation of the Bank;
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(iii) If the Executive shall have violated any banking law or regulation, memorandum of understanding, cease and desist order, or other agreement with any banking agency having jurisdiction over the Bank;
(iv) If the Executive shall have become subject to continuing intemperance in the use of alcohol or drugs which has adversely affected, or may adversely affect, the business or reputation of the Bank or the Parent;
(v) If after the date of this Agreement, the Executive shall have filed, or had filed against him or her, any petition under the federal bankruptcy laws or any state insolvency laws;
(vi) If the Executive has been convicted of, or the entering by the Executive of a plea of nolo contendere with respect to, a criminal offense constituting a felony or involving moral turpitude;
(vii) If the Executive engaged in the unlawful harassment of employees or customers of the Bank or the Parent;
(viii) If the Executive exposed the Bank or the Parent to criminal liability substantially caused by the Executive which results in an adverse effect on the business, financial condition, prospects or results of operations of the Parent or the Bank; or
(ix) If the Executive is in material breach of any provision of this Agreement.
In the event of termination for cause, the Bank shall pay the Executive only salary, vacation, and bonus amounts accrued and unpaid as of the effective date of termination.
(b) By the Executive upon the lapse of 30 days following written notice by the Executive to the Bank of termination of his or her employment hereunder for Good Reason (as defined below), which notice shall reasonably describe the Good Reason for which the Executive's employment is being terminated; provided, however, that the Bank shall have the opportunity to cure such Good Reason, during such 30 day period, and the Executive's employment shall continue in effect during such time. If such Good Reason shall be cured by the Bank during such time to the reasonable satisfaction of the Executive, the Executive's employment and the obligations of the Bank hereunder shall not terminate as a result of the notice which has been given with respect to such Good Reason. Cure of any Good Reason with or without notice from the Executive shall not relieve the Bank from any obligations to the Executive under this Agreement or otherwise and shall not affect the Executive's rights upon the reoccurrence of the same, or the occurrence of any other, Good Reason. For purposes of this Agreement, the term "Good Reason" shall mean any material breach by the Bank of any provision of this Agreement, or any significant reduction, without the Executive's prior written consent, in the duties, responsibilities, authority or title of the Executive as an officer of the Bank, except for any reduction in duties, responsibilities, authority or title due to (i) the Executive's illness or disability, (ii) an order from any regulatory authority having jurisdiction over the Parent or the Bank, or (iii) the temporary suspensions of the Executive's duties, responsibilities, authority or title pending results of any Board commissioned investigation as to potential cause for termination of the Executive's employment.
If the Executive's employment is terminated by the Executive for Good Reason, the Bank shall, for a period of six (6) months after said termination, continue to pay to the Executive the base annual salary in effect under Section 4(a) on the date of said termination (or, if greater, the highest annual salary in effect for the Executive within the thirty-six (36) month period prior to said termination).
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(c) By the Executive upon the lapse of 30 days following written notice by the Executive to the Bank of his or her resignation from the Bank for other than Good Reason; provided, however, that the Bank, in its discretion, may cause such termination to be effective at any time during such 30-day period. If the Executive's employment is terminated because of the Executive's resignation, the Bank shall be obligated to pay to the Executive any salary, vacation, and bonus amounts that would have been accrued and unpaid through the end of 30-day period.
(d) If the Executive's employment is terminated by the death or disability (i.e., the Executive is unable to perform the essential functions of his or her position for at least 180 days) of the Executive, this Agreement shall automatically terminate, and the Bank shall be obligated to pay to the Executive or the Executive' s estate any salary, vacation, and bonus amounts accrued and unpaid at the date of disability or death.
(e) By the Bank or the Executive within twelve (12) months of the closing of a Change of Control, in which event the Bank shall pay to the Executive, on the Bank's regular payroll payment date next following the thirtieth (30th) day after the effective date of termination, an amount equal to one times the average base annual salary received by the Executive during the three-year period prior to such termination. For purposes of this Agreement, a Change of Control shall mean a merger or acquisition in which the Parent or the Bank is not the surviving entity, or the acquisition by any individual or group of beneficial ownership of more than 50% of the outstanding shares of the Parent's or the Bank's common stock. The term "group" and the concept of beneficial ownership shall have such meanings ascribed thereto as set forth in the Securities Exchange Act of 1934, as amended (the "1934 Act"), and the regulations and rules thereunder. If the provisions of this Section 8(e) are triggered by the Bank or the Executive, the provisions of this Section 8(e) shall override and supersede the provisions of Sections 8(b), (c), (d) and (f), as applicable (for the avoidance of doubt, no duplicative compensation).
(f) By the Bank at any time if said discharge is without cause (but excluding the expiration of this Agreement as provided in Section 8(g)). If the Executive's employment is terminated by the Bank without cause, the Bank shall, for a period of six (6) months after said termination continue to pay to the Executive the base annual salary in effect under Section 4(a) on the date of said termination (or, if greater, the highest annual salary in effect for the Executive within the 36 month period prior to said termination).
(g) Upon the expiration of this Agreement on the fifth anniversary of the date of this Agreement (or on such later Expiration Date which has been extended specifically by written agreement of the parties), the Bank shall be obligated to pay to the Executive only any salary, vacation, and bonus amounts accrued and unpaid through the effective date of the expiration, plus reimbursements for any business expenses incurred by the Executive prior to the expiration date (subject to the terms of the Bank's reimbursement policies).
(h) Any amounts payable by the Bank to the Executive pursuant to this Section 8 shall be reduced by any amounts owed to the Bank by the Executive.
(i) Notwithstanding anything in this Agreement to the contrary, as a condition to receipt by the Executive of the payments due from the Bank pursuant to the applicable provision in this Section 8 in connection with termination of his or her employment, the Executive shall execute and deliver to the Bank within twenty-two (22) days of the effective date of the termination of his or her employment, a general release of all claims the Executive may have against the Parent and Bank and their respective officers and Boards of Directors with respect to the subject matter of this Agreement (other than any obligations of the Bank under this Agreement or any severance agreement which by their terms survive) in a form reasonably acceptable to the Bank and/or its counsel, and such release shall not have been revoked by the Executive.
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(j) Any termination of the Executive's employment for any reason shall require that the Executive resign all other positions (including as director) Executive may then be holding with the Parent of the Bank or as trustee of any of their benefit plans, unless the CEO and the Executive agree to the contrary.
9. Notice. All notices permitted or required to be given to either party under this Agreement shall be in writing and shall be deemed to have been given (a) in the case of delivery, when addressed to the other party as set forth at the end of this Agreement and delivered to said address, (b) in the case of mailing, three days after the same has been mailed by certified mail, return receipt requested, and deposited postage prepaid in the U.S. Mails, addressed to the other party at the address as set forth at the end of this Agreement, and (c) in any other case, when actually received by the other party. Either party may change the address at which said notice is to be given by delivering notice of such to the other party to this Agreement in the manner set forth herein.
10. Confidential Matters. The Executive is aware and acknowledges that the Executive shall have access to confidential information by virtue of his or her employment. The Executive agrees that, during the period of time the Executive is retained to provide services to the Bank, and thereafter subsequent to the termination of Executive's services to the Bank for any reason whatsoever, the Executive will not release or divulge any confidential information whatsoever relating to the Bank or its business, to any other person or entity without the prior written consent of the Bank. Confidential information does not include information that is available to the public or which becomes available to the public other than through a breach of this Agreement on the part of the Executive. Also, the Executive shall not be precluded from disclosing confidential information in furtherance of the performance of his or her services to the Bank or to the extent required by any legal proceeding. The Executive also agrees that all files, records, documents, equipment and similar items and technological information whether maintained in hard copy or by electronic means relating to the Bank's business, whether prepared by the Executive or others, shall remain the exclusive property of the Bank. Upon termination of employment, or at any earlier time requested by the Bank, the Executive will promptly return to the Bank all confidential information as well as any other property of the Bank, which is in the Executive's possession or under the Executive' s control. The Executive agrees not to delete, modify, or copy any work file or confidential information prior to or subsequent to termination of employment. For the avoidance of doubt, the parties agree that each of the terms of this Agreement shall be considered "confidential information" within the meaning of this Section 10, and may be disclosed by the Executive only to the limited extent permitted by the terms of this Section 10, to his or her spouse, and to his or her advisors solely to the extent necessary; without limiting the generality of the foregoing, they may not be disclosed by the Executive to any other employees of the Bank other than its Chairman or to anyone else designated in writing by the Chairman.
11. Injunction Without Bond. In the event there is a breach or threatened breach by the Executive of the provisions of Sections 10, 12, or 13, the Bank shall be entitled to an injunction without bond to restrain such breach or threatened breach, and the prevailing party in any such proceeding will be entitled to reimbursement for all costs and expenses, including reasonable attorneys' fees in connection therewith. Nothing herein shall be construed as prohibiting the Bank from pursuing such other remedies available to it for any such breach or threatened breach including recovery of damages from the Executive.
12. Legitimate Business Interests; Noncompetition.
(a) Legitimate Business Interests. The Executive acknowledges and agrees that in the performance of his or her duties of employment with the Bank he or she will be in contact with customers, potential customers and/or information about customers or potential customers of the Parent or the Bank either in person, through the mails, by telephone or by other electronic means. The Executive also acknowledges and agrees that trade secrets and confidential information of the Parent or the Bank that will be gained by Executive during his or her employment with the Bank, have been developed by the Parent and the Bank through substantial expenditures of time, effort and financial resources and constitute valuable and unique property of the Parent and the Bank. The Executive further understands, acknowledges and agrees that the foregoing makes it necessary for the protection of the Parent's and the Bank's businesses that the Executive not divert business or customers from the Parent and the Bank and that the Executive maintain the confidentiality and integrity of the confidential information as provided in this Agreement.
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(b) Non-competition.
(i) Notwithstanding anything in this Agreement to the contrary, the Executive agrees that during the period of time the Executive is retained to provide services to the Bank, and thereafter for a period of one (1) year subsequent to the termination of the Executive's services to the Bank for any of the reasons set forth in Section 8(c), the Executive will not enter the employ of, or have any interest in, directly or indirectly (either as executive, partner, director, officer, consultant, principal, agent or employee), any other bank or financial institution or any entity which either accepts deposits or makes loans (whether presently existing or subsequently established) and which has an office located within a radius of 50 miles of any office of the Bank, provided, however, that the foregoing shall not preclude any ownership by the Executive of an amount not to exceed 5% of the equity securities of any entity which is subject to the periodic reporting requirements of the 1934 Act and the shares of the Parent's common stock owned by the Executive at the time of termination of employment.
(ii) Notwithstanding anything in this Agreement to the contrary, if the Executive's employment is terminated for any of the reasons set forth in Sections 8(a), 8(b), 8(d), 8(e), 8(f), and/or 8(g), then for a period of sixty (60) days subsequent to the effective date of such termination of Executive's services to the Bank, the Executive will not enter the employ of, or have any interest in, directly or indirectly (either as executive, partner, director, officer, consultant, principal, agent or employee), any other bank or financial institution or any entity which either accepts deposits or makes loans (whether presently existing or subsequently established) and which has an office located within a radius of 50 miles of any office of the Bank, provided, however, that the foregoing shall not preclude any ownership by the Executive of an amount not to exceed 5% of the equity securities of any entity which is subject to the periodic reporting requirements of the 1934 Act and the shares of the Parent's common stock owned by the Executive at the time of termination of employment.
13. Nonsolicitation; Noninterference; Non-Disparagement.
(a) The Executive agrees that during the period of time the Executive is retained to provide services to the Bank, and thereafter for a period of one year subsequent to the termination of Executive's services to the Bank for any reason whatsoever, the Executive will not (a) solicit for employment by Executive, or anyone else, or employ any employee of the Bank or any person who was an employee of the Bank within 12 months prior to such solicitation of employment; (b) induce, or attempt to induce, any employee of the Bank to terminate such employee's employment; (c) induce, or attempt to induce, anyone having a business relationship with the Bank to terminate or curtail such relationship or, on behalf of himself or anyone else, compete with the Bank; (d) knowingly make any untrue statement concerning the Bank or its directors or officers to anyone; or (e) permit anyone controlled by the Executive, or any person acting on behalf of the Executive or anyone controlled by an employee of the Executive to do any of the foregoing.
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(b) The Executive shall not, during his or her employment by the Bank or at any time thereafter, directly or indirectly, in any communications in any media, criticize, ridicule or make (or cause or permit others to criticize, ridicule or make) any statement which disparages or is derogatory of any of the Parent or the Bank, their products or services, or any of the Parent's or the Bank's present, former or future shareholders, officers, directors, employees, affiliates and/or subsidiaries.
14. Remedies. The Executive agrees that the restrictions set forth in this Agreement are fair and reasonable. The covenants set forth in this Agreement are not dependent covenants and any claim against the Bank, whether arising out of this Agreement or any other agreement or contract between the Bank and Executive, shall not be a defense to a claim against Executive for a breach or alleged breach of any of the covenants of Executive contained in this Agreement. It is expressly understood by and between the parties hereto that the covenants contained in this Agreement shall be deemed to be a series of separate covenants. The Executive understands and agrees that if any of the separate covenants are judicially held invalid or unenforceable, such holding shall not release Executive from Executive's obligations under the remaining covenants of this Agreement. If in any judicial proceedings, a court shall refuse to enforce any or all of the separate covenants because taken together they are more extensive (whether as to geographic area, duration, scope of business m otherwise) than necessary to protect the business and goodwill of the Bank, it is expressly understood and agreed between the parties hereto that those separate covenants which, if eliminated or restricted, would permit the remaining separate covenants or the restricted separate covenant to be enforced in such proceeding shall, for the purposes of such proceeding, be eliminated from the provisions of this Agreement or restriction, as the case may be.
15. Invalid Provision. In the event any provision should be or become invalid or unenforceable, such facts shall not affect the validity and enforceability of any other provision of this Agreement. Similarly, if the scope of any restriction or covenant contained herein should be or become too broad or extensive to permit enforcement thereof to its full extent, then any such restriction or covenant shall be enforced to the maximum extent permitted by law, and Executive hereby consents and agrees that the scope of any such restriction or covenant may be modified accordingly in any judicial proceeding brought to enforce such restriction or covenant.
16. Governing Law; Venue. This Agreement shall be construed in accordance with and shall be governed by the laws of the State of Florida. The sole and exclusive venue for any action arising out of this Agreement shall be a state court situated in Miami-Dade County, Florida, and the parties to this Agreement agree to be subject to the personal jurisdiction of such Court and that service on each party shall be valid if served by certified mail, return receipt requested or hand delivery.
17. Attorneys' Fees and Costs. In the event a dispute arises between the parties under this Agreement and suit is instituted, the prevailing party shall be entitled to recover his or her or its costs and attorneys' fees from the nonprevailing party. As used herein, costs and attorneys' fees include any costs and attorneys' fees in any appellate proceeding.
18. Binding Effect. The rights and obligations of the parties under this Agreement shall inure to the benefit of and shall be binding upon the successors, assigns and legal representatives of the Bank and the Parent and the heirs and legal representatives of the Executive.
19. Effect on Other Agreements. This Agreement and the termination thereof shall not affect any other agreement between the Executive and the Bank, and the receipt by the Executive of benefits thereunder.
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20. Miscellaneous. The rights and duties of the parties hereunder are personal and may not be assigned or delegated without the prior written consent of the other party to this Agreement. The captions used herein are solely for the convenience of the parties and are not used in construing this Agreement. Time is of the essence of this Agreement and the performance by each party of its or his or her duties and obligations hereunder.
21. Compliance with Section 409A. Notwithstanding anything herein to the contrary, if it is determined by the Bank or the Executive, in good faith, at the time of the Executive's termination of employment that the Executive is a "specified employee" within the meaning of Section 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended (the "Code") and that payments to be made to the Executive hereunder, if made earlier than as required under Section 409A(a)(2)(B)(i) of the Code would result in the requirement for the Executive to pay additional interest and taxes to be imposed in accordance with Section 409A(a)(l)(B) of the Code, then any payments to be made in accordance with this Agreement shall be made as of the date that is 184 calendar days from the date of the Executive's termination of employment, or immediately upon the death of the Executive, if earlier. The provisions of this Section 21 shall survive the expiration of this Agreement.
22. Regulatory Actions. Notwithstanding any other provision of this Agreement to the contrary, any amounts paid or payable to the Executive pursuant to this Agreement, or otherwise, arc subject to and conditioned upon their compliance with Sections 18(k) and 32(a) of the Federal Deposit Insurance Act ("FDIA") and Part 359 of the FDIC's rules and regulations, and any regulations promulgated under the FDIA, and also are subject to and conditioned upon compliance by the Ban k with any Memorandum of Understanding, Consent Order, or other agreement between the Bank and the FDIC and/or the Florida Office of Financial Regulation.
23. Complete Agreement. This Agreement constitutes the complete agreement between the parties hereto and incorporates all prior discussions, agreements and representations made in regard to the matters set forth herein. This Agreement may not be amended, modified or changed except by a writing signed by the party to be charged by said amendment, change or modification.
24. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Confirmation of execution by electronic transmission of a facsimile signature page shall be binding on a party so confirming.
25. JURY WAIVER. IN ANY CIVIL ACTION, COUNTERCLAIM, OR PROCEEDING, WHETHER AT LAW OR IN EQUITY, WHICH ARISES OUT OF CONCERNS, OR RELATES TO THIS AGREEMENT, ANY AND ALL TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE PERFORMANCE OF THIS AGREEMENT, OR THE RELATIONSHIP CREATED BY THIS AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE, TRIAL SHALL BE TO A COURT OF COMPETENT JURISDICTION AND NOT TO A JURY. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY. ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT, AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THIS AGREEMENT OF THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. NEITHER PARTY HAS MADE OR RELIED UPON ANY ORAL REPRESENTATIONS TO OR BY ANY OTHER PARTY REGARDING THE ENFORCEABILITY OF THIS PROVISION. EACH PARTY HAS READ AND UNDERSTANDS THE EFFECT OF THIS JURY WAIVER PROVISION. EACH PARTY ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY ITS OWN COUNSEL WITH RESPECT TO THE TRANSACTION GOVERNED BY THIS AGREEMENT AND SPECIFICALLY WITH RESPECT TO THE TERMS OF THIS SECTION.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
PROFESSIONAL BANK | ||
By: | /s/ Abel L. Iglesias | |
Name: | Abel L. Iglesias | |
Title: | President and Chief Executive Office | |
Address: | 396 Alhambra Circle, Suite 255 | |
Coral Gables FL 33134 | ||
“EXECUTIVE” | ||
/s/ Mary B. Usategui | ||
Print Name: Mary B. Usategui | ||
Address: | 6787 SW 53rd St | |
Miami, FL 33155 |
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Exhibit 10.4
EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”) is made as of this 28th day of November, 2018, by and between Professional Bank (the “Bank”), and Ryan Gorney (the “Executive”).
WITNESSETH:
WHEREAS, the Bank desires to retain the services of and employ the Executive, and the Executive desires to provide services to the Bank, pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the promises and of the covenants and agreements herein contained, the Bank and the Executive covenant and agree as follows:
1. Employment. Pursuant to the terms and conditions of this Agreement, the Bank agrees to employ the Executive and the Executive agrees to render services to the Bank as set forth herein. Upon signing this Agreement, the Executive represents and warrants to the Bank that: (a) the Executive has the full right and authority to perform all services required of the Executive during the term of this Agreement, (b) that such service by the Executive to the Bank does not and will not constitute a breach of any contract or legal obligation that the Executive may have to any other party, (c) the Executive has not, and in connection with his employment with the Bank will not, violate any non-solicitation or other similar covenant or agreement by which he is or may be bound, and (d) in connection with his employment with the Bank, the Executive will not use any confidential or proprietary information he may have obtained in connection with employment with any prior employer.
2. Position and Duties. During the term of this Agreement, the Executive shall serve as Chief Information Officer and Chief Digital Officer of the Bank, and shall undertake such duties, consistent with such title, as may be assigned to him from time to time by the Executive Chairman of the Bank (the "Chairman") and the Board of Directors of the Bank (referred to as the “Board”), including overseeing all technology issues (including the preparation, implementation and monitoring of appropriate policies) of the Bank and/or any holding company of the Bank and/or their subsidiaries (collectively, the “Bank Group”), keeping the Board and the Chairman informed of industry and regulatory developments regarding the Bank's technology issues, and assisting in keeping the Bank Group in compliance with applicable technology laws and regulations. In addition, the Board and/or the Chairman shall provide the Executive with annual goals and responsibilities outlined in a “performance evaluation,” and it is the Executive’s responsibility to meet or exceed these goals as determined in the sole discretion of the Board and/the Chairman. In performing his duties pursuant to this Agreement, the Executive shall devote his full business time, energy, skill and best efforts to promote the Bank Group and its business and affairs; provided that, subject to Sections 10, 13 and 14 of this Agreement, the Executive shall have the right to manage and pursue personal and family interests, and make passive investments in securities, real estate, and other assets, and also to participate in charitable and community activities and organizations, so long as such activities do not adversely affect the performance by Executive of his duties and obligations to the Bank Group.
3. Term. The initial term of employment pursuant to this Agreement shall be for a period of three (3) years, commencing on the date set forth above and expiring (unless sooner terminated as otherwise provided in this Agreement or unless otherwise renewed or extended as set forth herein) on the third anniversary of this Agreement; provided, however that commencing on the third anniversary of the date of this Agreement and each anniversary thereafter, the term of this Agreement shall automatically renew for additional one (1) year periods on the same terms and conditions contained in this Agreement in effect as of the time of renewal, unless at least ninety (90) days prior to any such anniversary date either party shall notify the other in writing that it does not wish to extend the term of this Agreement beyond the then applicable expiration date. All references to the term of this Agreement shall refer both to the initial term and any successive term. After termination of the employment of the Executive for any reason whatsoever (including, without limitation, the expiration and/or termination of this Agreement), the Executive shall continue to be subject to the provisions of Sections 8 through 29, inclusive, of this Agreement, which shall be deemed to survive.
4. Compensation. During the term of this Agreement, the Bank shall pay or provide to the Executive as compensation for the services of the Executive set forth in Section 2 hereof:
(a) A base annual salary of $350,000 effective on the date of this Agreement, and such base annual salary may be increased thereafter in the discretion of the Board or the Chairman; and
(b) Such incentive bonuses as may be authorized by the Board from time to time.
The base salary, the bonuses, and all other payments and compensation to Executive for his services to the Bank shall be subject to all withholding and deductions required by federal, state or other law (including those authorized by the Executive but not otherwise required by law), including but not limited to state, federal and local income taxes, unemployment tax, Medicare and FICA, together with such deductions as the Executive may from time to time specifically authorize under any employee benefit program that may be adopted by the Bank for the benefit of its senior executives or the Executive.
5. Benefits and Insurance.
(a) The Bank shall provide to the Executive such medical, health, disability, and life insurance as well as any other benefits as the Board shall determine from time to time. As to health insurance, the Bank shall provide family health insurance coverage. The Bank also shall reimburse the Executive for medical insurance coverage under COBRA until the earlier of 90 days following the date of this Agreement or the eligibility of the Executive for enrollment in the Bank's medical insurance plan. The Executive understands that eligibility for the Bank's benefit plans is contingent upon the Executive qualifying for eligibility under such plans. The Bank reserves the right to modify, suspend or terminate the Bank benefit plans at any time and from time to time. The Executive also shall be entitled to participate in the 2014 Share Appreciation Rights Plan, as amended from time to time (the "SAR Plan"), of Professional Holding Corp., the sole shareholder of the Bank ("Parent"), to the extent units are granted to the Executive by the Parent, all subject to the terms and conditions of the SAR Plan; the Bank hereby confirms that the Executive will be granted 20,000 units in accordance with and subject to the terms of the SAR Plan.
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(b) The Bank shall have the right to obtain on the life of the Executive, pay all premium amounts related to, and maintain, “key employee” insurance naming any of the Bank Group as beneficiary. Selection of such insurance policy shall be in the sole and absolute discretion of the Board. The Executive shall cooperate fully with the Bank Group and the insurer in applying for, obtaining and maintaining such life insurance, by executing and delivering such further and other documents as the Bank Group and/or the insurer may request from time to time, and doing all matters and things which may be convenient or necessary to obtain such insurance, including, without limitation, submitting to any physical examinations and providing any medical information required by the insurer.
6. Vacation. During each 12-month period during the term of this Agreement, the Executive may take such weeks of vacation time as authorized by the Bank’s personnel policies and at such periods during each year as the Chairman and the Executive shall determine from time to time. Any unused vacation time will not roll over to the next 12-month period unless otherwise authorized by the Chairman. The Executive shall be entitled to full compensation during such vacation periods.
7. Reimbursement of Expenses. The Bank shall reimburse the Executive for reasonable expenses incurred in connection with his employment hereunder subject to guidelines issued from time to time by the Board and upon submission of documentation in conformity with applicable requirements of federal income tax laws and regulations supporting reimbursement of such expenses.
8. Termination. The employment of the Executive may be terminated as follows:
(a) By the Bank, by action taken by the Chairman, at any time and immediately upon written notice to the Executive if said discharge is for "Cause" (as defined below). In the notice of termination furnished to the Executive under this Section 8(a), the reason or reasons for said termination shall be given. Any one or more of the following conditions shall be deemed to be grounds for termination of the employment of the Executive for "Cause" under this Section 8(a):
(i) If the-Executive shall fail or refuse to comply with the obligations required of him as set forth in this Agreement or comply with the policies of the Bank Group established from time to time or fail to perform the duties assigned to the Executive by the Chairman or the Board from time to time or fails to perform his duties set forth in the annual document entitled “executive performance evaluation”;
(ii) If the Executive shall have engaged in conduct involving fraud, deceit, personal dishonesty, or breach of fiduciary duty, or any other conduct, which in any such case has adversely affected, or may adversely affect, the business or reputation of the Bank Group;
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(iii) If the Executive shall have violated any law or regulation, memorandum of understanding, cease and desist order, or other agreement with any regulatory agency having jurisdiction over any of the Bank Group;
(iv) If the Executive habitually abused alcohol or any controlled substance or reported to work under the influence of alcohol or any controlled substance;
(v) If the Executive has been convicted of, or the entering by the Executive of a plea of nolo contendere with respect to, a criminal offense constituting a felony or involving moral turpitude;
(vi) If the Executive engaged in the unlawful harassment of employees or customers of any of the Bank Group;
(vii) If the Executive exposed any of the Bank Group to criminal liability substantially caused by the Executive which results in an adverse effect on the business, financial condition, prospects or results of operations of the Bank Group;
(viii) If the Executive is in material breach of any provision of this Agreement; and/or
(ix) If after the date of this Agreement, the Executive shall have filed, or had filed against him, any petition under the federal bankruptcy laws or any state insolvency laws.
In the event of termination for Cause, the Bank shall pay the Executive, on the Bank’s regular payroll payment date next following the thirtieth (30th) day after the effective date of a termination, only salary, vacation, and bonus amounts accrued and unpaid as of the effective date of termination (less any amounts owed to the Bank by the Executive).
(b) By the Executive upon the lapse of thirty (30) days following written notice by the Executive to the Bank of termination of his employment hereunder for Good Reason (as defined below), which notice shall reasonably describe the Good Reason for which the Executive’s employment is being terminated; provided, however, that the Bank shall have the opportunity to cure such Good Reason, during such 30-day period, and the Executive’s employment shall continue in effect during such time. If such Good Reason shall be cured by the Bank during such time to the reasonable satisfaction of the Executive, the Executive’s employment and the obligations of the Bank hereunder shall not terminate as a result of the notice which has been given with respect to such Good Reason. Cure of any Good Reason with or without notice from the Executive shall not relieve the Bank from any obligations to the Executive under this Agreement or otherwise and shall not affect the Executive’s rights upon the reoccurrence of the same, or the occurrence of any other, Good Reason. For purposes of this Agreement, the term “Good Reason” shall mean any material breach by the Bank of any provision of this Agreement, or any significant reduction, without the Executive’s prior written consent, in the duties, responsibilities, authority or title of the Executive as an officer of the Bank, except for any reduction in duties, responsibilities, authority or title due to (i) the Executive’s illness or disability, (ii) an order from any regulatory authority having jurisdiction over any of the Bank Group, (iii) the temporary suspensions of the Executive’s duties, responsibilities, authority or title pending results of any Board commissioned investigation as to potential Cause for termination of the Executive’s employment, or (iv) the appointment of other positions created by the Bank Group.
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If the Executive’s employment is terminated by the Executive for Good Reason, the Bank shall, for a period which is the longer of (A) twelve (12) months after the effective date of termination or (B) the remainder of the then term of this Agreement (but, in either case, in no event beyond the date the Executive commences employment elsewhere), continue to pay to the Executive in accordance with the Bank's payroll policies the base annual salary in effect under Section 4(a) on the date of said termination, less any amounts owed to the Bank by the Executive, with such payments to commence on the Bank’s regular payroll payment date next following the thirtieth (30th) day after the effective date of such termination of employment (but retroactive to such effective date).
(c) By the Executive upon the lapse of ninety (90) days following written notice by the Executive to the Bank of his resignation from the Bank for other than Good Reason; provided, however, that the Bank, in its discretion, may cause such termination to be effective at any time during such 90-day period. If the Executive’s employment is terminated because of the Executive’s resignation, the Bank shall be obligated to pay to the Executive, within thirty (30) days of the effective date of such termination, only any salary, vacation, and bonus amounts that would have been accrued and unpaid through the end of such 90-day period (less any amounts owed to the Bank by the Executive).
(d) If the Executive’s employment is terminated by the death or disability (i.e., the Executive is unable to perform the essential functions of him position for at least 180 days within a nine-month period) of the Executive, this Agreement shall automatically terminate effective immediately, and the Bank shall be obligated to pay to the Executive or the Executive’s estate, on the Bank’s regular payroll payment date next following the thirtieth (30th) day after the effective date of termination, only any salary, vacation, and bonus amounts accrued and unpaid at the date of disability or death (less any amounts owed to the Bank by the Executive).
(e) By the Bank or the Executive within twelve (12) months of the closing of a Change of Control, in which event (i) the Bank shall pay to the Executive, on the Bank’s regular payroll payment date next following the thirtieth (30th) day after the effective date of termination, an amount equal to one times the average base annual salary received by the Executive during the three-year period prior to such termination, and (ii) the Bank, at its sole expense, shall maintain in full force and effect for the continued benefit of the Executive and his dependents, if any, or shall pay for (under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) or otherwise), for a period of one (1) year after the effective date of termination, all benefits provided by the Bank in which the Executive and/or his dependents were participating immediately prior to the effective date of termination at the level in effect and upon substantially the same terms and conditions (including, without limitation, contributions required by the Executive for such benefits) as existed immediately prior to the effective date of termination (except to the extent that the Executive and/or his dependents may be ineligible for one or more such benefits under applicable plan terms). For purposes of this Agreement, a Change of Control shall mean a merger or acquisition in which the Bank or its holding company is not the surviving entity, or the acquisition by any individual or group of beneficial ownership of more than 50% of the outstanding shares of the common stock of the Bank’s holding company or of the Bank. The term “group” and the concept of beneficial ownership shall have such meanings ascribed thereto as set forth in the Securities Exchange Act of 1934, as amended (the “1934 Act”), and the regulations and rules thereunder. If the provisions of this Section 8(e) are triggered by the Bank or the Executive, the provisions of this Section 8(e) shall override and supersede the provisions of Sections 8(b), (c), (d) and (f), as applicable (for the avoidance of doubt, no duplicative compensation).
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(f) By the Bank, by action taken by its Board, at any time if said discharge is without Cause. If the Executive’s employment is terminated by the Bank without Cause, the Bank shall, for a period which is the longer of (A) twelve (12) months after the effective date of termination or (B) the remainder of the then term of this Agreement (but, in either case, in no event beyond the date the Executive commences employment elsewhere), continue to pay to the Executive in accordance with the Bank’s payroll policies the base annual salary in effect under Section 4(a) on the date of said termination, less any amounts owed to the Bank by the Executive, with such payments to commence on the Bank’s regular payroll payment date next following the thirtieth (30th) day after the effective date of such termination of employment (but retroactive to such effective date).
(g) Notwithstanding anything in this Agreement to the contrary, as a condition to receipt by the Executive of the payments due from the Bank pursuant to the applicable provision in this Section 8 in connection with termination of his employment, the Executive shall execute and deliver to the Bank within twenty-two (22) days of the effective date of the termination of his employment, a general release of all claims the Executive may have against the Bank Group and their respective Boards of Directors with respect to the subject matter of this Agreement (other than any obligations of the Bank under this Agreement or any severance agreement which by their terms survive) in a form reasonably acceptable to the Bank and/or its counsel, and such release shall not have been revoked by the Executive.
(h) Any termination of the Executive’s employment for any reason shall require that the Executive resign all other positions (including as director) he may then be holding with the Bank Group or as trustee of any of their benefit plans, unless the Board and the Executive agree to the contrary.
(i) The parties acknowledge and agree that the compensation and benefits set forth in this Section 8 as being payable upon termination of this Agreement constitute liquidated damages upon the termination of this Agreement, and the parties hereto have agreed that such compensation and benefits are reasonable. The parties further acknowledge and agree that the Bank and any holding company of the Bank shall not be required to pay any salary, bonus or benefits under this Section 8 if, upon the advice of counsel, the Bank determines that the payment of such salary, bonus or benefits would be prohibited by 12 C.F.R. Part 359 or any successor regulations regarding employee compensation promulgated by any regulatory agency having jurisdiction over any of the Bank Group.
9. Notice. All notices permitted or required to be given to either party under this Agreement shall be in writing and shall be deemed to have been given (a) in the case of delivery, when addressed to the other party as set forth at the end of this Agreement and delivered to said address, (b) in the case of mailing, three days after the same has been mailed by certified mail, return receipt requested, and deposited postage prepaid in the U.S. Mails, addressed to the other party at the address as set forth at the end of this Agreement, and (c) in any other case, when actually received by the other party. Either party may change the address at which said notice is to be given by delivering notice of such to the other party to this Agreement in the manner set forth herein.
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10. Confidential Matters; Work Product.
(a) The Executive is aware and acknowledges that the Executive shall have access to Confidential Information by virtue of his employment. The Executive agrees that, during the period of time the Executive is retained to provide services to the Bank, and thereafter subsequent to the termination of Executive’s services to the Bank for any reason whatsoever, the Executive will not, except as is necessary for the Executive to perform his duties on behalf of the Bank Group, directly or indirectly, use, release or divulge any Confidential Information whatsoever relating to any of the Bank Group or their business, to any other person or entity without the prior written consent of the Bank. During the term of this Agreement, the Executive shall take all steps reasonably necessary and/or requested by the Bank to ensure that its Confidential Information is kept confidential pursuant to this Agreement. “Confidential Information” shall include the various confidential, trade secret and/or proprietary information of any of the Bank Group and of their clients and customers, including, without limitation, ideas, concepts, plans, designs, marketing techniques, sales techniques, forecasts, projections, products, technology, methods, procedures, pricing, costs, cost reports, customers, customer lists, customer identification, customer prospects, designs, computer systems, passwords, computer software, procedures, methods, formulae, financial statements, assets, liabilities, revenues, business methods, marketing information, marketing methods, acquisition plans, contract terms, contract negotiations, compensation information, structures and plans, employee responsibilities and duties, copyrights, trademarks, patents and other proprietary information. Confidential Information does not include information that is available to the public or which becomes available to the public other than through a breach of this Agreement on the part of the Executive.
(b) In the event the Executive is requested pursuant to, or required by, applicable law or regulation or by legal process to disclose any Confidential Information, the Executive agrees to provide the Bank Group with prompt notice of such request or requirement to enable the Bank Group to seek an appropriate protective order, waive compliance with the provisions of this Agreement or take other appropriate action. The Executive agrees to use the Executive’s best efforts in such event to assist the Bank Group in obtaining a protective order. If, in the absence of a protective order or the receipt of a waiver under this Agreement, the Executive is nonetheless, in the written opinion of the Executive’s counsel, compelled to disclose the Confidential Information to any tribunal or else stand liable for contempt or suffer other censure or significant penalty, the Executive, after notice to the Bank Group, may disclose to such tribunal only such Confidential Information that the Executive is compelled to disclose. The Executive shall not be liable for the disclosure of Confidential Information to a tribunal compelling such disclosure unless such disclosure was caused or resulted from a previous disclosure by the Executive not permitted under this Agreement.
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(c) The Executive acknowledges and agrees that all right, title and interest in and to all “Results” (as defined below), as well as any and all intellectual property rights therein and all improvements thereto, shall be the sole and exclusive property of the Bank Group. Results shall and shall at all times remain the Confidential Information of the Bank Group and the Bank Group shall have the unrestricted right (but not any obligation), in its sole and absolute discretion, to (i) use, commercialize or market any Results; or (ii) file an application for patent, copyright registration or any other intellectual property rights and prosecute or abandon such application prior to issuance or registration. No royalty or other consideration shall be due or owing to the Executive now or in the future as a result of such activities. For purposes of this Agreement, “Results” means all writings, works of authorship, technology, inventions, discoveries, processes, techniques, methods, ideas, concepts, research, proposals, materials and all other work product of any nature whatsoever, that are created, prepared, produced, authored, edited, amended, conceived or reduced to practice by the Executive individually or jointly with others as a result of the Executive’s employment by the Bank or related in any way to the business or contemplated business, products, activities, research or development of the Bank Group (in each case, regardless of when or where prepared or whose equipment or other resources are used in preparing the same), all rights and claims related to the foregoing, and all printed, physical and electronic copies, all improvements, and other tangible embodiments thereof.
(d) To the extent permitted by law, all Results consisting of copyrightable subject matter will be deemed “works for hire” or “works made for hire,” within the meaning of the United States Copyright Act of 1976, for the benefit of the Bank Group. To the extent the foregoing sentence does not apply to certain Results, the Executive irrevocably assigns to the Bank Group, and their successors and assigns, for no additional consideration, the Executive’s entire right, title and interest in and to all such Results and any related intellectual property rights therein, whether or not now or hereafter known, existing, contemplated, recognized or developed, and the Bank Group will have the right to use the same in perpetuity throughout the universe in any manner it determines, in its sole discretion, without any further payment or compensation to the Executive whatsoever. To the extent the Executive has any rights in any Results or any related intellectual property rights that cannot be assigned in the manner described above, the Executive unconditionally and irrevocably waives the enforcement of such rights. To the extent any copyrights are assigned under this Agreement, the Executive irrevocably waives in favor of the Bank Group, to the extent permitted by applicable law, any and all claims that the Executive may now or hereafter have in any jurisdiction to all rights of paternity, integrity, disclosure and withdrawal and any other rights that may be known as “moral rights” with respect to all Results and all intellectual property rights therein.
(e) During and after the Executive’s employment by the Bank, the Executive shall reasonably cooperate with the Bank Group to do any and all things which the Bank Group may deem useful, necessary or desirable to establish, maintain, protect and enforce the Bank Group’s exclusive ownership of any and all rights in any Results. The Executive hereby irrevocably grants the Bank Group a power of attorney to do all such things (including the execution and delivery of documents) on the Executive’s behalf and in the Executive’s name and to do all other lawfully permitted acts to establish, maintain, protect and enforce the Bank Group’s exclusive ownership of any and all rights in any Results and intellectual property rights therein, to the fullest extent permitted by law, if the Executive does not promptly cooperate with the Bank Group’s request (without limiting the rights the Bank Group may have in such circumstances by operation of law). This power of attorney is coupled with an interest and shall not be affected by the Executive’s subsequent incapacity.
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(f) The Executive will, immediately upon the Bank’s request, upon termination of the Executive’s employment by the Bank, for any reason or for no reason, return to the Bank: (i) all copies and manifestations of Confidential Information (including, without limitation, Results) that the Executive may have or have access to; (ii) all documents, other materials and equipment provided by any of the Bank Group; and (iii) all documents and materials that the Executive has prepared during the Executive’s employment by any of the Bank Group (collectively, the “Bank Property”). The Executive acknowledges and agrees that the Bank Property is, and shall, remain at all times the exclusive property of the Bank Group.
11. Equitable Relief. The Bank has entered into this Agreement in order to obtain the benefit of the Executive’s unique skills, talent, and experience. The parties enter into this Agreement with the understanding that the base salary and all other compensation and benefits to be paid to the Executive pursuant to this Agreement have been based in part on the value to the Bank Group of each of the provisions of this Agreement. The Executive acknowledges and agrees that any breach or threatened breach of this Agreement will result in irreparable damage to the Bank Group and, accordingly, any of the Bank Group may obtain injunctive relief, a decree of specific performance and/or any other equitable relief for any breach or threatened breach of this Agreement in addition to any other remedies available to the Bank Group, without being required to show any actual damage, or to post an injunction bond, and the prevailing party in any such proceeding will be entitled to reimbursement for all costs and expenses, including reasonable attorneys’ fees and expenses in connection therewith. Nothing herein shall be construed as prohibiting the Bank Group from pursuing such other remedies available to it for any such breach or threatened breach including recovery of damages from the Executive.
12. Legitimate Business Interests. The Executive acknowledges and agrees that in the performance of his duties of employment with the Bank, he will be in contact with customers, potential customers and/or information about customers or potential customers of the Bank Group either in person, through the mails, by telephone or by other electronic means. The Executive also acknowledges and agrees that trade secrets and confidential information of the Bank Group that will be gained by Executive during his employment with the Bank, have been developed by the Bank Group through substantial expenditures of time, effort and financial resources and constitute valuable and unique property of the Bank Group. The Executive further understands, acknowledges and agrees that the foregoing makes it necessary for the protection of the Bank Group’s businesses that the Executive not divert business or customers from the Bank Group and that the Executive maintain the confidentiality and integrity of the confidential information as provided in this Agreement.
13. Noncompetition. The Executive agrees that during the period of time the Executive is retained to provide services to the Bank, and thereafter for a period of one year subsequent to the termination of Executive’s services to the Bank for any reason (including expiration of this Agreement), the Executive will not enter the employ of, or have any interest in, directly or indirectly (either as executive, partner, director, officer, consultant, principal, agent or employee), any other bank or financial institution or any entity which either accepts deposits or makes loans (whether presently existing or subsequently established) or any holding company for any of the foregoing and which has an office located within a radius of 50 miles of any office of any of the Bank Group within the State of Florida; provided, however, that the foregoing shall not preclude any ownership by the Executive of an amount not to exceed 5% of the equity securities of any entity which is subject to the periodic reporting requirements of the 1934 Act and the shares of the Bank’s (or its holding company’s) common stock owned by the Executive at the time of termination of employment.
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14. Nonsolicitation; Noninterference. The Executive agrees that during the period of time the Executive is retained to provide services to the Bank, and thereafter for a period of one year subsequent to the termination of the Executive’s services to the Bank for any reason whatsoever, the Executive will not (a) solicit for employment by Executive, or anyone else, or employ any employee of the Bank Group or any person who was an employee of the Bank Group within twelve (12) months prior to such proposed employment or solicitation of employment; (b) induce, or attempt to induce, any employee of the Bank Group to terminate such employee’s employment; (c) induce, or attempt to induce, anyone having a business relationship with the Bank Group to terminate or curtail such relationship or enter into a similar relationship with another financial institution or financial services company or, on behalf of himself or anyone else, compete with the Bank Group; (d) knowingly make any untrue statement concerning the Bank Group or its directors or officers to anyone; or (e) permit anyone controlled by the Executive, or any person acting on behalf of the Executive or anyone controlled by an employee of the Executive, to do any of the foregoing.
15. Non-Disparagement. The Executive shall not, during his employment by the Bank or at any time thereafter, directly or indirectly, in any communications in any media, criticize, ridicule or make (or cause or permit others to criticize, ridicule or make) any statement which disparages or is derogatory of any of the Bank Group, the Bank Group’s products or services, or any of the Bank Group’s present, former or future shareholders, officers, directors, employees, affiliates and/or subsidiaries.
16. Remedies. The Executive agrees that the restrictions set forth in this Agreement are fair and reasonable. The covenants set forth in this Agreement are not dependent covenants and any claim against the Bank Group, whether arising out of this Agreement or any other agreement or contract between any of the Bank Group and the Executive, shall not be a defense to a claim against the Executive for a breach or alleged breach of any of the covenants of the Executive contained in this Agreement. It is expressly understood by and between the parties hereto that the covenants contained in this Agreement shall be deemed to be a series of separate covenants. The Executive understands and agrees that if any of the separate covenants are judicially held invalid or unenforceable, such holding shall not release him from his obligations under the remaining covenants of this Agreement. If in any judicial proceedings, a court shall refuse to enforce any or all of the separate covenants because taken together they are more extensive (whether as to geographic area, duration, scope of business or otherwise) than necessary to protect the business and goodwill of the Bank Group, it is expressly understood and agreed between the parties hereto that those separate covenants which, if eliminated or restricted, would permit the remaining separate covenants or the restricted separate covenant to be enforced in such proceeding shall, for the purposes of such proceeding, be eliminated from the provisions of this Agreement or restriction, as the case may be.
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17. Invalid Provision. In the event any provision should be or become invalid or unenforceable, such facts shall not affect the validity and enforceability of any other provision of this Agreement. Similarly, if the scope of any restriction or covenant contained herein should be or become too broad or extensive to permit enforcement thereof to its full extent, then any such restriction or covenant shall be enforced to the maximum extent permitted by law, and Executive hereby consents and agrees that the scope of any such restriction or covenant may be modified accordingly in any judicial proceeding brought to enforce such restriction or covenant.
18. Governing Law; Venue. This Agreement shall be construed in accordance with and shall be governed by the laws of the State of Florida. The sole and exclusive venue for any action arising out of this Agreement shall be a state court situated in Miami-Dade County, Florida, and the parties to this Agreement agree to be subject to the personal jurisdiction of such Court and that service on each party shall be valid if served by certified mail, return receipt requested or hand delivery.
19. Attorneys’ Fees and Costs. In the event a dispute arises between the parties under this Agreement and suit is instituted, the prevailing party shall be entitled to recover him or its costs and attorneys’ fees from the nonprevailing party. As used herein, costs and attorneys’ fees include any costs and attorneys’ fees and costs in any appellate proceeding.
20. Binding Effect. The rights and obligations of the parties under this Agreement shall inure to the benefit of and shall be binding upon the successors, assigns and legal representatives of the Bank Group and the heirs and legal representatives of the Executive.
21. Effect on Other Agreements. This Agreement and the termination thereof shall not affect any other agreement between the Executive and the Bank Group, and the receipt by the Executive of benefits thereunder.
22. Miscellaneous. The captions used herein are solely for the convenience of the parties and are not used in construing this Agreement. Time is of the essence of this Agreement and the performance by each party of its or his duties and obligations hereunder.
23. Compliance with Section 409A.
(a) If any amounts that become due under Section 8 of this Agreement constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), payment of such amounts shall not commence until the Executive incurs a “Separation from Service” (as defined below) if and only if necessary to avoid accelerated taxation or tax penalties in respect of such amounts.
(b) Notwithstanding any provision of this Agreement to the contrary, if the Executive is a “Specified Employee” (as defined below), he shall not be entitled to any payments upon a Separation from Service until the earlier of (i) the date which is the first (1st) business day following the date that is six (6) months after Executive’s Separation from Service for any reason other than death or (ii) Executive’s date of death. The provisions of this Section shall only apply if required to comply with Section 409A of the Code.
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(c) For purposes of this Agreement, “Separation from Service” shall have the meaning set forth in Section 409A(a)(2)(A)(i) of the Code and determined in accordance with the default rules under Section 409A of the Code. “Specified Employee” shall have the meaning set forth in Section 409A(a)(2)(B)(i) of the Code, as determined in accordance with the uniform methodology and procedures adopted by the Bank and then in effect.
(d) It is intended that the terms and conditions of this Agreement comply with Section 409A of the Code. If any provision of this Agreement contravenes any regulations or Treasury guidance promulgated under Section 409A of the Code, or could cause any amounts or benefits hereunder to be subject to taxes, interest and penalties under Section 409A of the Code, this Agreement or any provision hereof may be reformed by the Executive, subject to the consent of the Bank (which consent shall not be unreasonably withheld) to: (i) comply with, or avoid being subject to, Section 409A of the Code, (ii) avoid the imposition of taxes, interest and penalties under Section 409A of the Code, and/or (iii) maintain, to the maximum extent practicable, the original intent of the applicable provision without violating the provisions of Section 409A of the Code; provided, however, that no such amendment shall have the effect of reducing the amount of any payment or benefit payable to the Executive pursuant to this Agreement.
(e) Anything in this Agreement to the contrary notwithstanding, no reimbursement payable to the Executive pursuant to any provisions of this Agreement or pursuant to any plan or arrangement of the Bank Group covered by this Agreement shall be paid later than the last day of the calendar year following the calendar year in which the related expense was incurred, except to the extent that the right to reimbursement does not provide for a “deferral of compensation” within the meaning of Section 409A of the Code. No amount reimbursed during any calendar year shall affect the amounts eligible for reimbursement in any other calendar year.
24. Complete Agreement. This Agreement constitutes the complete agreement between the parties hereto and incorporates all prior discussions, agreements and representations made in regard to the matters set forth herein. This Agreement may not be amended, modified or changed except by a writing signed by the party to be charged by said amendment, change or modification.
25. Regulatory Actions. Notwithstanding any other provision of this Agreement to the contrary, any amounts paid or payable to the Executive pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with Sections 18(k) and 32(a) of the Federal Deposit Insurance Act ("FDIA") and Part 359 of the FDIC's rules and regulations, and any regulations promulgated under the FDIA, and also are subject to and conditioned upon compliance by the Bank with any Memorandum of Understanding, Consent Order, or other agreement between the Bank and the FDIC and/or the Florida Office of Financial Regulation.
26. Assignability. The Executive’s rights and obligations hereunder are personal and may not be assigned by the Executive (other than his rights to payments or benefits hereunder, which may be transferred only by will or the laws of descent and distribution or to the Executive’s representative in the event of his disability); provided, however, in the event of the Executive’s death or disability, the Executive’s representative may also exercise any unexercised stock options or stock appreciation rights, if any, to the extent permitted by the relevant option or stock appreciation rights plan agreement or this Agreement. As used in this Agreement, “Bank” and “Bank Group” shall mean the entities as hereinbefore defined and any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the equity, business and/or assets of the Bank Group or that otherwise becomes bound by all the terms and provisions of this Agreement by operation of law.
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27. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Confirmation of execution by electronic transmission of a facsimile signature page shall be binding on a party so confirming.
28. Indemnification. The Executive agrees and promises to indemnify and hold the Bank and its affiliates and each of their respective officers, directors, agents, owners, shareholders, employees, contractors, agents and representatives (each, individually, an "Indemnified Party") harmless from any and all damages, losses, claims and/or suits (including reasonable attorneys' fees, whether incurred at, prior to, or in preparation for trial, on appeal, or otherwise) arising as a result of any breach of any representation, warranty, covenant, or agreement, or duty of the Executive under this Agreement; provided, however, that the amount owed by the Executive to the Indemnified Party shall be reduced by the actual amount received by the Indemnified Party from insurance or other obligated person with respect to the matter which is the subject of indemnification.
29. JURY WAIVER. IN ANY CIVIL ACTION, COUNTERCLAIM, OR PROCEEDING, WHETHER AT LAW OR IN EQUITY, WHICH ARISES OUT OF, CONCERNS, OR RELATES TO THIS AGREEMENT, ANY AND ALL TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE PERFORMANCE OF THIS AGREEMENT, OR THE RELATIONSHIP CREATED BY THIS AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE, TRIAL SHALL BE TO A COURT OF COMPETENT JURISDICTION AND NOT TO A JURY. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY. ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT, AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THIS AGREEMENT OF THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. NEITHER PARTY HAS MADE OR RELIED UPON ANY ORAL REPRESENTATIONS TO OR BY ANY OTHER PARTY REGARDING THE ENFORCEABILITY OF THIS PROVISION. EACH PARTY HAS READ AND UNDERSTANDS THE EFFECT OF THIS JURY WAIVER PROVISION. EACH PARTY ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY ITS OWN COUNSEL WITH RESPECT TO THE TRANSACTION GOVERNED BY THIS AGREEMENT AND SPECIFICALLY WITH RESPECT TO THE TERMS OF THIS SECTION.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
PROFESSIONAL BANK | ||
By: | /s/ Daniel R. Sheehan | |
Daniel R. Sheehan, | ||
Executive Chairman | ||
“EXECUTIVE” | ||
/s/ Ryan Gorney | ||
Ryan Gorney |
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Exhibit 10.5
PROFESSIONAL BANK
2012 SHARE APPRECIATION RIGHTS PLAN
Professional Bank, a Florida commercial bank (“Professional Bank” or the “Bank”), previously adopted the Stock Option Plan (the “Prior Plan”). The Board of Directors adopted an amendment to the Prior Plan and adopted this 2012 Share Appreciation Rights Plan (the “SAR Plan”), effective upon approval by the Board of Directors of Professional Bank, for the benefit of its eligible employees.
The purposes of the amendment to the Prior Plan and of the SAR Plan are to directly benefit the interests of Professional Bank’s stockholders as follows:
a) | To further the growth, development and financial success of Professional Bank by providing appropriate incentives to certain key employees who have been or will be given responsibility for the management or administration of the business affairs of the Bank; |
b) | To provide for distinct plans for board and for management in order to maximize incentives offered while minimizing expenses; and |
c) | To enable Professional Bank to obtain and retain the services of the type of professional, technical and managerial employees considered essential to Professional Bank’s long-range success. |
1. Definitions. Wherever used herein, the following words and phrases shall have the meanings hereinafter set forth:
a. | “Award” means the grant of a Unit to a Participant; | |
b. | “Base Price” shall have the meaning set out in Section 8; | |
c. | “Board” means the Board of Directors of the Bank; | |
d. | “Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto; | |
e. | “Committee” means the Compensation Committee of the Board; | |
f. | “Common Stock” means the shares of common stock of the Bank; | |
g. | “Fair Market Value”, wherever used to refer to the price of a share of Common Stock, means the greater of the most recent offered price or book value. | |
h. | “Liquidity Event” means an event that triggers an exit opportunity for holders of Common Stock of the Bank to liquidate their holdings through a reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially all of the assets of the Bank, or exchange of Common Stock or other securities of the Bank, issuance of warrants or other rights to purchase Common Stock or other securities of the Bank, going public transaction or other similar corporate transaction or event that results in the ability of holders of Common Stock to receive a cash payment in exchange for their shares of Common Stock; provided, however, that the formation of a holding company with shareholders consisting substantially of the shareholders of the Bank shall not be considered a Liquidity Event. |
i. | “Participant” means any employee or officer of the Bank who has been selected to receive an Award under the SAR Plan; | |
j. | “Unit” means a right granted under this SAR Plan to a Participant, which entitles the Participant to receive at the time of exercise a cash amount equal to the difference between the Fair Market Value of a single share of Common Stock and the Base Price of a single share of Common Stock; | |
k. | “Unit Agreement” means an agreement between the Bank and a Participant setting out the terms and conditions for an Award of Units. |
2. Effective Date and Termination Date. The SAR Plan was approved by the Board on December 18, 2012. The Plan shall terminate on December 17, 2022].
3. Administration. The Plan shall be administered by the Committee. Subject to the provisions of the SAR Plan, the Committee shall have full authority to determine the number and type of Awards granted under the SAR Plan, to interpret the SAR Plan, to enact, amend and rescind any rules and regulations relating to the SAR Plan, to determine the provisions of each Unit Agreement, and to take such other action and make such other determinations as the Committee deems necessary or advisable for the administration of the Plan. The decisions of the Committee under the SAR Plan, in its sole and absolute discretion, shall be conclusive and binding. No member of the Board or the Committee shall be liable for any action relating to the affairs governing the SAR Plan.
4. Available Units. The maximum number of Units available for issuance under the SAR Plan is equal to 50% of the share options available under the Prior Plan. In the event that any Unit granted under the SAR Plan is not exercised before its expiry date, or is terminated, or ceases to be exercisable for any other reason prior to the end of the period during which Units may be granted under the SAR Plan, such unexercised Units shall become available for new Awards to be granted under the SAR Plan to any eligible employee, including the original holder of such Units.
5. Awards. Awards may be made to any of the employees or officers of the Bank who, in the opinion of the Committee, have already made or are in a position to make a significant contribution to the success of the Bank. Subject to the provisions of the SAR Plan, the Committee shall determine at what time(s) Units are to be granted, which key employees are to be granted Units, the number of Units, the duration of each Unit, the Base Price for each Unit, and the time or times within which all or portions of each Unit may be exercised. In making such determinations, the Committee shall consider the nature of the services rendered by the employee, the employee’s present and potential future contributions and such other factors as the Committee, in its sole discretion, deems relevant. Notwithstanding the above, the Committee may delegate certain powers relating to the granting of Awards as it deems appropriate to executive officers of the Bank, including the power to determine certain terms and conditions of such Awards.
6. Consideration. In consideration of the granting of an Award under the SAR Plan, the Participant shall agree, in the Unit Agreement, to a noncompetition provision for a period of at least one (1) year (or such shorter period as may be fixed in the Unit Agreement or by action of the Committee following grant of the Award) after the Award is granted and to penalties, including but not limited to nullification of the Award in the event of a breach of the Unit Agreement. The Committee may also require the Participant to amend their employment agreement to participate in the SAR Plan and forego participation in the Prior Plan and, at the discretion of the Committee, may consider a Participant’s willing waiver of options under the Prior Plan.
7. At Will Employment. Nothing in the SAR Plan or in any Unit Agreement hereunder shall confer upon any Participant any right to continue in the employ of the Bank, or shall interfere with or restrict in any way the rights of the Bank, which are hereby expressly reserved, to discharge any Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written employment agreement between the Participant and the Bank.
8. Base Price. The Base Price for each Unit shall be the Fair Market Value at the time of the Award, provided, however, that the Fair Market Value is subject to a high water mark such that a reduction in the Fair Market Value does not lower the Base Price below its highest level to date.
9. Vesting and Exercise. Subject to a one (1) year minimum period from Award to the right to exercise, a Unit granted to a Participant vests, in whole or in part, upon a Liquidity Event. If the Liquidity Event results in only a partial cash distribution to shareholders, then the Unit vests in proportional part and the remainder continues subject to a Liquidity Event. The Committee, in its sole discretion, may determine that an Award may not be exercised in whole or in part for a specified period after it is granted. No portion of an Award granted to a Participant which is not exercisable at termination of employment, as applicable, shall thereafter become exercisable provided, however, that if a there shall be a six month look-back period if a Participant is terminated without cause less than six months before the Liquidity Event.
10. Summary of Calculations. As set forth herein, each Unit represents a share of Common Stock. The Participant’s Award is a number of shares with the value measured as the Fair Market Value at the time the Award is granted (the Base Price – as of the date hereof $10). Upon a Liquidity Event whereby the shareholders have the right to liquidate their Common Stock, the Unit vests (subject to the minimum periods set forth above) and the Bank shall pay the Participant an amount equal to the increase of the Fair Market Value at the Liquidity Event above the Base Price then multiplied by the number of Units.
11. Compliance with Laws. The SAR Plan, the granting and vesting of Awards under the SAR Plan and the payment of money under the SAR Plan or under Awards granted hereunder are subject to compliance with all applicable federal and state laws, rules and regulations and to such approvals by any regulatory or governmental authority as may, in the opinion of counsel for the Bank, be necessary or advisable in connection therewith. To the extent permitted by applicable law, the SAR Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.
Unless otherwise determined by the Committee, in each Unit Agreement, the Participant will acknowledge and agree with the Bank as follows: (a) the SAR Plan serves as part of the compensation package for key employees and provides a mechanism to monetize executive performance consistent with adding shareholder value; (b) the Award expires if the Participant is not an employee at the time of the Liquidity Event, subject to a six month look-back in the event the Participant is terminated without cause; (c) the issuance of Units is not a security and does not provide rights as a holder of Common Stock; (d) the SAR Plan is intended to be outside of ERISA and is provided to key employee participants and is not available to all employees; (e) no award under the SAR Plan may be sold, pledged, assigned or transferred in any way; and (f) the Bank shall be entitled to require appropriate taxes be withheld at the time of the payment to the Participant.
The SAR Plan is intended to comply with Section 409A of the Code and shall be construed and interpreted in accordance with such intent. Any provision of the SAR Plan that would cause a grant or any other payment under the Plan to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Code Section 409A (which amendment may be retroactive to the extent permitted by the Guidance). If the Committee at any time determines that the SAR Plan or Awards granted under the SAR Plan are or may be subject to, and fail or may fail to comply with, the requirements of Section 409A of the Code, the Committee may make such modifications to the SAR Plan and to the terms of any Unit Agreements as it deems advisable to comply. Notwithstanding the foregoing, nothing herein shall create any obligation by the Bank to any participant should any grant or other payment fail to satisfy Section 409A of the Code. The SAR Plan is not intended to be deferred compensation under Code Section 409A because there is no right to payment until the Liquidity Event occurs and there is no grant of stock – instead there is a cash bonus measured by an increase in value for shareholders.
The SAR Plan and any agreements hereunder shall be administered, interpreted and enforced under the laws of the State of Florida without regard to conflicts of law issues.
12. WAIVER OF JURY TRIAL. THE BANK AND EACH PERSON WHO IS A PARTICIPANT EXPRESSLY WAIVES ALL RIGHTS TO ANY TRIAL BY JURY IN ALL LITIGATION RELATING TO OR ARISING OUT OF THE SUBJECT MATTER OF THIS SAR PLAN.
Exhibit 10.6
PROFESSIONAL HOLDING CORP.
2014 ASSOCIATE STOCK PURCHASE PLAN
1. Purpose. The purpose of the Plan is to provide Associates of the Company and its Designated Subsidiaries with an opportunity to purchase Common Stock of the Company through accumulated payroll deductions. It is the intention of the Company to have the Plan qualify as an "Employee Stock Purchase Plan" under Section 423 of the Internal Revenue Code of 1986, as amended. The provisions of the Plan, accordingly, shall be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code.
2. Definitions.
(a) "Associate" shall mean any individual who is an employee of the Company or a Designated Subsidiary for purposes of tax withholding under the Code and who is not an owner of five percent (5%) or more of all outstanding Common Stock on a fully diluted basis (i.e., after taking into account outstanding stock options and other Common Stock equivalents) except that the Chief Executive Officer of the Company shall not be an Associate for purposes of this Plan provided that the Chief Executive Officer is a highly compensated employee as defined in §414(q) of the Code.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Code" shall mean the Internal Revenue. Code of 1986, as amended.
(d) "Committee" shall mean a committee appointed by the Board which shall be the administrative committee for the Plan (the “Committee”); provided, that to the extent required by Rule 16b-3 of the Securities and Exchange Commission under the Exchange Act, such Committee shall be comprised solely of two or more Non-Employee Directors, as defined in Rule 16b-3(b)(3) under the Exchange Act. All references in this Plan to the “Committee” shall mean the Board if no Committee has been appointed.
(e) "Common Stock" shall mean the Class A Common Stock of the Company, $0.01 par value per share.
(f) "Company" shall mean Professional Holding Corp., a Florida corporation.
(g) "Compensation" shall mean all base gross earnings, salary, wages, annual bonuses and commissions paid to the Associate by the Company or a Designated Subsidiary as compensation for services to the Company or Designated Subsidiary, before deduction for any salary deferral contributions made by the Associate to any tax-qualified or nonqualified deferred compensation plan, including overtime, vacation pay, holiday pay, jury duty pay and funeral leave pay, but excluding education or tuition reimbursements, imputed income arising under any group insurance or benefit program, travel expenses, business and relocation expenses, and income received in connection with stock options or other equity-based awards.
(h) "Designated Subsidiaries" shall mean the Subsidiaries which have been designated by the Board from time to time in its sole discretion as eligible to participate in the Plan.
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(i) "Enrollment Date" shall mean the first day of each Offering Period.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
(k) "Exercise Date" shall mean the last day of each Offering Period.
(l) "Fair Market Value" shall mean (1) the closing price of the Common Stock on the principal national securities exchange on which the Common Stock is traded, if the Common Stock is then traded on a national securities exchange; or (2) the closing price of the Common Stock on the Nasdaq National Market, if the Common Stock is not then traded on a national securities exchange; or (3) the closing bid price last quoted by an established quotation service for over-the-counter securities, if the Common Stock is not reported on the Nasdaq National Market. However, if the Common Stock is not publicly-traded, "Fair Market Value" shall be deemed to be the fair value of the Common Stock as determined by the Committee after taking into consideration all factors which it deems appropriate, including, without limitation, recent sale and offer prices of the Common Stock in private transactions negotiated at arm’s length.
(m) "Offering Period" shall mean, subject to the second sentence of Section 4 hereof, a period of twelve months, commencing on January 1 of each calendar year and terminating on December 31 of that calendar year.
(n) "Parent" shall mean a corporation which is a "parent corporation" of the Company within the meaning of Section 424(e) of the Code.
(o) "Plan" shall mean this Professional Holding Corp. 2014 Associate Stock Purchase Plan.
(p) "Purchase Price" shall mean an amount equal to ninety-five percent (95%) of the Fair Market Value of a share of Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower, as determined in the sole discretion of the Committee. Subject to the limitations imposed under Section 423 of the Code, the Committee may adjust the Purchase Price to such other percentage of Fair Market Value as determined by the Committee.
(q) "Reserves" shall mean the number of shares of Common Stock covered by each option under the Plan which have not yet been exercised and the number of shares of Common Stock which have been authorized for issuance under the Plan but not yet placed under option.
(r) "Subsidiary" shall mean a corporation which is a "subsidiary corporation" of the Company within the meaning of Section 424(f) of the Code.
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3. Eligibility.
(a) Each person who is an Associate on a given Enrollment Date shall be eligible to participate in the Plan for the Offering Period containing such Enrollment Date, subject to the requirements of Section 423 of the Code.
(b) Any provisions of the Plan to the contrary notwithstanding, no Associate shall be granted an option under the Plan (i) if, immediately after the grant, such Associate would own stock (together with stock owned by any other person or entity that would be attributed to such Associate pursuant to Section 424(d) of the Code) of the Company (including, for this purpose, all shares of stock subject to any outstanding options to purchase such stock, whether or not currently exercisable and irrespective of whether such options are subject to the favorable tax treatment of Section 421(a) of the Code) possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of any Parent or Subsidiary, or (ii) which permits his or her rights to purchase stock under all employee stock purchase plans (within the meaning of Section 423 of the Code) of the Company and its Parents and Subsidiaries to accrue at a rate which exceeds twenty-five thousand dollars ($25,000) worth of stock (determined at the Fair Market Value of the stock at the time such option is granted) for each calendar year in which such option is outstanding at any time. The limitation described in clause (ii) of the preceding sentence shall be applied in a manner consistent with Section 423(b)(8) of the Code.
4. Offering Periods. The Plan shall be implemented by consecutive Offering Periods continuing from the first Offering Period until terminated in accordance with Section 19 hereof. The Committee shall have the power to change the duration of Offering Periods (including the commencement dates thereof) with respect to future offerings without shareowner approval if such change is announced at least fifteen (15) days prior to the scheduled beginning of the first Offering Period to be affected thereafter.
5. Participation.
(a) An Associate may become a participant in the Plan for an Offering Period by completing a subscription agreement authorizing payroll deductions in the form of Exhibit A to this Plan (or in such other form as the Committee shall approve and which shall contain substantially the same terms as Exhibit A) and filing it with the human resources office of the Company or applicable Designated Subsidiary at least fifteen (15) business days prior to the applicable Enrollment Date, unless a later time for filing the subscription agreement is set by the Committee for all Associates with respect to a given Offering Period.
(b) Payroll deductions for a participant shall commence on the first payroll date following the Enrollment Date and shall end on the last payroll date in the Offering Period to which such authorization is applicable, unless sooner terminated by the participant as provided in Section 10 hereof.
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6. Payroll Deductions.
(a) At the time a participant files his or her subscription agreement, he or she shall elect to have payroll deductions made on each pay day during the Offering Period in an amount (expressed as a whole number percentage or a fixed dollar amount) of the Compensation he or she receives on each pay day during the Offering Period.
(b) All payroll deductions made for a participant shall be credited to his or her account under the Plan. Subject to the limitations set forth in Section 7, the Committee may, in its sole discretion, determine whether or not to permit participants to make any additional payments into such account and, if so, upon such terms as the Committee may determine. However, in all events, all employees shall have the same rights and privileges with respect to their right to make such additional payments.
(c) A participant may discontinue his or her participation in the Plan, as provided in Section 10 hereof, at any time during the Offering Period prior to the Exercise Date. Once an Offering Period has commenced, a participant may not increase or decrease the rate or amount of his or her payroll deductions for that Offering Period, but may, during that Offering Period, increase or decrease the rate or amount of his or her payroll deductions for the next succeeding Offering Period, by completing or filing with the Company or applicable Designated Subsidiary a new subscription agreement, at least fifteen (15) business days prior to the end of that Offering Period, authorizing a change in payroll deduction rate or amount. A participant’s subscription agreement shall remain in effect for successive Offering Periods unless terminated as provided in Section 10 hereof.
(d) Notwithstanding the foregoing, a participant’s payroll deductions may be decreased to 0% at any time, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b) hereof. Subject to the preceding sentence, payroll deductions shall recommence at the rate or amount provided in such participant’s subscription agreement at the beginning of the next succeeding Offering Period, unless terminated by the participant as provided in Section 10 hereof.
(e) At the time the option is exercised, in whole or in part, or at the time some or all of the Common Stock issued under the Plan is disposed of, the participant must make adequate provisions for the federal, state, or other tax withholding obligations of the Company or applicable Designated Subsidiary, if any, which arise upon the exercise of the option or the disposition of the Common Stock. At any time, the Company or applicable Designated Subsidiary may, but will not be obligated to, withhold from the participant’s compensation the amount necessary for the Company or applicable Designated Subsidiary to meet applicable withholding obligations, including any withholding required to make available to the Company or applicable Designated Subsidiary any tax deductions or benefits attributable to sale or early disposition of Common Stock by the Associate.
7. Grant of Option. On the Enrollment Date of each Offering Period, each Associate participating in such Offering Period shall be granted an option to purchase on the Exercise Date of such Offering Period (at the applicable Purchase Price) up to a number of shares of the Company’s Common Stock determined by dividing such Associate’s payroll deductions accumulated prior to such Exercise Date and retained in the participant’s account as of the Exercise Date by the applicable Purchase Price; provided, however, that in no event shall an Associate be permitted to purchase during any calendar year more than $25,000 in Fair Market Value of Common Stock (with Fair Market Value to be determined on each Enrollment Date) within such calendar year and, provided further, that such purchase shall be subject to the limitations set forth in Sections 3(b) and 12 hereof. Exercise of the option shall occur as provided in Section 8 hereof, unless the participant has withdrawn pursuant to Section 10 hereof, and shall expire on the last day of the Offering Period.
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8. Exercise of Option. Unless a participant withdraws from the Plan as provided in Section 10 hereof, his or her option for the purchase of shares will be exercised automatically on the Exercise Date and, subject to the limitations set forth in Sections 3(b) and 12 hereof, the maximum number of full shares subject to option shall be purchased for such participant at the applicable Purchase Price with the accumulated payroll deductions in his or her account. No fractional shares will be purchased; any payroll deductions accumulated in a participant’s account which are not sufficient to purchase a full share shall be retained in the participant’s account for the subsequent Offering Period, subject to earlier withdrawal by the participant as provided in Section 10 hereof. During a participant’s lifetime, a participant’s option to purchase shares hereunder is exercisable only by the participant.
9. Delivery. As promptly as practicable after each Exercise Date on which a purchase of shares occurs, the Company shall arrange the delivery to or for the account of each participant, as appropriate, a certificate representing the shares purchased upon exercise of his or her option; provided, however, that the Committee may instead determine to hold such shares in an account for each such participant until the participant either ceases participation in the Plan or requests delivery of such shares.
10. Withdrawal; Termination of Employment.
(a) A participant may withdraw all but not less than all the payroll deductions credited to his or her account and not yet used to exercise his or her option under the Plan at any time prior to the last business day of an Offering Period (or such earlier date established by the Committee in its discretion) by giving written notice to the Company or applicable Designated Subsidiary in the form of Exhibit B to this Plan. All of the participant’s payroll deductions credited to his or her account will be paid to such participant promptly after receipt of notice of withdrawal and such participant’s option for the Offering Period will be automatically terminated, and no further payroll deductions for the purchase of shares will be made during the Offering Period. If a participant withdraws from the Plan during an Offering Period, he or she may not resume participation until the next Offering Period. He or she may resume participation for any other Offering Period by delivering to the Company or applicable Designated Subsidiary a new subscription agreement at least fifteen (15) days prior to the Enrollment Date for such Offering Period.
(b) Upon a participant’s ceasing to be an Associate for any reason, he or she will be deemed to have elected to withdraw from the Plan and the payroll deductions credited to such participant’s account during the Offering Period but not yet used to exercise the option will be returned to such participant or, in the case of his or her death, to the person or persons entitled thereto under Section 14 hereof, and such participant’s option will be automatically terminated.
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(c) A participant’s withdrawal from an Offering Period will not have any effect upon his or her eligibility to participant in any similar plan which may hereafter be adopted by the Company.
11. Interest. No interest shall accrue or be payable with respect to any of the payroll deductions of a participant in the Plan.
12. Stock.
(a) The maximum number of shares of Common Stock which shall be made available for sale under the Plan shall be Two Million (2,000,000) shares, subject to adjustment upon changes in capitalization of the Company as provided in Section 18 hereof. If on a given Exercise Date the number of shares with respect to which options are to be exercised exceeds the number of shares then available under the Plan, the Company shall make a pro rata allocation of the shares remaining available for purchase in as uniform a manner as shall be practicable and as it shall determine to be equitable.
(b) No participant will have an interest or voting right in shares covered by his or her option until such option has been exercised.
(c) Shares to be issued to a participant under the Plan will be registered in the record or beneficial name of the participant or in the record or beneficial name of the participant and his or her spouse.
13. Administration. The Plan shall be administered by the Committee. The Committee shall have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility and to adjudicate all disputed claims filed under the Plan. Every finding, decision and determination made by the Committee shall, to the full extent permitted by law, be final and binding upon all parties. Members of the Board who are Associates are permitted to participate in the Plan, provided that members of the Board who are eligible to participate in the Plan may not vote on any matter affecting the administration of the Plan or the grant of any option pursuant to the Plan.
14. Payments Upon Death of Participant. In the event of a participant’s death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such participant of such shares (or cash, if applicable), the Company shall deliver such shares or cash to the participant’s estate. In addition, in the event of a participant’s death prior to the exercise of an option, the Company shall remit any cash from the participant’s account under the Plan to his estate.
15. Transferability. Neither payroll deductions credited to a participant’s account nor any rights with regard to the exercise of an option or to receive shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 14 hereof) by the participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds from an Offering Period in accordance with Section 10 hereof.
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16. Use of Funds. All payroll deductions received or held by the Company or applicable Designated Subsidiary under the Plan may be used by the Company or such Subsidiary for any corporate purpose, and the Company or applicable Designated Subsidiary shall not be obligated to segregate such payroll deductions.
17. Reports. Individual accounts will be maintained for each participant in the Plan. Statements of account will be given to participating Associates at least annually, within such time as the Committee may reasonably determine, which statements will set forth the amounts of payroll deductions, the Purchase Price, the number of shares purchased and the remaining cash balance, if any.
18. Adjustments Upon Changes in Capitalization.
(a) Changes in Capitalization. Unless the Committee specifically determines otherwise, the Reserves as well as the price per share of Common Stock covered by each option under the Plan which has not yet been exercised shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an option. Any adjustment accomplished as a result of a change in capitalization shall be subject to any required action by the shareowners of the Company.
(b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Offering Period will terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Committee.
(c) Merger or Asset Sale. In the event of a proposed sale of all or substantially all of the assets of the Company, or the merger of the Company with or into another corporation, each option under the Plan shall be assumed or an equivalent option shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation, unless the Committee determines, in the exercise of its sole discretion and in lieu of such assumption or substitution, to shorten the Offering Period then in progress by setting a new Exercise Date (the "New Exercise Date"). If the Committee shortens the Offering Period then in progress in lieu of assumption or substitution in the event of a merger or sale of assets, the Committee shall notify each participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for his or her option has been changed to the New Exercise Date and that his or her option will be exercised automatically on the New Exercise Date, unless prior to such date he or she has withdrawn from the Offering Period as provided in Section 10 hereof. For purposes of this paragraph, an option granted under the Plan shall be deemed to be assumed if, following the sale of assets or merger, the option confers the right to purchase, for each share of option stock subject to the option immediately prior to the sale of assets or merger, the consideration (whether stock, cash or other securities or property) received in the sale of assets or merger by holders of Common Stock for each share of Common Stock held on the effective date of the transaction (and if such holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock); provided, however, that if such consideration received in the sale of assets or merger was not solely common stock of the successor corporation or its parent (as defined in Section 424(e) of the Code), the Committee may, with the consent of the successor corporation and the participant, provide for the consideration to be received upon exercise of the option to be solely common stock of the successor corporation or its parent equal in fair market value to the per share consideration received by holders of Common Stock in the sale of assets or merger.
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The Committee may, if it so determines in the exercise of its sole discretion, also make provision for adjusting the Reserves, as well as the price per share of Common Stock covered by each outstanding option, in the event the Company effects one or more reorganizations, recapitalizations, rights offerings or other increases or reductions of shares of its outstanding Common Stock, and in the event of the Company being consolidated with or merged into any other corporation.
19. Amendment or Termination.
(a) The Committee may, without further action by the shareowners and without receiving further consideration from the Associates, amend this Plan or condition or modify awards under this Plan in response to changes in securities or other laws or rules, regulations or regulatory interpretations thereof applicable to this Plan or to comply with applicable self-regulatory organization rules or requirements.
(b) The Committee may at any time and from time to time terminate or modify or amend the Plan in any respect, except that, without shareowner approval, the Committee may not materially amend the Plan, including, but not limited to, the following:
(i) increasing the number of shares of Common Stock to be issued under the Plan (other than pursuant to Section 18); and
(ii) changing the corporations whose employees may be offered purchase rights under the plan.
In addition to the foregoing, the Committee shall seek shareowner approval for amendments that require shareowner approval under Section 423 of the Code (or any successor provision or any other applicable law or regulation).
(c) Except as provided in Sections 18 and 19(a) hereof, no termination may, without the consent of an affected Associate, adversely affect options previously granted; provided, that an Offering Period may be terminated by the Committee on any Exercise Date if the Committee determines that the termination of the Plan is in the best interests of the Company and its shareowners. Except as provided in Sections 18 and 19(a) hereof, no amendment may adversely affect the rights of any options previously granted. The Committee shall determine in its sole discretion for purposes of this Section 19 whether or not a participant’s rights have been "adversely affected."
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20. Notices. All notices or other communications by a participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.
21. Conditions Upon Issuance of Shares. Shares shall not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder and the requirements of any stock exchange upon which the shares may then be listed.
22. Term of Plan. The Plan shall be effective as of October 21, 2014 upon its adoption by the Board. It shall continue in effect for a term of ten (10) years thereafter unless sooner terminated under Section 19 hereof.
23. Additional Restrictions of Section 16 of the Exchange Act. The terms and conditions of options granted hereunder to, and the purchase of shares by, persons subject to Section 16 of the Exchange Act shall comply with the applicable provisions of the rules and regulations promulgated under such Section 16. This Plan shall be deemed to contain, and such options shall contain, and the shares issued upon exercise thereof shall be subject to, such additional conditions and restrictions as may be required by such rules and regulations to qualify for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions.
* * *
As adopted by the Board of Directors of
Professional Holding Corp.
Effective as of October 21, 2014
By: | /s/ Daniel R. Sheehan |
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EXHIBIT A
PROFESSIONAL HOLDING CORP.
2014 ASSOCIATE STOCK PURCHASE PLAN
SUBSCRIPTION AGREEMENT
___ | Original Application | Enrollment Date:_________________ |
___ | Change in Payroll Deduction Rate | |
___ | Change of Beneficiary(ies) |
1. _____________________________________ hereby elects to participate in the Professional Holding Corp. 2014 Associate Stock Purchase Plan (the "Associate Stock Purchase Plan") and subscribes to purchase shares of the Company’s Common Stock in accordance with this Subscription Agreement and the Associate Stock Purchase Plan.
2. I hereby authorize payroll deductions from each paycheck in the amount of (please complete one or the other) (i) _______% (a whole number) of my Compensation, or (ii) $_______, on each payday during the Offering Period in accordance with the Associate Stock Purchase Plan. (Please note that no fractional percentages are permitted.)
3. I understand that said payroll deductions will be accumulated for the purchase of shares of Common Stock at applicable Purchase Price determined in accordance with the Associate Stock Purchase Plan. I understand that if I do not withdraw from an Offering Period, any accumulated payroll deductions will be used to automatically exercise my option on the Exercise Date.
4. I have received a copy of the complete "Professional Holding Corp. 2014 Associate Stock Purchase Plan." I understand that my participation in the Associate Stock Purchase Plan is in all respects subject to the terms of the Associate Stock Purchase Plan.
5. Shares purchased for me under the Associate Stock Purchase Plan should be issued in the name(s) of (Associate or Associate and Spouse Only):______________________
____________________________________________________________________________.
6. I understand that, under current federal income tax law, if I dispose of any shares received by me pursuant to the Plan before the later of the expiration of (i) two (2) years after the first day of the Offering Period during which I purchased such shares, or (ii) one (1) year after the date I purchased any Common Stock under the Associate Stock Purchase Plan, I will be treated for federal income tax purposes as having made a "disqualifying disposition" under Section 421(b) of the Code and as having received ordinary income at the time of such disposition in an amount equal to the excess of fair market value of the shares at the time such shares were delivered to me over the price which I paid for the shares. The remainder of the gain, if any, recognized on such disqualifying disposition will be taxed as capital gain. I hereby agree to notify the Company in writing within thirty (30) days after the date of any disqualifying disposition of my shares and I will make adequate provision for federal, state or other tax withholding obligations, if any, which arise upon such disqualifying disposition. The Company or applicable Designated Subsidiary may, but will not be obligated to, withhold from my compensation the amount necessary to meet any applicable withholding obligation including any withholding necessary to make available to the Company or such Subsidiary any tax deductions or benefits attributable to sale or disqualifying disposition of Common Stock by me. If I dispose of such shares at any time after the expiration of the two-year holding period, I understand that I will be treated for federal income tax purposes as having received income only at the time of such disposition, and that such income will be taxed as ordinary income only to the extent of an amount equal to the lesser of (a) the excess of the fair market value of the shares at the time of such disposition over the purchase price which I paid for the shares, or (b) the excess of the fair market value of the shares over the Purchase Price on the first day of the Offering Period in which the shares were purchased. The remainder of the gain, if any, recognized on such disposition will be taxed as capital gain.
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7. I hereby agree to be bound by the terms of the Associate Stock Purchase Plan. The effectiveness of this Subscription Agreement is dependent upon my eligibility to participate in the Associate Stock Purchase Plan.
Associate’s Social Security Number: | |
Associate’s Address: | |
I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Dated:_______________________________ | |
Signature of Associate |
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EXHIBIT B
PROFESSIONAL HOLDING CORP.
2014 ASSOCIATE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the Professional Holding Corp. 2014 Associate Stock Purchase Plan (the "Plan") which began on ______________, 2014 (the "Enrollment Date") hereby notifies the Company that he or she hereby withdraws from the Offering Period. The undersigned hereby directs the Company or applicable Designated Subsidiary to pay to the undersigned as promptly as practicable all the payroll deductions credited to his or her account with respect to such Offering Period. The undersigned understands and agrees that his or her option for such Offering Period will be automatically terminated. The undersigned understands further that no further payroll deductions will be made for the purchase of shares in the current Offering Period and the undersigned shall thereafter be eligible to participate in succeeding Offering Periods only by delivering to the Company or applicable Designated Subsidiary a new Subscription Agreement within the time period set forth in Section 5 of the Plan.
Name and Address of Participant | |
Signature | |
Date:_______________________________________________________ |
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Exhibit 10.7
PROFESSIONAL HOLDING CORP.
2014 SHARE APPRECIATION RIGHTS PLAN
Professional Holding Corp., a registered bank holding company organized under the laws of the State of Florida (“Corporation”), hereby adopts this 2014 Share Appreciation Rights Plan (“Plan”) through its Board of Directors for benefit of its employees and for the benefit of the employees of Professional Bank (“Bank”), its wholly owned subsidiary, effective as of October 21, 2014, (“Effective Date”) (Corporation and Bank are collectively referred to as “Company”).
1. Purpose. The purpose of the Plan is to further the growth, development and financial success of the Company by providing appropriate incentives to certain key employees who have been or will be given responsibility for the management or administration of the business affairs; to provide for distinct plans for operating management in order to maximize incentives offered while minimizing expenses; and to enable the Company to obtain and retain the services of the type of professional, technical and managerial employees considered essential to both the Company’s long-range success. This Plan shall be separate and distinct from the Professional Bank 2012 Share Appreciation Rights Plan.
2. Definitions.
(a) “Base Price” shall mean the Fair Market Value of a Unit at the time of the Grant.
(b) “Board” shall mean the Board of Directors of the Corporation.
(c) “Change in Control” shall mean any one of the following events with respect to the Company (and as pertains to either the Corporation or the Bank):
(i) “Change in the Ownership of the Company” that occurs on the date that any one person, or more than one person acting as a group acquires ownership of Common Stock of the Company that, together with Common Stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the Common Stock of the Company. However, if any one person, or more than one person acting as a group, is considered to own more than 50 percent of the total fair market value or total voting power of the Common Stock of the Company (or such higher percentage specified in accordance with the preceding sentence), the acquisition of additional Common Stock by the same person or persons is not considered to cause a change in the ownership of the Company (or to cause a change in the effective control of the Company. An increase in the percentage of Common Stock owned by any one person, or persons acting as a group, as a result of a transaction in which the Company acquires its Common Stock in exchange for property will be treated as an acquisition of Common Stock for purposes of this section. This section applies only when there is a transfer of Common Stock of the Company (or issuance of Common Stock of a Company) and Common Stock in the Company remains outstanding after the transaction; or
(ii) “Change in the Effective Control of the Company” that occurs only on either of the following dates:
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(1) The date any one person, or more than one person acting as a group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of Common Stock of the corporation possessing 30 percent or more of the total voting power of the Common Stock of such corporation, or
(2) The date a majority of members of the Company’s Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s Board before the date of the appointment or election; or
(iii) “Change in the Ownership of a Substantial Portion of a Company’s Assets” occurs on the date that any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the Company immediately before such acquisition or acquisitions.
(d) “Chairman” shall mean the Chairman of the Board of the Corporation, as elected from time to time.
(e) “Code” shall mean the Internal Revenue Code of 1986, as amended.
(f) “Committee” shall mean the Compensation Committee of the Corporation, which shall be the administrative committee for the Plan (the “Committee”); provided, that to the extent required by Rule 16b-3 of the Securities and Exchange Commission under the Exchange Act, such Committee shall be comprised solely of two or more Non-Employee Directors, as defined in Rule 16b-3(b)(3) under the Exchange Act. All references in this Plan to the “Committee” shall mean the Board if no Committee has been appointed.
(g) “Common Stock” shall mean the Class A Common Stock of the Corporation, $0.01 par value per share.
(h) “Company” shall mean the Corporation and/or the Bank as the case may be in the context used as to all provisions of this Plan.
(i) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
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(j) “Fair Market Value” shall mean (1) the closing price of the Common Stock on the principal national securities exchange on which the Common Stock is traded, if the Common Stock is then traded on a national securities exchange; or (2) the closing price of the Common Stock on the Nasdaq National Market, if the Common Stock is not then traded on a national securities exchange; or (3) the closing bid price last quoted by an established quotation service for over-the-counter securities, if the Common Stock is not reported on the Nasdaq National Market. However, if the Common Stock is not publicly-traded, “Fair Market Value” shall be deemed to be the fair value of the Common Stock as determined by the Committee after taking into consideration all factors which it deems appropriate, including, without limitation, recent sale and offer prices of the Common Stock in private transactions negotiated at arm’s length consistent with the provisions of Regulation 1.409A-1(b)(5)(iv)(B). The Fair Market Value of the Common Stock shall be determined consistently once every 365 days during which period the Fair Market Value so determined shall be used for all purposes of this Plan; provided, however, the Committee may select an interim valuation date on a nondiscriminatory basis it its discretion if and when it deems necessary. Notwithstanding the foregoing, the Committee’s determination of the Fair Market Value of Common Stock under this Plan shall not take into consideration any amounts paid by the Company to Shareholders in redemption of Common Stock. In addition, the Committee may use any other alternate valuation methods for separate actions for which a valuation is relevant provided that a single valuation method is used for each separate action and, once used, may not retroactively be altered once the valuation has been established, as contemplated in Regulation 1.409A-1(b)(5)(iv)(B)(3).
(k) “Grant Date” shall mean, with respect to any individual Participant, the date such Participant has executed a separate Unit Agreement pursuant to the terms of this Plan.
(1) “Liquidity Event” shall mean an event that triggers an exit opportunity for holders of the Common Stock of the Corporation or the holders of the common stock of the Bank (depending on the nature of the sales transaction) to liquidate their stock holdings through a transaction with the Corporation or with the Bank that (A) results in the receipt of cash or securities by either (i) the Corporation for Bank’s common stock or (ii) by the Corporation’s Shareholders for their Common Stock and provided (B) the receipt of cash or securities in (A) occurs in the same transaction in which a Change in Control shall occur.
(m) “Noncompetition Requirement” shall mean the agreement by the Participant with the Company, contained within each Unit Agreement, that during the Term and for a period of three hundred sixty-five days (365) following the Participant’s separation from service with the Bank for any reason whatsoever (except where the employment of the Participant is terminated pursuant to Section 8.(c) of the Plan), Participant will not enter the employ of, or have any interest in, directly or indirectly (either as executive, partner, director, officer, consultant, principal, agent or employee), any other bank or financial institution or any entity which either accepts deposits or makes loans (whether presently existing or subsequently established) and which has an office located within a radius of 50 miles of any office of the Bank; provided, however, that the foregoing shall not preclude any ownership by the Participant of an amount not to exceed 5% of the equity securities of any entity which is subject to the periodic reporting requirements of the 1934 Act and the shares of Bank common stock owned by the Participant at the time of termination of employment.
(n) “Option 1” shall mean the Participant has made an irrevocable election, as of the Grant Date, to receive payment of a Unit Appreciation Payment under this Plan after the Unit has vested in accordance with Section 7(a) of this Plan.
(o) “Option 2” shall mean the Participant has made an irrevocable election, as of the Grant Date, to receive payment of a Unit Appreciation Payment under this Plan after the Unit has vested in accordance with Section 7(b) of this Plan.
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(p) “Participant” shall mean select group of management or highly compensated employees who are in the regular employment of the Company and who are expected to be primarily responsible for the management, growth, or supervision of some part or all of the business of the Company. The power to determine who is and who is not a Participant shall be reserved solely for the Committee but participation shall exclude employees who would not qualify as one of the foregoing group of employees.
(q) “Participant Election” shall mean the irrevocable election the Participant makes in the Unit Agreement to receive payment of a Unit Appreciation Payment under this Plan under Option 1 or Option 2.
(r) “Plan” shall mean this Professional Bank 2014 Share Appreciation Rights Plan.
(s) “Prior Plan” shall mean the Professional Bank 2012 Share Appreciation Rights Plan.
(t) “Regulation” shall mean a Treasury Regulation unless otherwise clear from the context used.
(u) “Separation from service” shall have the same meaning as in Regulation 1.409A-1(h).
(v) “Shareholders” shall mean the holders of the Common Stock.
(w) “Term” shall include the period beginning upon the effective date of this Plan, October 21, 2014, and continuing until such time as Participant has separated from service with the Company in Section 8.
(x) “Unit” shall mean a vested or nonvested future right to share in the increase the Fair Market Value of a share of Common Stock as may be granted under this Plan which may entitle a Participant to receive a Unit Appreciation Payment as more specifically provided in Section 8.
(y) “Unit Agreement” shall mean an agreement between Company and a Participant setting out the terms and conditions of a grant of Units, substantially in the form attached hereto as Exhibit A.
(z) “Unit Appreciation Payment” shall mean the payment equal to the difference between the Base Price of a Unit and the Fair Market Value of the Unit (but not below zero) as of the date set forth in Section 8 hereof.
3. Effective Date and Termination Date. The Plan was approved by the Board on October 21, 2014. The Plan shall be effective as of October 21, 2014 upon its adoption by the Board. It shall continue in effect for a term of ten (10) years thereafter unless sooner terminated under Section 13 hereof (“Termination Date”). With respect to any Units outstanding after the Termination Date, vested or unvested, the terms of this Plan shall continue to apply to: (i) unvested Units under Option 1 until such time as the Units are vested and a Unit Appreciation Payment has been made pursuant to Section 8.(a); and (ii) all Units under Option 2, until such Units are vested under Section 7.(b), the occurrence of an event described in Section 8.(b) and a Unit Appreciation Payment is made.
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4. Grants of Units. Units may be granted to any Participant designated by the Committee, who in the discretion of the Committee, has already made or is in a position to make a significant contribution to the success of the Company. Subject to the provisions of this Plan, the Committee shall determine at what time(s) Units are to be granted, which Participants are to be granted Units, the number of Units, the duration of each Unit, the Base Price for each Unit (as herein defined), and the time or times within which all or portions of each Unit shall vest. In making such determinations, the Committee shall consider the nature of the services rendered by the employee, the employee’s present and potential future contributions and such other factors as the Committee, in its sole discretion, deems relevant. Notwithstanding the above, the Committee may delegate certain powers relating to the granting of Awards as it deems appropriate to executive officers of the Company, including the power to determine certain terms and conditions of such grants. The Participant shall make the Participant Election in the Unit Agreement to receive payment of a Unit Appreciation Payment under this Plan pursuant to either Option 1 or Option 2. A Participant Election that is made for Unit(s) in a Unit Agreement cannot subsequently be changed or modified by Participant or Company. However, different Participant Elections may be made for the Unit(s) granted in each separate Unit Agreement.
5. Available Units. The maximum number of Units which shall be made available for issuance under the Plan shall be Five Hundred Thousand (500,000) Units. If any Unit granted under the Plan is terminated, forfeited, or ceases to be exercisable for any other reason prior to the end of the period during which Units may be granted under the Plan, such unpaid Units shall become available for new grants under the Plan to any eligible employee, including the original holder of such Units.
6. Consideration of Grant.
(a) Services are Consideration of Grants. Grants of Units under the Plan are made in consideration of the services to be rendered by the Participant to the Company and is subject to the terms and conditions of the Plan and the Unit Agreement.
(b) Noncompetition Requirement. As a condition precedent to the grant of any Unit, the Participant shall agree by execution of the Unit Agreement that any entitlements to a Unit Appreciation Payment accrued or received under this Plan shall be subject to Participant’s compliance with the Noncompetition Requirement. The Committee may also require the Participant to agree to the amendment of the Participant’s employment agreement, if any, to participate in the Plan and forego participation in the Prior Plan. The Committee may take into consideration a Participant’s willing waiver of future participation under the Prior Plan.
7. Vesting of Units.
(a) Vesting of Units under Option 1. A nonvested Unit granted to a Participant who has elected to receive a Unit Appreciation Payment under Option 1 of this Plan shall vest at the earlier of the following events: (i) completion of 1,825 full calendar days of continuous service with the Bank from Grant Date; (ii) an involuntary separation from service without cause (as defined in Section 8.(a)(ii)) that occurs within the one hundred and eighty (180) day period preceding a Liquidity Event; (iii) upon Disability or death of the Participant described in Section 8.(d) and (e), respectively; or (iv) upon the occurrence of a Liquidity Event.
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(b) Vesting of Units under Option 2. A nonvested Unit granted to a Participant who has elected to receive a Unit Appreciation Payment under Option 2 of this Plan shall vest at the earlier of the following events: (i) completion of 1,825 full calendar days of continuous service with the Bank from the Grant Date; (ii) an involuntary separation from service without cause that occurs within the one hundred and eighty (180) day period preceding a Liquidity Event; (iii) upon Disability or death of the Participant; or (iv) upon the occurrence of a Liquidity Event.
(c) Partial Vesting upon a Partial Liquidity Event. If the Liquidity Event results in only a partial cash distribution to the Company or to the Shareholders so that less than 100% of the Common Stock or Company assets are sold, the nonvested Units shall partially vest based on a fraction, the numerator of which shall be the cash exchanged in the Liquidity event and the denominator shall be 100% of the Fair Market Value of the then outstanding Common Stock: the remainder of the nonvested Units shall continue to be subject to vesting as provided above in Sections 7.(a) or 7.(b) or shall be forfeited as the case may be.
(d) Forfeiture of Nonvested Units Upon Separation From Service. Except as may otherwise be provided in this Section 7., all nonvested Units granted to a Participant shall be forfeited and become null and void upon separation from service for any reason.
(e) Forfeiture of Vested Units and/or Repayment of Unit Appreciation Payments.
(i) Forfeiture. Notwithstanding the foregoing, a Participant’s vested Units shall become forfeited and null and void if the Participant’s involuntary separation from service for cause (as defined in Section 8(c)).
(ii) Repayment of Unit Appreciation Payments. If after separation from service for any reason (except an involuntary separation from service without cause), the Participant shall fail to comply with the Noncompetition Requirement in the Unit Agreement, (i) all vested Units shall be forfeited and (ii) any payments attributable to Units received by the Participant within the Noncompetition Requirement shall be repaid to the Company within ninety (90) days of such failure to comply or as the Participant and Committee may otherwise agree in writing.
8. Unit Appreciation Payment
(a) Payment Pursuant to Option 1.
(i) Payment of Vested Units. A Unit Appreciation Payment for vested Units under Option 1 shall be made in a lump sum on the 90th day following the date such Units become vested under Section 7.(a), and pursuant to such additional applicable payment terms under this Section 8. The amount of the Unit Appreciation Payment shall be the difference between the Base Price of the vested Unit and the Fair Market Value as of the date of vesting.
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(ii) Payment of Certain Nonvested Units. If the Bank had initiated the Participant’s involuntary separation from service for any reason other than for Cause, Death or Disability (“involuntary separation from service without cause”) and the Participant had not completed 1,825 full calendar days of continuous service with the Bank from the Grant Date as of the date of the involuntary separation from service without cause, the Participant shall nevertheless receive a Unit Appreciation Payment if and only if a Liquidity Event occurs within 180 days after the date of the Participant’s involuntary separation from service without cause. The amount of the Unit Appreciation Payment shall be the difference between the Base Price of each vested Unit and the Fair Market Value of such Unit determined as of the date of the Liquidity Event (but not below zero). If no Liquidity Event shall occur within the 180 day period after the involuntary separation from service without cause, the nonvested Unit shall be forfeited and null and void as of the date of separation from service.
(b) Payment Pursuant to Option 2.
(i) Payment of Vested Units.
(1) While Employed by the Company. A Unit Appreciation Payment for vested Units under Option 2 shall be made only upon the occurrence of a Liquidity Event and pursuant to the same terms and conditions of the Liquidity Event as applicable to holders of the Common Stock. The amount of the Unit Appreciation Payment shall be the difference between the Base Price of each vested Unit and the Fair Market Value of such Unit as determined in the Liquidity Event.
(2) Termination after Involuntary Separation from Service Without Cause. A Unit Appreciation Payment for vested Units under Option 2, after a Participant’s involuntary separation from service without cause, shall be made only upon the occurrence of a Liquidity Event and pursuant to the same terms and conditions of the Liquidity Event as applicable to holders of the Common Stock. The amount of the Unit Appreciation Payment shall be the difference between the Base Price of each vested Unit and the Fair Market Value of such Unit as determined on the date of the Participant’s involuntary separation from service without cause.
(ii) Payment of Certain Nonvested Units. If the Bank had initiated the Participant’s involuntary separation from service without cause and the Participant had not completed 1,825 full calendar days of continuous service with the Bank from the Grant Date as of the date of the involuntary separation from service without cause, the Participant shall nevertheless receive a Unit Appreciation Payment if and only if a Liquidity Event occurs within 180 days after the date of the Participant’s involuntary separation from service without cause. The amount of the Unit Appreciation Payment shall be the difference between the Base Price of each vested Unit and the Fair Market Value of such Unit determined as of the date of the Liquidity Event (but not below zero). If no Liquidity Event shall occur within the 180 day period after the involuntary separation from service without cause, the nonvested Unit shall be forfeited and null and void as of the date of separation from service.
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(c) Separation from Service for Cause. If the Bank shall initiate the Participant’s separation from service for cause (“involuntary separation from service for cause”), all of the Units then granted to the Participant (whether vested or unvested) shall immediately be forfeited and become null and void, and no Unit Appreciation Payment shall be made as to such forfeited Units under any circumstances. If the involuntary separation from service for cause is not defined in any separate employment agreement between the Participant and the Company, then for purposes of this Plan, “involuntary separation from service for cause” shall mean the Participant’s:
(i) dishonesty, fraud, malfeasance, gross negligence or misconduct which, in the reasonable judgment of the Company, has resulted, or is likely to result, in material injury to Company, its affiliates or the business reputation of Company or its affiliates;
(ii) willful failure to comply with the direction (consistent with Participant’s duties) of the Company or the Bank or to follow the policies, procedures, and rules of Company or Bank;
(iii) negligent failure to comply with the direction (consistent with Participant’s duties) of the Company or the Bank or to follow the policies, procedures, and rules of Company or Bank which is not substantially cured as is objectively reasonable within thirty (30) days of receipt of written notice from Company or Bank specifying the failure;
(iv) conviction of, or Participant’s entry of a plea of guilty or no contest to, a felony or crime involving moral turpitude; or
(v) failure to meet goals and performance objectives as specified by the Company and/or the Chairman on an annual basis.
(d) Separation from Service due to Disability. A Participant’s separation from service due to the Participant’s Disability occurs when the Participant has been diagnosed with a medically determinable physical or mental impairment that conforms to one of the definitions in Regulation 1.409A-3(i)(4)(i). All nonvested Units shall thereupon vest as of the date of Disability. All vested Units under Option 1 and Option 2 shall receive Unit Appreciation Payments in an amount that shall be the difference between the Base Price of each vested Unit and the Fair Market Value of such Unit determined as of the date of separation from service due to Disability (but not below zero). Unless the Participant or the Participant’s guardian shall tender cash to the Company in full payment of applicable all Participant and Company payroll and withholding taxes attributable to all Unit Appreciation Payments, the amount of such Unit Appreciation Payment shall be reduced (but not below zero) by the amount of Participant and Company payroll and withholding taxes. Payment of the Unit Appreciation Payment shall be made on the 90th day following the date of separation from service due to Disability. No further payments shall thereafter be made to such Units.
(e) Separation from Service due to Death. A Participant’s separation from service due to the Participant’s Death shall cause all nonvested Units to vest as of the date of Death. All vested Units under Option 1 and Option 2 shall receive Unit Appreciation Payments in an amount that shall be the difference between the Base Price of each vested Unit and the Fair Market Value of such Unit determined as of the date of separation from service due to Death (but not below zero). Unless the Participant’s estate or trust shall tender cash to the Company in full payment of applicable all Participant and Company payroll and withholding taxes attributable to all Unit Appreciation Payments, the amount of such Unit Appreciation Payment shall be reduced (but not below zero) by the amount of Participant and Company payroll and withholding taxes. Payment of the Unit Appreciation Payment shall be made on the 90th day following the date of separation from service due to Death. No further payments shall thereafter be made to such Units.
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(f) Voluntary Separation from Service. If a Participant voluntarily separates from service before the Units are vested under Option 1 or Option 2, the Participant’s nonvested Units shall immediately be forfeited and become null and void, and no Unit Appreciation Payment shall be made as to those nonvested Units under any circumstances.
(g) Form of payment. The Committee shall have the discretion to pay the amount of the Unit Appreciation Payment either in (i) cash, (ii) Common Stock with cash for fractional shares and for the payment of withholding and payroll taxes, or (iii) in kind consideration as provided in the Liquidity Event with cash for fractional shares and for the payment of withholding and payroll taxes.
(h) No interest. No interest shall be paid on any unpaid vested Unit Appreciation Payment under any circumstances.
(i) Withholding and Payroll Taxes. Unless the Participant shall tender cash to the Company in full payment of all applicable Participant and Company payroll and withholding taxes attributable to a Unit Appreciation Payment, the amount of such Unit Appreciation Payment shall be reduced (but not below zero) by the total amount of Participant’s and Company’s payroll and withholding tax obligations.
9. At Will Employment. Nothing in the Plan or in any Unit Agreement hereunder shall confer upon any Participant any right to continue in the employ of the Bank, or shall interfere with or restrict in any way the rights of the Bank, which are hereby expressly reserved, to discharge any Participant at any time for any reason whatsoever, as an involuntary separation from service without cause or for cause as those terms are defined in Section 8 hereof except to the extent expressly provided otherwise in a written employment agreement between the Participant and the Company.
10. Administration. The Plan shall be administered by the Committee. The Committee shall have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility and to adjudicate all disputed claims filed under the Plan. Every finding, decision and determination made by the Committee shall, to the full extent permitted by law, be final and binding upon all parties. Members of the Board who are Participants are permitted to participate in the Plan, provided that members of the Board who are eligible to participate in the Plan may not vote on any matter affecting the administration of the Plan or the grant of any Unit pursuant to the Plan.
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11. Transferability. Any rights granted to a Participant under the terms of this Plan may not be assigned, transferred, pledged or otherwise disposed of in any way by the Participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect and null and void.
12. Adjustments Upon Changes in Capitalization. Unless the Committee specifically determines otherwise, the price per share of Common Stock covered by each Unit under the Plan which has not yet been exercised shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to the Plan. Any adjustment accomplished as a result of a change in capitalization shall be subject to any required action by the shareowners of the Company.
13. Amendment or Termination.
(a) The Committee may, without further action by the Board and without receiving further consideration from the Participants, amend this Plan or condition or modify awards under this Plan in response to changes in securities or other laws or rules, regulations or regulatory interpretations thereof applicable to this Plan or to comply with applicable self-regulatory organization rules or requirements.
(b) The Committee may at any time and from time to time terminate or modify or amend the Plan in any respect, except that, without Board approval, the Committee may not materially amend the Plan, including, but not limited to, increasing the number of shares of Common Stock to be issued under the Plan (other than adjustments pursuant to Section 12).
14. Notices. All notices or other communications by a Participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.
15. Conditions Upon Issuance of Shares. Common Stock that may be issued with respect to a Unit Appreciation Payment shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder and the requirements of any stock exchange upon which the shares may then be listed.
16. Compliance with Laws.
(a) Securities Laws. The Plan, the granting and vesting of Units under the Plan and the payment of Unit Appreciation Payment are subject to compliance with all applicable federal and state laws, rules and regulations and to such approvals by any regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. To the extent permitted by applicable law, the Plan and Units granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.
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(b) Non-ERISA Plan. Unless otherwise determined by the Committee, in each Unit Agreement, the Participant shall acknowledge and agree with the Company as follows: (a) the Plan serves as part of the compensation package for key employees and provides a mechanism to monetize executive performance consistent with adding Shareholder value; (b) the award of Units is not a security and does not provide rights as a holder of Common Stock; (c) the Plan is intended not to be an ERISA plan and is limited to key employee participants and not available to all employees; (e) no Units granted under the Plan may be sold, pledged, assigned or transferred in any way; and (f) the Company shall be entitled to require that appropriate payroll and withholding taxes be withheld at the time of the payment of the Unit Appreciation Payment to the Participant.
(c) Code §409A Compliant Construction. The Plan is intended to comply with Section 409A of the Code and shall be construed and interpreted in accordance with such intent. Any provision of the Plan that would cause a grant or any other payment under the Plan to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Code Section 409A (which amendment may be retroactive to the extent permitted by the Guidance). If the Committee at any time determines that the Plan or Units granted under the Plan are or may be subject to, and fail or may fail to comply with, the requirements of Section 409A of the Code, the Committee may make such modifications to the Plan and to the terms of any Unit Agreements as it deems advisable to comply. Notwithstanding the foregoing, nothing herein shall create any obligation by the Company to any participant should the grant of a Unit or if a Unit Appreciation Payment shall fail to satisfy Section 409A of the Code.
17. Interpretation. Any dispute regarding the interpretation of this Plan shall be submitted by the Participant or the Company to the Committee for review, and shall be reviewed in favor of this Plan. The resolution of such dispute by the Committee shall be final and binding on the Participant and the Company.
18. Confidentiality of the Plan. The terms of this Plan are proprietary in nature and the Participant shall not make any public statement, announcement, press release, or otherwise disclose the terms of the Plan, or make public any documents Participant receives describing the Plan (including but not limited to, the Unit Agreement, the Plan, summary plan document, etc.), to any third parties not affiliated with the Company, without the prior written consent of the Company. Notwithstanding the foregoing, nothing herein shall prohibit Participant from sharing the terms of the Plan with Participant’s own legal counsel and/or accountants.
19. Additional Restrictions of Section 16 of the Exchange Act. The terms and conditions of rights granted hereunder to persons subject to Section 16 of the Exchange Act shall comply with the applicable provisions of the rules and regulations promulgated under such Section 16. This Plan, the Units, the Unit Appreciation Payment any and the shares that may be issued hereunder shall be subject to, such additional conditions and restrictions as may be required by such rules and regulations to qualify for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions.
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20. WAIVER OF JURY TRIAL. THE COMPANY AND EACH PERSON WHO IS A PARTICIPANT, BENEFICIARY, ESTATE, HEIR OR ASSIGN OF A UNIT EXPRESSLY WAIVES ALL RIGHTS TO ANY TRIAL BY JURY IN ALL LITIGATION RELATING TO OR ARISING OUT OF THE SUBJECT MATTER OF THIS PLAN.
* * *
As adopted by the Board of Directors of
Professional Holding Corp.
Effective as of October 21, 2014
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EXHIBIT A
PROFESSIONAL HOLDING CORP.
2014 STOCK APPRECIATION RIGHTS PLAN
UNIT AGREEMENT
Exhibit 10.8
EXHIBIT A
AMENDMENT NO. 1 TO PROFESSIONAL HOLDING
CORP.
2014 SHARE APPRECIATION RIGHTS PLAN
THIS AMENDMENT TO THE PROFESSIONAL HOLDING CORP. 2014 SHARE APPRECIATION RIGHTS PLAN (this "Amendment") is to be effective as of December 20, 2016 (the "Amendment Date").
WHEREAS, the Board of Directors of Professional Holding Corp. (the "Corporation") approved this Amendment;
NOW, THEREFORE:
1. Amendments. The Professional Holding Corp. 2014 Share Appreciation Rights Plan (the "Plan") is hereby amended and modified as follows:
(a) The text of Section 1 of the Plan is hereby deleted in its entirety and replaced with the following:
1. Purpose. The purpose of the Plan is to further the growth, development and financial success of the Company by providing appropriate incentives to Directors and to certain key employees who have been or will be given responsibility for the management or administration of the business affairs of the Company and/or the Bank; to provide for distinct plans for operating in order to maximize incentives offered while minimizing expenses; and to enable the Company to obtain and retain the services of Directors and the type of professional, technical and managerial employees considered essential to both the Company's and the Bank's long-range success. This Plan shall be separate and distinct from the Professional Bank 2012 Share Appreciation Rights Plan.
(b) The following definition is hereby added as Section 2(i) in the Plan and all of the other definitions in Section 2 of the Plan which follow 2(i) alphabetically shall be re-numbered accordingly:
(i) "Director" shall mean a member of the Board of Directors of the Corporation or a member of the Board of Directors of the Bank.
(c) The text of re-numbered Section 2(n) of the Plan is hereby deleted in its entirety and replaced with the following:
(n) "Noncompetition Requirement" shall mean the agreement by the Participant with the Company, contained within each Unit Agreement, that during the Term and for a period of three hundred sixty-five days (365) following the Participant's cessation of service as a Director or separation from service with the Bank (as applicable) for any reason whatsoever (except where the Participant is terminated pursuant to Section8.(c) of the Plan), Participant will not enter the employ of, or have any interest in, directly or indirectly (either as executive, partner, director, officer, consultant, principal, agent or employee), any other bank or financial institution, any holding company of any bank or other financial institution, or any other entity which either accepts deposits or makes loans (whether presently existing or subsequently established) and which has an office located within a radius of 50 miles of any office of the Bank; provided, however, that the foregoing shall not preclude any ownership by the Participant of an amount not to exceed 5% of the equity securities of any entity which is subject to the periodic reporting requirements of the 1934 Act and the shares of the Corporation's or the Bank's common stock owned by the Participant at the time of termination of employment or of his/her status as a Director.
(d) The text of re-numbered Section 2(q) of the Plan is hereby deleted in its entirety and replaced with the following:
(q) "Participant" shall mean a Director, and/or a select group of management or highly compensated employees who are in the regular employment of the Company, and who are expected to be primarily responsible for the management, growth, or supervision of some part of all of the business of the Company. The power to determine who is and who is not a Participant shall be reserved solely for the Committee but participation shall exclude employees who would not qualify as one of the foregoing group.
(e) The term "Bank" as used in each of Sections 7(a), 7(b), 8(a)(ii), 8(b)(ii) and 8(c) (first line only), of the Plan is hereby deleted and replaced with the term "Company."
(f) The text of Section 9 of the Plan is hereby deleted in its entirety and replaced with the following:
9. At Will Service. Nothing in the Plan or in any Unit Agreement hereunder shall confer upon any Participant any right to continue in the employ of the Bank or as a Director, or shall interfere with or restrict in any way the rights of the Company, which are hereby expressly reserved, to discharge any Participant at any time for any reason whatsoever, as an involuntary separation from service without cause or for cause as those terms are defined in Section 8 hereof except to the extent expressly provided otherwise in a written employment agreement between the Participant and the Company.
2. Definitions. Each capitalized term not otherwise defined in this Amendment shall have the definition ascribed to such term in the Plan.
3. Other Terms Unchanged. Except as expressly modified in this Amendment, all terms and provisions of the Plan shall remain unchanged and in full force and effect.
IN WITNESS WHEREOF, the Company has executed this Amendment as of the Amendment Date.
PROFESSIONAL HOLDING CORP. | ||
By: | /s/ Daniel R. Sheehan | |
Daniel R. Sheehan | ||
Chairman and President |
Exhibit 10.9
EXHIBIT B
AMENDMENT NO. 2 TO PROFESSIONAL HOLDING CORP. 2014 SHARE APPRECIATION RIGHTS PLAN
THIS AMENDMENT TO THE PROFESSIONAL HOLDING CORP. 2014 SHARE APPRECIATION RIGHTS PLAN (this "Amendment") is to be effective as of September 26, 2017 (the "Amendment Date").
WHEREAS, the Board of Directors of Professional Holding Corp. (the "Corporation") approved this Amendment:
NOW, THEREFORE:
1. Amendments. The Professional Holding Corp. 2014 Share Appreciation Rights Plan (the "Plan") is hereby amended and modified as follows:
(a) The text of Section 5 of the Plan is hereby deleted in its entirety and replaced with the following:
5. Available Units. The maximum number of Units which shall be made available for issuance under the Plan shall be One Million Two Hundred Thousand (1,200,000) Units. If any Unit granted under the Plan is terminated, forfeited, or ceases to be exercisable for any other reason prior to the end of the period during which Units may be granted under the Plan, such unpaid Units shall become available for new grants under the Plan to any eligible employee, including the original holder of such Units.
IN WITNESS WHEREOF, the Company has executed this Amendment as of the Amendment Date.
PROFESSIONAL HOLDING CORP. | ||
By: | /s/ Daniel R. Sheehan | |
Daniel R. Sheehan | ||
Chairman & President |
As adopted by the Board of Directors of
Professional Holding Corp.
Effective as of September 26, 2017
Exhibit 10.10
UNIT AGREEMENT
PROFESSIONAL HOLDING CORP. SHARE APPRECIATION RIGHTS PLAN
This Professional Holding Corp. Share Appreciation Rights Plan Unit Agreement (“Unit Agreement”), dated as of ________________ (“Grant Date”), has been made by and between (i) Professional Holding Corp., a registered bank holding company organized under the laws of the State of Florida (“Company”); (ii) Professional Bank (“Bank”), its wholly owned subsidiary, effective as of_____________ (“Effective Date”) (Corporation and Bank are collectively referred to as “Company”); and, (iii) ________________ (“Participant”).
The purposes of this Unit Agreement are to mutually benefit Company, Bank and Participant as follows:
a) | To further the growth, development and financial success of the Company and the Bank by providing appropriate incentives to certain key employees of the Bank and/or Company who have been or will be given responsibility for the management or administration of the business affairs of the Bank; | |
b) | To provide for distinct plans for operating management in order to maximize incentives offered while minimizing expenses; and | |
c) | To enable the Bank to obtain and retain the services of the type of professional, technical and managerial employees considered essential to both the Company’s and the Bank’s long-range success. |
WHEREAS, the provisions of the Professional Holding Corp. 2014 Share Appreciation Rights Plan (“SAR Plan”), adopted by the Company’s Board of Directors on October 21, 2014, are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the SAR Plan and any capitalized terms not otherwise defined in this Agreement shall have the definitions set forth in the SAR Plan. The Committee shall have final authority to interpret and construe the SAR Plan and this Agreement and to make any and all determinations thereunder, and its decision shall be binding and conclusive upon the Participant and his/her legal representative in respect of any questions arising under the SAR Plan or this Agreement;
NOW, THEREFORE, in consideration of the recitals and the mutual agreements herein contained, the parties hereto agree as follows:
Section 1. Grant of Units
(a) Grant of Units. Company hereby grants the Participant _____ Units at the Base Price as of the Grant Date. The Base Price referred to in this Agreement is equivalent to $____ per share of the Common Stock. The Units are granted on and subject to the terms and conditions set forth in this Agreement and as otherwise provided in the SAR Plan.
(b) Participant Election. Participant hereby makes an election of one of the two below options, to determine how the Company shall pay Participant under the SAR Plan. This Participant Election, made as of the Grant Date shall be irrevocable and cannot be modified by the Participant or Company at any time.
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[ ____ ] Participant elects Option 1 under the SAR Plan.
[ ____ ] Participant elects Option 2 under the SAR Plan.
(c) Unit Appreciation Payment Upon Separation From Service of the Company and/or Upon Liquidity Event. Unit Appreciation Payments attributable to vested Units shall only be made at such times and upon such events as provided in the SAR Plan. Units that are or have been forfeited shall receive no payment of any kind.
(d) Non-Transferability of Units. The Units and the right to any Unit Appreciation Payment and any interest therein, may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of, except by will or the laws of descent and distribution, prior to the time of Unit Appreciation Payments, if any, pursuant to the terms hereof. Any attempt to dispose of any Unit in contravention of the above restriction shall be null and void and without effect.
Section 2. Terms and Conditions of Award; Acknowledgments by Participant
(a) Income Taxes. Company shall withhold taxes that it determines it is required to withhold under applicable tax laws with respect to any Unit Appreciation Payment (with such withholding obligation determined based on any applicable statutory withholding rates).
(b) Additional Acknowledgments.
i. | The SAR Plan serves as part of the compensation package for a select group of management and highly compensated employees to provide a mechanism to monetize executive performance consistent with adding value to the Common Stock; | |
ii. | The issuance of any Unit hereunder is not a security and shall not provide any rights as a holder of Common Stock; | |
iii. | The SAR Plan is not intended to be subject to ERISA and shall be provided solely to participants selected by the Committee who are limited to a select group of management and highly compensated employees; and | |
iv. | The SAR Plan is intended to comply with Section 409A of the Code and shall be construed and interpreted in accordance with such intent. To the extent applicable, this Agreement shall incorporate the terms and conditions required by Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) and this Agreement shall be interpreted in accordance with Section 409A and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date of this Agreement. |
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Section 3. Condition Precedent to Receiving Unit Appreciation Payments under the SAR Plan
The Participant hereby covenants and agrees that any Unit Appreciation Payments received under the SAR Plan, shall be subject to Participant’s compliance with the Noncompetition Requirement that during the Term and for a period of three hundred sixty-five days (365) following the Participant’s separation from service with the Bank for any reason whatsoever (except where the employment of the Participant is terminated pursuant to Section 8.(c) of the SAR Plan), Participant will not enter the employ of, or have any interest in, directly or indirectly (either as executive, partner, director, officer, consultant, principal, agent or employee), any other bank or financial institution or any entity which either accepts deposits or makes loans (whether presently existing or subsequently established) and which has an office located within a radius of 50 miles of any office of the Bank; provided, however, that the foregoing shall not preclude any ownership by the Participant of an amount not to exceed 5% of the equity securities of any entity which is subject to the periodic reporting requirements of the 1934 Act and the shares of Bank common stock owned by the Participant at the time of termination of employment. In the event that Participant fails to comply with this Noncompetition Requirement, Participant shall immediately repay to the Company any Unit Appreciation Payments received under the SAR Plan.
Section 4. Miscellaneous
(a) Confidentiality of the Agreement and the SAR Plan. By signing this Agreement, Participant acknowledges the proprietary nature of the SAR Plan, and agrees not to make any public statement, announcement, press release, or otherwise disclose the terms of the SAR Plan, or make public any documents Participant receives describing the SAR Plan (including but not limited to, the Unit Agreement, SAR Plan, summary plan document, etc.), to any third parties not affiliated with the Company, without the prior written consent of the Company. Notwithstanding the foregoing, nothing herein shall prohibit Participant from sharing the terms of the SAR Plan with Participant’s own legal counsel and/or accountants.
(b) No Right to Continued Employment. Nothing in the SAR Plan or in this Agreement shall confer upon the Participant any right to continue in the employ of Bank or shall interfere with or restrict in any way the right of Bank to remove, terminate or discharge Participant at any time for any reason whatsoever, with or without cause and with or without advance notice.
(c) Bound by SAR Plan. By signing this Agreement, Participant acknowledges that he/she has received a copy of the SAR Plan and has had an opportunity to review the SAR Plan and agrees to be bound by all the terms and provisions of the SAR Plan.
(d) Successors. The terms of this Agreement shall be binding upon and inure to the benefit of Bank, its successors and assigns, and of the Participant and the beneficiaries, executors, administrators, heirs and successors of the Participant.
(e) Invalid Provision. The invalidity or unenforceability of any particular provision thereof shall not affect the other provisions hereof, and this Agreement shall be construed in all respects as if such invalid or unenforceable provision had been omitted.
(f) Modifications. No change, modification or waiver of any provision of this Agreement shall be valid unless the same is in writing and signed by the parties hereto.
(g) Entire Agreement. This Agreement and the SAR Plan contain the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and therein and supersedes all prior communications, representations and negotiations in respect thereto.
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(h) Governing Law. This Agreement and the rights of the Participant hereunder shall be construed and determined in accordance with the laws of the State of Florida.
(i) Headings. The headings of the Sections hereof are provided for convenience only and are not to serve as a basis for interpretation or construction, and shall not constitute a part, of this Agreement.
(j) Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
(k) WAIVER OF JURY TRIAL. THE COMPANY AND EACH PERSON WHO IS A PARTICIPANT, BENEFICIARY, ESTATE, HEIR OR ASSIGN OF A UNIT EXPRESSLY WAIVES ALL RIGHTS TO ANY TRIAL BY JURY IN ALL LITIGATION RELATING TO OR ARISING OUT OF THE SUBJECT MATTER OF THIS PLAN.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto as of the ___day of ___, 20___.
PROFESSIONAL HOLDING CORP., a | ||
Florida corporation | ||
By: Daniel Sheehan | ||
Its: President / CEO | ||
PROFESSIONAL BANK | ||
By: Abel Iglesias | ||
Its: President / CEO | ||
PARTICIPANT: | ||
Print Name: | ||
Address: |
||
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Exhibit 10.11
PROFESSIONAL HOLDING CORP.
2016 AMENDED AND RESTATED stock OPTION PLAN
ARTICLE
1
GENERAL PROVISIONS
1.1 Purpose.
This Stock Option Plan (the “Plan”) of PROFESSIONAL HOLDING CORP. (the “Company”) is adopted for the following purposes: (1) to closely associate the interests of certain Key Persons (as hereinafter defined) with the interests of the Company; (2) to encourage the Key Persons to focus on the growth and development of the Company, as reflected in increased shareholder value; (3) to maintain competitive compensation levels; and (4) to provide an incentive for the Key Persons to maintain association or employment with the Company so that the Company may retain the services of the most highly qualified individuals in high level capacities.
1.2 Administration.
(a) The Plan shall be administered by the Committee. The Committee shall at all times consist of at least three members. If the Stock is registered under Section 12 of the Securities Exchange Act of 1934, as amended, then each member of the Committee shall be a director who is a “non-employee director” within the meaning of Rule 16(b)-3 and, if necessary for any Options to qualify for any tax or other material benefit to Optionee under applicable regulations under Section 162(m) of the Code, each shall be an “outside director” (as defined in applicable regulations). The Committee shall be appointed by, and serve at the pleasure of, the Board.
(b) The Committee shall have the authority, in its sole discretion and from time to time to:
(i) grant awards to such employees, officers and directors of the Company as the Committee shall select, provided that the Committee may grant Incentive Stock Options only to eligible employees of the Company or its subsidiaries (as defined for this purpose in Section 424(f) of the Code or any successor thereto);
(ii) make all determinations necessary or desirable for the administration of the Plan including, within any applicable limits specifically set out in the Plan, the number of shares of Stock that may be subject to Options, the Option Price, and the period during which an Optionee must remain an employee, officer or director of the Company prior to the exercise of an Option;
(iii) impose such limitations, restrictions and conditions upon any such award as the Committee shall determine;
(iv) interpret the Plan, adopt, amend, and rescind rules and regulations relating to the Plan, and
(v) make all other determinations and take all other actions necessary or advisable for the implementation and administration of the Plan.
(c) The Committee may select one of its members as its chair, and shall hold meetings at such times and places as it may determine. Acts by a majority of the Committee, or acts reduced to or approved in writing by a majority of the members, shall be the valid acts of the Committee.
(d) The Committee’s interpretation of the Plan or any Awards granted pursuant thereto and all decisions and determinations by the Committee with respect to the Plan shall be final, binding, and conclusive on all parties unless otherwise determined by the Committee. Nothing in this Section 1.2(d) shall give the committee the right to increase the Total Authorized Shares or to extend the term of the Plan.
1.3 Eligibility for Participation.
Only Key Persons shall be eligible for participation in the Plan. For purposes of the Plan, “Key Persons” shall be individuals selected by the Committee for grants of Awards under this Plan.
1.4 Types of Awards Under Plan.
Awards that are available under the Plan shall be as follows:
(a) Nonqualified Stock Options (as described in Article 3);
(b) Incentive Stock Options (as described in Article 4); or
(c) Any combination of the foregoing Awards.
1.5 Aggregate Limitation on Awards.
(a) Shares of Stock which may be issued under the Plan shall be authorized and unissued or treasury shares of the Common Stock of the Company; provided, however, that treasury shares shall not be used unless the Company has total capital accounts in excess of eight (8) percent of total assets. The shares of Common Stock which may be issued under the Plan shall not exceed 265,000 of the issued and outstanding Common Stock; provided however, that if there shall be a prospective reduction in the outstanding Common Stock, any previously issued Awards shall remain valid and exercisable in Common Stock notwithstanding that Common Stock subsequently issued pursuant to the prior Awards may exceed such limit.
(b) For purposes of calculating the maximum number of shares of Common Stock which may be issued under the Plan, the following shall apply:
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(i) All the shares issued (including the shares, if any, withheld for tax withholding requirements) shall be counted when cash is used as full payment for the shares issued for any Award; and
(ii) Only the net shares issued (including the shares, if any, sold for withholding tax requirements as provided herein) shall be counted when shares of Common Stock are used as full or partial payment for the shares issued for any Award.
(c) Shares tendered by a Participant as payment for shares issued upon exercise of any Award shall be available for issuance under the Plan. If any Award granted under the Plan terminates for any reason without being wholly exercised, then the Committee shall have the discretion to grant new Awards to Participants covering the number of shares of Common Stock to which such Awards related. Any shares of Common Stock issued pursuant to an Award which are subsequently reacquired by the Company shall again be available for issuance under the Plan.
1.6 Effective Date and Term of Plan.
The Plan shall become effective on the date it is approved by the shareholders of the Company. Subject to the applicable provisions in Section 6 below, the Plan shall continue in effect from the Effective Date until the day before the tenth anniversary of the Effective Date (the “Termination Date”), provided that the terms of the Plan shall continue in effect after the Termination Date for so long as is necessary to the enforcement of the rights and obligations of the Company and of any Optionee under the Plan or any Option. In no event shall any Options be granted under the Plan after the Termination Date. Options granted prior to the Termination Date shall remain in effect until the exercise, surrender, cancellation or expiration in accordance with their terms and the terms of the Plan.
ARTICLE
2
Definitions
The following definitions shall be applicable throughout the Plan.
2.1 “Award” shall mean, individually or collectively, any Incentive Stock Option or Nonqualified Stock Option granted to a Participant pursuant to the terms of the Plan.
2.2 “Board” or “Board of Directors” shall mean the Board of Directors of the Company.
2.3 “Change in Control” shall, unless the Committee otherwise directs by resolution adopted prior thereto, be deemed to occur if (i) any “person” (as that term is used in Sections 13 and 14(d)(2) of the Exchange Act (as defined herein) is or becomes the beneficial owner (as that term is used in Section 13(d) of the Exchange Act), directly or indirectly, of fifty percent (50%) or more of the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (“Voting Stock”); or (ii) during any period of twelve moths, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof, unless the election or the nomination for election by the Company’s shareholders of each new Director was approved by a vote of at least three-quarters (3/4) of the Directors then still in office who were Directors at the beginning of the period.
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2.4 “Code” shall mean the Internal Revenue Code of 1986, as amended. Reference in the Plan to any section of the Code shall be deemed to include any amendments or successor provisions to such section and any regulations under such section.
2.5 “Committee” shall have the meaning set forth in Section 1.2(a) of the Plan.
2.6 “Common Stock” shall mean the Class A Voting Common Stock of the Company, $0.01 par value per share.
2.7 “Company” shall mean PROFESSIONAL HOLDING CORP. and its successors.
2.8 “Director” shall mean a member of the Board of Directors.
2.9 “Disability” shall mean any of the following: (a) the Participant’s inability to perform each of the essential duties of such Participant’s position by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months; or (b) the incurrence by the Participant of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months.
2.10 “Effective Date” shall mean April 16, 2009.
2.11 “Employee” shall mean a statutory employee of the Company as defined in Code Section 1402(d).
2.12 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
2.13 “Fair Market Value” shall have the following meaning:
(a) Company’s Common Stock is Publicly Traded.
For purposes of the Plan, if the Company’s Common Stock is publicly traded at the time of determination, “Fair Market Value” as of any date and in respect of any share of Common Stock shall mean:
(i) the average of the high and low prices of the Common Stock on the principal national securities exchange on which the Common Stock is traded, or if no sales of Common Stock occur on the date in question, on the last preceding date on which there was a sale on such market, if the Common Stock is then traded on a national securities exchange; or
(ii) the mean between the closing bid and ask prices last quoted by an established quotation service for over-the-counter securities, or if no sales of Common Stock occur on the date in question, on the last preceding date on which there was a sale on such market, if the Common Stock is not reported on a national securities exchange.
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The above definition shall be interpreted consistent with Treas. Reg. §1.409A-1(b)(5)(iv)(A).
(b) Company’s Common Stock is Not Publicly Traded.
For purposes of the Plan, if the Company’s Common Stock is not publicly traded at the time of determination, “Fair Market Value” as of any date and in respect of any share of Common Stock shall be deemed to be the fair value of the Common Stock as determined by the Committee after taking into consideration all factors which it deems appropriate, including, without limitation, recent sale and offer prices of the Common Stock in private transactions negotiated at arm’s length and taking into account the factors listed in Treas. Reg. §1.409A-1(b)(5)(iv)(B).
2.14 “Holder” shall mean a Participant who has been granted a Nonqualified Stock Option or an Incentive Stock Option.
2.15 “Incentive Stock Option” shall have the meaning set forth in Section 4.1.
2.16 “Incentive Stock Option Period” shall mean the period described in Section 4.6(a).
2.17 “Initial Public Offering” means the first public offering of the Company’s equity securities registered under the Securities Act of 1933, as amended, or any successor statute, or such other event as a result of which outstanding equity securities of the Company (or any successor entity) shall be publicly traded.
2.18 “Key Persons” shall mean any Employee and shall also include any officers or Directors of the Company whether or not the latter shall be an Employee of the Company.
2.19 “Nonqualified Stock Option” shall mean an Option granted by the Committee to a Participant under the Plan which is not designated by the Committee as an Incentive Stock Option.
2.20 “Nonqualified Stock Option Period” shall mean the period described in Section 3.5(a).
2.21 “Option” shall mean a Nonqualified Stock Option or an Incentive Stock Option.
2.22 “Optionee” shall mean a participant who has been granted an Option hereunder.
2.23 “Option Period” shall mean a Nonqualified Stock Option Period or an Incentive Stock Option Period.
2.24 “Option Price” shall mean the applicable Stock Option Price or Incentive Option Price.
2.25 “Participant” shall mean a Key Person who shall be granted an Award under the Plan.
2.26 “Plan” shall mean this Stock Option Plan of the Company, as amended from time to time.
2.27 “Stock” shall mean the Common Stock or such other authorized shares of stock of the Company as the Board may from time to time authorize for use under the Plan.
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ARTICLE
3
NONQUALIFIED STOCK OPTIONS
3.1 Award of Nonqualified Stock Options.
3.2 The Committee may from time to time, and subject to the provisions of the Plan and such other terms and conditions as the Committee may prescribe, grant to any Key Person one or more Options to purchase for cash or shares, the number of shares of Common Stock (“Nonqualified Stock Options”) allotted by the Committee. The date a Nonqualified Stock Option is granted shall mean the date selected by the Committee as of which the Committee shall allot a specific number of shares to a Participant pursuant to the Plan and when the Participant has a legally binding right constituting the Nonqualified Stock Option; provided that the grant date may not be a date that occurs prior to the date the Committee takes action to approve the Nonqualified Stock Option.
3.3 Nonqualified Stock Option Agreements.
Each Nonqualified Stock Option granted under the Plan shall be evidenced by a “Nonqualified Stock Option Agreement” between the Company and the Holder of the Nonqualified Stock Option containing such provisions as may be determined by the Committee, but shall be subject to the following terms and conditions.
(a) Each Nonqualified Stock Option or portion thereof that is exercisable shall be exercisable for the full amount or for any part thereof, except as otherwise determined by the terms of the Nonqualified Stock Option Agreement.
(b) Each share of Common Stock purchased through the exercise of a Nonqualified Stock Option shall be paid for in full at the time of the exercise. Each Nonqualified Stock Option shall cease to be exercisable as to any share of Common Stock, at the earlier of: (i) the Holder purchases the share; or (ii) when the Nonqualified Stock Option lapses.
(c) Nonqualified Stock Options shall not be assignable or transferable by the Holder except by (i) will or the laws of descent and distribution, or (ii) a domestic relations order, and shall be exercisable during the Holder’s lifetime only by him or her or his or her guardian or legal representative.
(d) Each Nonqualified Stock Option shall become exercisable by the Holder in accordance with the vesting schedule (if any) established by the Committee for the Award.
(e) Each Nonqualified Stock Option Agreement may contain an agreement that, upon demand by the Committee for such a representation, the Holder shall deliver to the Committee at the time of any exercise of a Nonqualified Stock Option a written representation that the shares to be acquired upon such exercise are to be acquired for investment and not for resale or with a view to the distribution thereof. Upon such demand, delivery of such representation prior to the delivery of any shares issued upon exercise of a Nonqualified Stock Option shall be a condition precedent to the right of the Holder or such other person to purchase any shares. In the event certificates for Common Stock are delivered under the Plan with respect to which such investment representation has been obtained, the Committee may cause a legend or legends to be placed on such certificates to make appropriate reference to such representation and to restrict transfer in the absence of compliance with applicable federal or state securities laws.
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3.4 Nonqualified Stock Option Price.
The exercise price per share of Common Stock (the “Nonqualified Stock Option Price”) shall be set by the Committee at the time of grant subject to the following: (i) the Nonqualified Stock Option Price shall never be less than the greater of the Fair Market Value of the underlying stock on the date the Nonqualified Stock Option is granted or the par value of the stock; (ii) the number of shares subject to the Nonqualified Stock Option Price must be fixed on the original date of grant; and (iii) the Nonqualified Stock Option Price may not include any additional feature for the deferral of compensation.
3.5 Manner of Exercise and Form of Payment.
(a) Nonqualified Stock Options which have become exercisable may be exercised by delivery of written notice of exercise (“Notice of Exercise”) to the Committee accompanied by payment of the Nonqualified Stock Option Price. The Nonqualified Stock Option Price shall be payable in cash or such other means as set forth in the Nonqualified Stock Option Agreement plus the amount (if any) of federal and/or other taxes which the Company may, in its judgment, be required to withhold with respect to an Award. If a Participant shall fail to pay the Nonqualified Stock Option Price at the time of exercise, the Nonqualified Stock Option(s) which are being exercised shall become null and void.
(b) Notwithstanding Section 3.4(a), at the time the Notice of Exercise pertaining to the Nonqualified Stock Option is given to the Committee with respect to the exercise of any Nonqualified Stock Option, if the Company’s shares of Common Stock are traded on a national securities exchange, a Participant may elect in writing to pay the Nonqualified Stock Option Price through a “cashless” feature. Upon such election, the Committee shall sell a sufficient number of shares of Common Stock on behalf of the electing Participant which would otherwise be a part of the shares exercised through the Nonqualified Stock Option in the Notice of Exercise. The sale price shall be the closing price of the shares as quoted on the exchange or market as of the trading day immediately preceding the date of the Notice of Exercise. The proceeds from such sale(s) shall be used to pay any and all applicable state and federal withholding or other employment or payroll taxes, if any, applicable to the taxable income of the Participant resulting from such exercise together with any sales, transfer or similar taxes imposed with respect to the issuance or transfer of shares of Common Stock in connection with such exercise. The exercising Participant shall then receive the balance of the shares net of those sold in order for the Company to pay such taxes.
(c) Any state or federal withholding taxes attributable to the portion of the Non Qualified Stock Option payable in cash shall be withheld from the cash that would otherwise be paid to the Participant hereunder.
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3.6 Nonqualified Stock Option Period; Termination.
(a) Each Nonqualified Stock Option shall be exercisable by the Holder in accordance with such terms as shall be established by the Committee for the Nonqualified Stock Option, and unless a shorter period is provided by the Committee or by another section of the Plan, may be exercised during a period of ten (10) years from the date of grant thereof (the “Nonqualified Stock Option Period”). No Nonqualified Stock Option shall be exercisable after the expiration of its Nonqualified Stock Option Period.
(b) If the Holder dies within the Nonqualified Stock Option Period (or such other period as may have been established by the Committee), any rights to the extent exercisable on the date of death may be exercised by the Holder’s estate, or by a person who acquires the right to exercise such Nonqualified Stock Option by bequest or inheritance or by reason of the death of the Holder, provided that such exercise occurs within both the Nonqualified Stock Option Period and twelve (12) months after the Holder’s death.
(c) If the Holder’s relationship as an Employee, officer or Director of the Company terminates by reason of Disability within the Nonqualified Stock Option Period, the Holder may, within twelve (12) months from the date of termination (or within such other period as determined by the Committee), exercise any Nonqualified Stock Options to the extent such options are exercisable during such twelve (12) month period.
(d) If the Holder’s relationship with the Company terminates for any reason other than death or Disability, all unvested Nonqualified Stock Options shall, except as set forth in the Holder’s Nonqualified Stock Option Agreement or as otherwise determined by the Committee at the time of the grant, terminate at the time of the termination of such relationship or employment, as the case may be.
3.7 Effect of Exercise.
As soon as practicable after receipt of payment, the Company shall deliver to the Participant a certificate or certificates for such shares of Common Stock. The Participant shall become a shareholder of the Company with respect to Common Stock represented by share certificates so issued and as such shall be fully entitled to receive dividends, to vote and to exercise all other rights of a shareholder.
3.8 Order of Exercise.
Options granted under the Plan may be exercised in any order, regardless of the date of the grant or the existence of any other outstanding Nonqualified Stock Option awarded to the Participant.
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ARTICLE
4
INCENTIVE STOCK OPTIONS
4.1 Award of Incentive Stock Options.
The Committee may, from time to time and subject to the provisions of the Plan and such other terms and conditions as the Committee may prescribe, grant to any Key Person who is an Employee of the Company one or more “incentive stock options” (intended to qualify as such under the provisions of Section 422 of the Code (“Incentive Stock Options”) to purchase for cash or shares, the number of shares of Common Stock allotted by the Committee. The date an Incentive Stock Option is granted shall mean the date selected by the Committee as of which the Committee allots a specific number of shares to a Participant pursuant to the Plan; provided that the grant date may not be a date that occurs prior to the date the Committee takes action to approve the Nonqualified Stock Option.
4.2 Incentive Stock Option Agreements.
Each Incentive Stock Option granted under the Plan shall be evidenced by an “Incentive Stock Option Agreement” between the Company and the Holder of the Incentive Stock Option, stating the number of shares of Common Stock subject to the Incentive Stock Option evidenced thereby and containing such other provisions as may be determined by the Committee from time to time, but shall be subject to the following terms and conditions.
(a) Each Incentive Stock Option or portion thereof that is exercisable shall be exercisable for the full amount or for any part thereof, except as otherwise determined by the terms of the Incentive Stock Option Agreement.
(b) Each share of Common Stock purchased through the exercise of an Incentive Stock Option shall be paid for in full at the time of the exercise. Each Incentive Stock Option shall cease to be exercisable, as to any share of Common Stock, at the earlier of: (i) the Holder purchases the share; or (ii) when the Incentive Stock Option lapses.
(c) Incentive Stock Options shall not be assignable or transferable by the Holder except by (i) will or the laws of descent and distribution, or (ii) a domestic relations order, and shall be exercisable during the Holder’s lifetime only by him or her or his or her guardian or legal representative.
(d) Each Incentive Stock Option shall become exercisable by the Holder in accordance with the vesting schedule (if any) established by the Committee for the Award.
(e) Each Incentive Stock Option Agreement may contain an agreement that, upon demand by the Committee for such a representation, the Holder shall deliver to the Committee at the time of any exercise of an Incentive Stock Option a written representation that the shares to be acquired upon such exercise are to be acquired for investment and not for resale or with a view to the distribution thereof. Upon such demand, delivery of such representation prior to the delivery of any shares issued upon exercise of an Incentive Stock Option shall be a condition precedent to the right of the Holder or such other person to purchase any shares. In the event certificates for Common Stock are delivered under the Plan with respect to which such investment representation has been obtained, the Committee may cause a legend or legends to be placed on such certificates to make appropriate reference to such representation and to restrict transfer in the absence of compliance with applicable federal or state securities laws.
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4.3 Incentive Stock Option Price.
The option price per share of Common Stock deliverable upon the exercise of an Incentive Stock Option shall be the greater of the Fair Market Value of a share of Common Stock on the date the Incentive Stock Option is granted or the par value of the stock.
4.4 Special Rule for Ten Percent Shareholder.
Notwithstanding Sections 4.2 and 4.3, if Incentive Stock Options are issued to an individual who owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, then (a) the option price per share of Common Stock deliverable upon the exercise of an Incentive Stock Option shall be at least the greater of one hundred and ten percent (110%) of the Fair Market Value of a share of Common Stock on the date the Incentive Stock Option is granted or the par value of the stock; and (b) such option, by its terms, shall not be exercisable after the expiration of five (5) years from the date such option is granted.
4.5 Maximum Amount of Incentive Stock Option Grant.
To the extent required for “Incentive Stock Option” status under Section 422 of the Code, the aggregate Fair Market Value (determined as of the Date of Grant) of the Common Shares with respect to which Incentive Stock Options are exercisable for the first time by the Optionee during any calendar year under the Plan and/or any other stock option plan of the Company (within the meaning of Section 424 of the Code) shall not exceed $100,000 (or such other amount set forth in section 422 of the Code) (the “ISO Limitation Amount”). To the extent the aggregate Fair Market Value (determined on the date the option is granted) of Common Stock for which Incentive Stock Options are exercisable for the first time during any calendar year (under all plans of the Company) exceeds the ISO Limitation Amount, such excess Incentive Stock Options shall be treated as Nonqualified Stock Options.
4.6 Incentive Stock Option Period; Termination.
(a) Each Incentive Stock Option shall be exercisable by the Holder in accordance with such terms as shall be established by the Committee for the Incentive Stock Option, and, unless a shorter period is provided by the Committee or by another section of the Plan, may be exercised during a period of ten (10) years from the date of grant thereof (the “Incentive Stock Option Period”). No Incentive Stock Option shall be exercisable after the expiration of its Incentive Stock Option Period.
(b) If the Holder dies within the Incentive Stock Option Period (or such other period as may have been established by the Committee), any rights to the extent exercisable on the date of death may be exercised by the Holder’s estate, or by a person who acquires the right to exercise such Incentive Stock Option by bequest or inheritance or by reason of the death of the Holder, provided that such exercise occurs within both the Incentive Stock Option Period and twelve (12) months after the Holder’s death.
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(c) If the Holder’s relationship as an Employee officer or Director of the Company terminates by reason of Disability within the Incentive Stock Option Period, the Holder may, within twelve (12) months from the date of termination (or within such other period as determined by the Committee), exercise any Incentive Stock Options to the extent such options are exercisable during such twelve (12) month period (or such other period as determined by the Committee).
(d) Notwithstanding the foregoing, the tax treatment available pursuant to Section 422 of the Code upon the exercise of an Incentive Stock Option will not be available to a Holder who exercises any Incentive Stock Options more than (i) twelve (12) months after the date of termination of employment due to Disability or (ii) three (3) months after the date of termination of employment due to death.
(e) If the Holder’s employment or relationship with the Company terminates for any reason other than death or Disability, all unvested Incentive Stock Options shall, except as set forth in the Holder’s Incentive Stock Option Agreement or as otherwise determined by the Committee at the time of the grant, terminate at the time of the termination of such relationship.
4.7 Notice of Disposition.
Participants shall give prompt notice to the Committee of any disposition of Common Stock acquired upon exercise of an Incentive Stock Option if such disposition occurs within either two (2) years after the date of the grant of such Incentive Stock Option and/or one (1) year after the receipt of such Common Stock by the Holder.
4.8 Applicability of Nonqualified Stock Options Sections.
Sections 3.4 (Manner of Exercise and Form of Payment), 3.6 (Effect of Exercise) and 3.7 (Order of Exercise) applicable to Nonqualified Stock Options, shall apply equally to Incentive Stock Options. These sections are incorporated by reference in this Article 4 as though fully set forth herein.
ARTICLE
5
vesting
Vesting. Unless otherwise designated by the Committee, the Options granted hereunder may initially be unvested or subject to forfeiture. The Committee shall determine the timing, terms and conditions of the vesting of any Options acquired hereunder, and in its discretion, may accelerate the vesting of the Option or any part thereof from time to time. Notwithstanding anything herein to contrary, if the Participant is terminated for Cause (as defined below), the Participant’s interest in such Stock Option Award, and the shares of Common Stock underlying such Stock Option Award, shall terminate at the time the Participant is terminated for Cause without regard to whether the Participant has satisfied any applicable vesting period before the Participant’s termination date. Cause is defined as: (i) violation of any standard of conduct or ethics applicable generally for officers, directors, employees or associates of the Company and its subsidiaries; (ii) the Participant is convicted of, or pleads guilty or no contest to, any crime punishable as a felony; (iii) conduct by the Participant which by the standard of clear and convincing evidence, in the Committee’s sole discretion, is unprofessional or unethical or behavior that is materially detrimental to the financial well-being or reputation of the Company; or (iv) any other for “Cause” reason for termination, as set forth in any employment agreement of Participant with the Company, that causes Participant’s employment to terminate with the Company. The terms of this Article 5 shall supercede and control anything to the contrary contained in any Nonqualified Stock Option Agreement or Incentive Stock Option Agreement between the Participant and the Company.
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ARTICLE
6
mISCELLANEOUS
6.1 General Restriction.
Each Award under the Plan shall be subject to the requirement that, if at any time the Committee shall determine that (a) the listing, registration or qualification of the shares of Common Stock subject or related thereto upon any securities exchange or under any state or Federal law, or (b) the consent or approval of any government regulatory body, or (c) an agreement by the grantee of an award with respect to the disposition of shares of Common Stock, is necessary or desirable as a condition of, or in connection with, the granting of such Award or the issue or purchase of shares of Common Stock thereunder, such Award may not be consummated in whole or in part unless such listing, registration, qualification, consent, approval or agreement shall have been effected or obtained free of any conditions not acceptable to the Committee.
6.2 Additional Provisions of an Award.
The award of any benefit under the Plan may also be subject to such other provisions (whether or not applicable to the benefit awarded to any other Participant) as the Committee determines appropriate, including, without limitation, provisions to assist the Participant in financing the purchase of Common Stock through the exercise of Options, provisions for the forfeiture of or restrictions on resale or other disposition of shares acquired under any form of benefit, provisions giving the Company the right to repurchase shares acquired under any form of benefit in the event the Participant elects to dispose of such shares, and provisions to comply with Federal and state securities laws and Federal and state income tax withholding requirements.
6.3 Restrictions on Transferability.
No Award under the Plan shall be assignable or transferable by the recipient thereof, except by will or by the laws of descent and distribution. During the life of the recipient, such Award shall be exercisable only by such person or by such person’s guardian or legal representative. No right or benefit under this Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge and any attempt to anticipate, alienate, sell, assign, pledge, encumber or charge the same shall be void. No right or benefit hereunder shall in any manner be liable for or subject to any debts, contracts, liabilities or torts of the person entitled to such benefits. If any Participant or beneficiary hereunder shall become bankrupt or attempt to anticipate, alienate, assign, pledge, sell, encumber or charge any right or benefit hereunder, then such right or benefit shall in the discretion of the Committee cease. Such Units shall thereupon become null and void.
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6.4 Withholding Taxes.
Notwithstanding any other provision of the Plan, the Company shall have the right in general and in addition to any other specific procedure for the payment of taxes attributable to any Award to deduct from all Awards, to the extent paid in cash, all federal, state or local taxes as required by law to be withheld with respect to such Awards and, in the case of Awards paid in Common Stock, the Holder or other person receiving such Common Stock may be required to pay to the Company prior to delivery of such stock, the amount of any such taxes which the Company is required to withhold, if any, with respect to such Common Stock. Subject in particular cases to the approval of the Committee, the Company may accept shares of Common Stock of equivalent Fair Market Value in payment of such withholding tax obligations if the Holder of the Award elects to make payment in such manner at least six (6) months prior to the date such tax obligation is determined.
6.5 Compliance with Section 409A of the Code.
The Plan is intended to comply with Section 409A of the Code and shall be construed and interpreted in accordance with such intent. Grants under this Plan shall be treated in a manner that will comply with Section 409A of the Code, including proposed, temporary or final regulations or any other guidance issued by the Secretary of Treasury and the Internal Revenue Service with respect thereto (the “Guidance”). Any provision of the Plan that would cause a grant or any other payment under the Plan to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Code Section 409A (which amendment may be retroactive to the extent permitted by the Guidance). If the Committee at any time determines that the Plan or Options granted under the Plan are or may be subject to, and fail or may fail to comply with, the requirements of Section 409A of the Code, the Committee may make such modifications to the Plan and to the terms of any awards under the Plan, including without limitation, modifications with respect to the exercisability of Options, as it deems advisable either to ensure that the Plan and Options granted under the Plan comply with any applicable requirements of Section 409A of the Code. Notwithstanding the foregoing, nothing herein shall create any obligation by the Company to any participant should any grant or other payment fail to satisfy Section 409A of the Code.
6.6 Fractional Shares.
The Company shall not be required to issue any fractional Common Stock pursuant to this Plan. The Committee may provide for the elimination of fractional Common Shares or for the settlement of fractional Common Shares for cash.
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6.7 Lock-Up Agreement.
The Company may, in its discretion, require in connection with an Initial Public Offering that a Participant agree that any Option not be sold, offered for sale, or otherwise disposed of for a period of time as determined by the Board, provided at least a majority of the Company’s Directors and officers who hold Options or Common Stock at such time are similarly bound.
6.8 Employment Not Affected.
Nothing in the Plan or in any agreement entered into pursuant to the Plan shall confer upon any Participant the right to continue to serve on the Committee or Board or in the employment of the Company or affect any right which the Company, or its shareholders, may have to terminate the relationship or employment or service of such Participant.
6.9 Acceleration Events.
If an event occurs which in the opinion of the Board is likely to lead to a Change in Control of the Company, whether or not such Change in Control actually occurs, the Board may direct the Committee to declare that all Nonqualified Stock Options and Incentive Stock Options granted under the Plan shall become immediately vested; provided, however, that to the extent that so accelerating the time an Incentive Stock Option may first be exercised would cause the limitation provided in Section 4.5 to be exceeded, such Options shall instead first become exercisable in so many of the next following years as is necessary to comply with such limitation. In addition, to the extent provided in the applicable Stock Option Agreement between the Participant and the Company, the vesting of Options granted hereunder may be accelerated if the Participant’s employment or service to the Company terminates by reason of the Participant’s death or Disability.
6.10 Payments to Persons Other than Participants.
If the Committee shall find that any person to whom any amount is payable under the Plan is unable to care for his or her affairs because of illness or accident, or is a minor, or has died, then any payment due to such person or his or her estate (unless a prior claim therefor has been made by a duly appointed legal representative), may, if the Committee so directs the Company, be paid to his or her spouse, child, relative, an institution maintaining or having custody of such person, or any other person deemed by the Committee to be a proper recipient on behalf of such person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Committee and the Company therefor.
6.11 Non-Uniform Determinations.
The Committee’s determinations under the Plan (including, without limitation, determinations of the persons to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the agreements evidencing same) need not be uniform and may be made by it selectively among persons who receive, or are eligible to receive, Awards under the Plan, whether or not such persons are similarly situated.
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6.12 Rights as a Shareholder.
Except as otherwise specifically provided in the Plan, no person shall be entitled to the privileges of stock ownership in respect of shares of Common Stock which are subject to Options hereunder until such shares have been issued to that person.
6.13 Leaves of Absence.
The Committee shall be entitled to make such rules, regulations and determinations as it deems appropriate under the Plan in respect of any leave of absence taken by the recipient of any award. Without limiting the generality of the foregoing, the Committee shall be entitled to determine (a) whether or not any such leave of absence shall constitute a termination of employment within the meaning of the Plan and (b) the impact, if any, of any such leave of absence on awards under the Plan previously made to any recipient who takes such leave of absence.
6.14 Newly Eligible Employees.
The Committee shall be entitled to make such rules, regulations, determinations and awards as it deems appropriate in respect of any person who becomes eligible to participate in the Plan or any portion thereof after the commencement of an Award or incentive period.
6.15 Adjustments.
Unless the Committee specifically determines otherwise, Options and any agreements evidencing such Awards shall be subject to adjustment or substitution as to the number, price or if applicable, kind of a shares of stock or other consideration subject to such Awards or as otherwise determined by the Committee to be equitable (a) in the event of changes in the outstanding Common Stock or in the capital structure of the Company, or of any other corporation whose performance is relevant to the attainment of performance goals hereunder, if any, by reason of stock dividends, stock splits, recapitalizations, reorganizations, mergers, consolidations, combinations, exchanges or other relevant changes in capitalization occurring after the date of the grant of any such Award or (b) in the event of any change in applicable laws or any change in circumstances which results in or would result in any substantial dilution or enlargement of the rights granted to, or available for, Participants in the Plan, or which otherwise warrants equitable adjustment because it interferes with the intended operation of the Plan. In addition, unless the Committee specifically determines otherwise, in the event of any such adjustments or substitution, the aggregate number of shares of Common Stock available under the Plan shall be appropriately adjusted by the Committee, whose determination shall be conclusive. Any adjustment in Incentive Stock Options under this Section shall be made only to the extent not constituting a “modification” within the meaning of Section 424(h)(3) of the Code, and any adjustments under this Section shall be made in a manner which does not adversely affect the exemption provided pursuant to Rule 16b-3 under the Exchange Act. The Company shall give each Participant notice of an adjustment hereunder and, upon notice, such adjustment shall be conclusive and binding for all purposes.
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6.16 Effect of Change in Control.
(a) In the event a Change in Control occurs and notwithstanding any vesting schedule provided for hereunder or by the Committee with respect to an Award of Options, such Option shall become immediately exercisable with respect to one hundred percent (100%) of the shares subject to such Option; provided, however, that to the extent that so accelerating the time an Incentive Stock Option may first be exercised would cause the limitation provided in Section 4.5 to be exceeded, such Options shall instead first become exercisable in so many of the next following years as is necessary to comply with such limitation.
(b) The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to substantially all of the assets and business of the Company. The Company agrees that it will make appropriate provisions for the preservation of a Participant’s rights under the Plan in any agreement or plan which it may enter into or adopt to effect any such merger, consolidation, reorganization or transfer of assets.
6.17 Funding.
Except as otherwise provided in the Plan, no provision of the Plan shall require the Company, for the purpose of satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or otherwise to segregate any assets, nor shall the Company maintain separate bank accounts, books, records, or other evidence of the existence of a segregated or separately maintained or administered fund for such purposes. Holders shall have no rights under the Plan other than as unsecured general creditors of the Company, except that insofar as they may have become entitled to payment of additional compensation by performance of services, they shall have the same rights as other employees under general law.
6.18 Reliance on Reports.
Each member of the Committee shall be fully justified in relying, acting or failing to act, and shall not be liable for having so relied, acted or failed to act in good faith, upon any report made by the independent public accountant of the Company and upon any other information furnished in connection with the Plan by any person or persons other than himself or herself.
6.19 Relationship to Other Benefits.
No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement, profit sharing, group insurance or other benefit plan of the Company except as otherwise specifically provided.
6.20 Expenses.
The expenses of administering the Plan shall be borne by the Company.
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6.21 Titles and Headings.
The titles and headings of the sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.
6.22 No Presumption.
The fact that this Agreement was prepared by counsel for the Company shall create no presumptions and specifically shall not cause any ambiguities to be construed against the Company.
6.23 Nonexclusivity of the Plan.
Neither the adoption of this Plan by the Board nor the submission of this Plan to the shareholders of the Company for approval shall be construed as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options otherwise than under this Plan, and such arrangements may be either applicable generally or only in specific cases.
6.24 No Liability of Committee Members.
No member of the Committee shall be personally liable by reason of any contract or other instrument executed by such member or on his or her behalf in his or her capacity as a member of the Committee nor for any mistake of judgment made in good faith, and the Company shall defend, indemnify and hold harmless each member of the Board and each other employee, officer or Director of the Company to whom any duty or power relating to the administration or interpretation of the Plan may be allocated or delegated, against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim) arising out of any act or omission to act in connection with the Plan unless arising out of such person’s own fraud or bad faith; provided, however, that approval of the Board shall be required for the payment of any amount in settlement of a claim against any such person. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.
6.25 Governing Law; Construction.
The Plan shall be governed by the laws of the state of Florida without regard to its conflict of laws principles. In case any one or more of the provisions contained herein are for any reason deemed to be invalid, illegal or unenforceable in any respect by a judicial body having jurisdiction, such illegality, invalidity or unenforceability shall not effect any other provision of this Plan, and this Plan shall be construed as if such invalid, unenforceable or illegal provision had never been contained herein. In construing the Plan, the singular shall include the plural and the masculine gender shall include the feminine and neuter, unless the context otherwise requires.
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6.26 Amendment of the Plan.
(a) The Committee may, without further action by the shareholders and without receiving further consideration from the Participants, amend this Plan or condition or modify awards under this Plan in response to changes in securities or other laws or rules, regulations or regulatory interpretations thereof applicable to this Plan or to comply with stock exchange rules or requirements.
(b) The Committee may at any time and from time to time terminate or modify or amend the Plan in any respect, except that, without shareholder approval, the Committee may not materially amend the Plan, including, but not limited to, the following:
(i) materially increase the number of shares of Common Stock to be issued under the Plan (other than pursuant to Sections 6.15 and 6.16);
(ii) materially increase benefits to Participants, including any material change to (A) permit a re-pricing (or decrease in exercise price) of outstanding Options, (B) reduce the price at which Options may be offered, or (C) extend the duration of the Plan;
(iii) materially expand the class of Participants eligible to participate in the Plan; and
(iv) expand the types of Options or other awards provided under the Plan.
(c) The termination or any modification or amendment of the Plan, except as provided in subsection (a), shall not without the consent of a Participant, affect his or her rights under an Award previously granted to him or her.
6.27 Binding Effect.
This Agreement shall be legally binding upon and shall operate for the benefit of the parties hereto, their respective heirs, personal and legal representatives, transferees, successors and assigns.
6.28 Survival.
All representations and other relevant provisions herein shall survive and thereby continue in full force and effect after termination of the Optionee’s employment with the Company.
6.29 No Waiver of Breach.
The waiver or inaction by any party hereto of a breach of any condition of this Agreement by the other party shall not be construed as a waiver of any subsequent breach by such party, nor shall it constitute a waiver of that party’s rights, actual or inherent. The failure of any party hereto in any instance to insist upon a strict performance of the terms of this Agreement or to exercise any option herein shall not be construed as a waiver or a relinquishment in the future of such term or option, but that the same shall continue in full force and effect.
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6.30 Notices.
All notices or communications provided for herein or incidental to the transactions contemplated hereby shall be in writing and shall be deemed duly given if delivered personally, sent by facsimile, certified mail and/or by registered mail, return receipt requested or sent by overnight delivery (i) to any officer of the Company (other than the Participant) at the address of the principal office of the Company and (ii) to any Participant at his or her address as reflected on the records of the Company for federal income tax purposes or at such other address as either party may have specified by prior written notice to the other party. Notices shall be effective as of the date of personal delivery or as of the first day after any other notice procedure.
6.31 WAIVER OF JURY TRIAL.
THE COMPANY AND EACH PERSON WHO IS A PARTICIPANT EXPRESSLY WAIVES ALL RIGHTS TO ANY TRIAL BY JURY IN ALL LITIGATION RELATING TO OR ARISING OUT OF THE SUBJECT MATTER OF THIS PLAN.
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Exhibit 10.12
Professional Holding Corp.
2019 Equity Incentive Plan
1. Purpose; Eligibility.
1.1 General Purpose. The name of this plan is the Professional Holding Corp. 2019 Equity Incentive Plan (the “Plan”). The purposes of the Plan are to (a) enable Professional Holding Corp., a Florida corporation (the “Company”), and any Affiliate to attract and retain the types of Employees, Consultants and Directors who will contribute to the Company’s long-term success; (b) provide incentives that align the interests of Employees, Consultants and Directors with those of the shareholders of the Company; and (c) promote the success of the Company’s business.
1.2 Eligible Award Recipients. The Persons eligible to receive Awards are the Employees, Consultants and Directors of the Company or its Affiliates and such other individuals designated by the Committee who are reasonably expected to become Employees, Consultants and Directors of the Company or its Affiliates after the receipt of Awards.
1.3 Available Awards. Awards that may be granted under the Plan include: (a) Incentive Stock Options, (b) Non-qualified Stock Options, (c) Stock Appreciation Rights, (d) Restricted Awards, (e) Performance Share Awards, (f) Cash Awards, and (g) Other Equity-Based Awards, or any combination of the foregoing.
2. Definitions.
“Affiliate” means a Person that, directly or through one or more intermediaries, controls, is controlled by or is under common control with, the Company.
“Applicable Laws” means the requirements related to or implicated by the administration of the Plan under applicable state corporate law, United States federal and state securities laws, the Code, any stock exchange or quotation system on which the shares of Common Stock are listed or quoted, and the applicable laws of any foreign country or jurisdiction where Awards are granted under the Plan.
“Award” means any right granted under the Plan, including an Incentive Stock Option, a Non-qualified Stock Option, a Stock Appreciation Right, a Restricted Award, a Performance Share Award, a Cash Award, or an Other Equity-Based Award.
“Award Agreement” means a written agreement, contract, certificate or other instrument or document evidencing the terms and conditions of an individual Award granted under the Plan which may be transmitted electronically to a Participant. Each Award Agreement shall be subject to the terms and conditions of the Plan.
“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular Person, such Person shall be deemed to have beneficial ownership of all securities that such Person has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.
“Board” means the Board of Directors of the Company, as constituted at any time.
“Cash Award” means an Award denominated in cash that is granted under Section 7.4 of the Plan.
“Cause” means:
(a) With respect to any Employee or Consultant, unless the applicable Award Agreement states otherwise:
(i) If the Employee or Consultant is a party to an employment or service agreement with the Company or its Affiliates and such agreement provides for a definition of Cause, the definition contained therein; or
(ii) If no such agreement exists, or if such agreement does not define Cause: (A) the commission of, or plea of guilty or no contest to, a felony, a crime involving moral turpitude, or the commission of any other act involving willful malfeasance or material fiduciary breach with respect to the Company or an Affiliate; (B) conduct that results in, or is reasonably likely to result in, harm to the reputation or business of the Company or any of its Affiliates; (C) gross negligence or willful misconduct with respect to the Company or any of its Affiliates; (D) a material breach of any employment or similar agreement or any Company policy; and (E) a material violation of state or federal securities or banking laws.
(b) With respect to any Director, unless the applicable Award Agreement states otherwise, a determination by a majority of the disinterested Directors that the Director has engaged in any of the following:
(i) malfeasance during term as a director of the Company or its Affiliates;
(ii) the commission of, or plea of guilty or no contest to, a felony, a crime involving moral turpitude, or the commission of any other act involving a material fiduciary breach with respect to the Company or an Affiliate
(iii) gross misconduct or neglect;
(iv) false or fraudulent misrepresentation inducing the Director’s appointment;
(v) willful conversion of corporate funds; or
(vi) repeated failure to participate in Board meetings on a regular basis despite having received proper notice of the meetings in advance.
The Committee shall determine the effect of all matters and questions relating to whether a Participant has been discharged for Cause.
“Change in Control” means:
(a) One Person (or more than one Person acting as a group) acquires ownership of stock of the Company that, together with the stock held by such person or group, constitutes more than 50% of the total Fair Market Value or total voting power of the capital stock of the Company; provided, that, a Change in Control shall not occur if any Person (or more than one Person acting as a group) owns more than 50% of the total Fair Market Value or total voting power of the Company’s capital stock and acquires additional capital stock;
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(b) One Person (or more than one Person acting as a group) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition) ownership of 30% or more of the total voting power of the capital stock of the Company;
(c) A majority of the Directors are replaced during any 12-month period by Directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election; or
(d) One Person (or more than one Person acting as a group), acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition) assets from the Company that have a total gross fair market value equal to or greater than 40% of the total gross fair market value of all of the assets of the Company immediately before such acquisition(s).
“Clawback Policy” has the meaning set forth in Section 14.2.
“Code” means the Internal Revenue Code of 1986, as it may be amended from time to time. Any reference to a section of the Code shall be deemed to include a reference to any regulations promulgated thereunder.
“Committee” means a committee of one or more Directors appointed by the Board to administer the Plan in accordance with Section 3.3 and Section 3.4.
“Common Stock” means the Class A Voting Common Stock, $0.01 par value per share, of the Company, or such other securities of the Company as may be designated by the Committee from time to time in substitution thereof.
“Company” means Professional Holding Corp., a Florida corporation, and any successor thereto.
“Consultant” means any individual or entity which performs bona fide services to the Company or an Affiliate, other than as an Employee or Director.
“Continuous Service” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Consultant or Director, is not interrupted or terminated. The Participant’s Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s Continuous Service; provided further that if any Award is subject to Section 409A of the Code, this sentence shall only be given effect to the extent consistent with Section 409A of the Code. For example, a change in status from an Employee to a director of an Affiliate will not constitute an interruption of Continuous Service. The Committee may determine whether Continuous Service shall be considered interrupted in the case of any approved leave of absence approved, including sick leave, military leave or any other personal or family leave of absence. The Committee may determine whether a Company transaction, such as a sale or spin-off of a division or subsidiary that employs a Participant, shall be deemed to result in a termination of Continuous Service for purposes of affected Awards, and such decision shall be final, conclusive and binding.
“Deferred Stock Units” has the meaning set forth in Section 7.2.
“Director” means a member of the Board.
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“Disability” means, unless the applicable Award Agreement says otherwise, that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment; provided, however, for purposes of determining the term of an Incentive Stock Option pursuant to Section 6.10, the term Disability shall have the meaning ascribed to it under Section 22(e)(3) of the Code. The determination of whether an individual has a Disability shall be determined under procedures established by the Committee. Except in situations where the Committee is determining Disability for purposes of the term of an Incentive Stock Option pursuant to Section 6.10 within the meaning of Section 22(e)(3) of the Code, the Committee may rely on any determination that a Participant is disabled for purposes of benefits under any long-term disability plan maintained by the Company or any Affiliate in which a Participant participates.
“Disqualifying Disposition” has the meaning set forth in Section 14.10.
“Dividend Equivalents” has the meaning set forth in Section 7.2
“Effective Date” means the date that the Company’s shareholders approve this Plan if such shareholder approval occurs before the first anniversary of the date the Plan is adopted by the Board.
“Employee” means any person, including an Officer or Director, employed by the Company or an Affiliate; provided, that, for purposes of determining eligibility to receive Incentive Stock Options, an Employee means an employee of the Company or a parent or subsidiary within the meaning of Section 424 of the Code. Mere service as a Director or payment of a Director’s fee by the Company or an Affiliate is not sufficient to constitute “employment” by the Company or an Affiliate.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Fair Market Value” means, as of any date, the value of the Common Stock as determined below. If the Common Stock is listed on any established stock exchange or a national market system, including without limitation, the New York Stock Exchange or the Nasdaq Stock Market, the Fair Market Value shall be the closing price of a share of Common Stock (or if no sales were reported the closing price on the date immediately preceding such date) as quoted on such exchange or system on the day of determination, as reported in the Wall Street Journal. If the Common Stock is not listed on an established stock exchange, but is quoted on an OTC market, then the Fair Market Value shall be the 20-day volume-weighted average price per share on such OTC market. In the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Committee in accordance with the requirements of Code Section 409A and such determination shall be conclusive and binding on all Persons.
“Fiscal Year” means the Company’s fiscal year.
“Free Standing Rights” has the meaning set forth in Section 7.1(a).
“Good Reason” means, unless the applicable Award Agreement states otherwise:
(a) If an Employee or Consultant is a party to an employment or service agreement with the Company or any of its Affiliates and such agreement provides for a definition of Good Reason, the definition contained therein; or
(b) If no such agreement exists or if such agreement does not define Good Reason, the occurrence of one or more of the following without the Participant’s express written consent, which circumstances are not remedied by the Company within 30 days of its receipt of a written notice from the Participant describing the applicable circumstances (which notice must be provided by the Participant within 30 days of the Participant’s knowledge of the applicable circumstances): (i) any material, adverse change in the Participant’s duties, responsibilities, authority, title, status or reporting structure; (ii) a material reduction in the Participant’s base salary or bonus opportunity; or (iii) a geographical relocation of the Participant’s principal office location by more than 50 miles.
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“Grant Date” means the date on which the Committee adopts a resolution, or takes other appropriate action, expressly granting an Award to a Participant that specifies the key terms and conditions of the Award or, if a later date is set forth in such resolution, then such date as is set forth in such resolution.
“Incentive Stock Option” means an Option that is designated by the Committee as an incentive stock option within the meaning of Section 422 of the Code and that meets the requirements set out in the Plan.
“ISO Limit” has the meaning set forth in Section 4.3.
“Non-Employee Director” means a Director who is a “non-employee director” within the meaning of Rule 16b-3.
“Non-qualified Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive Stock Option.
“Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.
“Option” means an Incentive Stock Option or a Non-qualified Stock Option granted pursuant to the Plan.
“Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.
“Option Exercise Price” means the price at which a share of Common Stock may be purchased upon the exercise of an Option.
“Other Equity-Based Award” means an Award that is not an Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, or Performance Share Award that is granted under Section 7.4 and is payable by delivery of Common Stock or which is measured by reference to the value of Common Stock.
“Participant” means an eligible person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Award.
“Performance Goals” means, for a Performance Period, the one or more goals established by the Committee for the Performance Period based upon business criteria or other performance measures determined by the Committee.
“Performance Period” means the one or more periods of time as the Committee may select over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to and the payment of a Performance Share Award or a Cash Award.
“Performance Share Award” means any Award granted pursuant to Section 7.3.
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“Performance Share” means the grant of a right to receive a number of actual shares of Common Stock or share units based upon the performance of the Company during a Performance Period, as determined by the Committee.
“Permitted Transferee” means: (a) a member of the Optionholder’s immediate family (child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships), any individual sharing the Optionholder’s household (other than a tenant or employee), a trust in which the foregoing individuals collectively have more than 50% of the beneficial interest, a foundation in which the foregoing individuals or the Optionholder control the management of assets, and any other Person in which the foregoing individuals or the Optionholder own more than 50% of the voting interests; (b) third parties designated by the Committee in connection with a program established and approved by the Committee pursuant to which Participants may receive a cash payment or other consideration in consideration for the transfer of a Non-qualified Stock Option; and (c) such other transferees as may be permitted by the Committee.
“Person” means a person as defined in Section 13(d)(3) of the Exchange Act.
“Plan” means this Professional Holding Corp. 2019 Equity Incentive Plan, as amended or restated from time to time.
“Related Rights” has the meaning set forth in Section 7.1(a).
“Restricted Award” means any Award granted pursuant to Section 7.2(a).
“Restricted Period” has the meaning set forth in Section 7.2(a).
“Restricted Stock” has the meaning set forth in Section 7.2(a)
“Restricted Stock Unit” has the meaning set forth in Section 7.2(a)
“Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.
“Securities Act” means the Securities Act of 1933, as amended.
“Stock Appreciation Right” means the right pursuant to an Award granted under Section 7.1 to receive, upon exercise, an amount payable in cash or shares equal to the number of shares subject to the Stock Appreciation Right that is being exercised multiplied by the excess of (a) the Fair Market Value of a share of Common Stock on the date the Award is exercised, over (b) the exercise price specified in the Stock Appreciation Right Award Agreement.
“Stock for Stock Exchange” has the meaning set forth in Section 6.4.
“Substitute Award” has the meaning set forth in Section 4.6.
“Ten Percent Shareholder” means a Person who owns (or is deemed to own pursuant to Section 424(d) of the Code) stock having more than 10% of the total combined voting power of all classes of capital stock of the Company or of any of its Affiliates.
“Total Share Reserve” has the meaning set forth in Section 4.1.
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3. Administration.
3.1 Authority of Committee. The Plan shall be administered by the Committee or, in the Board’s sole discretion, by the Board. Subject to the terms of the Plan, the Committee’s charter and Applicable Laws, and in addition to other express powers and authorization conferred by the Plan, the Committee (or the Board, as applicable) shall have the authority:
(a) to construe and interpret the Plan and apply its provisions;
(b) to promulgate, amend, and rescind rules and regulations relating to the administration of the Plan;
(c) to authorize any Person to execute, on behalf of the Company, any instrument required to carry out the purposes of the Plan;
(d) to delegate its authority to one or more Officers of the Company with respect to Awards that do not involve “insiders” within the meaning of Section 16 of the Exchange Act;
(e) to determine when Awards are to be granted under the Plan and the applicable Grant Date;
(f) from time to time to select, subject to the limitations set forth in this Plan, those eligible Award recipients to whom Awards shall be granted;
(g) to determine the number of shares of Common Stock to be made subject to each Award;
(h) to determine whether each Option is to be an Incentive Stock Option or a Non-qualified Stock Option;
(i) to prescribe the terms and conditions of each Award, including, without limitation, the exercise price and medium of payment and vesting provisions, and to specify the provisions of the Award Agreement relating to such grant;
(j) to determine the target number of Performance Shares to be granted pursuant to a Performance Share Award, the performance measures that will be used to establish the Performance Goals, the Performance Periods and the number of Performance Shares earned by a Participant;
(k) to amend any outstanding Awards, including for the purpose of modifying the time or manner of vesting, or the term of any outstanding Award; provided, however, that if any such amendment impairs a Participant’s rights or increases a Participant’s obligations under an Award or creates or increases a Participant’s federal income tax liability with respect to an Award, such amendment shall also be subject to the Participant’s consent;
(l) to determine the duration and purpose of leaves of absences which may be granted to a Participant without constituting termination of their employment for purposes of the Plan, which periods shall be no shorter than the periods generally applicable to Employees under the Company’s employment policies;
(m) to make decisions with respect to outstanding Awards that may become necessary upon a change in corporate control or an event that triggers anti-dilution adjustments;
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(n) to exclusively interpret, administer, reconcile any inconsistency in, correct any defect in or supply any omission in the Plan and any instrument or agreement relating to, or Award granted under, the Plan; and
(o) to exclusively make any and all other determinations which it determines to be necessary or advisable for the administration of the Plan in its sole and absolute discretion.
The Committee (or the Board, as applicable) may also modify the purchase price or the exercise price of any outstanding Award, provided that if the modification effects a repricing, shareholder approval shall be required before the repricing is effective.
3.2 Committee Decisions Final. All decisions made by the Committee (or the Board, as applicable) pursuant to the provisions of the Plan shall be final and binding on the Company and the Participants, unless such decisions are determined by a court having jurisdiction to be arbitrary and capricious.
3.3 Delegation. The Committee (or the Board, if applicable) may delegate administration of the Plan to a committee or committees of one or more Directors, and the term “Committee” shall apply to any Person or Persons to whom such authority has been delegated. The Committee may delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board or the Committee shall thereafter be to the committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and re-vest in the Board the administration of the Plan. The members of the Committee shall be appointed by and serve at the pleasure of the Board. From time to time, the Board may increase or decrease the size of the Committee, add additional members to, remove members (with or without cause) from, appoint new members in substitution therefor, and fill vacancies, however caused, in the Committee. The Committee shall act pursuant to a vote of the majority of its members or, in the case of a Committee comprised of only two members, the unanimous consent of its members, whether present or not, or by the written consent of the majority of its members and minutes shall be kept of all of its meetings and copies thereof shall be provided to the Board. Subject to the limitations prescribed by the Plan and the Board, the Committee may establish and follow such rules and regulations for the conduct of its business as it may determine to be advisable.
3.4 Committee Composition. Except as otherwise determined by the Board, the Committee shall consist solely of two or more Non-Employee Directors. The Board may determine whether to comply with the exemption requirements of Rule 16b-3. However, if the Board intends to satisfy such exemption requirements, with respect to any insider subject to Section 16 of the Exchange Act, the Committee shall be a compensation committee of the Board that at all times consists solely of two or more Non-Employee Directors. The Board or the Committee may delegate the authority to grant Awards to eligible Persons who are not then subject to Section 16 of the Exchange Act to a committee of one or more Directors who are not Non-Employee Directors. Nothing herein shall create an inference that an Award is not validly granted under the Plan in the event Awards are granted under the Plan by Committee even though the Committee does not at all times consist solely of two or more Non-Employee Directors.
3.5 Indemnification. To the extent allowed by Applicable Laws, the Committee shall be indemnified by the Company against the reasonable expenses, including attorney’s fees, actually incurred in connection with any action, suit or proceeding or in connection with any appeal therein, to which the Committee may be party by reason of any action taken or failure to act under or in connection with the Plan or any Award granted under the Plan, and against all amounts paid by the Committee in settlement thereof (provided, however, that the settlement has been approved by the Company, which approval shall not be unreasonably withheld) or paid by the Committee in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it is adjudged in such action, suit or proceeding that the Committee did not act in good faith and in a manner which the Committee reasonably believed to be in the best interests of the Company, or in the case of a criminal proceeding, had no reason to believe that the conduct complained of was unlawful.
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4. Shares Subject to the Plan.
4.1 Number of Shares Available; Automatic Annual Increase. Subject to adjustment in accordance with Section 11, no more than 300,000 shares of Common Stock shall be available for the grant of Awards under the Plan (the “Total Share Reserve”), provided that the Total Share Reserve shall automatically increase (but not decrease) on the first day of each Fiscal Year such that the Total Share Reserve shall be equal to 5% of the Company’s issued and outstanding shares of capital stock (including without limitation, the Company’s Common Stock and Class B Non-Voting Common Stock) as of each such date. During the terms of the Awards, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such Awards.
4.2 Shares Available for Awards. Shares of Common Stock available for Awards under the Plan may consist, in whole or in part, of authorized and unissued shares, treasury shares or shares reacquired by the Company or its Affiliates in any manner.
4.3 Limit on ISO Shares. Subject to adjustment in accordance with Section 11, no more than 300,000 shares of Common Stock may be issued in the aggregate pursuant to the exercise of Incentive Stock Options (the “ISO Limit”).
4.4 Limit on Director Awards. The maximum number of shares of Common Stock subject to Awards granted during a single Fiscal Year to any Director, together with any cash fees paid to such Director during the Fiscal Year, shall not exceed a total value of $300,000 (calculating the value of any Awards based on the grant date fair value for financial reporting purposes).
4.5 Recycling of Unissued Shares. Any shares of Common Stock subject to an Award that expires or is canceled, forfeited, or terminated without issuance of the full number of shares of Common Stock to which the Award related will again be available for issuance under the Plan. Notwithstanding anything to the contrary contained herein, shares subject to an Award under the Plan shall not again be made available for issuance or delivery under the Plan if such shares are (a) shares tendered in payment of an Option, (b) shares delivered or withheld by the Company to satisfy any tax withholding obligation, or (c) shares covered by a stock-settled Stock Appreciation Right or other Awards that were not issued upon the settlement of the Award.
4.6 Substitute Awards. The Committee may grant Awards under the Plan in assumption of, or in substitution for, outstanding awards previously granted by a Person acquired by the Company or with which the Company combines (“Substitute Awards”). Substitute Awards shall not be counted against the Total Share Reserve; provided, that, Substitute Awards issued in connection with the assumption of, or in substitution for, outstanding options intended to qualify as Incentive Stock Options shall be counted against the ISO Limit. Subject to applicable stock exchange requirements, available shares under a shareholder-approved plan of a Person directly or indirectly acquired by the Company or with which the Company combines (as appropriately adjusted to reflect such acquisition or transaction) may be used for Awards under this Plan and shall not count against the Total Share Reserve.
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5. Eligibility.
5.1 Eligibility for Specific Awards. Incentive Stock Options may be granted only to Employees. Awards other than Incentive Stock Options may be granted to Employees, Consultants and Directors and those individuals whom the Committee determines are reasonably expected to become Employees, Consultants and Directors following the Grant Date.
5.2 Ten Percent Shareholders. A Ten Percent Shareholder may not be granted an Incentive Stock Option unless the Option Exercise Price is at least 110% of the Fair Market Value of the Common Stock on the Grant Date and the Incentive Stock Option is not exercisable after the date that is five years after the Grant Date.
6. Option Provisions. Each Option granted under the Plan shall be evidenced by an Award Agreement and shall be subject to the conditions set forth in this Section 6 and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. All Options shall be separately designated Incentive Stock Options or Non-qualified Stock Options at the time of grant, and, if certificates are issued upon exercise of an Option, a separate certificate or certificates will be issued for shares of Common Stock acquired upon exercise of each type of Option. Notwithstanding the foregoing, the Company will not have any liability to any Participant or any other Person if an Option designated as an Incentive Stock Option fails to qualify as such at any time or if an Option is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code and the terms of such Option do not satisfy the requirements of Section 409A of the Code. The provisions of separate Options need not be identical, but each Option shall include (through incorporation by reference or otherwise) the substance of each of the following provisions:
6.1 Term. Subject to the provisions of Section 5.2 regarding Ten Percent Shareholders, no Incentive Stock Option shall be exercisable after the expiration of 10 years from the Grant Date. The term of a Non-qualified Stock Option granted under the Plan shall be determined by the Committee; provided, however, no Non-qualified Stock Option may be exercisable after the date that is 10 years after the applicable Grant Date.
6.2 Exercise Price of an Incentive Stock Option. Subject to the provisions of Section 5.2 regarding Ten Percent Shareholders, the Option Exercise Price of each Incentive Stock Option shall be not less than 100% of the Fair Market Value of the Common Stock subject to the Option on the Grant Date. Notwithstanding the foregoing, an Incentive Stock Option may be granted with an Option Exercise Price less than the amount set forth in the preceding sentence if such Option is granted pursuant to an assumption of, or substitution for, another option in a manner satisfying the provisions of Section 424(a) of the Code.
6.3 Exercise Price of a Non-qualified Stock Option. The Option Exercise Price of each Non-qualified Stock Option shall be not less than 100% of the Fair Market Value of the Common Stock subject to the Option on the Grant Date. Notwithstanding the foregoing, a Non-qualified Stock Option may be granted with an Option Exercise Price less than the amount set forth in the preceding sentence if such Option is granted pursuant to an assumption of, or substitution for, another option in a manner satisfying the provisions of Section 409A of the Code.
6.4 Consideration. The Option Exercise Price of Common Stock acquired pursuant to an Option shall be paid, to the extent permitted by applicable statutes and regulations, either (a) in cash or by certified or bank check at the time the Option is exercised or (b) upon such terms as the Committee shall approve, the Option Exercise Price may be paid: (i) by delivery to the Company of other Common Stock, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the Option Exercise Price (or portion thereof) due for the number of shares being acquired, or by means of attestation whereby the Participant identifies for delivery specific shares of Common Stock that have an aggregate Fair Market Value on the date of attestation equal to the Option Exercise Price (or portion thereof) and receives a number of shares of Common Stock equal to the difference between the number of shares thereby purchased and the number of identified attestation shares of Common Stock (a “Stock for Stock Exchange”); (ii) a “cashless” exercise program established with a broker; (iii) by reduction in the number of shares of Common Stock otherwise deliverable upon exercise of such Option with a Fair Market Value equal to the aggregate Option Exercise Price at the time of exercise; (iv) by any combination of the foregoing methods; or (v) in any other form of legal consideration that may be acceptable to the Committee. Notwithstanding the foregoing, during any period for which the Common Stock is publicly traded (i.e., the Common Stock is listed on any established stock exchange or a national market system), an exercise by a Director or Officer that involves or may involve a direct or indirect extension of credit or arrangement of an extension of credit by the Company, directly or indirectly, in violation of Section 402(a) of the Sarbanes-Oxley Act of 2002 shall be prohibited with respect to any Award under this Plan.
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6.5 Transferability of an Incentive Stock Option. An Incentive Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option.
6.6 Transferability of a Non-qualified Stock Option. A Non-qualified Stock Option may be transferable to a Permitted Transferee upon written approval by the Committee to the extent provided in the Award Agreement. If the Non-qualified Stock Option does not provide for transferability, then the Non-qualified Stock Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company in a form satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option.
6.7 Vesting of Options. Each Option may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal. An Option may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance or other criteria) as the Committee may deem appropriate. The vesting provisions of individual Options may vary. The Committee may provide for an acceleration of vesting and exercisability in the terms of any Award Agreement upon the occurrence of a specified event.
6.8 Termination of Continuous Service. Unless otherwise provided in an Award Agreement or in an employment agreement the terms of which have been approved by the Committee, in the event an Optionholder’s Continuous Service terminates (other than upon the Optionholder’s death or Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination) but only within such period of time ending on the earlier of (a) the date three months following the termination of the Optionholder’s Continuous Service or (b) the expiration of the term of the Option as set forth in the Award Agreement; provided that, if the termination of Continuous Service is by the Company for Cause, all outstanding Options (whether or not vested) shall immediately terminate and cease to be exercisable. If, after termination, the Optionholder does not exercise his or her Option within the time specified in the Award Agreement, the Option shall terminate.
6.9 Extension of Termination Date. An Optionholder’s Award Agreement may also provide that if the exercise of the Option following the termination of the Optionholder’s Continuous Service for any reason would be prohibited at any time because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act or any other state or federal securities law or the rules of any securities exchange or interdealer quotation system, then the Option shall terminate on the earlier of (a) the expiration of the term of the Option in accordance with Section 6.1 or (b) the expiration of a period after termination of the Participant’s Continuous Service that is three months after the end of the period during which the exercise of the Option would be in violation of such registration or other securities law requirements.
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6.10 Disability of Optionholder. Unless otherwise provided in an Award Agreement, in the event that an Optionholder’s Continuous Service terminates as a result of the Optionholder’s Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination), but only within such period of time ending on the earlier of (a) the date 12 months following such termination or (b) the expiration of the term of the Option as set forth in the Award Agreement. If, after termination, the Optionholder does not exercise his or her Option within the time specified herein or in the Award Agreement, the Option shall terminate.
6.11 Death of Optionholder. Unless otherwise provided in an Award Agreement, in the event an Optionholder’s Continuous Service terminates as a result of the Optionholder’s death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder’s estate, by a Person who acquired the right to exercise the Option by bequest or inheritance or by a Person designated to exercise the Option upon the Optionholder’s death, but only within the period ending on the earlier of (a) the date 12 months following the date of death or (b) the expiration of the term of such Option as set forth in the Award Agreement. If, after the Optionholder’s death, the Option is not exercised within the time specified herein or in the Award Agreement, the Option shall terminate.
6.12 Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and its Affiliates) exceeds $100,000, the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Non-qualified Stock Options.
7. Provisions for Awards Other Than Options.
7.1 Stock Appreciation Rights.
(a) General. Each Stock Appreciation Right granted under the Plan shall be evidenced by an Award Agreement and shall be subject to the conditions set forth in this Section 7.1, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. Stock Appreciation Rights may be granted alone (“Free Standing Rights”) or in tandem with an Option granted under the Plan (“Related Rights”).
(b) Grant Requirements. Any Related Right that relates to a Non-qualified Stock Option may be granted at the same time the Option is granted or at any time thereafter but before the exercise or expiration of the Option. Any Related Right that relates to an Incentive Stock Option must be granted at the same time the Incentive Stock Option is granted.
(c) Term of Stock Appreciation Rights. The term of a Stock Appreciation Right granted under the Plan shall be determined by the Committee; provided, however, no Stock Appreciation Right shall be exercisable later than the tenth anniversary of the Grant Date.
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(d) Vesting of Stock Appreciation Rights. Each Stock Appreciation Right may, but need not, vest and therefore become exercisable in periodic installments that may, but need not, be equal. The Stock Appreciation Right may be subject to such other terms and conditions on the time or times when it may be exercised as the Committee may deem appropriate. The vesting provisions of individual Stock Appreciation Rights may vary. No Stock Appreciation Right may be exercised for a fraction of a share of Common Stock. The Committee may, but shall not be required to, provide for an acceleration of vesting and exercisability in the terms of any Stock Appreciation Right upon the occurrence of a specified event.
(e) Exercise and Payment. Upon exercise of a Stock Appreciation Right, the holder shall be entitled to receive from the Company an amount equal to the number of shares of Common Stock subject to the Stock Appreciation Right that is being exercised multiplied by the excess of (i) the Fair Market Value of a share of Common Stock on the date the Award is exercised, over (ii) the exercise price specified in the Stock Appreciation Right or related Option. Payment with respect to the exercise of a Stock Appreciation Right shall be made on the date of exercise. Payment shall be made in the form of shares of Common Stock (with or without restrictions as to substantial risk of forfeiture and transferability, as determined by the Committee), cash or a combination thereof, as determined by the Committee.
(f) Exercise Price. The exercise price of a Free Standing Right shall be determined by the Committee, but shall not be less than 100% of the Fair Market Value of one share of Common Stock on the Grant Date of such Stock Appreciation Right. A Related Right granted simultaneously with or subsequent to the grant of an Option and in conjunction therewith or in the alternative thereto shall, subject to the requirements of Code Section 409A, have the same exercise price as the related Option, shall be transferable only upon the same terms and conditions as the related Option, and shall be exercisable only to the same extent as the related Option; provided, however, that a Stock Appreciation Right, by its terms, shall be exercisable only when the Fair Market Value per share of Common Stock subject to the Stock Appreciation Right and related Option exceeds the exercise price per share thereof and no Stock Appreciation Rights may be granted in tandem with an Option unless the Committee determines that the requirements of Section 7.1(b) are satisfied.
(g) Reduction in the Underlying Option Shares. Upon any exercise of a Related Right, the number of shares of Common Stock for which any related Option shall be exercisable shall be reduced by the number of shares for which the Stock Appreciation Right has been exercised. The number of shares of Common Stock for which a Related Right shall be exercisable shall be reduced upon any exercise of any related Option by the number of shares of Common Stock for which such Option has been exercised.
7.2 Restricted Awards.
(a) General. A Restricted Award is an Award of actual shares of Common Stock (“Restricted Stock”) or hypothetical Common Stock units (“Restricted Stock Units”) having a value equal to the Fair Market Value of an identical number of shares of Common Stock, which may, but need not, provide that such Restricted Award may not be sold, assigned, transferred or otherwise disposed of, pledged or hypothecated as collateral for a loan or as security for the performance of any obligation or for any other purpose for such period (the “Restricted Period”) as the Committee shall determine. Each Restricted Award granted under the Plan shall be evidenced by an Award Agreement and shall be subject to the conditions set forth in this Section 7.2, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement.
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(b) Restricted Stock and Restricted Stock Units. Each Participant granted Restricted Stock shall execute and deliver to the Company an Award Agreement with respect to the Restricted Stock setting forth the restrictions and other terms and conditions applicable to such Restricted Stock. If the Committee determines that the Restricted Stock shall be held by the Company or in escrow rather than delivered to the Participant pending the release of the applicable restrictions, the Committee may require the Participant to additionally execute and deliver to the Company (A) an escrow agreement satisfactory to the Committee, if applicable, and (B) the appropriate blank stock power with respect to the Restricted Stock covered by such agreement. If a Participant fails to execute an agreement evidencing an Award of Restricted Stock and, if applicable, an escrow agreement and stock power, the Award shall be null and void. Subject to the restrictions set forth in the Award, the Participant generally shall have the rights and privileges of a shareholder as to such Restricted Stock, including the right to vote such Restricted Stock and the right to receive dividends; provided that, any cash dividends and stock dividends with respect to the Restricted Stock shall be withheld by the Company for the Participant’s account, and interest may be credited on the amount of the cash dividends withheld at a rate and subject to such terms as determined by the Committee. The cash dividends or stock dividends so withheld by the Committee and attributable to any particular share of Restricted Stock (and earnings thereon, if applicable) shall be distributed to the Participant in cash or in shares of Common Stock having a Fair Market Value equal to the amount of such dividends, if applicable, upon the release of restrictions on such share and, if such share is forfeited, the Participant shall have no right to such dividends.
(c) Terms of Restricted Stock Units. The terms and conditions of a grant of Restricted Stock Units shall be reflected in an Award Agreement. No shares of Common Stock shall be issued at the time a Restricted Stock Unit is granted, and the Company will not be required to set aside funds for the payment of any such Award. A Participant shall have no voting rights with respect to any Restricted Stock Units granted hereunder. The Committee may also grant Restricted Stock Units with a deferral feature, whereby settlement is deferred beyond the vesting date until the occurrence of a future payment date or event set forth in an Award Agreement (“Deferred Stock Units”). Each Restricted Stock Unit or Deferred Stock Unit (representing one share of Common Stock) may be credited with an amount equal to the cash and stock dividends paid by the Company in respect of one share of Common Stock (“Dividend Equivalents”). In those instances, Dividend Equivalents shall be paid currently (and in no case later than the end of the calendar year in which the dividend is paid to the holders of the Common Stock or, if later, the 15th day of the third month following the date the dividend is paid to holders of the Common Stock). Dividend Equivalents shall be withheld by the Company and credited to the Participant’s account, and interest may be credited on the amount of cash Dividend Equivalents credited to the Participant’s account at a rate and subject to such terms as determined by the Committee. Dividend Equivalents credited to a Participant’s account and attributable to any particular Restricted Stock Unit or Deferred Stock Unit (and earnings thereon, if applicable) shall be distributed in cash or in shares of Common Stock having a Fair Market Value equal to the amount of such Dividend Equivalents and earnings, if applicable, to the Participant upon settlement of such Restricted Stock Unit or Deferred Stock Unit and, if such Restricted Stock Unit or Deferred Stock Unit is forfeited, the Participant shall have no right to such Dividend Equivalents.
(d) Restrictions. Restricted Stock awarded to a Participant shall be subject to the following restrictions until the expiration of the Restricted Period, and to such other terms and conditions as may be set forth in the applicable Award Agreement: (A) if an escrow arrangement is used, the Participant shall not be entitled to delivery of the stock certificate; (B) the shares shall be subject to the restrictions on transferability set forth in the Award Agreement; (C) the shares shall be subject to forfeiture to the extent provided in the applicable Award Agreement; and (D) to the extent such shares are forfeited, the stock certificates shall be returned to the Company, and all rights of the Participant to such shares and as a shareholder with respect to such shares shall terminate without further obligation on the part of the Company.
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(i) Restricted Stock Units and Deferred Stock Units awarded to any Participant shall be subject to (A) forfeiture until the expiration of the Restricted Period, and satisfaction of any applicable Performance Goals during such period, to the extent provided in the applicable Award Agreement, and to the extent such Restricted Stock Units or Deferred Stock Units are forfeited, all rights of the Participant to such Restricted Stock Units or Deferred Stock Units shall terminate without further obligation on the part of the Company and (B) such other terms and conditions as may be set forth in the applicable Award Agreement.
(ii) The Committee may remove any or all of the restrictions on the Restricted Stock, Restricted Stock Units and Deferred Stock Units whenever it may determine that, by reason of changes in Applicable Laws or other changes in circumstances arising after the date the Restricted Stock or Restricted Stock Units or Deferred Stock Units are granted, such action is appropriate.
(e) Restricted Period. The Restricted Period for Restricted Awards shall commence on the Grant Date and end at the time or times set forth on a schedule established by the Committee in the applicable Award Agreement. No Restricted Award may be granted or settled for a fraction of a share of Common Stock. The Committee may provide for an acceleration of vesting in the terms of any Award Agreement upon the occurrence of a specified event.
(f) Delivery of Restricted Stock and Settlement of Restricted Stock Units. Upon the expiration of the Restricted Period for any shares of Restricted Stock, the restrictions set forth in Section 7.2(d) and the applicable Award Agreement shall be of no further force or effect with respect to such shares, except as set forth in the applicable Award Agreement. If an escrow arrangement is used, upon such expiration, the Company shall deliver to the Participant, or his or her beneficiary, without charge, the stock certificate evidencing the shares of Restricted Stock that have not then been forfeited and any cash dividends or stock dividends credited to the Participant’s account with respect to such Restricted Stock. Upon the expiration of the Restricted Period with respect to any outstanding Restricted Stock Units, or at the expiration of the deferral period with respect to any outstanding Deferred Stock Units, the Company shall deliver to the Participant, or his or her beneficiary, without charge, one share of Common Stock for each such outstanding vested Restricted Stock Unit or Deferred Stock Unit (“Vested Unit”) and cash equal to any Dividend Equivalents credited with respect to each such Vested Unit in accordance with Section 7.2(b) or in shares of Common Stock having a Fair Market Value equal to such Dividend Equivalents; provided, however, that, if explicitly provided in the applicable Award Agreement, the Committee may elect to pay cash or part cash and part Common Stock in lieu of delivering only shares of Common Stock for Vested Units. If a cash payment is made in lieu of delivering shares of Common Stock, the amount of such payment shall be equal to the Fair Market Value of the Common Stock as of the date on which the Restricted Period lapsed in the case of Restricted Stock Units, or the delivery date in the case of Deferred Stock Units, with respect to each Vested Unit.
(g) Stock Restrictions. Each certificate representing Restricted Stock awarded under the Plan shall bear a legend in such form as the Company deems appropriate.
7.3 Performance Share Awards.
(a) Grant of Performance Share Awards. Each Performance Share Award granted under the Plan shall be evidenced by an Award Agreement and will be subject to the conditions set forth in this Section 7.3, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. The Committee may determine: (i) the number of shares of Common Stock or stock-denominated units subject to a Performance Share Award granted to any Participant; (ii) the Performance Period applicable to any Award; (iii) the conditions that must be satisfied for a Participant to earn an Award; and (iv) the other terms, conditions and restrictions of the Award.
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(b) Earning Performance Share Awards. The number of Performance Shares earned by a Participant will depend on the extent to which the performance goals established by the Committee are attained within the applicable Performance Period, as determined by the Committee.
7.4 Other Equity-Based Awards and Cash Awards. The Committee may grant Other Equity-Based Awards, either alone or in tandem with other Awards, in such amounts and subject to such conditions as the Committee shall determine. Each Equity-Based Award shall be evidenced by an Award Agreement and shall be subject to such conditions, not inconsistent with the Plan, as may be reflected in the applicable Award Agreement. The Committee may grant Cash Awards in such amounts and subject to such Performance Goals, other vesting conditions, and such other terms as the Committee determines. Cash Awards shall be evidenced in such form as the Committee may determine.
8. Securities Law Compliance. Each Award Agreement shall provide that no shares of Common Stock may be purchased or sold thereunder unless and until (a) any then applicable requirements of state or federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel and (b) if required to do so by the Company, the Participant has executed and delivered to the Company a letter of investment intent in such form and containing such provisions as the Committee may require. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency having jurisdiction over the Plan or the issuance of Awards under the Plan the authorization which counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Awards unless and until such authorization is obtained.
9. Use of Proceeds from Stock. Proceeds from the sale of Common Stock pursuant to Awards, or upon exercise thereof, shall constitute general funds of the Company.
10. Miscellaneous.
10.1 Acceleration of Exercisability and Vesting. The Committee may accelerate the time at which an Award may first be exercised or the time during which an Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Award stating the time at which it may first be exercised or the time during which it will vest.
10.2 Shareholder Rights. Except as provided in the Plan or an Award Agreement, no Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to such Award unless and until such Participant has satisfied all requirements for exercise of the Award pursuant to its terms and no adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions of other rights for which the record date is prior to the date such Common Stock certificate is issued, except as provided in Section 11.
10.3 No Employment or Other Service Rights. Nothing in the Plan or any instrument executed or Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in any capacity or shall affect the right of the Company or an Affiliate to terminate (a) the employment of an Employee with or without notice and with or without Cause or (b) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.
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10.4 Transfer; Approved Leave of Absence. For purposes of the Plan, no termination of employment by an Employee shall be deemed to result from either (a) a transfer of employment to the Company from an Affiliate or from the Company to an Affiliate, or from one Affiliate to another, or (b) an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the Employee’s right to reemployment is guaranteed either by a statute or by contract or under the policy pursuant to which the leave of absence was granted or if the Committee otherwise so provides in writing, in either case, except to the extent inconsistent with Section 409A of the Code if the applicable Award is subject thereto.
10.5 Withholding Obligations. To the extent provided by the terms of an Award Agreement or as determined by the Committee, the Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Common Stock under an Award by any of the following means (in addition to the Company’s right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (a) tendering a cash payment; (b) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise or acquisition of Common Stock under the Award, provided, however, that no shares of Common Stock are withheld with a value exceeding the maximum amount of tax required to be withheld by law; or (c) delivering to the Company previously owned and unencumbered shares of Common Stock of the Company.
11. Adjustments Upon Changes in Capital Structure. In the event of changes in the outstanding Common Stock or in the capital structure of the Company by reason of any stock or extraordinary cash dividend, stock split, reverse stock split, an extraordinary corporate transaction such as any recapitalization, reorganization, merger, consolidation, combination, exchange, or other relevant change in capitalization occurring after the Grant Date of any Award, Awards granted under the Plan and any Award Agreements, the exercise price of Options and Stock Appreciation Rights, the Performance Goals to which Performance Share Awards and Cash Awards are subject, the maximum number of shares of Common Stock subject to all Awards stated in Section 4 will be equitably adjusted or substituted, as determined by the Committee, as to the number, price or kind of a share of Common Stock or other consideration subject to such Awards to the extent necessary to preserve the economic intent of such Award. In the case of adjustments made pursuant to this Section 11, unless the Committee specifically determines that such adjustment is in the best interests of the Company or its Affiliates, the Committee shall, in the case of Incentive Stock Options, ensure that any adjustments under this Section 11 will not constitute a modification, extension or renewal of the Incentive Stock Options within the meaning of Section 424(h)(3) of the Code and in the case of Non-qualified Stock Options, ensure that any adjustments under this Section 11 will not constitute a modification of such Non-qualified Stock Options within the meaning of Section 409A of the Code. Any adjustments made under this Section 11 shall be made in a manner which does not adversely affect the exemption provided pursuant to Rule 16b-3 under the Exchange Act. The Company shall give each Participant notice of an adjustment hereunder and such adjustment shall be conclusive and binding for all purposes.
12. Effect of Change in Control.
12.1 Accelerated Vesting Upon a Change in Control. Unless otherwise provided in an Award Agreement, notwithstanding any provision of the Plan to the contrary:
(a) In the event of a Participant’s termination of Continuous Service without Cause or for Good Reason during the 12-month period following a Change in Control, notwithstanding any provision of the Plan or any applicable Award Agreement to the contrary, all outstanding Options and Stock Appreciation Rights shall become immediately exercisable with respect to 100% of the shares subject to such Options or Stock Appreciation Rights, and the Restricted Period shall expire immediately with respect to 100% of the outstanding shares of Restricted Stock or Restricted Stock Units as of the date of the Participant’s termination of Continuous Service.
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(b) With respect to Performance Share Awards and Cash Awards, in the event of a Participant’s termination of Continuous Service without Cause or for Good Reason, in either case, within 12 months following a Change in Control, all Performance Goals or other vesting criteria will be deemed achieved at 100% of target levels and all other terms and conditions will be deemed met as of the date of the Participant’s termination of Continuous Service.
To the extent practicable, any actions taken by the Committee under the immediately preceding clauses (a) and (b) shall occur in a manner and at a time which allows affected Participants the ability to participate in the Change in Control with respect to the shares of Common Stock subject to their Awards.
12.2 Cancelation of Awards Upon a Change in Control. In addition, in the event of a Change in Control, the Committee may, upon at least 10 days’ advance notice to the affected Persons, cancel any outstanding Awards and pay to the holders thereof, in cash or stock, or any combination thereof, the value of such Awards based upon the price per share of Common Stock received or to be received by other shareholders of the Company in the event. In the case of any Option or Stock Appreciation Right with an exercise price (or SAR Exercise Price in the case of a Stock Appreciation Right) that equals or exceeds the price paid for a share of Common Stock in connection with the Change in Control, the Committee may cancel the Option or Stock Appreciation Right without the payment of consideration therefor.
12.3 Binding Effect Upon Successors. The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to all or substantially all of the assets and business of the Company and its Affiliates, taken as a whole.
13. Amendment of the Plan and Awards.
13.1 Amendment of Plan. The Board at any time, and from time to time, may amend or terminate the Plan. However, except as provided in Section 4.1 relating to annual increases to the Total Share Reserve, Section 11 relating to adjustments upon changes in Common Stock and Section 13.3, no amendment shall be effective unless approved by the shareholders of the Company to the extent shareholder approval is necessary to satisfy any Applicable Laws. At the time of such amendment, the Board shall determine, upon advice from counsel, whether such amendment will be contingent on shareholder approval.
13.2 Shareholder Approval. The Board may submit any other amendment to the Plan for shareholder approval.
13.3 Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide eligible Employees, Consultants and Directors with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Incentive Stock Options or to the nonqualified deferred compensation provisions of Section 409A of the Code or to bring the Plan or Awards granted under it into compliance therewith.
13.4 No Impairment of Rights. Rights under any Award granted before amendment of the Plan shall not be impaired by any amendment of the Plan unless (a) the Company requests the consent of the Participant and (b) the Participant consents in writing.
13.5 Amendment of Awards. The Committee at any time, and from time to time, may amend the terms of any one or more Awards; provided, however, that the Committee may not effect any amendment which would otherwise constitute an impairment of the rights under any Award unless the Participant consents in writing to such amendment.
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14. General Provisions.
14.1 Forfeiture Events. The Committee may specify in an Award Agreement that the Participant’s rights, payments and benefits with respect to an Award are subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain events, in addition to applicable vesting conditions of an Award. Such events may include, without limitation, breach of non-competition, non-solicitation, non-disparagement, confidentiality, or other restrictive covenants that are contained in the Award Agreement or otherwise applicable to the Participant, a termination of the Participant’s Continuous Service for Cause, or other conduct by the Participant that is detrimental to the business or reputation of the Company or its Affiliates.
14.2 Clawback. Notwithstanding any other provisions in this Plan, the Company may cancel any Award, require reimbursement of any Award by a Participant, and effect any other right of recoupment of equity or other compensation provided under the Plan in accordance with any Company policies that may be adopted or modified from time to time, including, without limitation, to comply with applicable law or stock exchange listing requirements (“Clawback Policy”). In addition, a Participant may be required to repay to the Company previously paid compensation, whether provided pursuant to the Plan or an Award Agreement, in accordance with the Clawback Policy. By accepting an Award, the Participant agrees to be bound by the Clawback Policy.
14.3 Other Compensation Arrangements. Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to shareholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases.
14.4 Sub-Plans. The Committee may from time to time establish sub-plans under the Plan for purposes of satisfying securities, tax or other laws of various jurisdictions in which the Company intends to grant Awards. Any sub-plans shall contain such limitations and other terms and conditions as the Committee determines are necessary or desirable. All sub-plans shall be deemed a part of the Plan, but each sub-plan shall apply only to the Participants in the jurisdiction for which the sub-plan was designed.
14.5 Deferral of Awards. The Committee may establish one or more programs under the Plan to permit selected Participants the opportunity to elect to defer receipt of consideration upon exercise of an Award, satisfaction of performance criteria, or other event that absent the election would entitle the Participant to payment or receipt of shares of Common Stock or other consideration under an Award. The Committee may establish the election procedures, the timing of such elections, the mechanisms for payments of, and accrual of interest or other earnings, if any, on amounts, shares or other consideration so deferred, and such other terms, conditions, rules and procedures that the Committee deems advisable for the administration of any such deferral program.
14.6 Unfunded Plan. The Plan shall be unfunded and none of the Company, the Board or the Committee shall be required to establish any special or separate fund or to segregate any assets to assure the performance of their obligations under the Plan.
14.7 No Fractional Shares. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan. The Committee shall determine whether cash, additional Awards or other securities or property shall be issued or paid in lieu of fractional shares of Common Stock or whether any fractional shares should be rounded, forfeited or otherwise eliminated.
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14.8 Other Provisions. The Award Agreements authorized under the Plan may contain such other provisions not inconsistent with this Plan, including, without limitation, restrictions upon the exercise of Awards, as the Committee may deem advisable.
14.9 Section 409A. The Plan is intended to comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted and administered to be in compliance therewith. Any payments described in the Plan that are due within the “short-term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless Applicable Laws require otherwise. Notwithstanding anything to the contrary in the Plan, to the extent required to avoid accelerated taxation and tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan during the six-month period immediately following the Participant’s termination of Continuous Service shall instead be paid on the first payroll date after the six-month anniversary of the Participant’s separation from service (or the Participant’s death, if earlier). Notwithstanding the foregoing, unless otherwise expressly agreed, neither the Company nor the Committee shall have any obligation to take any action to prevent the assessment of any additional tax or penalty on any Participant under Section 409A of the Code and neither the Company nor the Committee will have any liability to any Participant for such tax or penalty.
14.10 Disqualifying Dispositions. Any Participant who shall make a “disposition” (as defined in Section 424 of the Code) of all or any portion of shares of Common Stock acquired upon exercise of an Incentive Stock Option within two years from the Grant Date of such Incentive Stock Option or within one year after the issuance of the shares of Common Stock acquired upon exercise of such Incentive Stock Option (a “Disqualifying Disposition”) shall be required to immediately advise the Company in writing as to the occurrence of the sale and the price realized upon the sale of such shares of Common Stock.
14.11 Section 16. It is the intent of the Company that the Plan satisfy, and be interpreted in a manner that satisfies, the applicable requirements of Rule 16b-3 as promulgated under Section 16 of the Exchange Act so that Participants will be entitled to the benefit of Rule 16b-3, or any other rule promulgated under Section 16 of the Exchange Act, and will not be subject to short-swing liability under Section 16 of the Exchange Act. Accordingly, if the operation of any provision of the Plan would conflict with the intent expressed in this Section 14.11, such provision to the extent possible shall be interpreted or deemed amended so as to avoid such conflict.
14.12 Beneficiary Designation. Each Participant under the Plan may from time to time name any beneficiary or beneficiaries by whom any right under the Plan is to be exercised in case of such Participant’s death. Each designation will revoke all prior designations by the same Participant, shall be in a form reasonably prescribed by the Committee and shall be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime.
14.13 Expenses. The costs of administering the Plan shall be paid by the Company.
14.14 Severability. If any of the provisions of the Plan or any Award Agreement is held to be invalid, illegal or unenforceable, whether in whole or in part, such provision shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability and the remaining provisions shall not be affected thereby.
14.15 Plan Headings. The headings in the Plan are for purposes of convenience only and are not intended to define or limit the construction of the provisions of the Plan.
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14.16 Non-Uniform Treatment. The Committee’s determinations under the Plan need not be uniform and may be made by it selectively among Persons who are eligible to receive, or actually receive, Awards. Without limiting the generality of the foregoing, the Committee shall be entitled to make non-uniform and selective determinations, amendments and adjustments, and to enter into non-uniform and selective Award Agreements.
15. Effective Date of Plan. The Plan shall become effective as of the Effective Date, but no Award shall be exercised (or, in the case of a stock Award, shall be granted) unless and until the Plan has been approved by the shareholders of the Company, which approval shall be within 12 months before or after the date the Plan is adopted by the Board.
16. Termination or Suspension of the Plan. The Plan shall terminate automatically on the 10th anniversary of the Effective Date. No Award shall be granted pursuant to the Plan after such date, but Awards granted prior to the Plan’s termination may extend beyond that date. The Board may suspend or terminate the Plan at any earlier date pursuant to Section 13.1. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated.
17. Choice of Law. The laws of the State of Florida shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to any conflict of law rules.
As adopted by the Board of Directors of Professional Holding Corp. on March 14, 2019.
As approved by the shareholders of Professional Holding Corp. on April 18, 2019.
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Exhibit 10.13
RESTRICTED STOCK AWARD AGREEMENT
This Restricted Stock Award Agreement (this “Agreement”) sets forth the terms of a Restricted Stock award granted on __________________ (the “Effective Date”) by Professional Holding Corp., a Florida corporation (the “Company”), to _________________________ (the “Participant”). Capitalized terms used but not defined in this Agreement have the meanings ascribed to them in the Professional Holding Corp. 2019 Equity Incentive Plan (the “Plan”).
RECITALS
A. The Company adopted Plan pursuant to which the Company may grant Restricted Stock awards to certain Employees, Consultants and Directors or those persons expected to become Employees, Consultants or Directors.
B. The Committee has determined that it is in the best interests of the Company and its shareholders to grant Restricted Stock to the Participant in accordance with the terms and conditions of this Agreement.
C. Participant wishes to accept such grant of Restricted Stock on the terms and subject to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises set forth in this Agreement, and for other good and valuable consideration, the adequacy of which is acknowledged by the parties’ execution of this Agreement, the Company and the Participant agree as follows:
1. Grant of Restricted Stock. Pursuant to Section 7 of the Plan, the Company has granted to the Participant on the Effective Date a Restricted Stock award consisting of, in the aggregate, _____________ shares of Class A Voting Common Stock of the Company, subject to the terms and conditions and subject to the restrictions set forth in this Agreement and the Plan. This grant of Restricted Stock is made in consideration of the services rendered and to be rendered by the Participant to the Company.
2. Restricted Period; Vesting.
a. Vesting Schedule. Except as otherwise provided in this Agreement, provided that the Participant remains in Continuous Service (as defined below) through the applicable vesting date, and further provided that any additional conditions and Performance Goals set forth in Schedule A have been satisfied, if any, the Restricted Stock will vest in accordance with the following schedule:
Vesting Date | Shares of Class A Voting Common Stock |
[DATE] | [NUMBER OR % OF SHARES] |
[DATE] | [NUMBER OR % OF SHARES] |
[DATE] | [NUMBER OR % OF SHARES] |
[DATE] (the “Final Vesting Date”) | [NUMBER OR % OF SHARES] |
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The period from the Effective Date through the Final Vesting Date is referred to as the “Restricted Period.” For purposes of this Agreement, “Continuous Service” means that the Participant’s service with the Company, whether as an Employee, Consultant or Director, is not interrupted or terminated. The Participant’s Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders service to the Company as an employee, consultant or director or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s Continuous Service; and provided further that if any Award is subject to Section 409A of the Code, this sentence shall only be given effect to the extent consistent with Section 409A of the Code. The Committee, in its sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence by the Participant, including sick leave, military leave or any other personal or family leave of absence.
b. Termination of Continuous Service. Except as set forth in this Agreement and subject to the Plan, the foregoing vesting schedule notwithstanding, if the Participant’s Continuous Service terminates for any reason at any time before all of his or her Restricted Stock has vested, the Participant’s unvested Restricted Stock shall be automatically forfeited upon such termination of Continuous Service and the Company shall have no further obligations to the Participant under this Agreement. Neither the Plan nor this Agreement shall confer upon the Participant any right to be retained in any position, as an Employee, Consultant or Director of the Company. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company to terminate the Participant’s Continuous Service at any time, with or without Cause.
c. Change in Control. The foregoing vesting schedule notwithstanding, upon the occurrence of a Change in Control, 100% of the unvested Restricted Stock shall vest as of the date of the Change in Control.
d. Death or Disability. The foregoing vesting schedule notwithstanding, if the Participant’s Continuous Service terminates as a result of death or Disability of the Participant, then any unvested Restricted Stock that would have vested within one (1) year from the date of termination (or within such other period as determined by the Committee) shall vest as of the date of termination and all other unvested shares shall be automatically forfeited as of the date of termination.
e. Termination without Cause. The foregoing vesting schedule notwithstanding, if the Participant’s Continuous Service terminates as a result of voluntary resignation by the Participant or termination by the Company without Cause, then any unvested Restricted Stock that would have vested within thirty (30) days from the date of termination (or within such other period as determined by the Committee) shall vest as of the date of termination and all other unvested shares shall be automatically forfeited as of the date of termination.
3. | Restrictions. |
a. Transfer Restriction. Subject to any exceptions set forth in this Agreement or the Plan, during the Restricted Period, the Restricted Stock or the rights relating thereto may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by the Participant. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Restricted Stock or the rights relating thereto during the Restricted Period shall be wholly ineffective and, if any such attempt is made, the Restricted Stock will be forfeited by the Participant and all of the Participant’s rights to such shares shall immediately terminate without any payment or consideration by the Company.
b. Effect of Prohibited Transfer. The Company shall not be required to (i) transfer on its books any shares of Restricted Stock that have been transferred in violation of any of the provisions set forth in this Agreement, or (i) treat as owner of such Restricted Stock or to pay dividends or other distributions to any transferee to whom any such Restricted Stock shall have been so sold or transferred.
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4. | Rights as a Shareholder; Dividends. |
a. Shareholder Rights. The Participant shall be the record owner of the Restricted Stock (including unvested Restricted Stock) granted under this Agreement until the shares are sold or otherwise disposed of, and shall be entitled to all of the rights of a shareholder of the Company including, without limitation, the right to vote such shares and receive all dividends or other distributions paid with respect to such shares. Notwithstanding the foregoing, (i) any dividends or other distributions shall be subject to the same restrictions on transferability as the shares of Restricted Stock with respect to which they were paid; and (ii) any dividends or other distributions paid by the Company with respect to any shares of Restricted Stock shall accrue but shall not be payable unless and until vesting of such Restricted Stock occurs, at which time the accumulated dividends shall be paid by the Company.
b. Stock Certificates. The Company may, but need not, issue stock certificates or evidence the Participant’s interest by using a restricted book entry account with the Company’s transfer agent.
c. Forfeiture. If the Participant forfeits any rights he or she has under this Agreement pursuant to Section 3, the Participant shall, on the date of such forfeiture, no longer have any rights as a shareholder with respect to any unvested Restricted Stock and shall no longer be entitled to vote or receive dividends on such shares.
5. Tax Liability and Withholding.
a. Payment of Taxes. The Participant shall be required to pay to the Company, and the Company shall have the right to deduct from any compensation paid to the Participant pursuant to this Agreement, the amount of any required withholding taxes in respect of the Restricted Stock granted under this Agreement and to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of such withholding taxes. The Committee may permit the Participant to satisfy any federal, state or local tax withholding obligation by any of the following means, or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the Company to withhold shares from those otherwise issuable or deliverable to the Participant as a result of the vesting of the Restricted Stock; provided, however, that no shares of Class A Voting Common Stock shall be withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (iii) delivering to the Company previously owned and unencumbered shares of Class A Voting Common Stock.
b. Liability. Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding (the “Tax-Related Items”), the ultimate liability for all Tax-Related Items is and remains the Participant’s responsibility and the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant or vesting of the Restricted Stock or the subsequent sale of any shares; and (b) does not commit to structure the Restricted Stock to reduce or eliminate the Participant’s liability for Tax-Related Items.
6. Section 83 Election. The Participant may make an election under Code Section 83(b) (a “Section 83(b) Election”) with respect to the Restricted Stock granted under this Agreement. Any such election must be made within thirty (30) days after the Effective Date. If the Participant elects to make a Section 83(b) Election, the Participant shall provide the Company with a copy of an executed version and satisfactory evidence of the filing of the executed Section 83(b) Election with the U.S. Internal Revenue Service. The Participant agrees to assume full responsibility for ensuring that the Section 83(b) Election is actually and timely filed with the U.S. Internal Revenue Service and for all tax consequences resulting from the Section 83(b) Election.
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7. | Compliance with Law. |
a. Compliance. The issuance and transfer of shares of Restricted Stock granted under this Agreement shall be subject to compliance by the Company and the Participant with all applicable requirements of federal and state securities laws and with all applicable requirements of any stock exchange on which the Company’s shares of Class A Voting Common Stock may be listed. No shares of Restricted Stock granted under this Agreement shall be issued or transferred unless and until any then applicable requirements of state and federal laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel. The Participant understands that the Company is under no obligation to register the shares of Class A Voting Common Stock with the Securities and Exchange Commission, any state securities commission or any stock exchange to effect such compliance.
b. Legend. A legend may be placed on any certificate(s) or other document(s) delivered to the Participant indicating restrictions on transferability of the shares of Restricted Stock pursuant to this Agreement or any other restrictions that the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any applicable federal or state securities laws or any stock exchange on which the shares of Class A Voting Common Stock are then listed or quoted.
8. | Miscellaneous. |
a. Interpretation. Any dispute regarding the interpretation of this Agreement shall be submitted by the Participant or the Company to the Committee for review. The resolution of such dispute by the Committee shall be final and binding on the Participant and the Company. In the event of any inconsistency between the terms and conditions of this Agreement and any existing employment agreement, service contract or other agreement between the Participant and the Company (each, a “Service Agreement”), the terms and conditions of the Service Agreement shall control.
b. Restricted Stock Subject to the Plan. This Agreement is subject to the Plan as approved by the Company’s shareholders, as the Plan may be amended from time to time, and the terms and provisions of the Plan, as it may be amended from time to time, are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Plan will govern and prevail.
c. Discretionary Nature of the Plan. The Plan is discretionary and may be amended, cancelled or terminated by the Company at any time, in its discretion. The grant of the Restricted Stock in this Agreement does not create any contractual right or other right to receive any Restricted Stock or other Awards in the future. Future Awards, if any, will be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Participant’s employment or engagement with the Company.
d. No Impact on Other Benefits. The value of the Participant’s Restricted Stock granted under this Agreement is not part of his normal or expected compensation for purposes of calculating any severance, retirement, welfare, insurance or similar employee benefit.
e. Acceptance. The Participant hereby acknowledges receipt of a copy of the Plan and this Agreement. The Participant has read and understands the terms and provisions this Agreement and the Plan, and accepts the Restricted Stock granted under this Agreement subject to all of the terms and conditions of the Plan and this Agreement. The Participant acknowledges that there may be tax consequences upon the grant or vesting of the Restricted Stock granted under this Agreement and/or the disposition of the underlying shares and that the Participant has been advised to consult a tax advisor prior to such grant, vesting or disposition.
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f. Gunster, Yoakley & Stewart, P.A. Represents the Company. The Participant acknowledges and agrees that Gunster, Yoakley & Stewart, P.A., a Florida professional association (“Gunster”) represents the Company and not the Participant. Participant acknowledges that Gunster has not represented him or her in connection with this Agreement and that he or she has been advised to engage legal counsel to advise him or her regarding this Agreement.
g. Further Instruments. The Company and the Participant agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.
h. Notices. Any notice required to be delivered to the Company under this Agreement shall be in writing and addressed to the Chief Financial Officer of the Company at the Company’s principal corporate offices. Any notice required to be delivered to the Participant under this Agreement shall be in writing and addressed to the Participant at the Participant’s address as shown in the records of the Company. Either party may designate another address by delivering notice of such designation in accordance with this Section.
i. Governing Law, Venue and Jurisdiction. This Agreement shall be governed in all respects by the laws of the State of Florida without regard to conflicts-of-law principles. Any civil action or legal proceeding arising out of or relating to this Agreement shall be brought in the courts of record of the State of Florida in Miami-Dade County, Florida. Each party consents to the jurisdiction of such Florida court in any such civil action or legal proceeding and waives any objection to the laying of venue of any such civil action or legal proceeding in such Florida court. Service of any court paper may be affected on such party by mail, as provided in this Agreement, or in such other manner as may be provided under applicable laws, rules of procedure or local rules.
j. Assignment. The Company may assign any of its rights under this Agreement. This Agreement will be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth in this Agreement, this Agreement will be binding upon the Participant and the Participant’s beneficiaries, executors, administrators and the person(s) to whom the Restricted Stock may be transferred by will or the laws of descent or distribution.
k. Amendment. The Committee has the right to amend, alter, suspend, discontinue or cancel the Restricted Stock granted under this Agreement, prospectively or retroactively; provided, that, no such amendment, nor any amendment to the Plan, shall adversely affect the Participant’s material rights under this Agreement without the Participant’s consent.
l. Severability. The invalidity or unenforceability of any provision of the Plan or this Agreement shall not affect the validity or enforceability of any other provision of the Plan or this Agreement, and each provision of the Plan and this Agreement shall be severable and enforceable to the extent permitted by law.
m. Waiver. No delay or omission by the Company in exercising any right under this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by the Company on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion.
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n. JURY WAIVER. IN ANY CIVIL ACTION, COUNTERCLAIM, OR PROCEEDING, WHETHER AT LAW OR IN EQUITY, WHICH ARISES OUT OF, CONCERNS, OR RELATES TO THIS AGREEMENT, ANY AND ALL TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE PERFORMANCE OF THIS AGREEMENT, OR THE RELATIONSHIP CREATED BY THIS AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE, TRIAL SHALL BE TO A COURT OF COMPETENT JURISDICTION AND NOT TO A JURY. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY. ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT, AS WRITTEN EVIDENCE OF THE CONSENT OF THE COMPANY AND PARTICIPANT OF THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. NEITHER PARTY HAS MADE OR RELIED UPON ANY ORAL REPRESENTATIONS TO OR BY ANY OTHER PARTY REGARDING THE ENFORCEABILITY OF THIS PROVISION. EACH PARTY HAS READ AND UNDERSTANDS THE EFFECT OF THIS JURY WAIVER PROVISION. EACH PARTY ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY ITS OWN COUNSEL WITH RESPECT TO THE TRANSACTION GOVERNED BY THIS AGREEMENT AND SPECIFICALLY WITH RESPECT TO THE TERMS OF THIS SECTION.
o. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and a complete set of which, when taken together, shall constitute one and the same document. Confirmation of execution by electronic transmission of a facsimile or .pdf signature page shall be binding, and each party hereby irrevocably waives any objection that it has or may have in the future as to the validity of any such electronic transmission of a signature page.
p. Entire Agreement. This Agreement, together with the attached Schedule A and the Plan, constitutes the sole and entire agreement of the parties with respect to the subject matter of this Agreement and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.
The Company and the Participant have executed this Restricted Stock Award Agreement as of the Effective Date.
COMPANY: | PARTICIPANT: | ||
PROFESSIONAL HOLDING CORP. | [NAME] | ||
By: | |||
Name: | |||
Title: |
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Schedule A
Additional Conditions and Performance Goals
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Exhibit 10.14
INDEMNIFICATION AGREEMENT
THIS INDEMNIFICATION AGREEMENT (“Agreement”) is made as of _____________________, 20___, by and among PROFESSIONAL HOLDING CORP., a registered bank holding company organized under the laws of the State of Florida (the “Company”), PROFESSIONAL BANK, a bank chartered under the laws of the State of Florida (the “Bank”) and ____________________________________________ (“Indemnitee”).
RECITALS
WHEREAS, highly competent persons have become more reluctant to serve corporations and banks as directors or in other capacities unless they are provided with adequate protection through insurance, adequate indemnification, or both, against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation or bank;
WHEREAS, the Company and the Bank have determined that, in order to attract and retain qualified individuals to serve as directors or in other capacities, the Company and the Bank will attempt to maintain on an ongoing basis, at their sole expense, liability insurance to protect persons serving, in any capacity, the Company, the Bank or any other part of the Enterprise (as hereinafter defined) from certain liabilities. Although the furnishing of such insurance has been a customary and widespread practice among United States-based corporations, banks and other business enterprises, the Company and the Bank believe that, given current market conditions and trends, such insurance may be available in the future only at higher premiums and with more exclusions. At the same time, directors, officers, and other persons in service to corporations, banks or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the business enterprise itself. The Bylaws of the Company (the “Company Bylaws”) permit indemnification by the Company of its officers and directors. The Bylaws of the Bank (the “Bank Bylaws”) require indemnification by the Bank of its officers and directors. Indemnitee may also be entitled to indemnification pursuant to the Act (as hereinafter defined). The Act expressly provides that the indemnification provisions set forth therein and in the Bank Bylaws are not exclusive, and thereby contemplate that contracts may be entered into between the Company, the Bank and the members of their respective boards of directors, officers and other persons with respect to indemnification;
WHEREAS, the Company and the Bank have determined that the increased difficulty in attracting and retaining such persons is detrimental to the best interests of the Company and the Bank and that the Company and the Bank should act to assure such persons that there will be increased certainty of such protection in the future;
WHEREAS, it is reasonable, prudent and necessary for the Company and the Bank contractually to obligate themselves to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company, the Bank, or both, free from undue concern that they will not be so indemnified;
WHEREAS, this Agreement is a supplement to and in furtherance of the indemnification provided in the Act, the Company Bylaws, the Bank Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and
WHEREAS, Indemnitee is concerned that the protection available under the Company Bylaws, Bank Bylaws and insurance may not be adequate in the present circumstances, and in consideration of serving as a director of the Company, the Bank or both, desires to be assured of adequate protection, and the Company and the Bank desire Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Company and/or the Bank, on the condition that Indemnitee be so indemnified.
NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and the Bank, jointly and severally, and Indemnitee do hereby covenant and agree as follows:
Section 1. Services to the Company, the Bank or Both. Indemnitee agrees to continue to serve as a director of the Company or the Bank or both, as the case may be. Indemnitee may at any time and for any reason resign from such position or positions (subject to any contractual or other obligation or any obligation imposed by operation of law), in which event the Company or the Bank, as applicable, shall have no obligation under this Agreement to cause Indemnitee to continue to serve in such position. This Agreement shall not be deemed an employment contract between the Company, the Bank (or any of their respective subsidiaries or any other part of the Enterprise) and Indemnitee. Notwithstanding the foregoing, this Agreement shall continue in force after Indemnitee has ceased to serve as a director of the Company or the Bank, as the case may be.
Section 2. Definitions.
As used in this Agreement:
(a) “Act” shall mean the Florida Business Corporation Act, as amended from time to time.
(b) “Bank” shall have the meaning in the preamble to this Agreement.
(c) “Bank Bylaws” shall have the meaning in the recitals to this Agreement.
(d) “Board” shall mean the Board of Directors of the Company or the Bank, as the case may be.
(e) “Company” shall have the meaning in the preamble to this Agreement.
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(f) “Company Bylaws” shall have the meaning in the recitals to this Agreement.
(g) “Corporate Status” describes the status of a person who is or was a director, officer, employee, agent or fiduciary of the Company, the Bank or any other corporation, partnership or joint venture, trust, employee benefit plan or other entity or enterprise which such person is or was serving at the request of the Company or the Bank.
(h) “Enterprise” shall mean the Company, the Bank and any other corporation, partnership, joint venture, trust, employee benefit plan or other entity or enterprise of which Indemnitee is or was serving at the request of the Company or the Bank as a director, officer, employee, agent, fiduciary, or any other capacity.
(i) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, paralegal and investigative fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedes bond, or other appeal bond or its equivalent. Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee. The parties agree that for the purposes of any advancement of Expenses for which Indemnitee has made written demand to the Company or the Bank, as the case may be, in accordance with this Agreement, all Expenses included in such demand that are certified by affidavit of Indemnitee’s counsel as being reasonable shall be presumed conclusively to be reasonable.
(j) “FDI Act” shall mean the Federal Deposit Insurance Act, as amended from time to time.
(k) “Indemnitee” shall have the meaning in the preamble to this Agreement.
(l) “Losses” means any and all Expenses, damages, losses, liabilities, judgments, fines, penalties (whether civil, criminal or other), ERISA excise taxes, amounts paid or payable in settlement, including any interest, assessments, any federal, state, local or foreign taxes imposed as a result of the actual or deemed receipt of any payments under this Agreement and all other charges paid or payable in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness or participate in, any Proceeding.
(m) “Part 359” shall mean Part 359 of the Rules and Regulations of the Federal Deposit Insurance Corporation, as amended from time to time.
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(n) The term “Proceeding” shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding (including on appeal), whether brought in the right of the Company, the Bank or otherwise and whether of a civil, criminal, administrative or investigative nature, in which Indemnitee was, is or will be involved as a party or otherwise by reason of the fact that Indemnitee is or was a director of the Company, the Bank, or both, as the case may be, by reason of any action taken or omitted by him or of any action on Indemnitee’s part while acting as director of the Company or the Bank, as the case may be, or by reason of the fact that Indemnitee is or was serving at the request of the Company, the Bank, or both, as a director, officer, employee, agent, fiduciary, or other capacity of another corporation, partnership, joint venture, trust, employee benefit plan or other entity or enterprise, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement; except one initiated by Indemnitee to enforce Indemnitee’s rights under this Agreement.
(o) “Prohibited Indemnification Payment” shall mean any payment (or any agreement or arrangement to make any payment, including under this Agreement) by the Company or the Bank, as the case may be, for the benefit of Indemnitee, to pay or reimburse Indemnitee for any civil money penalty or judgment resulting from any Proceeding instituted by any federal banking agency, or any other liability or legal expense with regard to any Proceeding instituted by any federal banking agency which results in a final order or settlement pursuant to which Indemnitee:
(i) is assessed a civil money penalty;
(ii) is removed from office or prohibited from participating in the conduct of the affairs of the Company or the Bank; or
(iii) is required to cease and desist from or take any affirmative action described in section 8(b) of the FDI Act with respect to the Company or the Bank;
provided, however, that “Prohibited Indemnification Payment” shall not include any reasonable payment by the Company or the Bank:
(i) used to purchase any commercial insurance policy or fidelity bond, provided that such insurance policy or bond shall not be used to pay or reimburse Indemnitee for the cost of any judgment or civil money penalty assessed against Indemnitee in a Proceeding commenced by any federal banking agency, but may be used to pay any Expenses incurred in connection with such Proceeding or the amount of any restitution to the Company, the Bank or a receiver; or
(ii) that represents partial indemnification for Expenses specifically attributable to particular charges for which there has been a formal and final adjudication or finding in connection with a settlement that Indemnitee has not violated certain banking laws or regulations or has not engaged in certain unsafe or unsound banking practices or breaches of fiduciary duty (as more fully defined or described in or pursuant to the FDI Act), unless the Proceeding has resulted in a prohibition against Indemnitee from participating in the conduct of the affairs of the Company or the Bank, as the case may be.
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Section 3. Indemnity in Third-Party Proceedings. The Company or the Bank, as applicable, shall indemnify Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the Company or the Bank to procure a judgment in the favor of the Company or the Bank or a Proceeding by a federal banking agency. Pursuant to this Section 3, Indemnitee shall be indemnified against all Losses incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Company or the Bank, as applicable, and, in the case of a criminal action or proceeding, had no reasonable cause to believe that Indemnitee’s conduct was unlawful. Indemnitee shall not enter into any settlement in connection with a Proceeding without the prior written consent of the Company or the Bank, as applicable, which consent shall not be unreasonably withheld or delayed.
Section 4. Indemnity in Proceedings by or in the Right of the Company or the Bank. The Company or the Bank, as applicable, shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company or the Bank to procure a judgment in favor of the Company or the Bank. Pursuant to this Section 4, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with any such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Company or the Bank, as applicable. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, the Bank, or both, as the case may be, unless and only to the extent that the court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification for such Expenses as such court shall deem proper.
Section 5. Indemnification in Proceeding by Federal Banking Agency. The Company or the Bank, as applicable, shall indemnify Indemnitee in accordance with this Section 5 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding initiated by any federal banking agency. Pursuant to this Section 5, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with a Proceeding initiated by any federal banking agency, or any claim, issue or matter therein, if the Board of the Company or the Bank, as applicable, in good faith, determines and confirms in writing after due investigation and consideration (a) that Indemnitee acted in good faith and in a manner Indemnitee believed to be in the best interests of the Company or the Bank, as the case may be; (b) that the indemnification will not materially adversely affect the safety and soundness of the Company or the Bank, as the case may be; (c) that payment of such indemnification does not constitute a Prohibited Indemnification Payment; and (d) Indemnitee agrees in writing to reimburse the Company or the Bank, as applicable, for any indemnification payments or any portion thereof, which subsequently become Prohibited Indemnification Payments (to the extent that the Company or the Bank, as the case may be, is not reimbursed for such payments by any insurance policy or bonds).
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Section 6. Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement (but subject to Section 5 hereof), to the extent that Indemnitee is a party to or a participant in and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company or the Bank, as applicable, shall indemnify Indemnitee against all Losses incurred by Indemnitee in connection therewith and no standard of conduct determination (as set forth in Section 11) shall be required. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company or the Bank, as applicable, shall indemnify Indemnitee against all Losses incurred by Indemnitee or on Indemnitee’s behalf in connection with (a) each successfully resolved claim, issue or matter and (b) any claim, issue or matter related to any such successfully resolved claim, issue or matter, provided that no indemnification payment shall be made if it would constitute a Prohibited Indemnification Payment and no standard of conduct determination (as set forth in Section 11) shall be required. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 7. Indemnification For Losses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified against all Losses incurred by Indemnitee or on Indemnitee’s behalf in connection therewith and no standard of conduct determination (as set forth in Sections 11 and 12) shall be required.
Section 8. Additional Indemnification.
(a) Notwithstanding any limitation in Sections 3, 4, 5 or 6, the Company or the Bank, as applicable, shall indemnify Indemnitee to the fullest extent permitted by law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company or the Bank, as applicable, to procure a judgment in its favor) against all Losses incurred by Indemnitee in connection with the Proceeding.
(b) For purposes of Section 8(a), the meaning of the phrase “to the fullest extent permitted by law” shall include, but not be limited to:
(i) to the fullest extent permitted by the provisions of the Act, Part 359, the FDI Act, and any other applicable statutes and regulations that authorize or contemplate additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the Act, Part 359 or the FDI Act, and
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(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the Act, Part 359 or the FDI Act adopted after the date of this Agreement that increase the extent to which a corporation or a bank, as the case may be, may indemnify its officers and directors.
Section 9. Exclusions. Notwithstanding any provision in this Agreement to the contrary, the Company and the Bank shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:
(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision;
(b) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of state statutory or common law, to the extent applicable;
(c) for which payment is prohibited by applicable law, including without limitation Section 607.0850 of the Act.
Section 10. Advances of Expenses. The Company or the Bank, as applicable, shall advance, to the extent not prohibited by law, the Expenses incurred by Indemnitee in connection with any Proceeding, and such advancement shall be made within 30 days after the receipt by the Company or the Bank, as applicable, of a statement or statements requesting such advances (which shall include invoices received by Indemnitee in connection with such Expenses but, in the case of invoices in connection with legal services, any references to legal work performed or to expenditures made that would cause Indemnitee to waive any privilege accorded by applicable law shall not be included with the invoice) from time to time, whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee’s ability to repay the expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement, including the standard of conduct determination (as set forth in Section 11). Advances shall include any and all Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company or the Bank, as applicable, to support the advances claimed. The Indemnitee shall qualify for advances upon the execution and delivery to the Company and the Bank of this Agreement, which shall constitute an undertaking providing that the Indemnitee undertakes to the fullest extent permitted by law to repay the advance if and to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company or the Bank, as applicable. This Section 10 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 9.
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Section 11. Procedure for Notification and Defense of Claim.
(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company or the Bank, as applicable, a written request therefor.
(b) Indemnitee requesting indemnification shall not participate in any way in the discussion and approval of indemnification; provided, however, that Indemnitee may present Indemnitee’s request to the Board of the Company, the Bank, or both, as applicable, and respond to any inquiries from the Board of the Company or the Bank, as applicable, concerning Indemnitee’s involvement in the circumstances giving rise to the Proceeding.
(c) The Company or the Bank, as applicable, will be entitled to participate in the Proceeding at its own expense.
Section 12. Procedure Upon Application for Indemnification.
(a) Upon written request by Indemnitee for indemnification pursuant to Section 11(a), a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in good faith by a majority vote of the directors of the Company or the Bank, as applicable, not party to the action, suit or proceeding (the “disinterested directors”). Such determination shall be contained in a written opinion, a copy of which shall be delivered to Indemnitee. If it is determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the disinterested directors making such determination with respect to Indemnitee’s entitlement to indemnification, including providing upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any reasonable costs or expenses (including reasonable attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the disinterested directors shall be borne by the Company or the Bank, as applicable (irrespective of the determination as to Indemnitee’s entitlement to indemnification unless it is a Prohibited Indemnification Payment), and the Company and the Bank, as applicable, hereby indemnify and agree to hold Indemnitee harmless therefrom.
(b) In the event that a majority of the Board of the Company or the Bank, as applicable, are, or threatened to be made, parties to or participants to the Proceeding and request indemnification, the remaining members of the Board of the Company or the Bank, as applicable, may authorize independent legal counsel to review the indemnification request and provide the remaining members of the Board of the Company or the Bank, as applicable, with a written opinion of counsel as to whether Indemnitee is entitled to indemnification. If independent legal counsel opines that Indemnitee is entitled to indemnification, the remaining members of the Board of the Company or the Bank, as applicable, may rely on such opinion in authorizing the requested indemnification of Indemnitee.
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(c) In the event that all of the members of the Board of the Company or the Bank, as applicable, are named as respondents in a Proceeding and request indemnification, the Board of the Company or the Bank, as applicable, shall authorize independent legal counsel to review the indemnification request and provide the Board of the Company or the Bank, as applicable, with a written opinion of counsel as to whether Indemnitee is entitled to indemnification. If independent legal counsel opines that Indemnitee is entitled to indemnification, the Board of the Company or the Bank, as applicable, may rely on such opinion in authorizing the requested indemnification of Indemnitee.
Section 13. Presumptions and Effect of Certain Proceedings.
(a) Except as otherwise provided in Section 2(o), the Company acknowledges that a settlement or other disposition short of final judgment may be successful on the merits or otherwise for purposes of Section 6 if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any Proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim or proceeding with or without payment of money or other consideration), it shall be presumed that Indemnitee has been successful on the merits or otherwise for purposes of Section 6. The Company shall have the burden of proof to overcome this presumption.
(b) For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or the Board of the Company or the Bank, as applicable, or counsel selected by any committee of the Board of the Company or the Bank, as applicable, or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser, investment banker or other expert selected with reasonable care by the Company, the Bank or the Board or any committee of the Board of the Company or the Bank, as applicable. The provisions of this Section 13(b) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.
(c) The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
Section 14. Remedies of Indemnitee.
(a) Subject to Section 14(e), in the event that (i) a determination is made pursuant to Sections 11 and 12 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 10 of this Agreement, (iii) no determination of entitlement to indemnification has been made pursuant to Sections 11 and 12 of this Agreement within 30 days after receipt by the Company or the Bank, as applicable, of the request for indemnification, (iv) payment of indemnification is not made pursuant to Sections 6, 7 or 12 of this Agreement within ten (10) days after receipt by the Company or the Bank, as applicable, of a written request therefor, or (v) payment of indemnification pursuant to Sections 3, 4, 5 or 8 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication by a court of Indemnitee’s entitlement to such indemnification of Losses and advancement of Expenses. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration, in which event Indemnitee and the Company shall each appoint one (1) arbitrator, and within twenty (20) days after the appointment of the second arbitrator, the two (2) appointed arbitrators shall select a third arbitrator. No arbitrator shall be affiliated, directly or indirectly, with Indemnitee, the Company or the Bank. The three arbitrators shall render a written decision upon the matter presented to them by a majority vote. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 14(a); provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce Indemnitee’s rights under Section 6 of this Agreement. The Company or the Bank, as applicable, shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.
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(b) In the event that a determination has been made pursuant to Sections 11 and 12 of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 14 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 14, the Company or the Bank, as applicable, shall have the burden of proving Indemnitee is not entitled to indemnification of Losses or advancement of Expenses, as the case may be.
(c) If a determination has been made pursuant to Sections 11 and 12 of this Agreement that Indemnitee is entitled to indemnification, the Company or the Bank, as applicable, shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 14, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The Company and the Bank shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 14 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company and the Bank are bound by all the provisions of this Agreement. Except as otherwise provided in Section 2(o), the Company or the Bank, as applicable, shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company or the Bank, as applicable, of a written request therefor) advance, to the extent not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company or the Bank, as applicable, under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company or the Bank, as applicable, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.
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(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding.
Section 15. Non-exclusivity; Survival of Rights; Insurance; Subrogation.
(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Company’s Articles of Incorporation, the Bank’s Articles of Incorporation, the Company Bylaws, the Bank Bylaws, any agreement, a vote of shareholders or a resolution of directors of the Company or the Bank, as applicable, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in Indemnitee’s Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Florida law, Part 359 or the FDI Act, or other applicable law or regulations, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded under the Company’s Articles of Incorporation, the Bank’s Articles of Incorporation, the Company Bylaws, the Bank Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) For the duration of Indemnitee’s service as a director of the Company and/or the Bank, and thereafter for as long as Indemnitee may be made a party to or a participant in any Proceeding, the Company and the Bank shall use commercially reasonable efforts (taking into account the scope and amount of coverage available relative to the cost thereof) to continue to maintain in effect policies of directors’ and officers’ liability insurance providing coverage that is at least substantially comparable in scope and amount to the greater of that provided by the directors’ and officers’ liability insurance maintained by the Company and the Bank (i) on the date of this Agreement, and (ii) on the date the Proceeding is instituted. In all policies of directors’ and officers’ liability insurance maintained by the Company and Bank, Indemnitee shall be named as an insured in such a manner as to provide Indemnitee the same rights and benefits as are provided to the most favorably insured of the directors of the Company and the Bank, but only to the extent that payments pursuant thereto do not constitute Prohibited Indemnification Payments. Upon request, the Company and Bank will provide to Indemnitee copies of all directors’ and officers’ liability insurance applications, binders, policies, declarations, endorsements and other related materials. Upon receipt of a notice of a claim pursuant to the terms hereof, the Company or the Bank, as applicable, shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company or the Bank, as applicable, shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.
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(c) In the event of any payment under this Agreement, the Company and the Bank, as applicable, shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company or the Bank, as the case may be, to bring suit to enforce such rights.
(d) The Company and the Bank shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.
(e) The Company and the Bank’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company or the Bank, as applicable, as a director, officer, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of Expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.
Section 16. Duration of Agreement. This Agreement shall continue during the period that Indemnitee is a director or officer of the Company or the Bank, as applicable (or is serving at the request of the Company or Bank as a director, officer, employee, member, trustee or agent of another entity or Enterprise) and shall continue thereafter (i) so long as Indemnitee may be made a party to or a participant in any Proceeding and (ii) throughout the pendency of any Proceeding commenced by Indemnitee to enforce or interpret Indemnitee’s rights under this Agreement, even if, in either case, Indemnitee may have ceased to serve in such capacity at the time of any such Proceeding. This Agreement shall be binding upon the Company, the Bank and their respective successors and assigns and shall inure to the benefit of Indemnitee and Indemnitee’s heirs, permitted assigns, legal and personal representatives, executors and administrators.
Section 17. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
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Section 18. Enforcement.
(a) The Company and the Bank expressly confirm and agree that they have entered into this Agreement and assumed the obligations imposed on them hereby in order to induce Indemnitee to serve as a director of the Company and/or the Bank, as applicable, and the Company and the Bank acknowledge that Indemnitee is relying upon this Agreement in serving as a director of the Company and/or the Bank, as applicable.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided, however, that this Agreement is a supplement to and in furtherance of the Company’s Articles of Incorporation, the Bank’s Articles of Incorporation, the Company Bylaws, the Bank Bylaws and applicable law, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder.
Section 19. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties thereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.
Section 20. Notice by Indemnitee. Indemnitee agrees promptly to notify the Company or the Bank, as applicable, in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company or the Bank, as applicable, shall not relieve the Company or the Bank, as applicable, of any obligation which they may have to the Indemnitee under this Agreement or otherwise, except to the extent that the Company or the Bank, as applicable, has been prejudiced in any material respect by such failure or from any liability that the Company or the Bank may have to Indemnitee otherwise than under this Section 20.
Section 21. Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier to whom said notice or other communication shall have been directed, or (d) sent by facsimile transmission with confirmation (electronic or otherwise) of receipt:
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(a) If to Indemnitee, at such address as Indemnitee shall provide to the Company;
(b) If to the Company or the Bank, to:
Professional Holding Corp.
396 Alhambra Circle, Suite 255
Coral Gables, FL 33134
Attn: Chief Executive Officer
or to any other address as may have been furnished to Indemnitee by the Company or the Bank.
Section 22. Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company or the Bank, as applicable, in lieu of indemnifying Indemnitee, shall, to the extent permitted under applicable law, contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company or the Bank, as applicable, and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company or the Bank, as applicable (and their respective directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
Section 23. Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Florida, without regard to its conflict of laws rules, except to the extent superseded by applicable Federal law. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 14(a) of this Agreement, the Company, the Bank and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in a court of the State of Florida in Miami-Dade County or the United States District Court, Southern District of Florida, and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of such Florida court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) waive any objection to the laying of venue of any such action or proceeding in such Florida court, and (iv) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in such Florida court has been brought in an improper or inconvenient forum.
Section 24. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement. Confirmation of execution by electronic transmission of a facsimile signature page shall be binding upon any party so confirming.
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Section 25. Miscellaneous. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
Section 26. JURY WAIVER. IN ANY CIVIL ACTION, COUNTERCLAIM, OR PROCEEDING, WHETHER AT LAW OR IN EQUITY, WHICH ARISES OUT OF, CONCERNS, OR RELATES TO THIS AGREEMENT, ANY AND ALL TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE PERFORMANCE OF THIS AGREEMENT, OR THE RELATIONSHIP CREATED BY THIS AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE, TRIAL SHALL BE TO A COURT OF COMPETENT JURISDICTION AND NOT TO A JURY. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY. ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT, AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THIS AGREEMENT OF THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. NEITHER PARTY HAS MADE OR RELIED UPON ANY ORAL REPRESENTATIONS TO OR BY ANY OTHER PARTY REGARDING THE ENFORCEABILITY OF THIS PROVISION. EACH PARTY HAS READ AND UNDERSTANDS THE EFFECT OF THIS JURY WAIVER PROVISION. EACH PARTY ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY ITS OWN COUNSEL WITH RESPECT TO THE TRANSACTION GOVERNED BY THIS AGREEMENT AND SPECIFICALLY WITH RESPECT TO THE TERMS OF THIS SECTION.
IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.
Professional Holding Corp. | ||
By: | ||
Print Name: | ||
Its: | ||
Professional Bank | ||
By: | ||
Print Name: | ||
Its: | ||
INDEMNITEE: | ||
By: | ||
Print Name: |
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Exhibit 10.15
EXECUTION VERSION
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is entered into by and between Professional Holding Corp., a Florida corporation (the “Company”), and each Investor (each an “Investor” and collectively, the “Investors”) whose name appears on the signature page hereto and is made as of the date of the Company’s acceptance hereof (the “Acceptance Date”).
RECITALS
WHEREAS, the Company is proposing to issue and sell shares of the Company’s Class A Voting Common Stock, $0.01 par value per share (the “Class A Common Stock”), and Class B Non-Voting Common Stock, $0.01 par value per share (the “Class B Common Stock”, and together with the Class A Common Stock, the “Company Stock”), to the Investors in a private offering of up to $20,000,000 (the “Offering”) at a purchase price of US$14.50 per share (the “Per Share Purchase Price”). The Company Stock is being offered only to persons who are accredited investors within the meaning of Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to a private placement exemption from the securities registration requirements of the Securities Act.
WHEREAS, the Company and each Investor agree that, upon the terms, representations and warranties, agreements, and covenants and subject to the conditions set forth in this Agreement, the Investor will purchase from the Company, and the Company will issue and sell to the Investor, at a price per share equal to the Per Share Purchase Price, Company Stock, pursuant to this Agreement. The Company Stock purchased by each Investor will be delivered in certificated form, registered in such Investor’s name and address as set forth below, to the Investors at the Closing.
NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and Investor mutually agree as follows:
ARTICLE 1
PURCHASE; CLOSINGS
1.1 Issuance, Sale and Purchase. On the terms and subject to the conditions set forth herein, the Company agrees to issue and sell to each Investor, and each Investor, severally and not jointly, agrees to purchase from the Company, free and clear of any Liens, at a price per share equal to the Per Share Purchase Price, the number of shares of Class A Common Stock and a number of shares of Class B Common Stock as indicated on the signature page for each respective Investor (the “Investment“), subject to the conditions set forth in Section 1.2.
1.2 Closings; Deliverables for the Closings; Conditions to the Closings.
(a) Closing. Unless this Agreement has been terminated pursuant to Article 4, and subject to the satisfaction or, to the extent permitted by Law and this Agreement, the written waiver of the conditions set forth in Section 1.2(c), the closing of an Investment in the amount set forth on the signature page for each respective Investor (the “Purchase Price”) and the transactions contemplated by this Agreement (the “Closing”) shall take place remotely via the electronic or other exchange of documents and signature pages, on a date to be specified by the Company on no less than two Business Days’ notice to the Investors, or at such other place or such other date as agreed to in writing by the parties hereto (the “Closing Date”).
(b) Closing Deliverables. Subject to the satisfaction or waiver on the Closing Date of the conditions to the Closing set forth in Section 1.2(c), at the Closing the parties shall make the following deliveries:
(i) the Company shall deliver to the Investor certificates evidencing the Company Stock to be purchased pursuant to Section 1.1 registered in the name of the Investor; and
(ii) each Investor shall deliver such Investor’s Purchase Price by wire transfer of immediately available funds to the account set forth in the Instruction Sheet attached hereto as Exhibit C.
(c) Closing Conditions.
(i) The obligations of each Investor, on the one hand, and the Company, on the other hand, to consummate the purchase and sale of Company Stock provided for in this Agreement are each subject to the satisfaction or, to the extent permitted by Law and this Agreement, the written waiver by the Company or such Investor (as to itself only), as applicable, of the following conditions at the Closing:
(A) No provision of any Law and no judgment, injunction, order or decree shall prohibit the Closing or shall prohibit or restrict the Investor from owning any Company Stock (or voting any Class A Common Stock) to be purchased pursuant to this Agreement or exercising any of the rights under any of the other Transaction Documents; and
(B) Any Governmental Consent required to consummate the transactions contemplated by this Agreement shall have been obtained and shall be in full force and effect, and all statutory waiting periods in respect thereof shall have expired; provided, however, that (x) no such required Governmental Consent shall impose or contain any restraint or condition that would impair in any material respect the benefits to the Investor of the transactions contemplated by this Agreement and (y) other than such restrictions as are commonly imposed by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”) in its standard passivity commitments, no such required Governmental Consent shall impose any restrictions on any activities or otherwise on, require any modification of governance, fee or carried interest arrangements with respect to, or impose any capital or other requirements on, such Investor or any of its Affiliates, including any agreement or requirement to maintain or contribute, directly or indirectly, to the capital of Professional Bank, a Florida-chartered commercial bank (the “Bank”), or the Company (each, a “Burdensome Condition”) and, provided, further that, notwithstanding any other provision of this Agreement, the imposition of a Burdensome Condition in connection with any such required Governmental Consent shall constitute a denial of such required Governmental Consent and such required Governmental Consent shall be deemed not received for all purposes in this Agreement, including Section 4.1(h).
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(ii) The obligation of each Investor to consummate the purchase of Company Stock provided for in this Agreement is also subject to the satisfaction or written waiver by such Investor (as to itself only) of the following conditions at the Closing:
(A) The representations and warranties of the Company set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except to the extent that the failure to be true and correct (without regard to any materiality or Material Adverse Effect qualifications contained therein), would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect (and except that (1) representations and warranties made as of a specified date shall be true and correct as of such date and (2) the representations and warranties of the Company set forth in Sections 2.2(a), 2.2(b), 2.2(c), 2.2(d), 2.2(q) and 2.2(ff) shall be true and correct in all respects);
(B) The Company shall have performed and complied with, in all material respects, all agreements, covenants and conditions required by this Agreement to be performed by it on or prior to the Closing Date;
(C) Since the date of this Agreement, a Material Adverse Effect shall not have occurred and no change or other event shall have occurred that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;
(D) The Investors shall have received a certificate, dated as of the Closing Date, signed on behalf of the Company by a senior executive officer certifying that the conditions set forth in Section 1.2(c)(ii)(A), Section 1.2(c)(ii)(B) and Section 1.2(c)(ii)(C) have been satisfied on and as of the Closing Date;
(E) The Company shall receive at the Closing aggregate gross proceeds from the sale of the Company Stock to all Investors of no more than $20.0 million, at a price per share equal to the Per Share Purchase Price;
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(F) The Investment shall not (i) cause such Investor or any of its affiliates to violate any banking regulation, (ii) require such Investor or any of its affiliates to file a prior notice under the Change in Bank Control Act, or otherwise seek prior approval of any banking regulator, (iii) require such Investor or any of its affiliates to become a bank holding company or otherwise serve as a source of strength for the Company or the Bank, or (iv) cause such Investor, together with any other person whose Company securities would be aggregated with such Investor’s Company securities for purposes of any banking regulation or law, to collectively be deemed to own, control, or have the power to vote securities which (assuming, for this purpose only, full conversion and/or exercise of such securities by the Investor and such other persons) would represent more than (a) 9.9% of any class of voting securities of the Company or (b) 14.9% of the total outstanding Capital Stock of the Company;
(G) With respect to EJF Sidecar Fund, Series LLC – Series E, a Delaware series limited liability company (“EJF”), the Company shall have entered into a letter agreement (including the Registration Rights Agreement) substantially in the form attached hereto as Exhibit A (the “EJF Letter Agreement“) with EJF which shall be in full force and effect and any closing conditions specified therein shall have been satisfied, and, with respect to each of Mendon Capital, LLC, a Delaware limited liability company (“Mendon”), and BayBoston Managers, LLC, a Delaware limited liability company (“BayBoston”), the Company shall have entered a letter agreement (including the Registration Rights Agreement) substantially in the form attached hereto as Exhibit B (the “Mendon/BayBoston Letter Agreement” and collectively with the EJF Letter Agreement, the “Letter Agreements”) with each of Mendon and BayBoston, which shall be in full force and effect and any closing conditions specified therein shall have been satisfied; and
(H) Each Investor who, together with its Affiliates and persons who share a common investment advisor with such Investor, has committed to acquire a beneficial ownership of 5% or more of the outstanding shares of Company Stock (each a “9.9% Investor”) has received, in each 9.9% Investor’s sole discretion, satisfactory feedback from the Federal Reserve Board that such 9.9% Investor will not have “control” of the Company or the Bank for purposes of the BHCA.
(iii) The obligation of the Company to consummate the sale of Company Stock to each Investor provided for in this Agreement is also subject to the satisfaction or written waiver by the Company of the following conditions at the Closing:
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(A) The representations and warranties of such Investor set forth in this Agreement shall be true and correct in all respects on and as of the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date, except where the failure to be true and correct (without regard to any materiality qualifications contained therein) would not materially adversely affect the ability of such Investor to perform its obligations hereunder (and except that (1) representations and warranties made as of a specified date shall be true and correct as of such date and (2) the representations and warranties of each Investor set forth in Sections 2.3(d) and 2.3(h) shall be true and correct in all respects); and
(B) Each Investor shall have performed and complied with, in all material respects, all agreements, covenants and conditions required by this Agreement to be performed by it on or prior to the Closing Date.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Certain Terms.
(a) As used in this Agreement, the term “Material Adverse Effect” means any circumstance, event, change, development or effect that would (i) result in a material adverse effect on the assets, liabilities (actual or contingent), prospects, business, operations, financial condition or results of operations of the Company and the Company Subsidiaries, taken as a whole, or (ii) materially impair or delay the ability of the Company or any of the Company Subsidiaries to perform its or their obligations under this Agreement or the other Transaction Documents to consummate the Closing or any of the transactions contemplated hereby; provided, however, that in determining whether a Material Adverse Effect has occurred under clause (i), there shall be excluded any circumstance, event, change, development or effect to the extent resulting from (A) actions or omissions of the Company or any Company Subsidiary expressly required or contemplated by the terms of this Agreement, (B) changes after the date hereof in general economic conditions in the United States, including financial market volatility or downturns, or in the markets in which the Company and the Company Subsidiaries operate, (C) changes after the date hereof affecting the banking industry generally or (D) any changes after the date hereof in applicable Laws or accounting rules or principles, including changes in GAAP, in each case to the extent that such circumstance, event, change, development or effect referred to in clauses (B), (C) and (D) do not have a disproportionate effect on the Company and the Company Subsidiaries compared to other participants in the industries or markets in which the Company and the Company Subsidiaries operate.
2.2 Representations and Warranties of the Company. The Company hereby represents and warrants to each of the Investors, as of the date hereof and as of the Closing Date (except for the representations and warranties that are as of a specific date which are made as of that date) that:
(a) Organization and Authority. Each of the Company and the Company Subsidiaries is a corporation or other entity duly organized and validly existing under the laws of the jurisdiction of its incorporation or organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified except where any failure to be so qualified would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, and has the corporate or other organizational power and authority to own its properties and assets and to carry on its business as it is now being conducted. Copies of the articles of incorporation and bylaws (or similar governing documents) as amended through the date of this Agreement for the Company and the Bank have been Previously Disclosed. The Company is duly registered with the Board of Governors of the Federal Reserve Board as a financial holding company under the Bank Holding Company Act of 1956, as amended (“BHCA”).
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(b) Company Subsidiaries. Except for the Bank and Professional Insurance Management, LLC, a Florida limited liability company (each, a “Company Subsidiary” and, collectively, the “Company Subsidiaries”), the Company does not own beneficially, directly or indirectly, more than 5% of any class of equity securities or similar interests of any corporation, business trust, association or similar organization, and is not, directly or indirectly, a partner in any partnership or party to any joint venture. The Company owns, directly or indirectly, all of its interests in each Company Subsidiary free and clear of any and all Liens. The deposit accounts of the Bank are insured by the Federal Deposit Insurance Corporation (“FDIC”) to the fullest extent permitted by the Federal Deposit Insurance Act, as amended (the “FDI Act”), and the rules and regulations of the FDIC thereunder, and all premiums and assessments required to be paid in connection therewith have been paid when due (after giving effect to any applicable extensions). The Company beneficially owns all of the outstanding capital securities of, and has sole control of, the Bank.
(c) Capitalization.
(i) As of the date hereof, the authorized Capital Stock of the Company consists of (A) 50,000,000 shares of Class A Common Stock, $0.01 par value per share, (B) 10,000,000 shares of Class B Common Stock, $0.01 par value per share, and (C) 10,000,000 shares of Preferred Stock.
(ii) As of the date hereof, without giving effect to the shares issued to the Investors pursuant to this Agreement, the Company had outstanding 3,513,478 shares of Class A Common Stock, no shares of Class B Common Stock and no shares of Preferred Stock. As of the date hereof, the Company has reserved 265,000 shares of Class A Voting Common Stock for issuance under or pursuant to the Company’s 2016 Amended and Restated Stock Option Plan (the “Company Option Plan”).
(iii) All of the issued and outstanding shares of Capital Stock have been duly authorized and validly issued and are fully paid and nonassessable. None of the outstanding shares of Capital Stock or other securities of the Company or any of the Company Subsidiaries was issued, sold or offered by the Company or any Company Subsidiary in violation of the Securities Act or the securities or blue sky laws of any state or jurisdiction. No bonds, debentures, notes or other indebtedness having the right to vote on any matters on which the shareholders of the Company may vote (“Voting Debt”) are issued and outstanding.
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(iv) As of the date of this Agreement, except for the outstanding awards under the Company Option Plan, the Company’s 2014 Associate Stock Purchase Plan or the Company’s Share Appreciation Rights Plan (collectively, the “Company Equity Plans”), the Company does not have any and is not bound by any outstanding subscriptions, options, warrants, calls, commitments or agreements of any character calling for the purchase or issuance of, or securities or rights convertible into or exchangeable or exercisable for, any shares of Capital Stock or any other equity securities of the Company or Voting Debt or any securities representing the right to purchase or otherwise receive any shares of Capital Stock of the Company.
(v) The issuance of the Company Stock in connection with the transactions contemplated by this Agreement has been duly authorized and such Company Stock, when issued and paid for in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and nonassessable and free and clear of all Liens, other than restrictions on transfer imposed by applicable securities Laws, and shall not be subject to preemptive or similar rights. The Company has a sufficient number of authorized and unissued shares of Capital Stock for the purpose of issuance of the Company Stock pursuant to this Agreement.
(d) Authorization; No Conflicts; Shareholder Approval.
(i) The Company has the corporate power and authority to execute and deliver this Agreement and the other Transaction Documents and to perform its obligations hereunder. The execution, delivery and performance of this Agreement and the other Transaction Documents by the Company and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of the Company and no further approval or authorization is required on the part of the Company or its shareholders. The Board of Directors has unanimously approved the transactions contemplated by this Agreement. This Agreement and the other Transaction Documents have been duly and validly executed and delivered by the Company and, assuming due authorization, execution and delivery by the Investors, are the valid and binding obligation of the Company enforceable against the Company in accordance with their respective terms, except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles (whether applied in equity or at law). There are no shareholder agreements, voting agreements, or other similar arrangements with respect to the Capital Stock to which the Company is a party or, to the Company’s Knowledge, between or among any of the Company’s shareholders.
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(ii) Neither the execution and delivery by the Company of this Agreement and the other Transaction Documents nor the consummation of the transactions contemplated hereby or thereby, nor compliance by the Company with any of the provisions hereof or thereof, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or result in the loss of any benefit or creation of any right on the part of any third party under, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any liens, charges, adverse rights or claims, pledges, covenants, title defects, security interests or other encumbrances of any kind (“Liens”) upon any of the properties or assets of the Company or any Company Subsidiary, under any of the terms, conditions or provisions of (1) the certificate of incorporation or bylaws (or similar governing documents) of the Company and each Company Subsidiary or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Company or any of the Company Subsidiaries is a party or by which it may be bound, or to which the Company or any of the Company Subsidiaries, or any of the properties or assets of the Company or any of the Company Subsidiaries may be subject, or (B) violate any Law applicable to the Company or any of the Company Subsidiaries or any of their respective properties or assets, except in the case of clauses (A)(2) and (B) for such violations, conflicts and breaches as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(e) Governmental Consents. No Governmental Consents are necessary for the Company to execute and deliver this Agreement or the other Transaction Documents, to perform all obligations under this Agreement or the other Transaction Documents, or to consummate the Closing or any of the transactions contemplated by this Agreement or the other Transaction Documents, other than: (i) the filing with the Securities and Exchange Commission one or more registration statements in accordance with the requirements of the Registration Rights Agreement, if applicable, (ii) the filings required in accordance with Section 3.9 of this Agreement, (iii) the feedback required in accordance with Section 1.2(c)(ii)(H), and (iv) those that have been obtained prior to the date of this Agreement.
(f) Litigation and Other Proceedings.
(i) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, there is no pending or, to the Knowledge of the Company, threatened claim, action, suit, arbitration, complaint, charge or investigation or proceeding (each an “Action”) against the Company or any Company Subsidiary or any of their respective assets, rights or properties, nor is the Company or any Company Subsidiary a party or named as subject to the provisions of any order, writ, injunction, settlement, judgment or decree of any Governmental Entity, and, to the Knowledge of the Company, there is no basis for any of the foregoing. Neither the Company nor the Bank, nor, to the Knowledge of the Company, any director or executive officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.
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(ii) Neither the Company nor the Bank is a party to any pending, or, to the Knowledge of the Company, threatened Action or subject to any order, judgment or decree, which challenges the legality, validity or enforceability of this Agreement or the issuance of the Company Stock.
(g) Financial Statements. True, correct and complete copies of (i) the unaudited consolidated balance sheet of the Company and the Company Subsidiaries and the related consolidated statements of operations, changes in stockholders’ equity and cash flows, together with the notes thereto, as of and for the nine-month period ended September 30, 2016 and (ii) the audited consolidated balance sheets of the Company and the Company Subsidiaries and the related consolidated statements of operations, changes in shareholders’ equity and cash flows, together with the notes thereto, as of and for the fiscal year periods ended December 31, 2015 and December 31, 2014 (the “Company Financial Statements”) have been Previously Disclosed. Each of the Company Financial Statements (i) have been prepared from, and are in accordance with, the books and records of the Company and the Company Subsidiaries, (ii) have been complied, as of the dates therein stated, in all material respects with applicable accounting requirements, (iii) have been prepared in accordance with GAAP applied on a consistent basis and (iv) present fairly in all material respects the consolidated financial position of the Company and the Company Subsidiaries at the dates stated therein and the consolidated results of operations, changes in shareholders’ equity and cash flows of the Company and the Company Subsidiaries for the periods stated therein. There is no transaction, arrangement, or other relationship between the Company (or any Company Subsidiary) and an unconsolidated or other off-balance sheet entity that is not reflected in the Company Financial Statements, other than financial instruments entered into in the Ordinary Course of Business.
(h) Accounting Matters.
(i) Each of the Company and each Company Subsidiary has established and maintains a system of internal control over financial reporting that is effective to provide reasonable assurance regarding the reliability of the Company’s and each Company Subsidiary’s financial reporting and the preparation of the Company’s and each Company Subsidiary’s financial statements for external purposes in accordance with GAAP. The Company has no Knowledge of (i) any significant deficiencies or material weaknesses in the design or operation of its internal control over financial reporting which are reasonably likely to adversely affect its ability to record, process, summarize and report financial information or (ii) any fraud, whether or not material, that involves management or other employees who have a role in the Company’s internal control over financial reporting. To the Company’s Knowledge, no change in the Company’s or and any Company Subsidiary’s internal control over financial reporting that has occurred since December 31, 2015 that has materially affected, or that is reasonably likely to materially affect, the Company’s or the Bank’s internal control over financial reporting.
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(ii) Since December 31, 2015 (i) neither the Company nor any Company Subsidiary has received any material complaint, allegation, assertion or claim, written or oral, regarding the accounting or auditing practices, or internal procedures or accounting controls, methodologies or methods of the Company or any Company Subsidiary, including but not limited to any complaint, allegation, assertion or claim that the Company or any Company Subsidiary has engaged in any questionable accounting or auditing practice, or regarding any violation of the securities laws; and (ii) no attorney representing the Company or any Company Subsidiary has reported to their respective Boards of Directors, committee thereof, any member thereof or any executive officer, evidence of a material violation of the securities or banking laws, breach of fiduciary duty or similar violation by the Company or any Company Subsidiary or any of their respective officers, directors, employees or agents.
(i) Environmental Matters. To the Company’s Knowledge, neither the Company nor any of the Company Subsidiaries (i) is in violation of any Law of any Governmental Entity relating to the use, disposal or release of hazardous or toxic substances or relating to the protection or restoration of the environment or human exposure to hazardous or toxic substances (collectively, “Environmental Laws”), (ii) is liable for any off-site disposal or contamination pursuant to any Environmental Laws, (iii) owns or operates any real property contaminated with any substance that is in violation of any Environmental Laws or (iv) is subject to any claim relating to any Environmental Laws; in each case, which violation, contamination, liability or claim has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and there is no pending or, to the Company’s Knowledge, threatened investigation that might lead to such a claim. Except as would not result in a Material Adverse Effect, there are no circumstances or conditions (including the presence of asbestos, underground storage tanks, lead products, polychlorinated biphenyls, prior manufacturing operations, dry-cleaning or automotive services) involving the Company or any of the Company Subsidiaries, or any currently or formerly owned or operated property of the Company or any of the Company Subsidiaries, that could reasonably be expected to result in any claim, liability, investigation, cost or restriction against the Company or any of the Company Subsidiaries, or result in any restriction on the ownership, use, or transfer of any property pursuant to any Environmental Law, or adversely affect the value of any currently owned property of the Company or any of the Company Subsidiaries.
(j) Risk Management Instruments. The Company and any Company Subsidiary have in place risk management policies and procedures designed to protect against risks of the type and in the amounts reasonably expected to be incurred by companies of similar sizes and in similar lines of business as the Company and any Company Subsidiary. All material derivative instruments, including swaps, caps, floors and option agreements entered into for the Company’s or any of the Company Subsidiaries’ own account were entered into (i) only in the Ordinary Course of Business, (ii) in accordance with prudent practices and in all material respects with all applicable Laws and (iii) with counterparties believed to be financially responsible at the time; and each of them constitutes the valid and legally binding obligation of the Company or any Company Subsidiary, as applicable, enforceable in accordance with its terms. Neither the Company nor, to the Knowledge of the Company, any other party thereto is in breach of any of its material obligations under any such agreement or arrangement.
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(k) No Undisclosed Liabilities. There are no liabilities of the Company or any of the Company Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, except for (i) liabilities adequately reflected or reserved against in accordance with GAAP in the Company’s Financial Statements and (ii) liabilities that have arisen in the Ordinary Course of Business since December 31, 2015 and that have not or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
(l) Mortgage Lending. The Company and each of the Company Subsidiaries have complied in all material respects with, and all documentation in connection with the origination, processing, underwriting and credit approval of any mortgage loan originated, purchased or serviced by the Company or any Company Subsidiary has satisfied, in all material respects (i) all Laws with respect to the origination, insuring, purchase, sale, pooling, servicing, subservicing, or filing of claims in connection with mortgage loans, including all Laws relating to real estate settlement procedures, consumer credit protection, truth in lending Laws, usury limitations, fair housing, transfers of servicing, collection practices, equal credit opportunity and adjustable rate mortgages, (ii) the responsibilities and obligations relating to mortgage loans set forth in any agreement between the Company and any Agency, Loan Investor or Insurer, (iii) the applicable rules, regulations, guidelines, handbooks and other requirements of any Agency, Loan Investor or Insurer and (iv) the terms and provisions of any mortgage or other collateral documents and other loan documents with respect to each mortgage loan. No Agency, Loan Investor or Insurer has (A) claimed in writing that the Company or any Company Subsidiary has violated or has not complied with the applicable underwriting standards with respect to mortgage loans sold by the Company or any Company Subsidiary to a Loan Investor or Agency, or with respect to any sale of mortgage servicing rights to a Loan Investor, (B) imposed in writing restrictions on the activities (including commitment authority) of the Company or any Company Subsidiary, or (C) indicated in writing to the Company or any Company Subsidiary that it has terminated or intends to terminate its relationship with the Company or any Company Subsidiary for poor performance, poor loan quality, or concern with respect to the Company’s or any Company Subsidiary’s compliance with laws.
(m) Bank Secrecy Act; Anti-Money Laundering; OFAC; and Customer Information. To the Company’s Knowledge, the Company and each Company Subsidiary have operated in compliance, in all material respects, with the Bank Secrecy Act of 1970, as amended, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (also known as the USA PATRIOT Act), any order or regulation issued by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), or any other applicable anti-money laundering or anti-terrorist-financing statute, rule or regulation. The Company is not aware of any facts or circumstances that would cause it to believe that any nonpublic customer information has been disclosed to or accessed by an unauthorized third party in a manner that would cause the Company to undertake any material remedial action. The Company and each of the Company Subsidiaries have adopted and implemented an anti-money laundering program designed to provide appropriate customer identification verification procedures that comply with the USA PATRIOT Act and such anti-money laundering program meets the requirements in all material respects of Section 352 of the USA PATRIOT Act and the regulations thereunder, and they have complied in all respects with any requirements to file reports and other necessary documents as required by the USA PATRIOT Act and the regulations thereunder. The Company will not directly or indirectly use the proceeds of the sale of the Company Stock pursuant to transactions contemplated by this Agreement, or lend, contribute or otherwise make available such proceeds to any Company Subsidiary, joint venture partner or other Person, towards any sales or operations in any country appearing on the OFAC Specially Designated Nationals List (“SDN List”) or for the purpose of financing the activities of any Person currently appearing on the SDN List.
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(n) Certain Payments. Neither the Company nor any of the Company Subsidiaries, nor any directors, officers, nor to the Knowledge of the Company, employees or any of their Affiliates or any other Person who to the Knowledge of the Company is associated with or acting on behalf of the Company or any of the Company Subsidiaries has directly or indirectly (i) made any contribution, gift, bribe, rebate, payoff, influence payment, kickback, or other payment in material violation of any Law to any Person, private or public, regardless of form, whether in money, property, or services (A) to obtain favorable treatment in securing business for the Company or any of the Company Subsidiaries, (B) to pay for favorable treatment for business secured by the Company or any of the Company Subsidiaries, or (C) to obtain special concessions or for special concessions already obtained, for or in respect of the Company or any of the Company Subsidiaries or (ii) established or maintained any fund or asset with respect to the Company or any of the Company Subsidiaries that was required by Law or GAAP to have been recorded and was not recorded in the books and records of the Company or any of the Company Subsidiaries.
(o) Absence of Certain Changes. Since December 31, 2015 and except as required or contemplated by the terms of this Agreement, (i) the Company and the Company Subsidiaries have conducted their respective businesses in all material respects in the Ordinary Course of Business, (ii) none of the Company or any Company Subsidiary has issued any securities (other than Capital Stock and options and other equity-based awards issued prior to the date of this Agreement pursuant to the Company Equity Plans and reflected in the numbers set forth in Section 2.2(c)), (iii) the Company has not made or declared any distribution in cash or in kind to its shareholders or repurchased any shares of its Capital Stock (other than 20,000 shares repurchased in 2016), (iv) through (and including) the date of this Agreement, no fact, event, change, condition, development, circumstance or effect has occurred that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; (v) there has not been any change in the nature of the business, results of operations, assets, financial condition, method of accounting or accounting practice, or manner or conduct of the business of the Company and the Bank that has had, or may reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, or on the ability of the Company to consummate the transactions contemplated hereby; and (vi) no material default (or event which, with notice or lapse of time, or both, would constitute a material default) exists on the part of the Company or any Company Subsidiary in the due performance and observance of any term, covenant or condition of any agreement to which the Company or any Company Subsidiary is a party and which would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
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(p) Compliance with Laws. The Company and each Company Subsidiary have all material permits, licenses, franchises, authorizations, orders and approvals of, and have made all filings, applications and registrations with, Governmental Entities that are required in order to permit them to own or lease their properties and assets and to carry on their business as presently conducted and that are material to the business of the Company and each Company Subsidiary. The Company and each Company Subsidiary have complied in all respects and (i) are not in default or violation in any respect of, (ii) are not, to the Company’s Knowledge, under investigation with respect to, and (iii) have not, to the Company’s Knowledge, been threatened to be charged with or given notice of any violation of, any applicable domestic (federal, state or local) or foreign law, statute, ordinance, license, rule, regulation, policy or guideline, order, demand, writ, injunction, decree or judgment of any Governmental Entity (each, a “Law”), other than such noncompliance, defaults or violations as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. No Governmental Entity has placed any material restriction on the business or properties of the Company or any of the Company Subsidiaries. As of the date hereof, the Bank has a Community Reinvestment Act rating of “satisfactory.”
(q) Regulatory Agencies.
(i) The Company and the Company Subsidiaries (i) are not subject to any cease-and-desist or other similar order or enforcement action issued by, (ii) are not a party to any written agreement, consent agreement or memorandum of understanding with, and (iii) are not a party to any commitment letter or similar undertaking to maintain capital ratios above the regulatory minimum. Since December 31, 2015, neither the Company nor any of the Company Subsidiaries has adopted any board resolutions at the request of any Governmental Entity that currently restricts in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its liquidity and funding policies and practices, its ability to pay dividends, its credit, risk management or compliance policies, its internal controls, its management or its operations or business (each item in the two previous sentences being referred to herein as a “Regulatory Agreement”), nor has the Company nor any of the Company Subsidiaries been advised since December 31, 2015 by any Governmental Entity that it is considering issuing, initiating, ordering, or requesting any such Regulatory Agreement.
(ii) As of December 31, 2016, the Company and each Company Subsidiary had filed, since that date have filed, and subsequent to the date hereof will file, all reports, registrations and statements, if any, together with any amendments required to be made with respect thereto, that were and are required to be filed with (i) the Federal Reserve Board, (ii) the FDIC, and (iii) the Florida Office of Financial Regulation (“FLOFR”) (all such reports and statements are collectively referred to herein as the “Company Reports). As of their respective dates, the Company Reports complied and will comply in all material respects with all the statutes, rules and regulations enforced or promulgated by the Governmental Entity with which they were filed and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading. There are no outstanding comments from any Governmental Entity with respect to any Company Reports.
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(iii) All documents which the Company is responsible for filing with any Governmental Entity in connection with the transactions contemplated by this Agreement will comply as to form in all material respects with the provisions of applicable Law.
(r) The Bank. No shares of Capital Stock of the Bank are or may become required to be issued by reason of any options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relative to, or concerning securities or rights convertible into, or exchangeable for, shares of any class of Capital Stock of the Bank, and there are no other contracts, commitments, understandings or arrangements by which the Bank is bound to issue, or the Company is bound to cause the Bank to issue, additional shares of its Capital Stock or options, warrants, scrip, rights to purchase or acquire, or securities or rights convertible into or exchangeable for, any additional shares of its Capital Stock. All of the shares of Capital Stock of the Bank so owned by the Company are fully paid and non-assessable and are owned by it free and clear of any Liens or agreement with respect thereto. The Bank is a commercial bank duly organized, validly existing and in good standing under the laws of the State of Florida and has the corporate power and authority and all necessary federal, state, local and foreign authorizations to own or lease its properties and assets and to carry on its business as it is now being conducted.
(s) Adequate Capitalization. The Bank meets or exceeds the standards necessary to be considered “well capitalized” under the FDIC’s regulatory framework for prompt corrective action and is in compliance with all minimum capital adequacy requirements of the FDIC and the FLOFR, as applicable. The Company is in compliance with all applicable minimum capital adequacy requirements of the Federal Reserve Board. The Company and the Bank have not received written notice of any facts or circumstances in existence, which would cause the Company or the Bank to be deemed to be not in compliance with applicable minimum capital adequacy requirements.
(t) Contracts. The Company has provided to each Investor that has made a request (including via access in any virtual data room) or such Investor’s representatives true, correct and complete copies of each of the following to which the Company or any Company Subsidiary is a party, each of which has been Previously Disclosed (each, a “Material Contract”):
(i) any contract or agreement relating to indebtedness of the Company or any Company Subsidiary for borrowed money, letters of credit, capital lease obligations, obligations secured by a Lien or interest rate or currency hedging agreements (including guarantees in respect of any of the foregoing, but in any event excluding trade payables, securities transactions and brokerage agreements arising in the Ordinary Course of Business, intercompany indebtedness and immaterial leases for telephones, copy machines, facsimile machines and other office equipment) in excess of $300,000, except for those issued in the Ordinary Course of Business;
(ii) any contract or agreement limiting, in any material respect, the ability of the Company or any of the Company Subsidiaries to engage in any line of business or to compete, whether by restricting territories, customers or otherwise, or in any other material respect, with any Person;
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(iii) any contract or agreement that concerns the sale or acquisition of any material portion of the Company’s business;
(iv) any alliance, cooperation, joint venture, shareholders, partnership or similar agreement involving a sharing of profits or losses relating to the Company or any Company Subsidiary;
(v) any contract or agreement involving annual payments in excess of $300,000 that cannot be cancelled by the Company or a Company Subsidiary without penalty on not more than 60 days’ notice;
(vi) any material hedge, collar, option, forward purchasing, swap, derivative or similar agreement, understanding or undertaking;
(vii) any contract or agreement with respect to the employment or service of any current or former directors, officers, employees or consultants of the Company or any of the Company Subsidiaries other than, with respect to non-executive employees and consultants, in the Ordinary Course of Business; and
(viii) any contract or agreement containing any (x) non-competition or exclusive dealing obligations or other obligation which purports to limit or restrict in any respect the ability of the Company or any Company Subsidiary to solicit customers or the manner in which, or the localities in which, all or any portion of the business of the Company or the Company Subsidiaries is or can be conducted, or (y) right of first refusal or right of first offer or similar right that limits or purports to limit the ability of the Company or any of the Company Subsidiaries to own, operate, sell, transfer, pledge or otherwise dispose of any material assets or business.
Each Material Contract (A) is legal, valid and binding on the Company and the Company Subsidiaries which are a party to such contract, (B) is in full force and effect and enforceable in accordance with its terms and (C) will continue to be legal, valid, binding, enforceable, and in full force and effect in all material respects following the consummation of the transactions contemplated by this Agreement. Neither the Company nor any of the Company Subsidiaries, nor to the Knowledge of the Company, any other party thereto is in material violation or default under any Material Contract. No benefits under any Material Contract will be increased, and no vesting of any benefits under any Material Contract will be accelerated, by the occurrence of any of the transactions contemplated by this Agreement, nor will the value of any of the benefits under any Material Contract be calculated on the basis of any of the transactions contemplated by this Agreement. The Company and the Company Subsidiaries, and to the Knowledge of the Company, each of the other parties thereto, have performed in all material respects all material obligations required to be performed by them under each Material Contract, and to the Knowledge of the Company, no event has occurred that with notice or lapse of time would constitute a material breach or default or permit termination, modification, or acceleration, under the Material Contracts.
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(u) Insurance. The Company and each of the Company Subsidiaries are presently insured, and have been insured for at least the past two years, for reasonable amounts with financially sound and reputable insurance companies against such risks as companies engaged in a similar business would, in accordance with good business practice, customarily be insured. All of the policies, bonds and other arrangements providing for the foregoing (the “Company Insurance Policies”) are in full force and effect, the premiums due and payable thereon have been timely paid and there is no material breach or default (and no condition exists or event has occurred that, with the giving of notice or lapse of time or both, would constitute such a material breach or default) by the Company or any of the Company Subsidiaries under any of the Company Insurance Policies or, to the Knowledge of the Company, by any other party to the Company Insurance Policies. Neither the Company nor any of the Company Subsidiaries has received any written notice of cancellation or non-renewal of any Company Insurance Policy nor, to the Knowledge of the Company, is the termination of any of the Company Insurance Policies threatened in writing by the insurer, and there is no material claim for coverage by the Company, or any of the Company Subsidiaries, pending under any of such Company Insurance Policies as to which coverage has been denied or disputed by the underwriters of such Company Insurance Policies or in respect of which such underwriters have reserved their rights.
(v) Title. The Company and the Company Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and valid title to all material personal property owned by them, in each case free and clear of all Liens, except for Liens which do not materially affect the value of such property or do not interfere with the use made and proposed to be made of such property by the Company or any Company Subsidiary. Any real property and facilities held under lease by the Company or the Company Subsidiaries are valid, subsisting and enforceable leases with such exceptions that are not material and do not interfere with the use made and proposed to be made of such property and facilities by the Company or the Company Subsidiaries.
(w) Patents and Trademarks. The Company and the Company Subsidiaries own, possess, license, or have other rights to use all domestic patents, patent applications, trade and service marks, trade and service mark registrations, trade names, copyrights, inventions, trade secrets, technology, internet domain names, know-how, and other intellectual property (collectively, the “Intellectual Property”) necessary for the conduct of their respective businesses as now conducted or as proposed to be conducted except where the failure to own, possess, license, or have such rights would not have or reasonably be expected to have a Material Adverse Effect. Except where such violations or infringements would not have or reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, (a) there are no rights of third parties to any such Intellectual Property, (b) there is no infringement by third parties of any such Intellectual Property, (c) there is no pending or threatened action, suit, proceeding, or claim by others challenging the Company’s and its Subsidiary’s rights in or to any such Intellectual Property, (d) there is no pending or threatened action, suit, proceeding, or claim by others challenging the validity or scope of any such Intellectual Property, and (e) there is no pending or threatened action, suit, proceeding, or claim by others that the Company and/or any of the Company Subsidiaries infringes or otherwise violates any patent, trademark, copyright, trade secret, or other proprietary rights of others.
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(x) Employee Benefits.
(i) The Company has Previously Disclosed each “employee benefit plan” (within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), including multiemployer plans within the meaning of Section 3(37) of ERISA), and all stock purchase, stock option, severance, employment, change-in-control, fringe benefit, bonus, incentive, deferred compensation and all other employee benefit plans, agreements, programs, policies or other arrangements, whether or not subject to ERISA (including any funding mechanism therefor now in effect or required in the future as a result of the transactions contemplated by this Agreement or otherwise), whether formal or informal, oral or written, under which (A) any current or former employee or director of the Company or any of the Company Subsidiaries (the “Company Employees”) has any present or future right to benefits and which are contributed to, sponsored by or maintained by the Company or any of the Company Subsidiaries or (B) the Company or any Company Subsidiary has had or has any present or future liability. All such plans, agreements, programs, policies and arrangements shall be collectively referred to as the “Benefit Plans.”
(ii) (A) Each Benefit Plan has been established and administered in all material respects in accordance with its terms, and in compliance with the applicable provisions of ERISA, the Code and other Laws; (B) the contributions made to, and benefits provided by, each Benefit Plan are eligible for the tax treatment accorded to them by the Company and each Company Subsidiary; and (C) no non-exempt “prohibited transaction” (as such term is defined in Section 406 of ERISA and Section 4975 of the Code) has been engaged in by the Company or any Company Subsidiary with respect to any Benefit Plan that has or is expected to result in any material liability.
(iii) Neither Company nor any trade or business (whether or not incorporated) which together with the Company is treated as a single employer under Section 4001(b) of ERISA and any of their predecessors: (A) maintains or has ever maintained a plan subject to Title IV of ERISA or Section 412 of the Code; (B) has had or has any obligation to contribute or other liability with respect to a multiemployer plan, as defined in Sections 3(37)(A) and 4001(a)(3) of ERISA; (C) maintains or has ever maintained a multiple employer welfare arrangement within the meaning of Section 3(40) of ERISA; or (D) has had or has any liability or obligation to provide retiree or post-termination of employment health or life benefits, except as required under Part 6 of ERISA, Section 4980B of the Code or any similar state law.
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(y) Taxes.
(i) All Tax Returns required to be filed by, or on behalf of, Company or the Company Subsidiaries have been timely filed, or will be timely filed, in accordance with all applicable Laws, and all such Tax Returns were, at the time of filing, complete and correct in all material respects. The Company and the Company Subsidiaries have timely paid all material Taxes due and payable (whether or not shown on such Tax Returns), or, where payment is not yet due, have made adequate provisions in accordance with GAAP. There are no Liens with respect to Taxes upon any of the assets or properties of the Company or any of the Company Subsidiaries other than with respect to Taxes not yet due and payable. The Company reasonably believes that neither it nor the Bank has or will have any material liability for any such Taxes in excess of the amounts so paid or reserved or accruals so established. Neither the Company nor any Company Subsidiary is delinquent in the payment of any material Tax, has not requested any extension of time within which to file any Tax Returns in respect of any fiscal year which have not since been filed or has participated in any “reportable transaction” within the meaning of Treasury Regulation 1.6011-4.
(ii) No material deficiencies for any Tax have been assessed (tentatively or definitively) or, to the Company’s Knowledge, proposed or asserted against the Company or any Company Subsidiary which have not been settled and paid and, as of the date of this Agreement, no requests for waivers of the time to assess any Tax, or waivers of the statutory period of limitation, are pending or have been granted, and the Company and each Company Subsidiary do not have in effect any currently effective power of attorney or authorization to any Person to represent it in connection with any Taxes. No issue has been raised with the Company by any federal, state, local or foreign Governmental Entity in connection with an audit or examination of the Tax Returns, or the business or properties of the Company and each Company Subsidiary which has not been settled, resolved and fully satisfied. No claim has ever been made by any Governmental Entity in a jurisdiction where the Company or a Company Subsidiary does not file Tax Return that the Company or the Company Subsidiary is or may be subject to taxation by that jurisdiction.
(iii) The Company and each Company Subsidiary have paid (or have had paid on their behalf) or have withheld and remitted to the appropriate Governmental Entity all material Taxes due and payable, or, where payment is not yet due, has established (or has had established on its behalf and for its sole benefit and recourse) in accordance with GAAP an adequate accrual for all Taxes through the end of the last period for which the Company and each Company Subsidiary ordinarily record items on their respective books. The Company and each Company Subsidiary have withheld or collected from each payment made to its employees the amount of all Taxes required to be withheld or collected therefrom, and have paid the same to the proper tax officers or authorized depositories.
(iv) Neither the Company nor any Company Subsidiary is a party to, or bound by, any agreement or arrangement relating to the apportionment, sharing, assignment, or indemnification or allocation of any Tax or Tax assets (other than an agreement or arrangement solely among the current members of a group the common parent of which is the Company) or has any liability for the Taxes of any Person including any former subsidiary of the Company or the Bank, other than the Company or the Bank, under (i) Treasury Regulation Section 1.1502-6 (or similar provision of federal, state or local law), (ii) any contract, (iii) any agreement, or (iv) any other arrangement.
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(z) Labor.
(i) Employees of the Company and the Company Subsidiaries are not represented by any labor union nor are any collective bargaining agreements otherwise in effect with respect to such employees. No labor organization or group of employees of the Company or any Company Subsidiary has made a pending demand for recognition or certification, and there are no representation or certification proceedings or petitions presently pending or threatened to be brought or filed with the National Labor Relations Board or any other labor relations tribunal or authority, nor have there been in the last three years. There are no strikes, work stoppages, slowdowns, labor picketing lockouts, material arbitrations or material grievances, or other material labor disputes pending or, to the Knowledge of the Company, threatened against or involving the Company or any Company Subsidiary, nor have there been any in the past year.
(ii) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, the Company and the Company Subsidiaries are in compliance with all applicable Laws and requirements respecting employment and employment practices, terms and conditions of employment, collective bargaining, disability, immigration, health and safety, wages, hours and benefits, non-discrimination in employment, workers’ compensation and the collection and payment of withholding and/or payroll taxes and similar taxes.
(iii) Except as would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, there is no charge or complaint pending or threatened before any Governmental Entity alleging unlawful discrimination in employment practices, unfair labor practices or other unlawful employment practices by the Company or any Company Subsidiary.
(aa) Loan Portfolio.
(i) Each of the loans, including loans held for sale, of the Bank (“Loans): (i) is evidenced by notes, agreements or other evidences of indebtedness which are true, genuine and what they purport to be; (ii) to the extent secured, has been secured by valid liens or security interests which have been perfected; and (iii) represents the legal, valid and binding obligation of the borrowers named therein, enforceable in accordance with its terms (including the validity, perfection and enforceability of any Lien, security interest or other encumbrance relating to such Loan), except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws relating to or affecting the enforcement of creditors’ rights generally, and subject to general principles of equity which may limit the enforcement of certain remedies. For purposes of the foregoing sentence, it is agreed that the phrase “enforceable in accordance with its terms” shall not mean that the borrower or other obligor has the financial ability to repay a Loan or that the collateral is sufficient in value to result in payment of the Loan secured thereby.
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(ii) Each Loan of the Bank was made in material compliance with the provisions of applicable Law, including but not limited to the Real Estate Settlement Practices Act (“RESPA”), the Truth in Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, and the regulations promulgated thereunder, as well as the rules and regulations promulgated by the Consumer Financial Protection Bureau.
(iii) No default (including any event or circumstance which with the passage of time or the giving of notice or both would constitute a default) in respect of any material provision (including any default in payment) of any Loan of the Bank exists, except as Previously Disclosed.
(bb) Offering of Securities.
(i) Neither the Company nor any Person acting on its behalf has taken any action which would subject the offering, issuance or sale of any of the Company Stock to be issued pursuant to this Agreement to be subject to the registration requirements of the Securities Act. Neither the Company nor any Person acting on its behalf has engaged or will engage in any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with any offer or sale of the Company Stock pursuant to the transactions contemplated by this Agreement. Assuming the accuracy of each Investor’s representations and warranties set forth in this Agreement, no registration under the Securities Act is required for the offer and sale of the Company Stock by the Company to the Investors. Except for this Agreement and the related agreements referenced herein, the Company is not a party to or otherwise bound by any agreement with respect to the sale of its Capital Stock.
(ii) Each offering circular, private placement memorandum or other securities offering document used by the Company in connection with the sale of Company Stock, and all other sales documentation relating thereto, did not, as of the respective dates thereof, contain any untrue or misleading statement of a material fact, and did not omit to state a material fact necessary in order to make the statements contained therein, in light of the circumstances in which they were made, not misleading.
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(iii) Assuming the accuracy of each Investor’s representations and warranties set forth in this Agreement, none of the Company, the Company’s Subsidiaries nor, to the Company’s Knowledge, any of its Affiliates or any Person acting on its behalf has, directly or indirectly, at any time within the past six months, made any offers or sales of any Company security or solicited any offers to buy any security under circumstances that would eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Company Stock as contemplated hereby.
(iv) To the Company’s Knowledge, following the exercise of reasonable care, no Covered Person (as defined below) is subject to any of the “bad actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (“Disqualification Events”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act. The Company has complied, to the extent applicable, with any disclosure obligations under Rule 506(e) under the Securities Act. “Covered Persons” are those persons specified in Rule 506(d)(1) under the Securities Act, including the Company, any predecessor or affiliate of the Company, any director, executive officer, other officer participating in the offering, general partner or managing member of the Company, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, any promoter (as defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of the sale of the Company Stock, and any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of the Shares (a “Solicitor”), any general partner or managing member of any Solicitor, and any director, executive officer or other officer participating in the offering of any Solicitor or general partner or managing member of any Solicitor.
(v) The Company has not, and to the Company’s Knowledge, no one acting on its behalf has, taken, directly or indirectly, any action designed to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Company Stock.
(vi) Other than the Letter Agreements and Registration Rights Agreements to be entered into with each of EJF, Mendon and BayBoston, the Company has no agreements or understandings (including, without limitation, side letters) with any Investor or other Person to purchase shares of Company Stock on terms more favorable to such Person than as set forth herein. Except for this Agreement and the Letter Agreements, the Company does not have any agreement or understanding with any Investor with respect to the transactions contemplated by the Transaction Documents. To the extent any Letter Agreements or additional agreements or modifications to the Transaction Documents have been entered into on or prior to the date hereof, the Company has provided each Investor with true and accurate copies of such Letter Agreements, other additional agreements or modified Transaction Documents into which it has entered.
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(cc) Investment Company Status. The Company is not, and upon consummation of the transactions contemplated by this Agreement will not be, an “investment company,” a company controlled by an “investment company” or an “affiliated Person” of, or “promoter” or “principal underwriter” of, an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.
(dd) Affiliate Transactions. No officer, director, five percent (5%) shareholder or other Affiliate of the Company (or any Company Subsidiary), or any individual who, to the Knowledge of the Company, is related (including by marriage or adoption) to or shares the same home as any such Person, or any entity which, to the Knowledge of the Company, is controlled by any such Person (collectively, an “Insider”), is a party to any contract or transaction with the Company (or any Company Subsidiary) which pertains to the business of the Company (or any Company Subsidiary) or has any interest in any property, real or personal or mixed, tangible or intangible, used in or pertaining to the business of the Company (or any Company Subsidiary). The foregoing representation and warranty does not include deposits at the Company (or any Company Subsidiary) or loans of $250,000 or less made in the Ordinary Course of Business in compliance with Regulation O and other applicable Law.
(ee) Anti-takeover Provisions Not Applicable. The Board of Directors has taken all necessary action to ensure that the transactions contemplated by this Agreement and the consummation of the transactions contemplated hereby will be exempt from any anti-takeover or similar provisions of the Company’s articles of incorporation and bylaws and any provisions of any applicable “moratorium”, “control share”, “fair price”, “interested shareholder” or other anti-takeover Laws and regulations of the jurisdiction of the Company’s incorporation.
(ff) No Triggering Events. The transactions contemplated by this Agreement will not be deemed a Change in Control or constitute any other triggering event which would result in the (i) obligation of the Company or any of the Company Subsidiaries to make any payments under any employment, change in control or other agreements to which the Company or any of the Company Subsidiaries is a party or (ii) acceleration or vesting of any benefits under any employee benefit plan of the Company or any of the Company Subsidiaries.
(gg) No Brokers. No broker, placement agent, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon arrangements made by or on behalf of the Company.
(hh) Common Control. The Company is not and, after giving effect to the offering and sale of the Company Stock, will not be under the control (as defined in the BHCA and the Federal Reserve Board’s Regulation Y (12 C.F.R. Part 225) (“BHCA Control”),”) of any company (as defined in the BHCA and the Federal Reserve Board’s Regulation Y). The Company is not in BHCA Control of any federally insured depository institution other than the Bank. The Bank is not under the BHCA Control of any company (as defined in the BHCA and the Federal Reserve Board’s Regulation Y) other than Company. Neither the Company nor the Bank controls, in the aggregate, more than five percent of the outstanding voting class, directly or indirectly, of any federally insured depository institution, except for the Company’s ownership of 100% of the capital stock of the Bank. The Bank is not subject to the liability of any commonly controlled depository institution pursuant to Section 5(e) of the FDI Act.
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For purposes of this Agreement, “Previously Disclosed” means information (i) set forth by the Company in the applicable section of its Disclosure Schedules or any other paragraph of its Disclosure Schedule (so long as it is reasonably clear from the context that the disclosure in such other paragraph of its Disclosure Schedule is also applicable to the section of this Agreement in question) or (ii) contained in the virtual data room maintained by the Company in connection with the transactions contemplated hereby to which the Investor was provided access.
2.3 Representations and Warranties of the Investors. Each Investor, for itself and no other Investor, hereby represents and warrants to the Company, as of the date hereof and as of the Closing Date (except for the representations and warranties that are as of a specific date which are made as of that date) that:
(a) Organization and Authority. If the Investor is an entity, the Investor is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, is duly qualified to do business and is in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified and where failure to be so qualified would be reasonably expected to materially and adversely impair or delay its ability to perform its obligations under this Agreement or to consummate the transactions contemplated hereby.
(b) Authorization; No Conflicts.
(i) The Investor has the necessary power and authority to execute and deliver this Agreement and to perform its obligations hereunder. With regard to each Investor that is not an individual, the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by its board of directors, general partners, managers, investment committee, investment adviser or other authorized person, as the case may be, and no further approval or authorization by any of its shareholders, partners, members or other equity owners, as the case may be, is required. With regard to each Investor that is an individual, the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized. This Agreement has been duly and validly executed and delivered by the Investor and, assuming due authorization, execution and delivery by the Company is the valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms (except as enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and similar laws of general applicability relating to or affecting creditors’ rights or by general equity principles).
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(ii) Neither the execution, delivery and performance by the Investor of this Agreement nor the consummation of the transactions contemplated hereby, nor compliance by the Investor with any of the provisions hereof, will (A) violate, conflict with, or result in a breach of any provision of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of any Liens upon any of the properties or assets of the Investor under any of the terms, conditions or provisions of (1) its certificate of incorporation or its similar governing documents, if applicable, or (2) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which the Investor is a party or by which the Investor may be bound, or to which the Investor or any of the properties or assets of the Investor may be subject, or (B) violate any Law applicable to the Investor or any of its properties or assets except in the case of clauses (A)(2) and (B) for such violations, conflicts and breaches as would not reasonably be expected to materially adversely affect the Investor’s ability to perform its obligations under this Agreement or consummate the transactions contemplated hereby on a timely basis.
(c) Governmental Consents. No Governmental Consents are necessary for the Investor to execute and deliver this Agreement or the other Transaction Documents, to perform all obligations under this Agreement or the other Transaction Documents, or to consummate the Closing or any of the transactions contemplated by this Agreement or the other Transaction Documents, other than: (i) the filing with the Securities Exchange Commission one or more registration statements in accordance with the requirements of the Registration Rights Agreement, if applicable, (ii) the filings required in accordance with Section 3.9 of this Agreement, (iii) the feedback required in accordance with Section 1.2(c)(ii)(H), and (iv) those that have been obtained prior to the date of this Agreement.
(d) Purchase for Investment; Accredited Investor Status. The Investor acknowledges that the Company Stock to be purchased by the Investor pursuant to this Agreement has not been registered under the Securities Act or under any state securities laws and may not be resold or transferred by the Investor without such registration or appropriate reliance on any available exemption from such requirements. The Investor (i) is acquiring the Company Stock pursuant to an exemption from the registration requirements of the Securities Act and other applicable securities laws solely for investment with no present intention to distribute any of the Company Stock to any Person, (ii) will not sell or otherwise dispose of any of the Company Stock, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws, (iii) has such knowledge and experience in financial and business matters and in investments of this type that it is capable of evaluating the merits and risks of its investment in the Company Stock and of making an informed investment decision and (iv) is an “accredited investor” (as that term is defined by Rule 501 of the Securities Act).
(e) Brokers and Finders. Neither the Investor, nor its respective Affiliates nor any of their respective officers or directors, has employed any broker or finder or incurred any liability for any financial advisory fees, brokerage fees, commissions or finder’s fees, and no broker or finder has acted directly or indirectly for the Investor in connection with this Agreement or the transactions contemplated hereby.
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(f) Investment Decision. The Investor has independently evaluated the merits of its decision to purchase the Company Stock pursuant to this Agreement, and the Investor confirms that it has not relied on the advice of any other Person’s business or legal counsel in making such decision. The Investor understands that nothing in this Agreement or any other materials presented by or on behalf of the Company to the Investor in connection with the purchase of the Company Stock constitutes legal, tax or investment advice. The Investor has consulted such accounting, legal, tax and investment advisors as it has deemed necessary or appropriate in connection with its purchase of the Company Stock. Except as Previously Disclosed and except for the Transaction Documents, there are no agreements or understandings with respect to the transactions contemplated by this Agreement and any of the Letter Agreements, as applicable, between the Investor or any of its Affiliates, on the one hand, and (i) any of the other shareholders of the Company or any of their respective Affiliates, in each case, the identity of which is known to the Investor, (ii) the Company or (iii) the Company Subsidiaries, on the other hand.
(g) Financial Capability. At the Closing, the Investor shall have available all funds necessary to pay the Purchase Price and consummate the purchase of Company Stock on the terms and conditions contemplated by this Agreement.
(h) Access to Information. The Investor acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Company Stock and the merits and risks of investing in the Company Stock; (ii) access to information about the Company and the Company Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the Investment.
(i) No Reliance. The Investor has not relied on any representation or warranty in connection with the Investment other than those contained in this Agreement.
(j) No Coordinated Acquisition. The Investor (i) reached its decision to invest in the Company Stock independently from any other Person known by the Investor to be a potential investor in the Company (any such person, a “Potential Investor”), (ii) is not affiliated with any other Potential Investor, (iii) is not advised or managed by an advisor or manager that advises or manages any other Potential Investor, (iv) has not entered into any agreement or understanding, whether written or not reduced to writing, with any other Potential Investor to act in concert for the purpose of exercising a controlling influence over the Company or any Company Subsidiaries, including any agreements or understandings regarding the voting or transfer of shares of the Company, (v) has not shared due diligence materials prepared by such Investor or any of its advisors or representatives with respect to the Company or any Company Subsidiaries with any other Potential Investor, (vi) has not been induced, nor has induced any other Potential Investor, to enter into the transactions contemplated by this Agreement by any other Potential Investor, (vii) was not notified of or provided the opportunity to enter into the transactions contemplated by this Agreement pursuant to the terms of any agreement or informal understanding with, or otherwise acting in concert with, any other Potential Investor and was not required by the terms of any agreement or informal understanding to so notify any other Potential Investor, (viii) is not a party to any formal or informal understanding with any other Potential Investor to make a coordinated acquisition of stock of the Company, and the investment decision of the Investor is not based on the investment decision of any other Potential Investor, (ix) is not a party to any formal or informal agreement or understanding concerning the appointment of any individual to the Board of Directors (other than as set forth in the Letter Agreements, as applicable), (x) has not engaged as part of a group consisting of substantially the same entities as the Potential Investors, in substantially the same combination of interests, in any additional banking or nonbanking activities or business ventures in the United States and (xi) will not pay any other Potential Investor any fee in connection with the transactions contemplated hereby.
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(k) No Advertisement. The Investor has not seen, received, been presented with, or been solicited by any leaflet, public promotional meeting, newspaper or magazine article or advertisement, radio or television advertisement, or any other form of advertising or general solicitation with respect to the purchase of Company Stock.
(l) Residency. The Investor’s residence or principal executive office, as applicable is set forth on such Investor’s signature page hereto.
(m) Anti-Money Laundering Procedures. The Investor understands, acknowledges, represents and agrees that (i) the Investor is not the target of any sanction, regulation, or law promulgated by the Office of Foreign Assets Control, the Financial Crimes Enforcement Network or any other U.S. governmental entity (“U.S. Sanctions Laws”),”); (ii) the Investor is not owned by, controlled by, under common control with, or acting on behalf of any person that is the target of U.S. Sanctions Laws; (iii) the Investor is not a “foreign shell bank” and is not acting on behalf of a “foreign shell bank” under applicable anti-money laundering Laws and regulations; (iv) the Investor’s entry into this Agreement or consummation of the transactions contemplated hereby will not contravene U.S. Sanctions Laws or applicable anti-money laundering Laws or regulations; (v) the Investor will promptly provide to the Company or any regulatory or law enforcement authority such information or documentation as may be required to comply with U.S. Sanctions Laws or applicable anti-money laundering Laws or regulations; and (vi) the Company may provide to any regulatory or law enforcement authority information or documentation regarding, or provided by, the Investor for the purposes of complying with U.S. Sanctions Laws or applicable anti-money laundering laws or regulations.
ARTICLE 3
COVENANTS
3.1 Conduct of Business Prior to Closing. Except as otherwise expressly required or contemplated by this Agreement or applicable Law or in the performance of any Material Contract, or with the prior written consent of the Investors, between the date of this Agreement and the Closing, the Company shall, and the Company shall cause each Company Subsidiary to:
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(a) use commercially reasonable efforts to conduct its business only in the Ordinary Course of Business;
(b) use commercially reasonable efforts to (i) preserve the present business operations, organization (including officers and employees) and goodwill of the Company and each Company Subsidiary and (ii) preserve business relationships with customers, suppliers, consultants and others having business dealings with the Company; provided, however, that nothing in this clause (b) shall place any limit on the ability of the Board of Directors to act, or require any actions, that the Board of Directors may, in good faith, determine to be inconsistent with their duties or the Company’s obligations under applicable Law or imposed by any Governmental Entity;
(c) not knowingly take any action which would: (i) adversely affect the ability to obtain the necessary Governmental Consents required for the transactions contemplated hereby or (ii) adversely affect the ability to perform the covenants and agreements under this Agreement;
(d) not amend, repeal or modify any provision of its articles of incorporation or bylaws; and
(e) maintain the allowance for loan losses at a level which, in management’s reasonable and good faith determination, is adequate to absorb reasonably anticipated losses in the loan portfolio in accordance with GAAP and regulatory requirements, after taking charge-offs required in accordance with GAAP and regulatory requirements.
3.2 Confidentiality. From time to time, the Company may disclose or make available to the Investors information about the Company’s business affairs, products, services, confidential intellectual property, trade secrets, third-party confidential information and other sensitive or proprietary information, whether orally or in written, electronic or other form or media, and whether or not marked, designated or otherwise identified as “confidential” (collectively, “Confidential Information”). Each Investor shall: (A) protect and safeguard the confidentiality of the Company’s Confidential Information with at least the same degree of care as such Investor would protect its own Confidential Information, but in no event with less than a commercially reasonable degree of care; (B) not use the Company’s Confidential Information, or permit it to be accessed or used, for any purpose other than to exercise its rights or perform its obligations under this Agreement; and (C) not disclose any such Confidential Information to any person or entity, except to such Investor’s representatives who need to know the Confidential Information to assist the Investor, or act on its behalf, to exercise its rights or perform its obligations under the Agreement. The Investors shall be responsible for any breach of this Section 3.2 caused by their respective representatives. Upon the Company’s request, the Investors shall promptly return, and shall require their respective representatives to return to the Company all copies, whether in written, electronic or other form or media, of the Company’s Confidential Information, or destroy all such copies and certify in writing to the Disclosing Party that such Confidential Information has been destroyed. In addition to all other remedies available at law, the Company may seek equitable relief (including injunctive relief) against the Investors and their respective representatives to prevent the breach or threatened breach of this Section 3.2 and to secure its enforcement.
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3.3 Filings; Other Actions. Investor, on the one hand, and the Company, on the other hand, will cooperate and consult with the other and use commercially reasonable efforts to prepare and file all necessary documentation, to effect all necessary applications, notices, petitions, filings and other documents, and to obtain all necessary permits, consents, orders, approvals and authorizations of, or any exemption by, all third parties and Governmental Entities, and the expiration or termination of any applicable waiting period, necessary or advisable to consummate the transactions contemplated by this Agreement, and to perform the covenants contemplated hereby. Each party shall execute and deliver, both before and after the Closing, such further certificates, agreements and other documents, and shall take such other actions as the other party may reasonably request to consummate or implement such transactions contemplated by this Agreement or to evidence such events or matters. Investor and the Company will have the right to review in advance and, to the extent practicable, each will consult with the other, in each case, subject to applicable Laws relating to the exchange of information, all the information relating to such other party and any of their respective Affiliates which appears in any filing made with, or written materials submitted to, any third party or any Governmental Entity in connection with the transactions contemplated by this Agreement to which it will be party. In exercising the foregoing right, each of the parties hereto agrees to act reasonably and as promptly as practicable. Each party hereto agrees to keep the other party apprised of the status of the matters referred to in this Section 3.3. Investor shall promptly furnish the Company, and the Company shall promptly furnish the Investor, to the extent permitted by applicable Law, with copies of written communications received by it or its Affiliates from, or delivered by any of the foregoing to, any Governmental Entity in respect of the transactions contemplated by this Agreement. For the avoidance of doubt, none of the foregoing obligations shall require Investor or any of its Affiliates to take any action that would (i) result in Investor or its Affiliates being deemed to control the Company for purposes of the BHCA or the cross-guaranty liability provisions of the FDI Act, (ii) require Investor or its Affiliates to register as a bank holding company, or (ii) result in the imposition of any Burdensome Condition.
3.4 Legend.
(a) Each Investor agrees that all certificates or other instruments representing the Company Stock subject to this Agreement shall bear a legend substantially to the following effect, until such time as they are not required under Section 3.4(b):
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE STATE SECURITIES LAWS OF ANY STATE. WITHOUT REGISTRATION, THESE SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO COUNSEL FOR THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH LAWS.”
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(b) Upon request of an Investor, the Company shall promptly cause such legend to be removed from any certificate for any Company Stock to be so transferred if (i) such Company Stock is being transferred pursuant to a registration statement in effect with respect to such transfer or (ii) such Company Stock is being transferred pursuant to an exemption from registration under the Securities Act and applicable state laws subject to receipt by the Company of a reasonably acceptable legal opinion from counsel for such Investor who is reasonably satisfactory to the Company to the effect that such legend is no longer required under the Securities Act and applicable state laws. Each Investor acknowledges that the Company Stock has not been registered under the Securities Act or under any state securities laws and agrees that it shall not sell or otherwise dispose of any of the Company Stock, except in compliance with the registration requirements or exemption provisions of the Securities Act and any other applicable securities laws.
3.5 Certain Other Transactions.
(a) Prior to the Closing, notwithstanding anything in this Agreement to the contrary, the Company shall not directly or indirectly effect or cause to be effected any transaction with a third party that would reasonably be expected to result in a Change in Control unless such third party shall have provided prior assurance in writing to each Investor (in a form that is reasonably satisfactory to such Investor) that the terms of this Agreement shall be fully performed (i) by the Company or (ii) by such third party if it is the successor of the Company or if the Company is its direct or indirect Subsidiary. For the avoidance of doubt, it is understood and agreed that, in the event that a Change in Control occurs on or prior to the Closing, each Investor shall maintain the right under this Agreement to acquire, pursuant to the terms and conditions of this Agreement, the Company Stock that is to be purchased by such Investor pursuant to this Agreement (or such other securities or property (including cash) into which the Company Stock that is to be purchased by Investor pursuant to this Agreement may have become exchangeable as a result of such Change in Control), as if the Closing had occurred immediately prior to such Change in Control.
(b) In the event that, at or prior to the Closing, (i) the number of shares of Company Stock, or securities convertible or exchangeable into or exercisable for shares of Company Stock, issued and outstanding is changed as a result of any reclassification, stock split (including reverse split), stock dividend or distribution (including any dividend or distribution of securities convertible or exchangeable into or exercisable for shares of Company Stock), merger, tender or exchange offer or other similar transaction, or (ii) the Company fixes a record date that is at or prior to the Closing Date for the payment of any non-stock dividend or distribution on the Company Stock, then the number of shares of Company Stock to be issued to each Investor at the Closing under this Agreement, together with the applicable implied per share price, shall be equitably adjusted and/or the shares of Company Stock to be issued to such Investor at the applicable Closing under this Agreement shall be equitably replaced with shares of other stock or securities or property (including cash), in each case, to provide each Investor with substantially the same economic benefit from this Agreement as such Investor had prior to the applicable transaction. Notwithstanding anything in this Agreement to the contrary, in no event shall the Purchase Price or any component thereof, or the aggregate percentage of shares to be purchased by any Investor, be changed by the foregoing.
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(c) Notwithstanding anything in the foregoing to the contrary, the provisions of this Section 3.5 shall not apply to any issuance or sale of any Capital Stock, or any securities, options or debt that are convertible or exchangeable into Capital Stock, issued or sold by the Company in connection with: (a) a grant to any existing or prospective directors, officers or other employees, consultants or service providers of the Company or any Company Subsidiary pursuant to the Company Option Plan or similar equity-based plans or other compensation agreement; (b) the conversion or exchange of any securities of the Company into Capital Stock, or the exercise of any warrants or other rights to acquire Capital Stock; (c) any acquisition by the Company or any Company Subsidiary of any equity interests, assets, properties or business of any Person; (d) any merger, consolidation or other business combination involving the Company or any Company Subsidiary; (e) the commencement of any public offering or any transaction or series of related transactions involving a Change in Control; (f) any subdivision of Capital Stock (by a split of Capital Stock or otherwise), payment of stock dividend, reclassification, reorganization or any similar recapitalization; (g) a joint venture, strategic alliance or other commercial relationship with any Person relating to the operation of the Company’s or any Company Subsidiary’s business and not for the primary purpose of raising equity capital; or (h) a purchase of Capital Stock by an employee pursuant to the Company’s employee stock purchase plan.
3.6 Insurance. The Company shall maintain directors’ and officers’ liability insurance and fiduciary liability insurance with insurers of recognized financial responsibility in such amounts as the Board determines to be prudent and customary for the Company's business and operations.
3.7 Access to Information. From the date hereof until the Closing Date, the Company will permit, and cause the Bank to permit, Investor and its officers, employees, accountants, counsel and other representatives to visit and inspect, at Investor’s expense, the properties of the Company and the Bank, and to examine the corporate books of the Company and the Bank and discuss the affairs, finances and accounts of the Company and the Bank with the officers and employees of the Company, all upon reasonable notice and at such reasonable times and as often as the Investor may reasonably request. Any investigation pursuant to this Section 3.7 shall be conducted during normal business hours and in such a manner as not to interfere unreasonably with the conduct of the business of the Company, and nothing herein shall require the Company or the Bank to disclose any information to the extent (1) prohibited by applicable Law or regulation, (2) that the Company reasonably believes such information to be competitively sensitive proprietary information (except to the extent Investor provides assurances acceptable to the Company that such information shall not be used by Investor or its Affiliates to compete with the Company or the Bank), or (3) that such disclosure would reasonably be expected to cause a violation of any agreement to which the Company or any Company Subsidiary is a party or would cause a risk of a loss of privilege to the Company or any Company Subsidiary (provided that the Company shall use commercially reasonable efforts to make appropriate substitute disclosure arrangements under circumstances where the restrictions in clauses (1) or (3) apply).
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3.8 Tax Matters. The Company will pay any and all Transfer Taxes incurred in connection with this Agreement and the issuance and purchase of the Company Stock purchased as part of the Investment. The Company shall timely make all filings, Tax Returns, reports and forms relating to such Transfer Taxes as may be required to comply with the provisions of such Transfer Tax laws. “Transfer Taxes” means transfer, documentary, sales, use, registration and other such taxes (including all applicable real estate transfer taxes).
3.9 Form D and Blue Sky. The Company agrees to timely file a Form D with respect to the Company Stock as required under Regulation D. Investor agrees to timely provide Company with any and all needed information in connection with Company’s preparation and filing of a Form D. The Company, on or before the Closing Date, shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify the applicable Company Stock for sale to the Investors at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification). The Company shall make all filings and reports relating to the offer and sale of the Company Stock required under applicable securities or blue sky laws of the states of the United States following the Closing Date.
ARTICLE 4
TERMINATION
4.1 Termination. This Agreement may be terminated prior to the Closing:
(a) by mutual written agreement of the Company and any Investor (with respect to itself only);
(b) by any the Company or any Investor (with respect to itself only), upon written notice to the non-terminating parties, in the event that the Closing does not occur on or before the date that is 120 days after the date of this Agreement; provided, however, that the right to terminate this Agreement pursuant to this Section 4.1(b) shall not be available to any party or parties whose failure to fulfill any obligation under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Closing to occur on or prior to such date;
(c) by any Investor (with respect to itself only), upon written notice to the Company, if (i) there has been a breach of any representation, warranty, covenant or agreement made by the Company in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 1.2(c)(ii)(A) would not be satisfied and (ii) such breach or condition is not curable or, if curable, is not cured prior to the date that would otherwise be the Closing Date in absence of such breach or condition; provided that this Section 4.1(c) shall only apply if the Investor is not in material breach of any of the terms of this Agreement;
(d) by any Investor (with respect to itself only), if such Investor or any of its Affiliates receives written notice from or is otherwise advised by a Governmental Entity that it will not grant (or intends to rescind or revoke if previously approved) any required regulatory approval or receives written notice from such Governmental Entity that it will not grant such required regulatory approval on the terms contemplated by this Agreement without imposing any Burdensome Condition;
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(e) by the Company, upon written notice to any Investor, if (i) there has been a breach of any representation, warranty, covenant or agreement made by such Investor in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 1.2(c)(iii)(A) would not be satisfied and (ii) such breach or condition is not curable or, if curable, is not cured prior to the date that would otherwise be the Closing Date in absence of such breach or condition; provided that this Section 4.1(e) shall only apply if the Company is not in material breach of any of the terms of this Agreement;
(f) by the Company or any Investor (with respect to itself only) if it becomes impossible to satisfy the conditions contained in Section 1.2(c)(i), by the Company if it becomes impossible to satisfy the conditions contained in Section 1.2(c)(iii), or by any Investor (with respect to itself only) if it becomes impossible to satisfy the conditions contained in Section 1.2(c)(ii);
(g) by any Investor (with respect to itself only), in the event the Company enters into a definitive agreement with a third party that would reasonably be expected to result in a Change in Control of the Company;
(h) by any Investor (with respect to itself only), if such Investor or its Affiliates receives written notice from or is otherwise advised by the Federal Reserve Board that the Federal Reserve Board will not issue a determination (formal or informal) that such Investor will not be deemed in control of the Company for purposes of the BHCA or that it will not make such determination without the imposition of a Burdensome Condition, or otherwise indicates that it will deem Investor or any of its Affiliates to control the Company for purposes of the BHCA; or
(i) by the Company or any Investor (with respect to itself only), upon written notice to the non-terminating parties, in the event that any Governmental Entity shall have issued any order, decree or injunction or taken any other action restraining, enjoining or prohibiting any of the transactions contemplated by this Agreement, and such order, decree, injunction or other action shall have become final and nonappealable.
4.2 Effects of Termination. In the event of any termination of this Agreement as provided in Section 4.1, this Agreement (other than Section 3.2, this Article 4 and Article 6 of this Agreement, which shall remain in full force and effect) shall forthwith become wholly void and of no further force and effect; provided that nothing herein shall relieve any party from liability for fraud or willful breach of this Agreement.
ARTICLE 5
INDEMNITY
5.1 Indemnification by the Company. In addition to the indemnity provided in the Registration Rights Agreement, if applicable, after the Closing, and subject to Sections 5.3 and 5.4, the Company shall indemnify, defend and hold harmless to the fullest extent permitted by Law each Investor and its Affiliates, and their successors and assigns, officers, directors, shareholders partners, members, agents, investment advisors, and employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), as applicable (the “Investor Indemnified Parties”), against, and reimburse any of the Investor Indemnified Parties for, all Losses that any of the Investor Indemnified Parties may at any time suffer or incur, or become subject to, as a result of or in connection with (i) the inaccuracy or breach of any representation or warranty made by the Company in this Agreement or any certificate delivered pursuant hereto, (ii) any breach or failure by the Company to perform any of its covenants or agreements contained in this Agreement, (iii) any action instituted against an Investor Indemnified Party in any capacity, or any of them or their respective affiliates, by any shareholder of the Company who is not an affiliate of such Investor Indemnified Party, with respect to any of the transactions contemplated by this Agreement, and (iv) any actions involving the Company arising out of or related to any event, fact, change, occurrence, development or condition prior to the Closing Date. Notwithstanding anything herein to the contrary, the obligations of the Company under this Section 5.1(a) shall not be applicable to or inure to the benefit of any transferee of the Company Stock sold pursuant to this Agreement who is not an Affiliate of an Investor.
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5.2 Indemnification by the Investors. After the Closing, and subject to Sections 5.3 and 5.4, each Investor shall indemnify, defend and hold harmless to the fullest extent permitted by Law the Company, its Affiliates and their respective successors and assigns, officers, directors, partners, members and employees (collectively, the “Company Indemnified Parties”) against, and reimburse any of the Company Indemnified Parties for, all Losses that the Company Indemnified Parties may at any time suffer or incur, or become subject to, as a result of or in connection with (i) the inaccuracy or breach of any representation or warranty made by such Investor in this Agreement or any certificate delivered pursuant hereto or (ii) any breach or failure by such Investor to perform any of its covenants or agreements contained in this Agreement.
5.3 Notification of Claims.
(a) Any Person that may be entitled to be indemnified under this Article 5 (the “Indemnified Party”) shall promptly notify the party or parties liable for such indemnification (the “Indemnifying Party”) in writing of any claim in respect of which indemnity may be sought hereunder, including any pending or threatened claim or demand by a third party that the Indemnified Party has determined has given or could reasonably give rise to a right of indemnification under this Agreement (including a pending or threatened claim or demand asserted by a third party against the Indemnified Party) (each, a “Third Party Claim”), describing in reasonable detail the facts and circumstances with respect to the subject matter of such claim or demand; provided, however, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Agreement except to the extent that the Indemnifying Party is materially prejudiced by such failure. The parties agree that notices for claims in respect of a breach of a representation, warranty, covenant or agreement must be delivered prior to the expiration of any applicable survival period specified in Section 6.1 for such representation, warranty, covenant or agreement; provided, that if, prior to such applicable date, a party hereto shall have notified the other parties hereto in accordance with the requirements of this Section 5.3(a) of a claim for indemnification under this Agreement (whether or not formal legal action shall have been commenced based upon such claim), such claim shall continue to be subject to indemnification in accordance with this Agreement notwithstanding the passing of such applicable date.
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(b) Upon receipt of a notice of a claim for indemnity from an Indemnified Party pursuant to Section 5.3(a) in respect of a Third Party Claim, the Indemnifying Party may, by notice to the Indemnified Party delivered within twenty (20) Business Days of the receipt of notice of such Third Party Claim, assume the defense and control of any Third Party Claim, with its own counsel reasonably acceptable to the Indemnified Party and at its own expense. The Indemnified Party shall have the right to employ counsel on its own behalf for, and otherwise participate in the defense of, any such Third Party Claim, but the fees and expenses of its counsel will be at its own expense unless (A) the employment of counsel by the Indemnified Party at the Indemnifying Party’s expense has been authorized in writing by the Indemnifying Party, as applicable, (B) the Indemnified Party reasonably believes there may be a conflict of interest between the Indemnified Party and the Indemnifying Party in the conduct of the defense of such Third Party Claim, (C) the Indemnified Party reasonably believes there are legal defenses available to it that are different from, additional to or inconsistent with those available to the Indemnifying Party, or (D) the Indemnifying Party has not in fact employed counsel to assume the defense of such Third Party Claim within a reasonable time after receipt of notice of the commencement of such Third Party Claim, in each of which cases the fees and expenses of such Indemnified Party’s counsel shall be at the expense of the Indemnifying Party; provided, however, that in the event any Investor Indemnified Party is similarly situated with any other Investor Indemnified Party with respect to any Third Party Claim, and does not have any conflict of interest with such Person in the conduct of the defense of such Third Party Claim or have legal defenses available to it that are different from, additional to or inconsistent with those available to such Person, such Investor Indemnified Party shall be required to employ the same counsel as such Person and the Company shall be responsible for the fees and expenses of only one such counsel for such Investor Indemnified Party and such other Person or Persons (assuming any of clauses (A) through (D) is satisfied). The Indemnified Party may take any actions reasonably necessary to defend such Third Party Claim prior to the time that it receives a notice from the Indemnifying Party as contemplated by the immediately preceding sentence. The Indemnified Party shall, and shall cause each of their Affiliates and representatives to, use reasonable best efforts to cooperate with the Indemnifying Party in the defense of any Third Party Claim. The Indemnifying Party shall not, without the prior written consent of the Indemnified Party (which shall not be unreasonably withheld), consent to a settlement, compromise or discharge of, or the entry of any judgment arising from, any Third Party Claim, unless such settlement, compromise, discharge or entry of any judgment does not involve any statement, finding or admission of any fault, culpability, failure to act, violation of Law or admission of any wrongdoing by or on behalf of the Indemnified Party, and the Indemnifying Party shall (i) pay or cause to be paid all amounts arising out of such settlement or judgment concurrently with the effectiveness of such settlement or judgment (unless otherwise provided in such judgment), (ii) not encumber any of the assets of any Indemnified Party or agree to any restriction or condition that would apply to or materially adversely affect any Indemnified Party or the conduct of any Indemnified Party’s business and (iii) obtain, as a condition of any settlement, compromise, discharge, entry of judgment (if applicable), or other resolution, a complete and unconditional release of each Indemnified Party in form and substance reasonably satisfactory to such Indemnified Party from any and all liabilities in respect of such Third Party Claim. An Indemnified Party shall not settle, compromise or consent to the entry of any judgment with respect to any claim or demand for which it is seeking indemnification from the Indemnifying Party or admit to any liability with respect to such claim or demand without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld or delayed); provided that such consent shall not be required if the Indemnifying Party has not fulfilled any material obligations under this Section 5.3(b).
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(c) In the event any Indemnifying Party receives a notice of a claim for indemnity from an Indemnified Party pursuant to Section 5.3(a) that does not involve a Third Party Claim, the Indemnifying Party shall notify the Indemnified Party within twenty (20) Business Days following its receipt of such notice whether the Indemnifying Party disputes its liability to the Indemnified Party under this Agreement. The Indemnified Party shall reasonably cooperate with and assist the Indemnifying Party in determining the validity of any such claim for indemnity by the Indemnified Party.
5.4 Indemnification Payment. In the event a claim or any Action for indemnification hereunder has been finally determined, the amount of such final determination shall be paid by the Indemnifying Party to the Indemnified Party on demand in immediately available funds; provided, however, that any reasonable and documented out-of-pocket expenses incurred by the Indemnified Party as a result of such claim or Action shall be reimbursed promptly by the Indemnifying Party upon receipt of an invoice describing such costs incurred by the Indemnified Party. A claim or an Action, and the liability for and amount of damages therefor, shall be deemed to be “finally determined” for purposes of this Agreement when the parties hereto have so determined by mutual agreement or, if disputed, when a final non-appealable judicial order has been entered into with respect to such claim or Action.
5.5 Exclusive Remedies. Each party hereto acknowledges and agrees that following the Closing, the indemnification provisions hereunder shall be the sole and exclusive remedies of the parties hereto for any breach of the representations, warranties or covenants contained in the this Agreement. No investigation of the Company by the Investor, or of the Investor by the Company, whether prior to or after the date of this Agreement, shall limit any Indemnified Party’s exercise of any right hereunder or be deemed to be a waiver of any such right. The parties agree that any indemnification payment made pursuant to this Agreement shall be treated as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.
ARTICLE 6
MISCELLANEOUS
6.1 Survival. The representations and warranties of the parties hereto contained in this Agreement shall survive in full force and effect until the date that is eighteen (18) months after the Closing Date (or until final resolution of any claim or Action arising from the breach of any such representation and warranty, if notice of such breach was provided prior to the end of such period), at which time they shall terminate and no claims shall be made for indemnification under Section 5.1 or Section 5.2, as applicable, for breaches of representations or warranties thereafter, except the Company Specified Representations and the Investor Specified Representations shall survive the Closing indefinitely. The covenants and agreements set forth in this Agreement shall survive until the earliest of the duration of any applicable statute of limitations or until performed or no longer operative in accordance with their respective terms.
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6.2 Other Definitions. Wherever required by the context of this Agreement, the singular shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa, and references to any agreement, document or instrument shall be deemed to refer to such agreement, document or instrument as amended, supplemented or modified from time to time. In addition, the following terms shall have the meanings assigned to them below:
(a) “Affiliate“ means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such other Person provided that no security holder of the Company shall be deemed to be an Affiliate of any other security holder or of the Company or any of the Company Subsidiaries solely by reason of any investment in the Company and, for purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”) when used with respect to any Person, means the possession, directly or indirectly, of the power to cause the direction of management or policies of such Person, whether through the ownership of voting securities by contract or otherwise;
(b) “Agency“ means the Federal Housing Administration, the Federal Home Loan Mortgage Corporation, the Farmers Home Administration (now known as Rural Housing and Community Development Services), the Federal National Mortgage Association, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture or any other Governmental Entity with authority to (i) determine any investment, origination, lending or servicing requirements with regard to mortgage loans originated, purchased or serviced by the Company or (ii) originate, purchase, or service mortgage loans, or otherwise promote mortgage lending, including state and local housing finance authorities;
(c) “Board of Directors“ means the Board of Directors of the Company;
(d) “Business Day“ means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of Florida generally are authorized or required by Law or other governmental actions to close;
(e) “Capital Stock“ means the capital stock or other applicable type of equity interest in a Person;
(f) “Change in Control“ means the acquisition by any Person (including a group of related persons within the meaning of Rule 13d-2 of the Exchange Act) of (i) more than fifty percent (50%) of the outstanding Capital Stock of the Company, (ii) all or substantially all of the assets of the Company (including the sale of more than two-thirds (2/3) of the Capital Stock held by the Company in the Bank), or (iii) a merger of the Company with or into any Person, or of any Person with or into the Company, immediately after which the shareholders of the Company (as measured immediately prior to completion of the transaction) own less than a majority of the combined Capital Stock of the surviving Person.
(g) “Code“ means the Internal Revenue Code of 1986, as amended;
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(h) “Company Specified Representations” means the representations and warranties made in Section 2.2(a), Section 2.2(b), Section 2.2(c), Section 2.2(d), Section 2.2(q) and Section 2.2(ff);
(i) “Disclosure Schedule” shall mean a schedule delivered, on or prior to the date of this Agreement, by (i) the Investor to the Company and (ii) the Company to the Investor setting forth, among other things, items the disclosure of which is necessary or appropriate either in response to an express disclosure requirement contained in a provision hereof or as an exception to one or more representations or warranties contained in Section 2.2 with respect to the Company, or in Section 2.3 with respect to the Investor, or to one or more covenants contained in Article 3;
(j) “GAAP” means United States generally accepted accounting principles and practices as in effect from time to time;
(k) “Governmental Consent” means any notice to, registration, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any Governmental Entity, or the expiration or termination of any statutory waiting periods;
(l) “Governmental Entity” means any court, administrative agency or commission or other governmental authority or instrumentality, whether federal, state, local or foreign, and any applicable industry self-regulatory organization or securities exchange;
(m) “Insurer” means a Person who insures or guarantees for the benefit of the mortgagee all or any portion of the risk of loss upon borrower default on any of the mortgage loans originated, purchased or serviced by the Bank, including the Federal Housing Administration, the United States Department of Veterans’ Affairs, the Rural Housing Service of the U.S. Department of Agriculture and any private mortgage insurer, and providers of hazard, title or other insurance with respect to such mortgage loans or the related collateral;
(n) “Investor Specified Representations” means the representations and warranties made in Section 2.3(a), Section 2.3(b)(i), Section 2.3(d), Section 2.3(e), Section 2.3(h) and Section 2.3(i);
(o) “Knowledge” of the Company and words of similar import mean the actual knowledge of any directors or executive officers of the Company;
(p) “Loan Investor” means any Person (including an Agency) having a beneficial interest in any mortgage loan originated, purchased or serviced by the Bank or a security backed by or representing an interest in any such mortgage loan;
(q) “Losses” means any and all losses, damages, reasonable costs, reasonable expenses (including reasonable attorneys’ fees and disbursements), liabilities, settlement payments, awards, judgments, fines, obligations, claims, and deficiencies of any kind;
(r) “Ordinary Course of Business” means an action taken by any Person only if such action is constituent with the past practices of such Person and is similar in nature and magnitude to actions customarily taken in the ordinary course of the normal day-to-day operations of other Persons that are in the same line of business as such Person.
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(s) “Person” means any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, Governmental Entity or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity;
(t) “Subsidiary” means, with respect to any Person, any corporation, partnership, joint venture, limited liability company or other entity (x) of which such Person or a Subsidiary of such Person is a general partner or (y) of which a majority of the voting securities or other voting interests, or a majority of the securities or other interests of which having by their terms ordinary voting power to elect a majority of the board of directors or persons performing similar functions with respect to such entity, is directly or indirectly owned by such Person and/or one or more Subsidiaries thereof;
(u) “Tax” or “Taxes” means all United States federal, state, local or foreign income, profits, estimated, gross receipts, windfall profits, severance, property, intangible property, occupation, production, sales, use, license, excise, emergency excise, franchise, capital gains, Capital Stock, employment, withholding, transfer, stamp, payroll, goods and services, value added, alternative or add-on minimum tax, or any other tax, custom, duty or governmental fee, or other like assessment or charge of any kind whatsoever, together with any interest, penalties, fines, related liabilities or additions to tax that may become payable in respect thereof imposed by any Governmental Entity, whether or not disputed;
(v) “Tax Return” means any return, declaration, report or similar statement required to be filed with respect to any Taxes (including any attached schedules), including any information return, claim or refund, amended return and declaration of estimated Tax;
(w) the word “or” is not exclusive;
(x) the words “including,” “includes,” “included” and “include” are deemed to be followed by the words “without limitation”;
(y) the terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision; and
(z) all article, section, paragraph or clause references not attributed to a particular document shall be references to such parts of this Agreement, and all exhibit and schedule references not attributed to a particular document shall be references to such exhibits and schedules to this Agreement.
6.3 Expense Reimbursement. The Company shall promptly pay the fees and expenses incurred by EJF in connection with its evaluation of the Company and negotiation of this Agreement and the documents and instruments delivered or to be delivered in connection herewith (including legal and travel expenses) in an amount not to exceed $20,000 in the aggregate, provided the Closing occurs. In the event there is more than one Closing, the cap on reimbursement described herein shall apply cumulatively to all such Closings.
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6.4 Corporate Opportunities.
(a) Investor and any of its Affiliates may engage in or possess an interest in other business ventures of any nature or description, independently or with others, similar or dissimilar to the business of the Company or any Company Subsidiary, and the Company, any Company Subsidiary, the directors, the directors of any Company Subsidiary, and their other stockholders shall have no rights by virtue of this Agreement in and to such ventures or the income or profits derived therefrom, and the pursuit of any such venture, even if competitive with the business of the Company, shall not be deemed wrongful or improper.
(b) To the fullest extent permitted by law and except as otherwise provided below, neither Investor nor any of its directors, principals, officers, members, limited or general partners, fiduciaries, managers, employees and/or other representatives (the “Investor Equityholders”) or its or their Affiliates or director designees shall be obligated to refer or present any particular business opportunity to the Company or any Company Subsidiary even if such opportunity is of a character that, if referred or presented to the Company or any Company Subsidiary, could be taken by the Company or any Company Subsidiary, and Investor, any such Investor Equityholder or any of its or their Affiliates, respectively, shall have the right to take for its own account (individually or as a partner, investor, member, participant or fiduciary) or to recommend to others such particular opportunity.
(c) In the event that a director of the Company who has been designated by Investor acquires knowledge of a potential transaction or other matter which may be a corporate or business opportunity for both the Company and Investor, such director of the Company shall have fully satisfied and fulfilled the fiduciary duty of such director to the Company and its stockholders with respect to such corporate or other business opportunity, if such director acts in a manner consistent with the following policy: A business or corporate opportunity offered to any person who is a director but not an officer of the Company and who has been designated by Investor shall belong to the Company only if such opportunity is offered to such person in his or her capacity as a director of the Company, and otherwise shall belong to Investor.
(d) No act or omission by Investor or any of its Affiliates in accordance with this Section shall be considered contrary to (i) any fiduciary duty that Investor or any of its Affiliates may owe to the Company or any Company Subsidiary or to any other stockholder or by reason of Investor or any of its Affiliates being a stockholder of the Company, or (ii) any fiduciary duty of any director of the Company or any Company Subsidiary who has been designated by Investor to the Company or any Company Subsidiary, or to any stockholder thereof. Any person purchasing or otherwise acquiring any Capital Stock of the Company, or any interest therein, in connection with the transactions contemplated by the Transaction Documents or at any time thereafter shall be deemed to have notice of and to have consented to the provisions of this Section. The Company hereby waives any right to bring a claim for breach of fiduciary duty against Investor or any Affiliate thereof, or any director designated by Investor, based on any act or omission by Investor or any Affiliate thereof, or such director, taken in accordance with this Section.
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6.5 Amendment and Waivers. The conditions to each party’s obligation to consummate the Closing are for the sole benefit of such party and may be waived by such party in whole or in part to the extent permitted by Law. No amendment or waiver of any provision of this Agreement will be effective against any party hereto unless it is in a writing signed by a duly authorized officer of such party.
6.6 Counterparts and Facsimile. For the convenience of the parties hereto, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement. Executed signature pages to this Agreement may be delivered by facsimile or other electronic transmission and such transmissions shall be deemed as sufficient as if manually signed signature pages had been delivered.
6.7 Governing Law. This Agreement will be governed by and construed in accordance with the Laws of the State of Florida applicable to contracts made and to be performed entirely within such jurisdiction.
6.8 Jurisdiction. The parties hereby agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the federal or state courts located in Miami-Dade County, Florida, so long as such court shall have subject matter jurisdiction over such suit, action or proceeding, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by Law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 6.10 shall be deemed effective service of process on such party. The parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the state and federal courts referred to above for any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby.
6.9 WAIVER OF JURY TRIAL. THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR UNDER ANY AGREEMENT, INSTRUMENT OR OTHER DOCUMENT CONTEMPLATED HEREBY OR RELATED HERETO AND IN ANY ACTION DIRECTLY OR INDIRECTLY RELATED TO OR CONNECTED WITH THE OBLIGATIONS OF THIS AGREEMENT. THE PARTIES ACKNOWLEDGE THAT THIS WAIVER MAY DEPRIVE EACH OF THEM AN IMPORTANT RIGHT AND THAT SUCH WAIVER HAS BEEN KNOWINGLY AND VOLUNTARILY MADE BY THE PARTIES AFTER CONSULTATION WITH THEIR LEGAL COUNSEL.
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6.10 Notices. Any notice, request, instruction or other document to be given hereunder by any party to the other will be in writing and will be deemed to have been duly given (a) on the date of delivery if delivered personally or by e-mail (upon confirmation of receipt), (b) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service, or (c) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice.
(a) If to the Company:
Professional Holding Corp.
396 Alhambra Circle, Suite 255
Coral Gables, FL 33134
E-mail: dsheehan@professionalbankfl.com
Attention: Daniel R. Sheehan
Title: Chairman and Chief Executive Officer
with a copy to:
Gunster, Yoakley & Stewart, P.A.
777 South Flagler Drive, Suite 500 East
West Palm Beach, FL 33401
Attention: Michael V. Mitrione
Facsimile: (561) 671-2425
E-Mail: mmitrione@gunster.com
(b) If to any Investor:
To the address or e-mail set forth on the applicable signature page for such Investor
6.11 Entire Agreement. This Agreement and the agreements referred to herein (including the Annexes, the Letter Agreements, as applicable, and Schedules hereto) (collectively, the “Transaction Documents”) constitute the entire agreement, and supersede all other prior agreements, understandings, representations and warranties, inducements or conditions, both written and oral, among the parties, with respect to the subject matter hereof and thereof.
6.12 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any purchasers of the Company Stock to be issued pursuant to this Agreement. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investor. The Investor may assign some or all of its rights hereunder or thereunder without the consent of the Company to any Affiliate of the Investor, unless such assignment would result in a breach of any of the representations or warranties of the Investor or a failure of any of the conditions set forth in Section 1.2(c) of this Agreement. Any such permitted assignee shall be deemed to be an Investor hereunder with respect to such assigned rights and shall be bound by the terms and conditions of this Agreement that apply to the Investor.
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6.13 Captions. The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.
6.14 Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.
6.15 Third Party Beneficiaries. Nothing contained in this Agreement, expressed or implied, is intended to confer upon any Person other than the parties hereto, any benefit right or remedies, except that the provisions of Sections 5.1 and 5.2 shall inure to the benefit of the Persons referred to in such Sections.
6.16 Public Announcements. The Investor will not make (and will use its reasonable best efforts to ensure that its Affiliates and representatives do not make) any news release or public disclosure with respect to this Agreement and any of the transactions contemplated hereby, without first consulting with the Company and, in each case, also receiving the Company’s consent (which shall not be unreasonably withheld or delayed).
6.17 Specific Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms. It is accordingly agreed that the parties shall be entitled to seek specific performance of the terms hereof, this being in addition to any other remedies to which they are entitled at law or equity.
6.18 Independent Nature of Investors’ Obligations and Rights. The obligations of each Investor under any Transaction Document are several and not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under any Transaction Document. The decision of each Investor to purchase Company Stock pursuant to the Transaction Documents has been made by such Investor independently of any other Investor and independently of any information, materials, statements, or opinions as to the business, affairs, operations, assets, properties, liabilities, results of operations, condition (financial or otherwise), or prospects of the Company or any Company Subsidiary which may have been made or given by any other Investor or by any agent or employee of any other Investor, and no Investor and none of its agents or employees shall have any liability to any other Investor (or any other Person) relating to or arising from any such information, materials, statements, or opinions. Nothing contained herein or in any Transaction Document, and no action taken by any Investor pursuant thereto, shall be deemed to constitute the Investors as a partnership, an association, a joint venture, or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Investor acknowledges that no other Investor has acted as agent for such Investor in connection with making its investment hereunder and that no Investor will be acting as agent of such Investor in connection with monitoring its investment in the Company Stock or enforcing its rights under the Transaction Documents. Each Investor shall be entitled to independently protect and enforce its rights, including without limitation the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose. It is expressly understood and agreed that each provision contained in this Agreement is between the Company and an Investor, solely, and not between the Company and the Investors collectively and not between and among the Investors.
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6.19 No Recourse. This Agreement may only be enforced against the named parties hereto. All claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may be made only against the Persons that are expressly identified as parties hereto or that are subject to the terms hereof, and no past, present or future director, officer, employee, incorporator, member, manager, partner, shareholder, Affiliate, agent, attorney or representative of any party hereto (including any person negotiating or executing this Agreement on behalf of a party hereto) shall have any liability or obligation with respect to this Agreement or with respect to any claim or cause of action, whether in tort, contract or otherwise, that may arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement and the transactions contemplated hereby.
[Signature Page Follows]
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SIGNATURE PAGE FOR INDIVIDUAL
IN WITNESS WHEREOF, this Stock Purchase Agreement has been executed by Investor and by the Company on the respective dates set forth below.
Signature | Signature (If Shares Purchased Jointly) | |||
Name | Name | |||
(Please Print) | (Please Print) |
Taxpayer ID Number | Taxpayer ID Number |
Address | Address | |||
Telephone # | Telephone # |
Fax # | Fax # | |||
Email: | Email: | |||
Date: | Date: |
Stock Purchase Amount:
(1) | Number of shares of Class A Voting Common Stock: | ||
(2) | Number of shares of Class B Non-Voting Common Stock: | ||
(3) | Total number of shares subscribed (Line 1 plus Line 2): | ||
(4) | Amount per share to be paid with subscription: | $14.50 | |
(5) | Total Payment (Line 3 multiplied by Line 4): |
Form of ownership: o Individual o TBE o JTWROS o TIC o Other (specify): ___________________
PROFESSIONAL HOLDING CORP. | ||||
By: | ||||
Name: | Daniel R. Sheehan | |||
Title: | Chairman and President |
Date: |
SIGNATURE PAGE FOR CORPORATIONS, PARTNERSHIPS, LIMITED LIABILITY COMPANIES, ASSOCIATIONS, TRUSTS AND OTHER ENTITIES
IN WITNESS WHEREOF, this Stock Purchase Agreement has been executed by Investor and by the Company on the respective dates set forth below.
(Name of Entity) | (Taxpayer Identification Number) |
By: |
Its: | |||
(Date) |
Address of Investor: | ||
Telephone Number: |
Fax Number: |
E-mail Address: |
Stock Purchase Amount:
(1) | Number of shares of Class A Voting Common Stock: | ||
(2) | Number of shares of Class B Non-Voting Common Stock: | ||
(3) | Total number of shares subscribed (Line 1 plus Line 2): | ||
(4) | Amount per share to be paid with subscription: | $14.50 | |
(5) | Total Payment (Line 3 multiplied by Line 4): |
PROFESSIONAL HOLDING CORP.
By: | ||||
Name: | Daniel R. Sheehan | |||
Title: | Chairman and President |
Date: |
List of Exhibits and Schedules Omitted from the Purchase Agreement
Referenced in Exhibit 10.15 Above
Pursuant to Regulation S-K, Item 601(a)(5), the Exhibits and Schedules to the Purchase Agreement referenced in Exhibit 10.15 above, as listed below, have not been filed. The Registrant agrees to furnish supplementally a copy of any omitted Exhibit or Schedule to the Securities and Exchange Commission (the “Commission”) upon request; provided, however, that the Registrant may request confidential treatment of omitted items.
Exhibits:
Exhibit A: | EJF Sidecar Fund Letter Agreement | |
Exhibit B: | Mendon/BayBoston Letter Agreement | |
Exhibit C: | Instruction Sheet |
Exhibit 10.16
PROFESSIONAL HOLDING CORP.
SUBSCRIPTION INSTRUCTIONS
To subscribe for shares of Class A Voting Common Stock and/or Class B Non-Voting Common Stock of Professional Holding Corp., a Florida corporation (Company), prospective investors must complete all of the subscription documents contained in this package in accordance with the instructions below:
(1) | Prospective investors must carefully review, complete and execute the following attached documents: |
(a) | Subscription Agreement (please note that there are separate signature pages for individuals and entities); and |
(b) | Purchaser Questionnaire, which is attached to the Subscription Agreement as Exhibit 1 (please note that there are separate questions for individuals and entities). |
(2) | Prospective investors must wire the full amount of the purchase price of the shares subscribed on or before December 18, 2018 to: |
Wire to: Professional Bank
ABA Number: 067016574
Account Name: Professional Holding Corp. Escrow Account
Account Number: 2005195
Reference: 2018 PFHD Stock Purchase
(3) | Prospective investors should direct all questions and send the completed originals or electronic copies of the above-referenced documents, to the address below so that the Representative may determine whether the prospective investor meets federal and state securities law standards to subscribe for shares in the Company: |
Professional Holding Corp.
Attn: Daniel R. Sheehan
5100 PGA Blvd., Suite 101
Palm Beach Gardens, Florida 33418
Tel: (561) 868-1275
Email: drs@probankfl.com
(4) | Upon acceptance of the subscription, a copy of the executed Subscription Agreement signed by the Company will be returned to the investor as soon as is practicable. |
(5) | The applicable documents should be completed in their entirety and executed. If any documents are signed for the prospective investor by the prospective investor’s attorney-in-fact, a copy of the power of attorney must be enclosed with the subscription documents the prospective investor returns. |
(6) | The Company will have the right, in its sole and absolute discretion, to accept or reject this subscription for any reason or no reason in whole or in part and at any time prior to acceptance thereof. |
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THE SECURITIES SUBSCRIBED FOR BY THIS SUBSCRIPTION AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (SECURITIES ACT), OR ANY APPLICABLE STATE SECURITIES LAWS. TRANSFER OF THE SECURITIES IS RESTRICTED BY THE TERMS OF THIS SUBSCRIPTION AGREEMENT AND BY APPLICABLE LAW. NEITHER THE SECURITIES AND EXCHANGE COMMISSION (COMMISSION) NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THE OFFERING DOCUMENTS OR ANY OFFERING NOTICE IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
SUBSCRIPTION AGREEMENT
Professional Holding Corp.
5100 PGA Blvd., Suite 101
Palm Beach Gardens, Florida 33418
Re: Purchase of Class A Voting Common Stock and/or Class B Non-Voting Common Stock
Ladies and Gentlemen:
To induce Professional Holding Corp., a Florida corporation (Company), to accept this subscription for shares of its Class A Voting Common Stock and/or Class B Non-Voting Common Stock, par value $0.01, per share in the Company (Securities), the undersigned (Purchaser) hereby offers to purchase Securities pursuant to the terms and conditions of this Subscription Agreement (Subscription Agreement), the Purchaser Questionnaire attached to this Subscription Agreement (Purchaser Questionnaire), and any other relevant documents provided by the Company in connection with this offering, if any (collectively, Offering Documents).
1. | Purchase and Terms of Offering. |
1.1. | The Purchaser agrees to purchase and subscribe for the aggregate amount of Securities in the Company as set forth on the signature page hereof (including the specified allocation of shares of Class A Voting Common Stock and Class B Non-Voting Common Stock, if applicable) at a price of $18.25 per share, which is payable in accordance with the instructions provided with this Subscription Agreement. |
1.2. | The Purchaser tenders this Subscription Agreement on the understanding that the investment is part of a private offering to a limited group of investors of up to $20,000,000 (Maximum). The offering does not have a minimum to be sold and subscriptions for Securities may be closed in one or more closings at the discretion of the Company. The offering is being made on a “best efforts” basis. |
1.3. | The Purchaser understands that the Company has imposed certain standards that prospective investors must meet to be eligible to purchase the Securities. The Company has the right to accept or reject the Purchaser’s subscription, in whole or in part, for any reason. The Company may also allocate to the Purchaser, in the Company’s sole discretion, less than the number of the Securities the Purchaser subscribes for, even if the Purchaser meets those standards. Subscriptions need not be accepted in the order received. The Purchaser further understands that the Company shall not have any obligation to sell any Securities to any prospective investor who is a resident of a jurisdiction in which the sale of the Securities to such prospective investor would constitute a violation of the securities, “blue sky” or other similar laws of such jurisdiction. The Company will notify the Purchaser whether the Purchaser’s subscription is accepted. In the event the Purchaser’s subscription is rejected in whole, the Company will return the Purchaser’s entire payment for the Securities to the Purchaser without interest along with this Subscription Agreement and the Purchaser Questionnaire, and all of the rights and obligations of the parties under this Subscription Agreement will terminate. In the event the Purchaser’s subscription is rejected in part, the Company will return payment for the rejected portion of the subscription without interest along with this Subscription Agreement and the Purchaser Questionnaire, and all rights and obligations of the parties under this Subscription Agreement will continue to the extent accepted. |
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1.4. | The Purchaser acknowledges that the Company intends to use substantially all of the net proceeds primarily to support the Company’s growth, for general corporate purposes, and to fund operational expenses, including, without limitation, costs and expenses incurred by the Company in connection with the offering. |
2. | Representations of the Purchaser. By executing this Subscription Agreement, the Purchaser warrants, covenants and represents as follows: |
2.1. | Information Concerning the Company. |
2.1.1. | The Purchaser has been furnished with the Offering Documents, and such other documents, materials and information as the Purchaser deems necessary or appropriate for evaluating an investment in the Company, including all exhibits referred to in the Offering Documents. The Purchaser has carefully read and understands these materials, and has made such further investigation of the Company as the Purchaser (or its professional advisors) deemed appropriate to obtain additional information to verify the accuracy of such materials and to evaluate the merits and risks of the investment. The Purchaser has not been furnished with any offering literature other than the Offering Documents and has relied only on the Offering Documents. |
2.1.2. | The Purchaser acknowledges that the Purchaser has had the opportunity to ask questions of, and receive answers from, the Company, concerning the terms and conditions of the offering and the information contained in the Offering Documents, and all such questions have been answered to the Purchaser’s full satisfaction. The Company has afforded the Purchaser the opportunity to obtain any additional information (to the extent that the Company possesses such information or can acquire it without unreasonable effort or expense) necessary to verify the accuracy of any information in the Offering Documents and to make an informed investment decision. |
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2.1.3. | The Purchaser had the opportunity to seek and receive tax, legal, and financial advice or counsel with respect to this offering. |
2.1.4. | The Purchaser is familiar with the nature of, and risks attendant to, investments in securities of the type being subscribed for and has determined, in consultation with the Purchaser’s professional advisors, if any, that the purchase of such securities is consistent with the Purchaser’s investment objectives. |
2.1.5. | The Purchaser understands that the distribution of the Offering Documents and the offer and sale of Securities in certain jurisdictions may be restricted by law. Delivery of the Offering Documents does not constitute an offer to sell or the solicitation of an offer to buy in a state or other jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such state or jurisdiction. This offering does not constitute an offer of Securities to the public and no action has been or will be taken to permit a public offering in any jurisdiction where action would be required for that purpose. Securities may not be offered or sold, directly or indirectly, and the Offering Documents may not be distributed, in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. |
2.2. | Non-reliance. |
2.2.1. | The Purchaser agrees that neither the Company nor any of its officers, directors, employees, agents, counsel, advisors, accountants, or other representatives have furnished, and that the Offering Documents do not constitute, any investment, legal, or tax advice to the Purchaser. The Purchaser acknowledges and understands that, except as set forth in this Subscription Agreement, no representations or warranties have been made to the Purchaser by the Company or any agent, employee or affiliate of the Company, and that in making a decision to subscribe for the Securities, the Purchaser is relying solely upon the information that is contained in Offering Documents and the result of independent investigation by the Purchaser and its professional advisors. |
2.2.2. | The Purchaser confirms that the Company has not (A) given any guarantee or representation as to the potential success, return, effect or benefit (either legal, regulatory, tax, financial, accounting or otherwise) of an investment in the Securities or (B) made any representation to the undersigned regarding the legality of an investment in the Securities under applicable legal investment or similar laws or regulations. |
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2.3. | Information About the Purchaser. |
2.3.1. | The Purchaser acknowledges and agrees that an investment in the Securities is suitable only for persons who are able to afford the risk. Accordingly, Securities will be offered only to selected individuals and entities that qualify as “accredited investors” as that term is defined in Rule 501 of Regulation D (Regulation D) promulgated under the Securities Act and described in the Purchaser Questionnaire. The Purchaser is an “accredited investor” and has reviewed, completed and returned to the Company the Purchaser Questionnaire. The Purchaser hereby affirms the completeness and correctness of Purchaser’s answers to such questions. |
2.3.2. | The Purchaser has sufficient “sophistication,” including such knowledge and experience in financial and business matters (especially in investments that have risks similar to those that may be encountered by the Company), to evaluate the merits and risks of an investment in the Company. |
2.3.3. | Unless otherwise indicated in a writing attached hereto, the Purchaser is not, and is not acting on behalf of, (A) an employee benefit plan within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (ERISA), (B) a plan described by Section 4975 of the Code (including, without limitation, Individual Retirement Accounts and Keogh Plans); or (C) an entity that is deemed to hold the plan assets of any of the foregoing pursuant to 29 C.F.R. Section 2510.3-101. |
2.3.4. | The Purchaser has the power and authority to enter into this Subscription Agreement and each other document required to be or otherwise executed and delivered by the Purchaser in connection with this subscription for the Securities, and to perform Purchaser’s obligations hereunder and thereunder and consummate the transactions contemplated hereby and thereby, and, if applicable, the person signing this Subscription Agreement on behalf of the Purchaser has been duly authorized to execute and deliver such documents. If other than an individual, the Purchaser is duly organized validly existing and in good standing under the laws of its jurisdiction of incorporation or organization. The execution and delivery by the Purchaser of, and compliance by the Purchaser with, each document required to be or otherwise executed and delivered by the Purchaser in connection with this subscription for Securities does not conflict with, or constitute a default under, any instruments governing the Purchaser, or any law, permit, regulation, order, franchise, judgment, decree, statute or rule or any agreement or other instrument to which the Purchaser is a party or by which the Purchaser or any of its properties is bound. No consent, approval or authorization of any person or entity (including any governmental authority) is required on the part of the Purchaser in connection with the execution, delivery and performance of this Subscription Agreement or any other document required to be or otherwise executed and delivered by the Purchaser in connection with this subscription for Securities. |
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2.3.5. | The address set forth on the signature page of this Subscription Agreement is the Purchaser’s true and correct primary residence, and Purchaser has no present intention of becoming a resident of any other state or jurisdiction. Purchaser is not acquiring the Securities as a nominee or agent or otherwise for any other person. |
2.3.6. | The Purchaser will comply with all applicable laws and regulations in effect in any jurisdiction in which the Purchaser purchases or sells Securities and obtain any consent, approval or permission required for such purchases or sales under the laws and regulations of any jurisdiction to which the Purchaser is subject or in which the Purchaser makes such purchases or sales, and the Company shall have no responsibility therefor. |
2.3.7. | The funds provided for the purchase of the Securities are either separate property of the Purchaser, community property over which the Purchaser has the right of control or are otherwise funds as to which the Purchaser has the sole right of management. |
2.3.8. | There are no actions, suits, proceedings or investigations pending against the Purchaser or any of the Purchaser’s assets before any court or governmental agency (nor, to the best of the Purchaser’s knowledge, is there any threat thereof) which would impair in any way the Purchaser’s ability to enter into and fully perform the Purchaser’s commitments and obligations under this Subscription Agreement or the transactions contemplated hereby. |
2.3.9. | No broker, financial advisor or finder is entitled to any brokerage fees, commissions or finder’s fees in connection with the transactions contemplated by this Subscription Agreement based upon arrangements made by or on behalf of the Purchaser. |
2.4. | General Solicitation. The Purchaser is not subscribing for the Securities as a result of, or subsequent to, any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or presented at any seminar or meeting or other general solicitation or general advertising. Purchaser has not provided or made available the Offering Documents to any other person other than the Purchaser’s professional advisors. |
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2.5. | Gunster is Company’s Counsel and Not Counsel to Purchaser. The Purchaser acknowledges and agrees that Gunster, Yoakley & Stewart, P.A. (Gunster) is acting as counsel to the Company in connection with preparation and execution of the Offering Documents, the offering of the Securities, the management and operations of the Company and its subsidiaries and unrelated matters. The Purchaser acknowledges that Gunster does not represent or owe any duty to the Purchaser and that Gunster has not performed any due diligence on the Purchaser’s behalf. The Purchaser acknowledges that neither this Subscription Agreement, nor the transactions contemplated hereby relating to the management and operation of the Company are intended to create an attorney-client or any other relationship between the Purchaser and Gunster. The Purchaser further acknowledges that the Company and its affiliates may further engage Gunster in the future and that, in such event, such engagement will also not create an attorney-client or any other relationship between the Purchaser and Gunster. The Purchaser acknowledges and agrees that Gunster has not provided any legal, tax or business advice to the Purchaser and the Purchaser has been advised to seek its own independent counsel. The Purchaser acknowledges that Gunster is an intended third-party beneficiary of this Section of the Subscription Agreement, having the right to enforce this Section. |
2.6. | Restrictions on Transfer; Exchange of Class B Non-Voting Common Stock. |
2.6.1. | The Purchaser understands that the Securities have not been registered under the Securities Act or related laws and regulations or any other applicable securities laws of any other jurisdiction (collectively, the Securities Laws), in reliance on exemptions therefrom for non-public offerings. |
2.6.2. | The Purchaser understands that the Securities are “restricted securities” under applicable federal securities laws and that the Securities Act and the rules of the Commission provide in substance that the Purchaser may dispose of the Securities only pursuant to an effective registration statement under the Securities Act or an exemption therefrom, and the Purchaser understands that the Company has no obligation or intention to register any of the Securities, or to take action so as to permit sales pursuant to the Securities Act (including Rule 144 thereunder). Accordingly, the Purchaser understands that under the Commission’s rules, the Purchaser may dispose of the Securities principally only in “private placements” which are exempt from registration under the Securities Act, in which event the transferee will acquire “restricted securities” subject to the same limitations as in the hands of the Purchaser. Consequently, the Purchaser understands that the Purchaser must bear the economic risks of the investment in the Securities for an indefinite period of time. |
2.6.3. | The Purchaser further acknowledges that there is no public market for the Securities and that such a market may never develop. The Purchaser has no presumption that there will be a public offering of the Securities. |
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2.6.4. | The Purchaser is acquiring the Securities solely for Purchaser’s own account and is not acquiring such Securities with a view to, or for resale in connection with, any distribution within the meaning of the Securities Act or any other applicable Securities Laws. The Purchaser will not resell or offer to resell the Securities except in accordance with the terms of this Subscription Agreement and in compliance with the Securities Laws. |
2.6.5. | The Purchaser covenants and agrees to not sell, make any short sale of, loan, grant any option for the purchase of, effect any public sale or distribution of or otherwise dispose of any Securities owned by Purchaser during the 180 days after a registration statement relating to an initial public offering of the Company’s equity securities (or such shorter period as may be required by the underwriter). |
2.6.6. | To induce the Company to issue and sell the Securities, the Purchaser agrees that the Company will have no obligation to recognize the ownership of such Securities by anyone but the Purchaser and Purchaser’s heirs and beneficiaries at law, except as set forth herein. |
2.6.7. | The Purchaser (or a transferee) may exchange shares of Class B Voting Common Stock into an equal number of shares of Class A Voting Common Stock (automatically by the transferee upon the Purchaser’s permitted transfer of shares of Class B Non-Voting Common Stock to such transferee (a) upon the consummation of a Permitted Transfer or (b) if the Company’s Board of Directors, acting in its sole and absolute discretion, have approved the exchange and the exchange would not result in the Purchaser (or the transferee, together with their respective affiliates) beneficially owning greater than 9.9% of the outstanding shares of the Company’s Class A Voting Common Stock. For the purposes of this Subscription Agreement, Permitted Transfer means (1) a transfer pursuant to a widely distributed public offering, (2) a transfer in which no transferee acquires greater than 2% of the issued and outstanding shares Class A Voting Common Stock (after giving effect to any conversion of Class B Non-Voting Common Stock, (3) a transfer to a person that beneficially owns greater than 50% of the issued and outstanding shares of the Company’s Class A Voting Common Stock or (4) a transfer that is approved by the Federal Reserve Board. The Company shall hold in reserve, at all times, sufficient shares of Class A Voting Common Stock to permit the exchange of all shares of Class B Non-Voting Common Stock then outstanding. |
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2.7. | Anti-Money Laundering. |
2.7.1. | The Purchaser understands that Federal regulations and Executive Orders administered by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) prohibit, among other things, the engagement in transactions with, and the provision of services to, certain foreign countries, territories, entities and individuals.1 The Purchaser represents and warrants that neither the Purchaser nor any person controlling, controlled by, or under common control with, the Purchaser, nor, to the best of the Purchaser’s knowledge, any person having a beneficial interest in the Purchaser or the Purchaser’s investment in the Securities, or for whom the Purchaser is acting as agent or nominee in connection with this investment, is not a country (or instrumentality thereof), territory (or instrumentality thereof), person or other entity named on an OFAC list, nor are any of the foregoing a person or other entity with whom dealings are prohibited under any OFAC regulations. The Purchaser and any of the foregoing are each not a foreign bank without a physical presence in any country that is not a Regulated Affiliate2 (Foreign Shell Bank). |
2.7.2. | Except as otherwise disclosed to the Company in writing: (i) the Purchaser is not resident in, or organized or chartered under the laws of, (A) a jurisdiction that has been designated by the Secretary of the Treasury under the USA PATRIOT Act Improvement and Reauthorization Act of 2005, as amended, or any other anti-money laundering or anti-terrorist laws, rules, regulations, directives or special measures (AML Laws) as warranting special measures due to money laundering concerns or (B) any foreign country that has been designated as non-cooperative with international anti-money laundering principles or procedures by an intergovernmental group or organization, such as the Financial Action Task Force on Money Laundering, of which the United States is a member and with which designation the United States representative to the group or organization continues to concur (Non-Cooperative Jurisdiction); (ii) the funds used by the Purchaser to purchase the Securities or to make capital contributions to the Company do not originate from, nor will they be routed through, an account maintained at (A) a Foreign Shell Bank, (B) a foreign bank (other than a Regulated Affiliate) that is barred, pursuant to its banking license, from conducting banking activities with the citizens of, or with the local currency of, the country that issued the license, or (C) a bank organized or chartered under the laws of a Non-Cooperative Jurisdiction; and (iii) the Purchaser is not a senior foreign political figure, or any immediate family member or close associate of a senior foreign political figure, in each case within the meaning of any AML Laws. |
1 The lists of OFAC prohibited countries, territories, persons and entities can be found on the OFAC website at www.treas.gov/ofac.
2 Regulated Affiliate means a foreign bank that (i) is an affiliate of a depositary institution, credit union or foreign bank that maintains a physical presence in the United States or a foreign country, as applicable and (ii) is subject to supervision by a banking authority in the country regulating such affiliated depositary institution, credit union, or foreign bank.
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2.7.3. | The proposed investment by the Purchaser in the Company will not directly or indirectly contravene United States Federal, State, international or other laws, rules or regulations, including anti-money laundering laws, rules and regulations (Prohibited Investment), and neither the funds used to purchase the Securities or any capital contributions to the Company by the Purchaser are or will be derived from any illegal or illegitimate activities. The Purchaser acknowledges and agrees that, notwithstanding anything to the contrary contained in any document (including this Subscription Agreement, the LLC Agreement, any side letters or similar agreements), if, following the Purchaser’s investment in the Company, the Company reasonably believes that the investment is or has become a Prohibited Investment or if otherwise required by law, the Company may be obligated to freeze the account of the Purchaser, either by prohibiting additional capital contributions, restricting any distributions and/or declining any requests to transfer the Purchaser’s Securities. In addition, in any such event, the Purchaser may forfeit its Securities, may be forced to withdraw from the Company or may otherwise be subject to the remedies required by law, and the Purchaser shall have no claim against any Indemnitee (as defined below) for any form of damages as a result of any of the actions described in this paragraph. The Company may also be required to report such action and to disclose the Purchaser’s identity or provide other information with respect to the Purchaser to OFAC or other governmental entities. |
2.8. | Subject to applicable Securities Laws, the Purchaser acknowledges and is aware that the Purchaser is not entitled to cancel, terminate or revoke this subscription, and any agreements of the Purchaser in connection herewith shall survive the death or disability of the Purchaser. |
2.9. | The Purchaser understands the meaning and legal consequences of the foregoing representations and warranties, which are true as of the date hereof and will be true as of the date of the purchase of the Securities subscribed for herein. |
2.10. | This Subscription Agreement does not contain any untrue statement of a material fact or omit any material fact concerning the Purchaser. |
3. | Further Advice and Assurances. Purchaser agrees to notify the Company immediately upon learning that any representation, warranty or information contained in this Subscription Agreement (including, without limitation, the Purchaser Questionnaire) has become untrue at any time. The Purchaser agrees to provide such information and execute and deliver such documents regarding itself and all of its beneficial owners as the Company may reasonably request from time to time to verify the accuracy of the Purchaser’s representations and warranties herein or to comply with any law, rule or regulation to which the Company may be subject (including, without limitation, compliance with AML Laws and OFAC regulations). The Purchaser agrees to respond promptly to each questionnaire from the Company requesting information as to the ownership of the Securities and agrees to provide the Company with such other documents, declarations and other evidence or information as the Company may reasonably request. |
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4. | Tax Information. The Purchaser certifies that the Purchaser’s name, taxpayer identification or social security number and address provided in the Purchaser Questionnaire are correct. The Purchaser agrees to execute promptly and provide to the Company in a timely manner any tax documentation that may reasonably be required by the Company. |
5. | Binding Effect and Survival of Representations and Warranties. This Subscription Agreement and the representations and warranties contained in it shall be binding upon the Purchaser’s heirs, personal and legal representatives, successors and permitted assigns (and will, if the Purchaser consists of more than one person, be the joint and several obligation of all such persons). The representations, warranties, agreements, and indemnification obligations of the Purchaser contained in this Subscription Agreement and in the Purchaser Questionnaire and related subscription documents shall survive the execution hereof, the acceptance of this subscription, the closing of the transactions contemplated hereby and any investigation made by the Company on behalf of the Company and shall be deemed to be reaffirmed by the Purchaser at any time the Purchaser makes an additional capital contribution to the Company. The act of making such additional capital contributions shall be evidence of such reaffirmation. |
6. | Indemnification. |
6.1. | If the Company accepts Purchaser’s investment in the Securities, such acceptance will have been based upon the Purchaser’s representations, warranties and acknowledgments set forth in this Subscription Agreement. The Purchaser understands the meaning of the representations the Purchaser has made in this Subscription Agreement, and the Purchaser hereby agrees to indemnify, defend and hold harmless the Company, their affiliates, and each of their respective directors, officers, members, shareholders, employees, agents, attorneys and other representatives (each, an Indemnitee), and all persons deemed to be in control of the foregoing, and to hold such persons harmless, from and against any and all loss, damage, liability or expense, including costs and reasonable attorneys’ fees, to which they may be put or which they may incur by reason of, or in connection with: |
6.1.1. | any misstatement, misrepresentation or omission made by the Purchaser or on the Purchaser’s behalf with respect to the matters described in this Subscription Agreement; or |
6.1.2. | any breach of any representations or warranties or any failure to fulfill any covenants or agreements set forth in this Subscription Agreement, including, but not limited to, any sale, transfer or other disposition of all or any part of the Securities by the Purchaser in violation of the Securities Act, other applicable law, or this Subscription Agreement. |
6.2. | The indemnification obligations of the Purchaser contained in this Section 6 will survive the Company’s acceptance of the Purchaser’s subscription, the closing of the transactions contemplated hereby and any investigation made by the Company. |
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7. | Miscellaneous. |
7.1. | Governing Law and Venue. This Subscription Agreement shall be governed by and construed in accordance with the laws of the State of Florida without regard to the application of the principles of conflicts of law. Any suit, action or legal proceeding arising out of or relating to this Subscription Agreement, any other agreement or document delivered pursuant hereto or any transaction contemplated hereby, shall be brought solely and exclusively in the courts of record of the State of Florida in Palm Beach County or the district court of the United States, Southern District of Florida, West Palm Beach Division. Each of the parties hereby irrevocably and unconditionally submits to the exclusive jurisdiction of such courts. In addition, each of the parties hereto irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of such action or proceeding, and irrevocably and unconditionally consents to the service of any and all process in any such action or proceeding by the mailing of copies of such process by certified mail to such party and its counsel at their respective addresses or in any other manner permitted by law. |
7.2. | Severability. The invalidity of any one or more words, phrases, sentences, clauses, sections or subsections contained in this Subscription Agreement shall not affect the enforceability of the remaining portions of this Subscription Agreement or any part hereof, all of which are inserted conditionally on their being valid in law, and, in the event that any one or more of the words, phrases, sentences, clauses, sections or subsections contained in this Subscription Agreement shall be declared invalid, this Subscription Agreement shall be construed as if such invalid word or words, phrase or phrases, sentence or sentences, clause or clauses, section or sections, or subsection or subsections had not been inserted. |
7.3. | Pronouns. In this Subscription Agreement, the use of any gender shall be deemed to include all genders, and the use of the singular shall include the plural and vice versa, wherever it appears appropriate from the context. |
7.4. | Confidentiality. The Purchaser agrees that the Purchaser will keep confidential and will not disclose or divulge any confidential, proprietary or secret information that the Purchaser may obtain from the Offering Documents or other material submitted by the Company to the Purchaser pursuant to this Subscription Agreement. Notwithstanding the foregoing, the Purchaser may disclose such information (i) as has become generally available to the public, (ii) as may be required in any report, statement or testimony submitted to any municipal, state or federal regulatory body having jurisdiction over the Purchaser, (iii) as may be required in response to any summons or subpoena or in connection with any litigation (provided the Purchaser makes reasonable efforts to enable the Company to seek a protective order or other confidential treatment), (iv) in order to comply with any law, order, regulation or ruling applicable to the Company or (v) on a confidential basis to the Purchaser’s agents, advisors, members, attorneys, accountants, consultants and other professionals to the extent necessary to obtain their services in connection with the Purchaser’s investment in the Company. |
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7.5. | Non-Assignable. Neither this Subscription Agreement nor any rights, remedies, obligations or liabilities that may accrue to the Purchaser under it may be transferred or assigned without the Company’s prior written consent. |
7.6. | Jury Waiver. IN ANY CIVIL ACTION, COUNTERCLAIM, OR PROCEEDING, WHETHER AT LAW OR IN EQUITY, WHICH ARISES OUT OF, CONCERNS, OR RELATES TO THIS SUBSCRIPTION AGREEMENT, ANY AND ALL TRANSACTIONS CONTEMPLATED BY THIS SUBSCRIPTION AGREEMENT, THE PERFORMANCE OF THIS SUBSCRIPTION AGREEMENT, OR THE RELATIONSHIP CREATED BY THIS SUBSCRIPTION AGREEMENT, WHETHER SOUNDING IN CONTRACT, TORT, STRICT LIABILITY, OR OTHERWISE, TRIAL SHALL BE TO A COURT OF COMPETENT JURISDICTION AND NOT TO A JURY. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY. ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SUBSCRIPTION AGREEMENT WITH ANY COURT, AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO THIS SUBSCRIPTION AGREEMENT OF THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. NEITHER PARTY HAS MADE OR RELIED UPON ANY ORAL REPRESENTATIONS TO OR BY ANY OTHER PARTY REGARDING THE ENFORCEABILITY OF THIS PROVISION. EACH PARTY HAS READ AND UNDERSTANDS THE EFFECT OF THIS JURY WAIVER PROVISION. EACH PARTY ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY ITS OWN COUNSEL WITH RESPECT TO THE TRANSACTION GOVERNED BY THIS SUBSCRIPTION AGREEMENT AND SPECIFICALLY WITH RESPECT TO THE TERMS OF THIS SECTION. |
7.7. | Counterparts. This Subscription Agreement may be executed in counterparts, each of which shall be deemed an original, and a complete set of which, when taken together, shall constitute one and the same document. Confirmation of execution by electronic transmission of a .pdf signature page shall be binding, and each party hereby irrevocably waives any objection that it has or may have in the future as to the validity of any such electronic transmission of a signature page. |
7.8. | Entire Agreement. This Subscription Agreement constitutes the entire agreement among the parties hereto, and supersedes all prior agreements, understandings, negotiations and discussions, both written and oral, among the parties hereto with respect to the subject matters hereof. This Subscription Agreement may not be amended or modified in any way except by a written instrument executed by all of the parties. |
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Notices Required by Law:
In making an investment decision, investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved. The Securities have not been recommended by any federal or state securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this memorandum. Any representation to the contrary is a criminal offense.
For Purchases in Florida Only. Florida Law Provides That, When Sales Are Made To Five Or More Persons In Florida, Any Sale Made In Florida Is Voidable By The Purchaser Within Three Days After The First Tender Of Consideration Is Made By Such Purchaser To The Company, An Agent Of The Company Or An Escrow Agent Or Within Three Days After The Availability Of That Privilege Is Communicated To Such Purchaser, Whichever Occurs Later. ALL Sales IN THIS OFFERING Are deemed to be SALES In Florida for purposes of this notice. Payments For Terminated Subscriptions Voided By Purchasers As Provided For In This Paragraph Will Be Promptly Refunded Without Interest. Notice Should Be Given To The Company At The Address Set Forth On The Cover Page Of The Subscription Agreement.
[Signature Pages Follow]
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SUBSCRIPTION AGREEMENT SIGNATURE PAGE
FOR
INDIVIDUALS AND JOINT ACCOUNTS
IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement as of the date set forth below.
$_______________ | by wired funds no later than December 18, 2018 ($18.25 per share multiplied by the aggregate number of shares to be purchased). |
Shares of Class A Voting Common Stock to be purchased: |
Shares of Class B Non-Voting Common Stock to be purchased: |
Signature | Print Name | Date | |||||
Signature | Print Name | Date |
Type of Ownership (Initial One)
Individual (Only One Signature Required) | ||
Tenants in Common (Both Parties Sign) | ||
Tenants by the Entirety (Both Parties Sign) | ||
Joint Tenants with Right of Survivorship (Both Parties Sign) |
If Securities are held in more than one name, please indicate the relationship (spouses, siblings, business partners, etc.) of all named owners.
Address: | |
FOR INDIVIDUALS ONLY |
SUBSCRIPTION AGREEMENT SIGNATURE PAGE FOR ENTITIES
IN WITNESS WHEREOF, the undersigned has executed this Subscription Agreement as of the date set forth below.
$_______________ by wired funds no later than December 18, 2018 ($18.25 per share multiplied by the aggregate number of shares to be purchased).
Shares of Class A Voting Common Stock to be purchased: |
Shares of Class B Non-Voting Common Stock to be purchased: |
Print or Type Name of Purchaser | ||
By: | ||
Signature of Authorized Signatory | ||
Name: | ||
Print or Type Name and Title of Signatory | ||
Date: | ||
Address: | ||
FOR ENTITIES ONLY |
ACCEPTANCE BY THE COMPANY
Professional Holding Corp. hereby accepts (subject to receipt of cleared funds) the foregoing subscription in the amount set forth below as of the date set forth below.
Accepted Subscription:
Amount: $_______________
PROFESSIONAL HOLDING CORP. | ||
By: | ||
Name: | Daniel R. Sheehan | |
Title: | President | |
Date: |
EXHIBIT 1
Purchaser Questionnaire
IT IS MANDATORY THAT EACH PURCHASER COMPLETE THIS QUESTIONNAIRE
AND SIGN IN THE APPROPRIATE SPOT
PURCHASER QUESTIONNAIRE
Instructions. This Purchaser Questionnaire is being sent to each person (you, your or Purchaser) who has indicated an interest in purchasing shares (Securities) in Professional Holding Corp., a Florida corporation (Company). The purpose of this Purchaser Questionnaire is to permit the Company to determine whether each such person meets certain standards imposed by exemptions from the registration requirements of the Securities Act of 1933 (Securities Act), the securities laws of certain states, and rules promulgated thereunder since the Securities will not be registered under any such laws.
Please complete, sign, date and return one copy of this Purchaser Questionnaire to the Company. Neither the provision of this Purchaser Questionnaire to you nor your completion of it constitutes an offer of Securities to you. All information contained herein must be complete and accurate and shall be deemed a representation of the person or entity executing this Purchaser Questionnaire, and the Company and its agents may rely on such representations. Moreover, in reliance upon the representations and information contained herein, the Securities will not be registered under applicable securities laws. Should there be any material change in the information contained herein prior to acceptance by the Company of your subscription for the Securities, you must notify the Company or its authorized representative immediately.
FOR ALL INVESTORS
Accredited Investor Representation. By signing the Purchaser Questionnaire, the prospective investor certifies that it is an accredited investor for one of the reasons enumerated below. Please check one.
For Individual Investors Only:
¨ | I certify that I am an accredited investor because I have an individual net worth, or my spouse and I have combined net worth, in excess of $1,000,000. For purposes of calculating net worth under this paragraph (1), (i) the primary residence shall not be included as an asset, (ii) to the extent that the indebtedness that is secured by the primary residence is in excess of the fair market value of the primary residence, the excess amount shall be included as a liability, and (iii) if the amount of outstanding indebtedness that is secured by the primary residence exceeds the amount outstanding 60 days prior to the execution of this Subscription Agreement, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability. |
¨ | I certify that I am an accredited investor because I had individual income (exclusive of any income attributable to my spouse) of more than $200,000 in the two most recent calendar years and I reasonably expect to have an individual income in excess of $200,000 in the current year. |
¨ | I certify that I am an accredited investors because my spouse and I have joint income in excess of $300,000 in the two most recent calendar years and my spouse and I reasonably expect to have a joint income in excess of $300,000 in the current year. |
¨ | I certify that I am an accredited investors because I am a director or executive officer of the Company. |
For Entity Investors Only:
¨ | The undersigned certifies that it is one of the following: any bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; insurance company as defined in Section 2(a)(13) of the Securities Act; investment company registered under the Investment Company Act of 1940 or a business development company as defined in Section 2(a)(48) of that Act; Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment advisor, or if the employee benefit plan has total assets in excess of $5,000,000, or if a self-directed plan, with investment decisions made solely by persons that are accredited investors. |
¨ | The undersigned certifies that it is a private business development company as defined in Section 202(a)(22) of the Investment Advisors Act of 1940. |
¨ | The undersigned certifies that it is an organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000. |
¨ | The undersigned certifies that it is a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) of the Securities Act. |
¨ | The undersigned certifies that it is an entity in which all of the equity owners are accredited investors. |
The Purchaser understands that the foregoing information will be relied upon by the Company for the purpose of determining the eligibility of the Purchaser to purchase and own Securities in the Company. The Purchaser agrees to notify the Company immediately if any representation or warranty contained in this Subscription Agreement, including this Purchaser Questionnaire, becomes untrue at any time. The Purchaser agrees to provide, if requested, any additional information that may reasonably be required to substantiate the Purchaser’s status as an accredited investor or to otherwise determine the eligibility of the Purchaser to purchase Securities in the Company. The Purchaser agrees to indemnify, defend and hold harmless the Company and their affiliates and agents from and against any loss, damage or liability due to or arising out of a breach of any representation, warranty or agreement of the Purchaser contained herein.
Purchaser Name: | ||
Signature: | ||
Printed Name: | ||
Title (if applicable): | ||
Date: |
Exhibit 10.17
April 1, 2015 BayBoston Capital L.P. 1280 Centre Street, Suite 2 Newton Center, MA 02459 Attention: Carlos Garcia Re: Board Seat and Holdings Confirmation Dear Carlos: This letter will confirm our mutual understanding that BayBoston Capital L.P. (the "Fund") shall have the right to designate one board member of Professional Holdings Corp. (the "Company") as well as its wholly owned subsidiary, Professional Bank (the "Bank"). The Company agrees to take all necessary steps to cause the prompt appointment (within 45 days of the closing date of Fund's acquisition of Class A Voting Common Stock of the Company, as described in further detail below) of such designee to the Board of Directors of the Company and Bank for a term expiring at the 2018 annual meeting. The Fund's initial designee is Carlos Garcia. The Company agrees that if a vacancy occurs because of the death, disability, disqualification or legal inability to serve of the Fund's designee, prior to the expiration of such term, the Fund shall be entitled to designate a replacement, and, in the meantime, the vacant board seat shall not be filled. In addition, this letter will serve as confirmation that the Fund's purchase of 339,073 shares of Class A Voting Common Stock, for a total dollar purchase price of $3,729,803, on or about the date hereof is less than or equal to 9.9% of the voting power and contributed capital of the Company. Sincerely, PROFESSIONAL HOLDING CORP. By: Name: Daniel R. Sheehan Title: Chairman & CEO Acknowledged and Agreed: BAYBOSTON CAPITAL L.P. By: BayBoston Capital G.1:tt LLC, its general partner Name: Carlos M Garak Title: Manager
Exhibit 10.18
February 17, 2017 BayBoston Capital L.P. 1280 Centre Street, Suite 2 Newton Center, MA 02459 Attention: Carlos Garcia Re: Amendment to Letter Agreement Dated April 1, 2015 Dear Carlos: This letter will confirm the mutual agreement between Professional Holding Corp. ("PHC") and BayBoston Capital L.P. ("BayBoston") that the first sentence of that certain letter agreement, dated as of April 1, 2015, by and between PHC and BayBoston (the "Letter Agreement") is hereby deleted in its entirety and replaced with the following: This letter will confirm our mutual understanding that BayBoston Capital L.P. (the "Fund") shall have the right to designate one board member of Professional Holdings Corp. (the "Company") as well as its wholly owned subsidiary, Professional Bank (the "Bank"). The Company agrees to take all necessary steps to cause the prompt appointment (within 45 days of the closing date of Fund's acquisition of Class A Voting Common Stock of the Company, as described in further detail below) of such designee to the Board of Directors of the Company and Bank for a term expiring at the 2021 annual meeting. Except and to the extent modified by this letter, the provisions of the Letter Agreement shall remain in full force and effect and are hereby incorporated into and made a part of this letter as if fully stated herein. Sincerely, PROFESS ONAL HOLDING CORP. By: CON Daniel R. Sheehan Chairman & President Acknowledged and Agreed: BAYBOSTON CAPITAL L.P. By: BayBoston Capital GP LLC, its general partner By: *4111410 TWOS Carlos M. Garcia Manager
Exhibit10.19
PROFESSIONAL HOLDING CORP.
396 Alhambra Circle, Suite 255
Coral Gables, Florida 33146
February 17, 2017
EJF Sidecar Fund, Series LLC – Series E
2107 Wilson Blvd.
Suite 410
Arlington, VA 22201
Re: Investor Rights Letter Agreement
Ladies and Gentlemen:
This letter agreement (the “Letter Agreement”) will confirm our agreement that pursuant to and effective as of the Closing Date of your purchase of capital stock of Professional Holding Corp. (the “Company”), a Florida corporation and parent company of Professional Bank, a Florida-chartered commercial bank (the “Bank”), EJF Sidecar Fund, Series LLC – Series E, a Delaware series limited liability company (“EJF”), shall be entitled to the contractual rights set forth in this Letter Agreement, in addition to any other rights specifically provided to EJF pursuant to that certain Stock Purchase Agreement dated as of February 17, 2017 by and among the Company and certain investors, including EJF (the “Agreement”), including any amendments or supplements thereto, and such other agreements, instruments and certificates delivered in connection therewith (collectively, the “Transaction Documents”). Capitalized terms not defined in this Letter Agreement shall have the meanings ascribed in the Agreement.
1. Board Observer Rights. For as long as EJF and its Affiliates beneficially own at least 9.9% of the Company’s issued and outstanding Class A Voting Common Stock (calculated assuming any Class B Non-Voting Common Stock held by EJF and its Affiliates is converted into Class A Voting Common Stock), the Company and the Bank shall allow EJF to designate one (1) representative to attend all meetings of the Board and Bank Board in a non-voting observer capacity and, in this respect, shall give such representative copies of all notices, minutes, consents and other materials that it provides to its directors at the same time and in the same manner as provided to such directors; provided, however, that (i) such representative shall enter into a customary confidentiality agreement with the Company and the Bank (in form and substance reasonably satisfactory to EJF, the Company and the Bank) requiring the representative to hold in confidence and trust all information so provided; and (ii) the representative may be excluded from access to any material or meeting or portion thereof if the Board or Bank Board (as applicable) determines in good faith, upon advice of counsel, that access to such material or attendance at such meeting would adversely affect the attorney-client privilege between the Company or the Bank and its counsel or would conflict with applicable banking laws or regulations or if such material or meeting relates to relations or negotiations with EJF or require the consent or non-objection of any Regulator. For the avoidance of doubt, such representative shall not have access to any “confidential supervisory information” (as such term or relevant similar term is defined under the regulations of any Regulator).
2. Exchange of Class B Non-Voting Common Stock. EJF may exchange shares of Class B Voting Common Stock into an equal number of shares of Class A Voting Common Stock (automatically upon EJF’s permitted transfer of shares of Class B Non-Voting Common Stock (a) upon the consummation of a Permitted Transfer or (b) if the Company’s Board of Directors, acting in its sole and absolute discretion, have approved the exchange and the exchange would not result in EJF (together with its Affiliates) beneficially owning greater than 9.9% of the outstanding shares of the Company’s Class A Voting Common Stock. For the purposes of this Letter Agreement, “Permitted Transfer” means (1) a transfer pursuant to a widely distributed public offering, (2) a transfer in which no transferee acquires greater than 2% of the issued and outstanding shares Class A Voting Common Stock (after giving effect to any conversion of Class B Non-Voting Common Stock, (3) a transfer to a Person that beneficially owns greater than 50% of the issued and outstanding shares of the Company’s Class A Voting Common Stock or (4) a transfer that is approved by the Federal Reserve Board. The Company shall hold in reserve, at all times, sufficient shares of Class A Voting Common Stock to permit the exchange of all shares of Class B Non-Voting Common Stock then outstanding.
3. Preemptive Rights. If, following the consummation of the transactions contemplated by the Transaction Documents, the Company authorizes the issuance or sale, other than an Excluded Issuance, of any Capital Stock, or any securities, options or debt that are convertible or exchangeable into Capital Stock (“Stock Equivalents”) of the Company (any such security, a “New Security”), EJF shall be entitled, in its sole discretion, to purchase its pro rata portion of the New Securities for the same price and on the same terms as such New Securities are proposed to be offered to others, such that EJF and its Affiliates are able to maintain their aggregate percentage ownership interest in the Company’s Capital Stock on a fully diluted basis, subject to compliance with applicable Law. With respect to such rights described above (the “Preemptive Rights”), the Company shall give written notice of such proposed issuance or sale (including the terms and conditions thereof) to EJF at least thirty (30) days prior to the anticipated issuance or sale date, and EJF shall have twenty (20) days from the receipt thereof to provide the Company with notice of the exercise of its Preemptive Rights with respect to such issuance or sale. For the purposes of this Letter Agreement, “Excluded Issuance” means an issuance or sale of any Capital Stock or Stock Equivalents issued or sold by the Company in connection with: (a) a grant to any existing or prospective directors, officers or other employees, consultants or service providers of the Company or any Company Subsidiary pursuant to the Company Option Plan or similar equity-based plans or other compensation agreement; (b) the conversion or exchange of any securities of the Company into Capital Stock, or the exercise of any warrants or other rights to acquire Capital Stock; (c) any acquisition by the Company or any Company Subsidiary of any equity interests, assets, properties or business of any Person; (d) any merger, consolidation or other business combination involving the Company or any Company Subsidiary; (e) the commencement of any transaction or series of related transactions involving a Change in Control; (f) any subdivision of Capital Stock (by a split of Capital Stock or otherwise), payment of stock dividend, reclassification, reorganization or any similar recapitalization; or (g) a joint venture, strategic alliance or other commercial relationship with any Person relating to the operation of the Company’s or any Company Subsidiary’s business and not for the primary purpose of raising equity capital. The Preemptive Rights described herein will terminate upon the consummation of a firm commitment underwritten public offering of the Company’s Capital Stock pursuant to a registration statement or registration statements resulting in gross proceeds to the Company of at least $25 million.
4. Registration Rights. In addition to, and not exclusive of, any other registration rights granted to EJF pursuant to the Transaction Documents, EJF shall be entitled to exercise registration rights as are set forth in a Registration Rights Agreement in the form of Exhibit A hereto.
5. Most Favored Nation. The Company shall provide EJF with rights and benefits under the this Letter Agreement and the Agreement that are no less favorable to those of any other investor participating in the Offering.
6. Legal Opinion. At the Closing, Investor shall have received an opinion from the Company’s legal counsel in the form set forth in Exhibit B to this Letter Agreement. Delivery of such opinion shall be a closing condition as expressed in Section 1.2(c)(ii)(G) of the Agreement.
7. Miscellaneous. The provisions of Sections 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11, 6.14, 6.16 and 6.17 of the Agreement are hereby incorporated into and made a part of this letter agreement and shall apply mutatis mutandis to this Letter Agreement.
[Signature Page Follows]
Very truly yours, | |||
PROFESSIONAL HOLDING CORP. | |||
By: | /s/ Daniel R. Sheehan | ||
Name: Daniel R. Sheehan | |||
Title: Chairman and President | |||
Professional BANK | |||
By: | /s/ Abel Iglesias | ||
Name: Abel L. Iglesias | |||
Title: Chief Executive Officer |
Acknowledged and agreed: | |||
EJF Sidecar Fund, Series LLC – Series E | |||
By: | /s/ Emmanuel J. Friedman | ||
Name: | Emmanuel J. Friedman | ||
Title: | Chief Executive Officer |
EXECUTION VERSION
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of February 17, 2017, by and between Professional Holding Corp., a Florida corporation and the parent company of Professional Bank (the “Company”), and the undersigned Investor (the “Investor”). Capitalized terms not defined in this Agreement shall have the meaning ascribed in that certain Stock Purchase Agreement dated February 17, 2017 by and between the Company and certain investors, including Investor (the “Purchase Agreement”).
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and Investor hereby mutually agree as follows:
1. | Registration RIGHTS |
(a) Any time after the fourth (4th) anniversary of the date of this Agreement, Investor may request one registration (the “Demand Registration”) under the Securities Act of 1933, as amended (the “Securities Act”), of its Registrable Securities (as defined below). The Demand Registration shall be on such form as the Company shall select. The Demand Registration shall specify the number of Registrable Securities to be registered. The Company shall use best efforts to cause a registration statement to be filed within 180 days after the date on which the initial request by Investor is received by the Company and shall use its best efforts to cause such registration statement to be declared effective by the U.S. Securities and Exchange Commission (“SEC”) as soon as practicable thereafter. The Company shall use best efforts to keep such Demand Registration current and effective until the Registrable Securities registered thereby cease to be Registrable Securities.
(b) As long as Investor holds Registrable Securities, if at any time or from time to time, the Company shall determine to register any of its securities under the Securities Act (except for the registration of securities to be offered pursuant to an employee benefit plan on Form S-8 or pursuant to a registration made on Form S-4, or any successor forms then in effect) and the registration form to be used may be used for the registration of the Registrable Securities (a “Piggyback Registration”), the Company shall:
(1) Provide thirty (30) calendar days’ advance written notice to Investor prior to filing the registration statement (the “Registration Rights Notice”); and
(2) include in such registration, and in any underwriting involved therein, all the Registrable Securities specified in a written request made by Investor within fifteen (15) calendar days after receipt of the Registration Rights Notice from the Company, except as set forth in Section 1(c) below.
(c) If the registration is for a registered public offering involving an underwriting, the Company shall so advise Investor as a part of the Registration Rights Notice. In such event, the right of Investor to registration shall be conditioned upon Investor’s participation in such underwriting and the inclusion of Investor’s Registrable Securities in the underwriting to the extent provided herein. If Investor proposes to distribute its securities through such underwriting, it shall (together with the Company and any other holders distributing their securities through such underwriting) enter into an underwriting agreement in the form agreed to by the Company with the underwriter(s) selected for such underwriting by the Company. Notwithstanding any other provision of this Agreement, if the managing underwriters advise the Company and Investor in writing that in their reasonable and good faith opinion the number of securities requested to be included in such offering exceeds the number which can be sold without adversely affecting the per share offering price of the securities, the Company will include in such registration (i) first, the securities that the Company proposes to sell; (ii) second, the Registrable Securities requested to be included therein by Investor, allocated pro rata among all such holders on the basis of the number of Registrable Securities owned by each such holder or in such manner as they may otherwise agree; and (iii) third, the securities requested to be included therein by holders of securities other than holders of Registrable Securities, allocated among such holders in such manner as they may agree. If Investor disapproves of the terms of any such underwriting, Investor may elect to withdraw therefrom by written notice to the Company and the managing underwriter.
(d) For purposes of this Agreement, “Registrable Securities” shall mean any and all shares of (i) Company Stock issued pursuant to the Purchase Agreement (including Class A Common Stock issued or issuable upon exchange of Class B Common Stock), (ii) Capital Stock issued in respect of the Company Stock in any reorganization of the Company, and (iii) Capital Stock issued in respect of the stock referred to in clause (i) or (ii) above as a result of a stock split, stock dividend, recapitalization or combination.
2. | Expenses of Registration |
All expenses incurred in connection with the registrations pursuant to Section 1 hereof, including all registration, filing and qualification fees, printing expenses, fees and disbursements of counsel for the Company and expenses of any special audits of the Company’s financial statements incidental to or required by such registration, shall be borne by the Company, except that the Company shall not be required to pay underwriters’ fees, discounts or commissions relating to Registrable Securities.
3. | Registration Procedures |
In the case of each registration affected by the Company pursuant to this Agreement, the Company will keep Investor advised in writing as to the initiation of each registration and as to the completion thereof. At its expense the Company will:
(a) keep such registration pursuant to this Agreement continuously effective until all of such Registrable Securities have been disposed of and to comply with the provisions of the Securities Act with respect to the disposition of such Registrable Securities in accordance with the intended methods of disposition set forth in such registration statement;
(b) promptly prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to comply with the provisions of the Securities Act, and to keep such registration statement effective for that period of time specified in Section 3(a) above;
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(c) at least five (5) business days before filing such registration statement, prospectus or amendments or supplements thereto with the SEC, furnish to Investor copies of such documents proposed to be filed, which documents shall be subject to the reasonable review, comment and approval of Investor;
(d) notify Investor, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed with the SEC;
(e) advise Investor, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the SEC suspending the effectiveness of such registration statement or the initiation or threatening of any proceeding for such purpose and promptly use best efforts to obtain the withdrawal of any order suspending the effectiveness of a registration statement, or the lifting of any suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction, at the earliest possible moment;
(f) cause all Registrable Securities covered by such registrations to be listed on each securities exchange on which similar securities issued by the Company are then listed or, if such securities are not then listed, on a national securities exchange selected by Investor;
(g) notify each selling holder of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event that would cause the prospectus included in such registration statement to contain an untrue statement of a material fact or omit any fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, and, at the request of any such holder, the Company shall prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
(h) make available for inspection by Investor all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “Records”), and cause the Company’s officers, directors and employees to supply all Records requested by Investor in connection with such registration statement;
(i) provide a transfer agent and registrar (which may be the same entity) for all such Registrable Securities not later than the effective date of such registration;
(j) otherwise use its best efforts to comply with all applicable rules and regulations of the SEC and make available to its shareholders an earnings statement (in a form that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities Act or any successor rule thereto) no later than thirty (30) days after the end of the 12-month period beginning with the first day of the Company’s first full fiscal quarter after the effective date of such Registration Statement, which earnings statement shall cover said 12-month period, and which requirement will be deemed to be satisfied if the Company timely files complete and accurate information on Forms 10-K, 10-Q and 8-K under the Securities Exchange Act of 1934, as amended (“Exchange Act”), and otherwise complies with Rule 158 under the Securities Act or any successor rule thereto; and
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(k) enter into such customary agreements (including underwriting agreements in customary form) and take all such other actions as the holders of a majority of the Registrable Securities being sold or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities;
(l) use its best efforts to cause such Registrable Securities to be registered with or approved by such other Governmental Entities as may be necessary by virtue of the business and operations of the Company to enable the holders of such Registrable Securities to consummate the disposition of such Registrable Securities in accordance with their intended method of distribution thereof;
(m) notify Investor promptly of any request by the Commission for the amending or supplementing of such registration statement or prospectus or for additional information;
(n) permit Investor to participate in the preparation of such Registration Statement and to require the insertion therein of language, furnished to the Company in writing, which in the reasonable judgment of such holder and its counsel should be included, if in Investor’s judgment, Investor might be deemed to be an underwriter or a “controlling person” (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) (a “Controlling Person”) of the Company; and
(o) take such other actions as reasonably requested by Investor.
4. | Indemnification |
(a) In the event of a registration of any of the Registrable Securities under the Securities Act pursuant to this Agreement, the Company will (i) indemnify and hold harmless, to the fullest extent permitted by law, Investor, each underwriter of such Registrable Securities thereunder, and any other person acting on behalf of Investor and each other person, if any, who controls such foregoing persons within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which any of the foregoing persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such Registrable Securities were registered under the Securities Act, any preliminary prospectus, free writing prospectus, or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of any rule or regulation promulgated under the Securities Act or any state securities law applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, and (ii) will reimburse such persons, each of their officers, directors and partners, and each person controlling such persons, for any legal and any other expenses incurred in connection with investigating, defending or settling any such claim, loss, damage, liability or action. Notwithstanding the foregoing, the Company will not be liable in any such case to the extent that any such claim, loss, damage or liability arises out of or is based on any untrue statement or omission based upon written information furnished to the Company in an instrument duly executed by Investor or an underwriter, as applicable, specifically for use therein. This indemnity shall be in addition to any liability the Company may otherwise have.
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(b) Investor will, if Registrable Securities held by or issuable to Investor are included in the securities for which such registration is being effected, indemnify and hold harmless, to the fullest extent permitted by law, the Company, each of its directors and officers, each underwriter, if any, of the Company’s securities covered by such registration statement, each person who controls the Company and each underwriter within the meaning of the Securities Act, against all claims, losses, expenses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of a prospectus, in light of the circumstances under with they were made), but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company in an instrument duly executed by Investor specifically for use therein. Notwithstanding the foregoing, the total amount for which Investor, its officers, directors and partners, and any person controlling Investor, shall be liable under this Section 4(b) shall not in any event exceed the net proceeds (after deducting underwriting fees, commissions, and discounts) received by Investor from the sale of its Registrable Securities in such registration. This indemnity shall be in addition to any liability Investor may otherwise have.
(c) Each party entitled to indemnification under this Section 4 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claims as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided, however, that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party’s expense. Notwithstanding the foregoing, the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations hereunder, unless such failure resulted in actual detriment to the Indemnifying Party. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect of such claim or litigation.
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(d) Notwithstanding the foregoing, to the extent that the provisions on indemnification contained in the underwriting agreements entered into among Investor, the Company and the underwriters in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall be controlling as to the Registrable Securities included in the public offering.
(e) The indemnification provided by this Section 4 shall be a continuing right to indemnification and shall survive the registration and sale of any securities by any person entitled to indemnification hereunder and the expiration or termination of this Agreement.
(f) If the indemnification provided for hereunder is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, claim, damage, liability or action referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amounts paid or payable by such Indemnified Party as a result of such loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions which resulted in such loss, claim, damage, liability or action as well as any other relevant equitable considerations; provided, that the maximum amount of liability in respect of such contribution shall be limited, in the case of each holder of Registrable Securities, to an amount equal to the net proceeds (after underwriting fees, commissions or discounts) actually received by such seller from the sale of Registrable Securities effected pursuant to such registration. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties agree that it would not be just and equitable if contribution pursuant hereto were determined by pro rata allocation or by any other method or allocation which does not take account of the equitable considerations referred to herein. No Person guilty or liable of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
5. | REPORTS UNDER the EXCHANGE ACT |
With a view to making available to Investor the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the SEC that may at any time permit Investor to sell securities of the Company to the public without registration, the Company shall:
(a) make and keep public information available, within the meaning of Rule 144, at all times after the effective date of (i) the first registration statement covering an underwritten public offering filed by the Company or (ii) the first registration by the Company under the Exchange Act;
(b) following a public offering or a registration under the Exchange Act, file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and
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(c) furnish to Investor forthwith upon request a written statement by the Company that it has complied with the reporting requirements of Rule 144 (at any time after ninety (90) days after the effective date of said first registration statement filed by the Company), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents filed by the Company with the SEC as may be reasonably requested in availing any such holder to take advantage of any rule or regulation of the SEC permitting the selling of any such securities without registration.
6. | LIMITATIONS IN CONNECTION WITH FUTURE GRANTS OF REGISTRATION RIGHTS |
From and after the date of this Agreement, the Company shall not, without the prior written consent of Investor, enter into any agreement with any holder or prospective holder of any securities of the Company which would allow such holder or prospective holder to include such securities in any registration filed under Section 1 hereof, unless under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of his securities will not reduce the amount of the Registrable Securities of Investor to be included in such registration.
7. | TRANSFER OF REGISTRATION RIGHTS |
The registration rights of Investor (and of any permitted transferee of Investor) under this Agreement with respect to any Registrable Securities may be assigned in whole or in part as provided in Section 8(b) below.
8. | Miscellaneous |
(a) No amendment or waiver of any provision of this Agreement will be effective against any party hereto unless it is in a writing signed by a duly authorized officer of such party.
(b) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors and permitted assigns. This Agreement, and the rights and obligations of Investor hereunder, may be assigned by Investor to any person or entity to which Registrable Securities are transferred by Investor, and such transferee shall be deemed to have acquired all of the rights and obligations of Investor for purposes of this Agreement; provided, that the transferee provides written notice of such assignment to the Company and provided that any such transfer shall be made strictly in accordance with all applicable laws; and provided, further, that such rights may not be held or exercised by more than one transferee at any one time. The Company may not assign its rights under this Agreement except to its successors-in-interest as a result of a merger, reorganization or a sale of all or substantially all of the assets of the Company.
(c) For the convenience of the parties hereto, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement. Executed signature pages to this Agreement may be delivered by facsimile or other electronic transmission and such transmissions shall be deemed as sufficient as if manually signed signature pages had been delivered.
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(d) Any notice, request, instruction or other document to be given hereunder by any party to the other will be in writing and will be deemed to have been duly given (i) on the date of delivery if delivered personally or by e-mail (upon confirmation of receipt), (ii) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service, or (iii) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice.
If to the Company:
Professional Holding Corp.
396 Alhambra Circle, Suite 255
Coral Gables, FL 33146
E-mail: dsheehan@professionalbankfl.com
Attention: Daniel R. Sheehan
Title: Chairman and President
with a copy to:
Gunster, Yoakley & Stewart, P.A.
777 South Flagler Drive, Suite 500 East
West Palm Beach, FL 33401
E-mail: mmitrione@gunster.com
Attention: Michael V. Mitrione
If to Investor:
EJF Sidecar Fund, Series LLC – Series E
2107 Wilson Blvd., Suite 410
Arlington, VA 22201
E-mail: trading@ejfcap.com
Attention: Neal J. Wilson
Title: Chief Operating Officer
with copies to:
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(e) If any provision of this Agreement or the application thereof to any person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.
(f) If, and as often as, there is any change in the Class A Common Stock or Class B Common Stock by way of a stock split, stock dividend, combination or reclassification, or through a merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions hereof so that the rights and privileges granted hereby shall continue with respect to the Class A Common Stock and Class B Common Stock as so changed.
(g) This Agreement will be governed by and construed in accordance with the Laws of the State of Florida applicable to contracts made and to be performed entirely within such jurisdiction.
(h) The parties hereby agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the federal or state courts located in Miami-Dade County, Florida, so long as such court shall have subject matter jurisdiction over such suit, action or proceeding, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by Law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 8(h) shall be deemed effective service of process on such party. The parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the state and federal courts referred to above for any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby.
(i) THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR UNDER ANY AGREEMENT, INSTRUMENT OR OTHER DOCUMENT CONTEMPLATED HEREBY OR RELATED HERETO AND IN ANY ACTION DIRECTLY OR INDIRECTLY RELATED TO OR CONNECTED WITH THE OBLIGATIONS OF THIS AGREEMENT. THE PARTIES ACKNOWLEDGE THAT THIS WAIVER MAY DEPRIVE EACH OF THEM AN IMPORTANT RIGHT AND THAT SUCH WAIVER HAS BEEN KNOWINGLY AND VOLUNTARILY MADE BY THE PARTIES AFTER CONSULTATION WITH THEIR LEGAL COUNSEL.
(j) The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.
[Signature page follows]
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EXECUTION VERSION
IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date set forth above.
COMPANY: | |||
PROFESSIONAL HOLDING CORP. | |||
By: | |||
Name: | Daniel R. Sheehan | ||
Title: | Chairman and President | ||
INVESTOR: | |||
EJF SIDECAR FUND, SERIES LLC – SERIES E | |||
By: | |||
Name: | |||
Title: |
EXHIBIT B
FORM OF OPINION
1. The Company has been incorporated under the Florida Business Corporation Act, and its corporate status is active under the laws of the State of Florida.
2. The Bank (a) has been incorporated under the Florida Business Corporation Act and is a Florida-chartered commercial bank, and its corporate status is active, and (b) based solely on the FDIC Certificate, is an “insured depository” as defined under Section 3(c)(2) of the Federal Deposit Insurance Act, and the deposit accounts of the Bank are insured by the FDIC up to the maximum amounts provided by law and the rules of the FDIC.
3. The Company has the corporate power to execute and deliver the Agreement and to perform its obligations thereunder.
4. The Company has authorized the execution, delivery and performance of the Agreement by all necessary corporate action.
5. Subject to the limitations set forth herein, the Agreement is a valid and binding obligation of the Company and is enforceable against the Company in accordance with its terms under the laws of the State of Florida.
6. The Securities have been duly authorized by the Company, and the Securities, when issued, delivered and paid for in accordance with the terms of the Agreement, will be validly issued, fully paid and nonassessable.
7. The Company is not and, after giving effect to the offer and sale of the Securities, will not be an “investment company” as such term is defined in the Investment Company Act of 1940, as amended (the “ICA”).
8. The execution and delivery by the Company of the Agreement and the performance by the Company of its obligation under the Agreement do not: (a) violate the Company’s Articles of Incorporation or Bylaws; (b) to our knowledge, constitute a breach or a default under, or result in the creation of a security interest or a lien on the assets of the Company under, any of the Company’s material agreements that are known to us (to the extent that any such agreement is governed by the law of a jurisdiction other than the State of Florida, we express no opinion with respect to the effect or other matters of any such law and have assumed that the laws of such jurisdiction are identical to the laws of the State of Florida, without giving effect to principles of conflicts of laws); (c) violate any judgment, decree or order known to us of any court or administrative tribunal of the State of Florida that is known to us to be applicable to the Company; or (d) based on existing facts of which we are aware, violate any Applicable Laws (as hereinafter defined).
[Signature Page to Registration Rights Agreement]
Exhibit 10.20
PROFESSIONAL HOLDING CORP.
396 Alhambra Circle, Suite 255
Coral Gables, Florida 33146
February 17, 2017
BayBoston Capital L.P.
1280 Centre Street, Suite 2
Newton Center, MA 02459
Attention: Carlos M. Garcia
Re: Investor Rights Letter Agreement
Ladies and Gentlemen:
This letter agreement (the “Letter Agreement”) will confirm our agreement that pursuant to and effective as of the Closing Date of your purchase of capital stock of Professional Holding Corp. (the “Company”), a Florida corporation and parent company of Professional Bank, a Florida-chartered commercial bank (the “Bank”), BayBoston Capital L.P., a Delaware limited partnership (the “Investor”), shall be entitled to the contractual rights set forth in this Letter Agreement, in addition to any other rights specifically provided to Investor pursuant to that certain Stock Purchase Agreement dated as of February 17, 2017 by and among the Company and certain investors, including Investor (the “Agreement”), including any amendments or supplements thereto, and such other agreements, instruments and certificates delivered in connection therewith (collectively, the “Transaction Documents”). Capitalized terms not defined in this Letter Agreement shall have the meanings ascribed in the Agreement.
1. Exchange of Class B Non-Voting Common Stock. Investor may exchange shares of Class B Voting Common Stock into an equal number of shares of Class A Voting Common Stock (automatically upon Investor’s permitted transfer of shares of Class B Non-Voting Common Stock (a) upon the consummation of a Permitted Transfer or (b) if the Company’s Board of Directors, acting in its sole and absolute discretion, have approved the exchange and the exchange would not result in Investor (together with its Affiliates) beneficially owning greater than 9.9% of the outstanding shares of the Company’s Class A Voting Common Stock. For the purposes of this Letter Agreement, “Permitted Transfer” means (1) a transfer pursuant to a widely distributed public offering, (2) a transfer in which no transferee acquires greater than 2% of the issued and outstanding shares Class A Voting Common Stock (after giving effect to any conversion of Class B Non-Voting Common Stock, (3) a transfer to a Person that beneficially owns greater than 50% of the issued and outstanding shares of the Company’s Class A Voting Common Stock or (4) a transfer that is approved by the Federal Reserve Board. The Company shall hold in reserve, at all times, sufficient shares of Class A Voting Common Stock to permit the exchange of all shares of Class B Non-Voting Common Stock then outstanding.
2. Preemptive Rights. If, following the consummation of the transactions contemplated by the Transaction Documents, the Company authorizes the issuance or sale, other than an Excluded Issuance, of any Capital Stock, or any securities, options or debt that are convertible or exchangeable into Capital Stock (“Stock Equivalents”) of the Company (any such security, a “New Security”), Investor shall be entitled, in its sole discretion, to purchase its pro rata portion of the New Securities for the same price and on the same terms as such New Securities are proposed to be offered to others, such that Investor and its Affiliates are able to maintain their aggregate percentage ownership interest in the Company’s Capital Stock on a fully diluted basis, subject to compliance with applicable Law. With respect to such rights described above (the “Preemptive Rights”), the Company shall give written notice of such proposed issuance or sale (including the terms and conditions thereof) to Investor at least thirty (30) days prior to the anticipated issuance or sale date, and Investor shall have twenty (20) days from the receipt thereof to provide the Company with notice of the exercise of its Preemptive Rights with respect to such issuance or sale. For the purposes of this Letter Agreement, “Excluded Issuance” means an issuance or sale of any Capital Stock or Stock Equivalents issued or sold by the Company in connection with: (a) a grant to any existing or prospective directors, officers or other employees, consultants or service providers of the Company or any Company Subsidiary pursuant to the Stock Option Plan or similar equity-based plans or other compensation agreement; (b) the conversion or exchange of any securities of the Company into Capital Stock, or the exercise of any warrants or other rights to acquire Capital Stock; (c) any acquisition by the Company or any Company Subsidiary of any equity interests, assets, properties or business of any Person; (d) any merger, consolidation or other business combination involving the Company or any Company Subsidiary; (e) the commencement of any transaction or series of related transactions involving a Change in Control; (f) any subdivision of Capital Stock (by a split of Capital Stock or otherwise), payment of stock dividend, reclassification, reorganization or any similar recapitalization; or (g) a joint venture, strategic alliance or other commercial relationship with any Person relating to the operation of the Company’s or any Company Subsidiary’s business and not for the primary purpose of raising equity capital. The Preemptive Rights described herein will terminate upon the consummation of a firm commitment underwritten public offering of the Company’s Capital Stock pursuant to a registration statement or registration statements resulting in gross proceeds to the Company of at least $25 million.
3. Registration Rights. In addition to, and not exclusive of, any other registration rights granted to Investor pursuant to the Transaction Documents, Investor shall be entitled to exercise registration rights as are set forth in a Registration Rights Agreement in the form of Exhibit A hereto.
4. Most Favored Nation. The Company shall provide Investor with rights and benefits under the this Letter Agreement and the Agreement that are no less favorable to those of any other investor participating in the Offering.
5. Legal Opinion. At the Closing, Investor shall have received an opinion from the Company’s legal counsel in the form set forth in Exhibit B to this Letter Agreement. Delivery of such opinion shall be a closing condition as expressed in Section 1.2(c)(ii)(G) of the Agreement.
6. Miscellaneous. The provisions of Sections 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11, 6.14, 6.16 and 6.17 of the Agreement are hereby incorporated into and made a part of this letter agreement and shall apply mutatis mutandis to this Letter Agreement.
[Signature Page Follows]
Very truly yours, | ||
PROFESSIONAL HOLDING CORP. | ||
By: | /s/ Daniel R. Sheehan | |
Name: Daniel R. Sheehan | ||
Title: Chairman and President | ||
Professional BANK | ||
By: | /s/ Abel L. Iglesias | |
Name: Abel L. Iglesias | ||
Title: Chief Executive Officer |
Acknowledged and agreed: | ||
BAYBOSTON MANAGERS, LLC | ||
By: | /s/ Carlos M. Garcia | |
Name: | Carlos M. Garcia | |
Title: | Manager of its general partner, | |
BayBoston Capital GP, LLC |
EXECUTION VERSION
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of February 17, 2017, by and between Professional Holding Corp., a Florida corporation and the parent company of Professional Bank (the “Company”), and the undersigned Investor (the “Investor”). Capitalized terms not defined in this Agreement shall have the meaning ascribed in that certain Stock Purchase Agreement dated February 17, 2017 by and between the Company and certain investors, including Investor (the “Purchase Agreement”).
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and Investor hereby mutually agree as follows:
1. | Registration RIGHTS |
(a) Any time after the fourth (4th) anniversary of the date of this Agreement, Investor may request one registration (the “Demand Registration”) under the Securities Act of 1933, as amended (the “Securities Act”), of its Registrable Securities (as defined below). The Demand Registration shall be on such form as the Company shall select. The Demand Registration shall specify the number of Registrable Securities to be registered. The Company shall use best efforts to cause a registration statement to be filed within 180 days after the date on which the initial request by Investor is received by the Company and shall use its best efforts to cause such registration statement to be declared effective by the U.S. Securities and Exchange Commission (“SEC”) as soon as practicable thereafter. The Company shall use best efforts to keep such Demand Registration current and effective until the Registrable Securities registered thereby cease to be Registrable Securities.
(b) As long as Investor holds Registrable Securities, if at any time or from time to time, the Company shall determine to register any of its securities under the Securities Act (except for the registration of securities to be offered pursuant to an employee benefit plan on Form S-8 or pursuant to a registration made on Form S-4, or any successor forms then in effect) and the registration form to be used may be used for the registration of the Registrable Securities (a “Piggyback Registration”), the Company shall:
(1) Provide thirty (30) calendar days’ advance written notice to Investor prior to filing the registration statement (the “Registration Rights Notice”); and
(2) include in such registration, and in any underwriting involved therein, all the Registrable Securities specified in a written request made by Investor within fifteen (15) calendar days after receipt of the Registration Rights Notice from the Company, except as set forth in Section 1(c) below.
(c) If the registration is for a registered public offering involving an underwriting, the Company shall so advise Investor as a part of the Registration Rights Notice. In such event, the right of Investor to registration shall be conditioned upon Investor’s participation in such underwriting and the inclusion of Investor’s Registrable Securities in the underwriting to the extent provided herein. If Investor proposes to distribute its securities through such underwriting, it shall (together with the Company and any other holders distributing their securities through such underwriting) enter into an underwriting agreement in the form agreed to by the Company with the underwriter(s) selected for such underwriting by the Company. Notwithstanding any other provision of this Agreement, if the managing underwriters advise the Company and Investor in writing that in their reasonable and good faith opinion the number of securities requested to be included in such offering exceeds the number which can be sold without adversely affecting the per share offering price of the securities, the Company will include in such registration (i) first, the securities that the Company proposes to sell; (ii) second, the Registrable Securities requested to be included therein by Investor, allocated pro rata among all such holders on the basis of the number of Registrable Securities owned by each such holder or in such manner as they may otherwise agree; and (iii) third, the securities requested to be included therein by holders of securities other than holders of Registrable Securities, allocated among such holders in such manner as they may agree. If Investor disapproves of the terms of any such underwriting, Investor may elect to withdraw therefrom by written notice to the Company and the managing underwriter.
(d) For purposes of this Agreement, “Registrable Securities” shall mean any and all shares of (i) Company Stock issued pursuant to the Purchase Agreement (including Class A Common Stock issued or issuable upon exchange of Class B Common Stock), (ii) Capital Stock issued in respect of the Company Stock in any reorganization of the Company, and (iii) Capital Stock issued in respect of the stock referred to in clause (i) or (ii) above as a result of a stock split, stock dividend, recapitalization or combination.
2. | Expenses of Registration |
All expenses incurred in connection with the registrations pursuant to Section 1 hereof, including all registration, filing and qualification fees, printing expenses, fees and disbursements of counsel for the Company and expenses of any special audits of the Company’s financial statements incidental to or required by such registration, shall be borne by the Company, except that the Company shall not be required to pay underwriters’ fees, discounts or commissions relating to Registrable Securities.
3. | Registration Procedures |
In the case of each registration affected by the Company pursuant to this Agreement, the Company will keep Investor advised in writing as to the initiation of each registration and as to the completion thereof. At its expense the Company will:
(a) keep such registration pursuant to this Agreement continuously effective until all of such Registrable Securities have been disposed of and to comply with the provisions of the Securities Act with respect to the disposition of such Registrable Securities in accordance with the intended methods of disposition set forth in such registration statement;
(b) promptly prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to comply with the provisions of the Securities Act, and to keep such registration statement effective for that period of time specified in Section 3(a) above;
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(c) at least five (5) business days before filing such registration statement, prospectus or amendments or supplements thereto with the SEC, furnish to Investor copies of such documents proposed to be filed, which documents shall be subject to the reasonable review, comment and approval of Investor;
(d) notify Investor, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed with the SEC;
(e) advise Investor, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the SEC suspending the effectiveness of such registration statement or the initiation or threatening of any proceeding for such purpose and promptly use best efforts to obtain the withdrawal of any order suspending the effectiveness of a registration statement, or the lifting of any suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction, at the earliest possible moment;
(f) cause all Registrable Securities covered by such registrations to be listed on each securities exchange on which similar securities issued by the Company are then listed or, if such securities are not then listed, on a national securities exchange selected by Investor;
(g) notify each selling holder of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event that would cause the prospectus included in such registration statement to contain an untrue statement of a material fact or omit any fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, and, at the request of any such holder, the Company shall prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
(h) make available for inspection by Investor all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “Records”), and cause the Company’s officers, directors and employees to supply all Records requested by Investor in connection with such registration statement;
(i) provide a transfer agent and registrar (which may be the same entity) for all such Registrable Securities not later than the effective date of such registration;
(j) otherwise use its best efforts to comply with all applicable rules and regulations of the SEC and make available to its shareholders an earnings statement (in a form that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities Act or any successor rule thereto) no later than thirty (30) days after the end of the 12-month period beginning with the first day of the Company’s first full fiscal quarter after the effective date of such Registration Statement, which earnings statement shall cover said 12-month period, and which requirement will be deemed to be satisfied if the Company timely files complete and accurate information on Forms 10-K, 10-Q and 8-K under the Securities Exchange Act of 1934, as amended (“Exchange Act”), and otherwise complies with Rule 158 under the Securities Act or any successor rule thereto; and
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(k) enter into such customary agreements (including underwriting agreements in customary form) and take all such other actions as the holders of a majority of the Registrable Securities being sold or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities;
(l) use its best efforts to cause such Registrable Securities to be registered with or approved by such other Governmental Entities as may be necessary by virtue of the business and operations of the Company to enable the holders of such Registrable Securities to consummate the disposition of such Registrable Securities in accordance with their intended method of distribution thereof;
(m) notify Investor promptly of any request by the Commission for the amending or supplementing of such registration statement or prospectus or for additional information;
(n) permit Investor to participate in the preparation of such Registration Statement and to require the insertion therein of language, furnished to the Company in writing, which in the reasonable judgment of such holder and its counsel should be included, if in Investor’s judgment, Investor might be deemed to be an underwriter or a “controlling person” (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) (a “Controlling Person”) of the Company; and
(o) take such other actions as reasonably requested by Investor.
4. | Indemnification |
(a) In the event of a registration of any of the Registrable Securities under the Securities Act pursuant to this Agreement, the Company will (i) indemnify and hold harmless, to the fullest extent permitted by law, Investor, each underwriter of such Registrable Securities thereunder, and any other person acting on behalf of Investor and each other person, if any, who controls such foregoing persons within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which any of the foregoing persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such Registrable Securities were registered under the Securities Act, any preliminary prospectus, free writing prospectus, or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of any rule or regulation promulgated under the Securities Act or any state securities law applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, and (ii) will reimburse such persons, each of their officers, directors and partners, and each person controlling such persons, for any legal and any other expenses incurred in connection with investigating, defending or settling any such claim, loss, damage, liability or action. Notwithstanding the foregoing, the Company will not be liable in any such case to the extent that any such claim, loss, damage or liability arises out of or is based on any untrue statement or omission based upon written information furnished to the Company in an instrument duly executed by Investor or an underwriter, as applicable, specifically for use therein. This indemnity shall be in addition to any liability the Company may otherwise have.
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(b) Investor will, if Registrable Securities held by or issuable to Investor are included in the securities for which such registration is being effected, indemnify and hold harmless, to the fullest extent permitted by law, the Company, each of its directors and officers, each underwriter, if any, of the Company’s securities covered by such registration statement, each person who controls the Company and each underwriter within the meaning of the Securities Act, against all claims, losses, expenses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of a prospectus, in light of the circumstances under with they were made), but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company in an instrument duly executed by Investor specifically for use therein. Notwithstanding the foregoing, the total amount for which Investor, its officers, directors and partners, and any person controlling Investor, shall be liable under this Section 4(b) shall not in any event exceed the net proceeds (after deducting underwriting fees, commissions, and discounts) received by Investor from the sale of its Registrable Securities in such registration. This indemnity shall be in addition to any liability Investor may otherwise have.
(c) Each party entitled to indemnification under this Section 4 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claims as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided, however, that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party’s expense. Notwithstanding the foregoing, the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations hereunder, unless such failure resulted in actual detriment to the Indemnifying Party. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect of such claim or litigation.
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(d) Notwithstanding the foregoing, to the extent that the provisions on indemnification contained in the underwriting agreements entered into among Investor, the Company and the underwriters in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall be controlling as to the Registrable Securities included in the public offering.
(e) The indemnification provided by this Section 4 shall be a continuing right to indemnification and shall survive the registration and sale of any securities by any person entitled to indemnification hereunder and the expiration or termination of this Agreement.
(f) If the indemnification provided for hereunder is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, claim, damage, liability or action referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amounts paid or payable by such Indemnified Party as a result of such loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions which resulted in such loss, claim, damage, liability or action as well as any other relevant equitable considerations; provided, that the maximum amount of liability in respect of such contribution shall be limited, in the case of each holder of Registrable Securities, to an amount equal to the net proceeds (after underwriting fees, commissions or discounts) actually received by such seller from the sale of Registrable Securities effected pursuant to such registration. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties agree that it would not be just and equitable if contribution pursuant hereto were determined by pro rata allocation or by any other method or allocation which does not take account of the equitable considerations referred to herein. No Person guilty or liable of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
5. | REPORTS UNDER the EXCHANGE ACT |
With a view to making available to Investor the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the SEC that may at any time permit Investor to sell securities of the Company to the public without registration, the Company shall:
(a) make and keep public information available, within the meaning of Rule 144, at all times after the effective date of (i) the first registration statement covering an underwritten public offering filed by the Company or (ii) the first registration by the Company under the Exchange Act;
(b) following a public offering or a registration under the Exchange Act, file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and
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(c) furnish to Investor forthwith upon request a written statement by the Company that it has complied with the reporting requirements of Rule 144 (at any time after ninety (90) days after the effective date of said first registration statement filed by the Company), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents filed by the Company with the SEC as may be reasonably requested in availing any such holder to take advantage of any rule or regulation of the SEC permitting the selling of any such securities without registration.
6. | LIMITATIONS IN CONNECTION WITH FUTURE GRANTS OF REGISTRATION RIGHTS |
From and after the date of this Agreement, the Company shall not, without the prior written consent of Investor, enter into any agreement with any holder or prospective holder of any securities of the Company which would allow such holder or prospective holder to include such securities in any registration filed under Section 1 hereof, unless under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of his securities will not reduce the amount of the Registrable Securities of Investor to be included in such registration.
7. | TRANSFER OF REGISTRATION RIGHTS |
The registration rights of Investor (and of any permitted transferee of Investor) under this Agreement with respect to any Registrable Securities may be assigned in whole or in part as provided in Section 8(b) below.
8. | Miscellaneous |
(a) No amendment or waiver of any provision of this Agreement will be effective against any party hereto unless it is in a writing signed by a duly authorized officer of such party.
(b) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors and permitted assigns. This Agreement, and the rights and obligations of Investor hereunder, may be assigned by Investor to any person or entity to which Registrable Securities are transferred by Investor, and such transferee shall be deemed to have acquired all of the rights and obligations of Investor for purposes of this Agreement; provided, that the transferee provides written notice of such assignment to the Company and provided that any such transfer shall be made strictly in accordance with all applicable laws; and provided, further, that such rights may not be held or exercised by more than one transferee at any one time. The Company may not assign its rights under this Agreement except to its successors-in-interest as a result of a merger, reorganization or a sale of all or substantially all of the assets of the Company.
(c) For the convenience of the parties hereto, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement. Executed signature pages to this Agreement may be delivered by facsimile or other electronic transmission and such transmissions shall be deemed as sufficient as if manually signed signature pages had been delivered.
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(d) Any notice, request, instruction or other document to be given hereunder by any party to the other will be in writing and will be deemed to have been duly given (i) on the date of delivery if delivered personally or by e-mail (upon confirmation of receipt), (ii) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service, or (iii) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice.
If to the Company:
Professional Holding Corp.
396 Alhambra Circle, Suite 255
Coral Gables, FL 33146
E-mail: dsheehan@professionalbankfl.com
Attention: Daniel R. Sheehan
Title: Chairman and President
with a copy to:
Gunster, Yoakley & Stewart, P.A.
777 South Flagler Drive, Suite 500 East
West Palm Beach, FL 33401
E-mail: mmitrione@gunster.com
Attention: Michael V. Mitrione
If to Investor:
BayBoston Capital L.P.
1280 Centre Street, Suite 2
Newton Center, MA 02459
E-mail: carlos@bayboston.com
Attention: Carlos Garcia
Title: Chief Executive Officer
with copies to:
________________________
________________________
________________________
E-mail________________________
Attention: ________________________
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(e) If any provision of this Agreement or the application thereof to any person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.
(f) If, and as often as, there is any change in the Class A Common Stock or Class B Common Stock by way of a stock split, stock dividend, combination or reclassification, or through a merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions hereof so that the rights and privileges granted hereby shall continue with respect to the Class A Common Stock and Class B Common Stock as so changed.
(g) This Agreement will be governed by and construed in accordance with the Laws of the State of Florida applicable to contracts made and to be performed entirely within such jurisdiction.
(h) The parties hereby agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the federal or state courts located in Miami-Dade County, Florida, so long as such court shall have subject matter jurisdiction over such suit, action or proceeding, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by Law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 8(h) shall be deemed effective service of process on such party. The parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the state and federal courts referred to above for any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby.
(i) THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR UNDER ANY AGREEMENT, INSTRUMENT OR OTHER DOCUMENT CONTEMPLATED HEREBY OR RELATED HERETO AND IN ANY ACTION DIRECTLY OR INDIRECTLY RELATED TO OR CONNECTED WITH THE OBLIGATIONS OF THIS AGREEMENT. THE PARTIES ACKNOWLEDGE THAT THIS WAIVER MAY DEPRIVE EACH OF THEM AN IMPORTANT RIGHT AND THAT SUCH WAIVER HAS BEEN KNOWINGLY AND VOLUNTARILY MADE BY THE PARTIES AFTER CONSULTATION WITH THEIR LEGAL COUNSEL.
(j) The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.
[Signature page follows]
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EXECUTION VERSION
IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date set forth above.
COMPANY: | ||
PROFESSIONAL HOLDING CORP. | ||
By: | /s/ Daniel R. Sheehan | |
Name: | Daniel R. Sheehan | |
Title: | Chairman and President | |
INVESTOR: | ||
BAYBOSTON CAPITAL L.P. | ||
By: | /s/ Carlos M. Garcia | |
Name: | Carlos M. Garcia | |
Title: | BayBoston Capital GP LLC |
Exhibit 10.21
PROFESSIONAL HOLDING CORP.
396 Alhambra Circle, Suite 255
Coral Gables, Florida 33146
February 17, 2017
___________________________
___________________________
___________________________
___________________________
Re: Investor Rights Letter Agreement
Ladies and Gentlemen:
This letter agreement (the “Letter Agreement”) will confirm our agreement that pursuant to and effective as of the Closing Date of your purchase of capital stock of Professional Holding Corp. (the “Company”), a Florida corporation and parent company of Professional Bank, a Florida-chartered commercial bank (the “Bank”), __________________, a Delaware limited liability company (the “Investor”), shall be entitled to the contractual rights set forth in this Letter Agreement, in addition to any other rights specifically provided to Investor pursuant to that certain Stock Purchase Agreement dated as of February 17, 2017 by and among the Company and certain investors, including Investor (the “Agreement”), including any amendments or supplements thereto, and such other agreements, instruments and certificates delivered in connection therewith (collectively, the “Transaction Documents”). Capitalized terms not defined in this Letter Agreement shall have the meanings ascribed in the Agreement.
1. Exchange of Class B Non-Voting Common Stock. Investor may exchange shares of Class B Voting Common Stock into an equal number of shares of Class A Voting Common Stock (automatically upon Investor’s permitted transfer of shares of Class B Non-Voting Common Stock (a) upon the consummation of a Permitted Transfer or (b) if the Company’s Board of Directors, acting in its sole and absolute discretion, have approved the exchange and the exchange would not result in Investor (together with its Affiliates) beneficially owning greater than 9.9% of the outstanding shares of the Company’s Class A Voting Common Stock. For the purposes of this Letter Agreement, “Permitted Transfer” means (1) a transfer pursuant to a widely distributed public offering, (2) a transfer in which no transferee acquires greater than 2% of the issued and outstanding shares Class A Voting Common Stock (after giving effect to any conversion of Class B Non-Voting Common Stock, (3) a transfer to a Person that beneficially owns greater than 50% of the issued and outstanding shares of the Company’s Class A Voting Common Stock or (4) a transfer that is approved by the Federal Reserve Board. The Company shall hold in reserve, at all times, sufficient shares of Class A Voting Common Stock to permit the exchange of all shares of Class B Non-Voting Common Stock then outstanding.
2. Preemptive Rights. If, following the consummation of the transactions contemplated by the Transaction Documents, the Company authorizes the issuance or sale, other than an Excluded Issuance, of any Capital Stock, or any securities, options or debt that are convertible or exchangeable into Capital Stock (“Stock Equivalents”) of the Company (any such security, a “New Security”), Investor shall be entitled, in its sole discretion, to purchase its pro rata portion of the New Securities for the same price and on the same terms as such New Securities are proposed to be offered to others, such that Investor and its Affiliates are able to maintain their aggregate percentage ownership interest in the Company’s Capital Stock on a fully diluted basis, subject to compliance with applicable Law. With respect to such rights described above (the “Preemptive Rights”), the Company shall give written notice of such proposed issuance or sale (including the terms and conditions thereof) to Investor at least thirty (30) days prior to the anticipated issuance or sale date, and Investor shall have twenty (20) days from the receipt thereof to provide the Company with notice of the exercise of its Preemptive Rights with respect to such issuance or sale. For the purposes of this Letter Agreement, “Excluded Issuance” means an issuance or sale of any Capital Stock or Stock Equivalents issued or sold by the Company in connection with: (a) a grant to any existing or prospective directors, officers or other employees, consultants or service providers of the Company or any Company Subsidiary pursuant to the Stock Option Plan or similar equity-based plans or other compensation agreement; (b) the conversion or exchange of any securities of the Company into Capital Stock, or the exercise of any warrants or other rights to acquire Capital Stock; (c) any acquisition by the Company or any Company Subsidiary of any equity interests, assets, properties or business of any Person; (d) any merger, consolidation or other business combination involving the Company or any Company Subsidiary; (e) the commencement of any transaction or series of related transactions involving a Change in Control; (f) any subdivision of Capital Stock (by a split of Capital Stock or otherwise), payment of stock dividend, reclassification, reorganization or any similar recapitalization; or (g) a joint venture, strategic alliance or other commercial relationship with any Person relating to the operation of the Company’s or any Company Subsidiary’s business and not for the primary purpose of raising equity capital. The Preemptive Rights described herein will terminate upon the consummation of a firm commitment underwritten public offering of the Company’s Capital Stock pursuant to a registration statement or registration statements resulting in gross proceeds to the Company of at least $25 million.
3. Registration Rights. In addition to, and not exclusive of, any other registration rights granted to Investor pursuant to the Transaction Documents, Investor shall be entitled to exercise registration rights as are set forth in a Registration Rights Agreement in the form of Exhibit A hereto.
4. Most Favored Nation. The Company shall provide Investor with rights and benefits under the this Letter Agreement and the Agreement that are no less favorable to those of any other investor participating in the Offering.
5. Legal Opinion. At the Closing, Investor shall have received an opinion from the Company’s legal counsel in the form set forth in Exhibit B to this Letter Agreement. Delivery of such opinion shall be a closing condition as expressed in Section 1.2(c)(ii)(G) of the Agreement.
6. Miscellaneous. The provisions of Sections 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11, 6.14, 6.16 and 6.17 of the Agreement are hereby incorporated into and made a part of this letter agreement and shall apply mutatis mutandis to this Letter Agreement.
[Signature Page Follows]
Very truly yours, | ||||
PROFESSIONAL HOLDING CORP. | ||||
By: | ||||
Name: | Daniel R. Sheehan | |||
Title: | Chairman and President | |||
PROFESSIONAL BANK | ||||
By: | ||||
Name: | Abel L. Iglesias | |||
Title: | Chief Executive Officer | |||
Acknowledged and agreed: | ||||
[INVESTOR] | ||||
By: | ||||
Name: | ||||
Title: |
EXECUTION VERSION
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of February 17, 2017, by and between Professional Holding Corp., a Florida corporation and the parent company of Professional Bank (the “Company”), and the undersigned Investor (the “Investor”). Capitalized terms not defined in this Agreement shall have the meaning ascribed in that certain Stock Purchase Agreement dated February 17, 2017 by and between the Company and certain investors, including Investor (the “Purchase Agreement”).
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and Investor hereby mutually agree as follows:
1. | Registration RIGHTS |
(a) Any time after the fourth (4th) anniversary of the date of this Agreement, Investor may request one registration (the “Demand Registration”) under the Securities Act of 1933, as amended (the “Securities Act”), of its Registrable Securities (as defined below). The Demand Registration shall be on such form as the Company shall select. The Demand Registration shall specify the number of Registrable Securities to be registered. The Company shall use best efforts to cause a registration statement to be filed within 180 days after the date on which the initial request by Investor is received by the Company and shall use its best efforts to cause such registration statement to be declared effective by the U.S. Securities and Exchange Commission (“SEC”) as soon as practicable thereafter. The Company shall use best efforts to keep such Demand Registration current and effective until the Registrable Securities registered thereby cease to be Registrable Securities.
(b) As long as Investor holds Registrable Securities, if at any time or from time to time, the Company shall determine to register any of its securities under the Securities Act (except for the registration of securities to be offered pursuant to an employee benefit plan on Form S-8 or pursuant to a registration made on Form S-4, or any successor forms then in effect) and the registration form to be used may be used for the registration of the Registrable Securities (a “Piggyback Registration”), the Company shall:
(1) Provide thirty (30) calendar days’ advance written notice to Investor prior to filing the registration statement (the “Registration Rights Notice”); and
(2) include in such registration, and in any underwriting involved therein, all the Registrable Securities specified in a written request made by Investor within fifteen (15) calendar days after receipt of the Registration Rights Notice from the Company, except as set forth in Section 1(c) below.
(c) If the registration is for a registered public offering involving an underwriting, the Company shall so advise Investor as a part of the Registration Rights Notice. In such event, the right of Investor to registration shall be conditioned upon Investor’s participation in such underwriting and the inclusion of Investor’s Registrable Securities in the underwriting to the extent provided herein. If Investor proposes to distribute its securities through such underwriting, it shall (together with the Company and any other holders distributing their securities through such underwriting) enter into an underwriting agreement in the form agreed to by the Company with the underwriter(s) selected for such underwriting by the Company. Notwithstanding any other provision of this Agreement, if the managing underwriters advise the Company and Investor in writing that in their reasonable and good faith opinion the number of securities requested to be included in such offering exceeds the number which can be sold without adversely affecting the per share offering price of the securities, the Company will include in such registration (i) first, the securities that the Company proposes to sell; (ii) second, the Registrable Securities requested to be included therein by Investor, allocated pro rata among all such holders on the basis of the number of Registrable Securities owned by each such holder or in such manner as they may otherwise agree; and (iii) third, the securities requested to be included therein by holders of securities other than holders of Registrable Securities, allocated among such holders in such manner as they may agree. If Investor disapproves of the terms of any such underwriting, Investor may elect to withdraw therefrom by written notice to the Company and the managing underwriter.
(d) For purposes of this Agreement, “Registrable Securities” shall mean any and all shares of (i) Company Stock issued pursuant to the Purchase Agreement (including Class A Common Stock issued or issuable upon exchange of Class B Common Stock), (ii) Capital Stock issued in respect of the Company Stock in any reorganization of the Company, and (iii) Capital Stock issued in respect of the stock referred to in clause (i) or (ii) above as a result of a stock split, stock dividend, recapitalization or combination.
2. | Expenses of Registration |
All expenses incurred in connection with the registrations pursuant to Section 1 hereof, including all registration, filing and qualification fees, printing expenses, fees and disbursements of counsel for the Company and expenses of any special audits of the Company’s financial statements incidental to or required by such registration, shall be borne by the Company, except that the Company shall not be required to pay underwriters’ fees, discounts or commissions relating to Registrable Securities.
3. | Registration Procedures |
In the case of each registration affected by the Company pursuant to this Agreement, the Company will keep Investor advised in writing as to the initiation of each registration and as to the completion thereof. At its expense the Company will:
(a) keep such registration pursuant to this Agreement continuously effective until all of such Registrable Securities have been disposed of and to comply with the provisions of the Securities Act with respect to the disposition of such Registrable Securities in accordance with the intended methods of disposition set forth in such registration statement;
(b) promptly prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to comply with the provisions of the Securities Act, and to keep such registration statement effective for that period of time specified in Section 3(a) above;
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(c) at least five (5) business days before filing such registration statement, prospectus or amendments or supplements thereto with the SEC, furnish to Investor copies of such documents proposed to be filed, which documents shall be subject to the reasonable review, comment and approval of Investor;
(d) notify Investor, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed with the SEC;
(e) advise Investor, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the SEC suspending the effectiveness of such registration statement or the initiation or threatening of any proceeding for such purpose and promptly use best efforts to obtain the withdrawal of any order suspending the effectiveness of a registration statement, or the lifting of any suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction, at the earliest possible moment;
(f) cause all Registrable Securities covered by such registrations to be listed on each securities exchange on which similar securities issued by the Company are then listed or, if such securities are not then listed, on a national securities exchange selected by Investor;
(g) notify each selling holder of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event that would cause the prospectus included in such registration statement to contain an untrue statement of a material fact or omit any fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, and, at the request of any such holder, the Company shall prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
(h) make available for inspection by Investor all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “Records”), and cause the Company’s officers, directors and employees to supply all Records requested by Investor in connection with such registration statement;
(i) provide a transfer agent and registrar (which may be the same entity) for all such Registrable Securities not later than the effective date of such registration;
(j) otherwise use its best efforts to comply with all applicable rules and regulations of the SEC and make available to its shareholders an earnings statement (in a form that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities Act or any successor rule thereto) no later than thirty (30) days after the end of the 12-month period beginning with the first day of the Company’s first full fiscal quarter after the effective date of such Registration Statement, which earnings statement shall cover said 12-month period, and which requirement will be deemed to be satisfied if the Company timely files complete and accurate information on Forms 10-K, 10-Q and 8-K under the Securities Exchange Act of 1934, as amended (“Exchange Act”), and otherwise complies with Rule 158 under the Securities Act or any successor rule thereto; and
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(k) enter into such customary agreements (including underwriting agreements in customary form) and take all such other actions as the holders of a majority of the Registrable Securities being sold or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities;
(l) use its best efforts to cause such Registrable Securities to be registered with or approved by such other Governmental Entities as may be necessary by virtue of the business and operations of the Company to enable the holders of such Registrable Securities to consummate the disposition of such Registrable Securities in accordance with their intended method of distribution thereof;
(m) notify Investor promptly of any request by the Commission for the amending or supplementing of such registration statement or prospectus or for additional information;
(n) permit Investor to participate in the preparation of such Registration Statement and to require the insertion therein of language, furnished to the Company in writing, which in the reasonable judgment of such holder and its counsel should be included, if in Investor’s judgment, Investor might be deemed to be an underwriter or a “controlling person” (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) (a “Controlling Person”) of the Company; and
(o) take such other actions as reasonably requested by Investor.
4. | Indemnification |
(a) In the event of a registration of any of the Registrable Securities under the Securities Act pursuant to this Agreement, the Company will (i) indemnify and hold harmless, to the fullest extent permitted by law, Investor, each underwriter of such Registrable Securities thereunder, and any other person acting on behalf of Investor and each other person, if any, who controls such foregoing persons within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which any of the foregoing persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such Registrable Securities were registered under the Securities Act, any preliminary prospectus, free writing prospectus, or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of any rule or regulation promulgated under the Securities Act or any state securities law applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, and (ii) will reimburse such persons, each of their officers, directors and partners, and each person controlling such persons, for any legal and any other expenses incurred in connection with investigating, defending or settling any such claim, loss, damage, liability or action. Notwithstanding the foregoing, the Company will not be liable in any such case to the extent that any such claim, loss, damage or liability arises out of or is based on any untrue statement or omission based upon written information furnished to the Company in an instrument duly executed by Investor or an underwriter, as applicable, specifically for use therein. This indemnity shall be in addition to any liability the Company may otherwise have.
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(b) Investor will, if Registrable Securities held by or issuable to Investor are included in the securities for which such registration is being effected, indemnify and hold harmless, to the fullest extent permitted by law, the Company, each of its directors and officers, each underwriter, if any, of the Company’s securities covered by such registration statement, each person who controls the Company and each underwriter within the meaning of the Securities Act, against all claims, losses, expenses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of a prospectus, in light of the circumstances under with they were made), but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company in an instrument duly executed by Investor specifically for use therein. Notwithstanding the foregoing, the total amount for which Investor, its officers, directors and partners, and any person controlling Investor, shall be liable under this Section 4(b) shall not in any event exceed the net proceeds (after deducting underwriting fees, commissions, and discounts) received by Investor from the sale of its Registrable Securities in such registration. This indemnity shall be in addition to any liability Investor may otherwise have.
(c) Each party entitled to indemnification under this Section 4 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claims as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided, however, that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party’s expense. Notwithstanding the foregoing, the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations hereunder, unless such failure resulted in actual detriment to the Indemnifying Party. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect of such claim or litigation.
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(d) Notwithstanding the foregoing, to the extent that the provisions on indemnification contained in the underwriting agreements entered into among Investor, the Company and the underwriters in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall be controlling as to the Registrable Securities included in the public offering.
(e) The indemnification provided by this Section 4 shall be a continuing right to indemnification and shall survive the registration and sale of any securities by any person entitled to indemnification hereunder and the expiration or termination of this Agreement.
(f) If the indemnification provided for hereunder is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, claim, damage, liability or action referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amounts paid or payable by such Indemnified Party as a result of such loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions which resulted in such loss, claim, damage, liability or action as well as any other relevant equitable considerations; provided, that the maximum amount of liability in respect of such contribution shall be limited, in the case of each holder of Registrable Securities, to an amount equal to the net proceeds (after underwriting fees, commissions or discounts) actually received by such seller from the sale of Registrable Securities effected pursuant to such registration. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties agree that it would not be just and equitable if contribution pursuant hereto were determined by pro rata allocation or by any other method or allocation which does not take account of the equitable considerations referred to herein. No Person guilty or liable of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
5. | REPORTS UNDER the EXCHANGE ACT |
With a view to making available to Investor the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the SEC that may at any time permit Investor to sell securities of the Company to the public without registration, the Company shall:
(a) make and keep public information available, within the meaning of Rule 144, at all times after the effective date of (i) the first registration statement covering an underwritten public offering filed by the Company or (ii) the first registration by the Company under the Exchange Act;
(b) following a public offering or a registration under the Exchange Act, file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and
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(c) furnish to Investor forthwith upon request a written statement by the Company that it has complied with the reporting requirements of Rule 144 (at any time after ninety (90) days after the effective date of said first registration statement filed by the Company), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents filed by the Company with the SEC as may be reasonably requested in availing any such holder to take advantage of any rule or regulation of the SEC permitting the selling of any such securities without registration.
6. | LIMITATIONS IN CONNECTION WITH FUTURE GRANTS OF REGISTRATION RIGHTS |
From and after the date of this Agreement, the Company shall not, without the prior written consent of Investor, enter into any agreement with any holder or prospective holder of any securities of the Company which would allow such holder or prospective holder to include such securities in any registration filed under Section 1 hereof, unless under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of his securities will not reduce the amount of the Registrable Securities of Investor to be included in such registration.
7. | TRANSFER OF REGISTRATION RIGHTS |
The registration rights of Investor (and of any permitted transferee of Investor) under this Agreement with respect to any Registrable Securities may be assigned in whole or in part as provided in Section 8(b) below.
8. | Miscellaneous |
(a) No amendment or waiver of any provision of this Agreement will be effective against any party hereto unless it is in a writing signed by a duly authorized officer of such party.
(b) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors and permitted assigns. This Agreement, and the rights and obligations of Investor hereunder, may be assigned by Investor to any person or entity to which Registrable Securities are transferred by Investor, and such transferee shall be deemed to have acquired all of the rights and obligations of Investor for purposes of this Agreement; provided, that the transferee provides written notice of such assignment to the Company and provided that any such transfer shall be made strictly in accordance with all applicable laws; and provided, further, that such rights may not be held or exercised by more than one transferee at any one time. The Company may not assign its rights under this Agreement except to its successors-in-interest as a result of a merger, reorganization or a sale of all or substantially all of the assets of the Company.
(c) For the convenience of the parties hereto, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement. Executed signature pages to this Agreement may be delivered by facsimile or other electronic transmission and such transmissions shall be deemed as sufficient as if manually signed signature pages had been delivered.
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(d) Any notice, request, instruction or other document to be given hereunder by any party to the other will be in writing and will be deemed to have been duly given (i) on the date of delivery if delivered personally or by e-mail (upon confirmation of receipt), (ii) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service, or (iii) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice.
If to the Company:
Professional Holding Corp.
396 Alhambra Circle, Suite 255
Coral Gables, FL 33146
E-mail: dsheehan@professionalbankfl.com
Attention: Daniel R. Sheehan
Title: Chairman and President
with a copy to:
Gunster, Yoakley & Stewart, P.A.
777 South Flagler Drive, Suite 500 East
West Palm Beach, FL 33401
E-mail: mmitrione@gunster.com
Attention: Michael V. Mitrione
If to Investor:
with copies to:
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(e) If any provision of this Agreement or the application thereof to any person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.
(f) If, and as often as, there is any change in the Class A Common Stock or Class B Common Stock by way of a stock split, stock dividend, combination or reclassification, or through a merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions hereof so that the rights and privileges granted hereby shall continue with respect to the Class A Common Stock and Class B Common Stock as so changed.
(g) This Agreement will be governed by and construed in accordance with the Laws of the State of Florida applicable to contracts made and to be performed entirely within such jurisdiction.
(h) The parties hereby agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the federal or state courts located in Miami-Dade County, Florida, so long as such court shall have subject matter jurisdiction over such suit, action or proceeding, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by Law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 8(h) shall be deemed effective service of process on such party. The parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the state and federal courts referred to above for any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby.
(i) THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR UNDER ANY AGREEMENT, INSTRUMENT OR OTHER DOCUMENT CONTEMPLATED HEREBY OR RELATED HERETO AND IN ANY ACTION DIRECTLY OR INDIRECTLY RELATED TO OR CONNECTED WITH THE OBLIGATIONS OF THIS AGREEMENT. THE PARTIES ACKNOWLEDGE THAT THIS WAIVER MAY DEPRIVE EACH OF THEM AN IMPORTANT RIGHT AND THAT SUCH WAIVER HAS BEEN KNOWINGLY AND VOLUNTARILY MADE BY THE PARTIES AFTER CONSULTATION WITH THEIR LEGAL COUNSEL.
(j) The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.
[Signature page follows]
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EXECUTION VERSION
IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date set forth above.
COMPANY: | ||
PROFESSIONAL HOLDING CORP. | ||
By: | ||
Name: | Daniel R. Sheehan | |
Title: | Chairman and President | |
INVESTOR: | ||
[INVESTOR] | ||
By: | ||
By: | ||
Name: | ||
Title: |
EXHIBIT B
FORM OF OPINION
1. The Company has been incorporated under the Florida Business Corporation Act, and its corporate status is active under the laws of the State of Florida.
2. The Bank (a) has been incorporated under the Florida Business Corporation Act and is a Florida-chartered commercial bank, and its corporate status is active, and (b) based solely on the FDIC Certificate, is an “insured depository” as defined under Section 3(c)(2) of the Federal Deposit Insurance Act, and the deposit accounts of the Bank are insured by the FDIC up to the maximum amounts provided by law and the rules of the FDIC.
3. The Company has the corporate power to execute and deliver the Agreement and to perform its obligations thereunder.
4. The Company has authorized the execution, delivery and performance of the Agreement by all necessary corporate action.
5. Subject to the limitations set forth herein, the Agreement is a valid and binding obligation of the Company and is enforceable against the Company in accordance with its terms under the laws of the State of Florida.
6. The Securities have been duly authorized by the Company, and the Securities, when issued, delivered and paid for in accordance with the terms of the Agreement, will be validly issued, fully paid and nonassessable.
7. The Company is not and, after giving effect to the offer and sale of the Securities, will not be an “investment company” as such term is defined in the Investment Company Act of 1940, as amended (the “ICA”).
8. The execution and delivery by the Company of the Agreement and the performance by the Company of its obligation under the Agreement do not: (a) violate the Company’s Articles of Incorporation or Bylaws; (b) to our knowledge, constitute a breach or a default under, or result in the creation of a security interest or a lien on the assets of the Company under, any of the Company’s material agreements that are known to us (to the extent that any such agreement is governed by the law of a jurisdiction other than the State of Florida, we express no opinion with respect to the effect or other matters of any such law and have assumed that the laws of such jurisdiction are identical to the laws of the State of Florida, without giving effect to principles of conflicts of laws); (c) violate any judgment, decree or order known to us of any court or administrative tribunal of the State of Florida that is known to us to be applicable to the Company; or (d) based on existing facts of which we are aware, violate any Applicable Laws (as hereinafter defined).
[Signature Page to Registration Rights Agreement]
Exhibit 10.22
EXECUTION VERSION
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of February 17, 2017, by and between Professional Holding Corp., a Florida corporation and the parent company of Professional Bank (the “Company”), and the undersigned Investor (the “Investor”). Capitalized terms not defined in this Agreement shall have the meaning ascribed in that certain Stock Purchase Agreement dated February 17, 2017 by and between the Company and certain investors, including Investor (the “Purchase Agreement”).
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and Investor hereby mutually agree as follows:
1. | Registration RIGHTS |
(a) Any time after the fourth (4th) anniversary of the date of this Agreement, Investor may request one registration (the “Demand Registration”) under the Securities Act of 1933, as amended (the “Securities Act”), of its Registrable Securities (as defined below). The Demand Registration shall be on such form as the Company shall select. The Demand Registration shall specify the number of Registrable Securities to be registered. The Company shall use best efforts to cause a registration statement to be filed within 180 days after the date on which the initial request by Investor is received by the Company and shall use its best efforts to cause such registration statement to be declared effective by the U.S. Securities and Exchange Commission (“SEC”) as soon as practicable thereafter. The Company shall use best efforts to keep such Demand Registration current and effective until the Registrable Securities registered thereby cease to be Registrable Securities.
(b) As long as Investor holds Registrable Securities, if at any time or from time to time, the Company shall determine to register any of its securities under the Securities Act (except for the registration of securities to be offered pursuant to an employee benefit plan on Form S-8 or pursuant to a registration made on Form S-4, or any successor forms then in effect) and the registration form to be used may be used for the registration of the Registrable Securities (a “Piggyback Registration”), the Company shall:
(1) Provide thirty (30) calendar days’ advance written notice to Investor prior to filing the registration statement (the “Registration Rights Notice”); and
(2) include in such registration, and in any underwriting involved therein, all the Registrable Securities specified in a written request made by Investor within fifteen (15) calendar days after receipt of the Registration Rights Notice from the Company, except as set forth in Section 1(c) below.
(c) If the registration is for a registered public offering involving an underwriting, the Company shall so advise Investor as a part of the Registration Rights Notice. In such event, the right of Investor to registration shall be conditioned upon Investor’s participation in such underwriting and the inclusion of Investor’s Registrable Securities in the underwriting to the extent provided herein. If Investor proposes to distribute its securities through such underwriting, it shall (together with the Company and any other holders distributing their securities through such underwriting) enter into an underwriting agreement in the form agreed to by the Company with the underwriter(s) selected for such underwriting by the Company. Notwithstanding any other provision of this Agreement, if the managing underwriters advise the Company and Investor in writing that in their reasonable and good faith opinion the number of securities requested to be included in such offering exceeds the number which can be sold without adversely affecting the per share offering price of the securities, the Company will include in such registration (i) first, the securities that the Company proposes to sell; (ii) second, the Registrable Securities requested to be included therein by Investor, allocated pro rata among all such holders on the basis of the number of Registrable Securities owned by each such holder or in such manner as they may otherwise agree; and (iii) third, the securities requested to be included therein by holders of securities other than holders of Registrable Securities, allocated among such holders in such manner as they may agree. If Investor disapproves of the terms of any such underwriting, Investor may elect to withdraw therefrom by written notice to the Company and the managing underwriter.
(d) For purposes of this Agreement, “Registrable Securities” shall mean any and all shares of (i) Company Stock issued pursuant to the Purchase Agreement (including Class A Common Stock issued or issuable upon exchange of Class B Common Stock), (ii) Capital Stock issued in respect of the Company Stock in any reorganization of the Company, and (iii) Capital Stock issued in respect of the stock referred to in clause (i) or (ii) above as a result of a stock split, stock dividend, recapitalization or combination.
2. | Expenses of Registration |
All expenses incurred in connection with the registrations pursuant to Section 1 hereof, including all registration, filing and qualification fees, printing expenses, fees and disbursements of counsel for the Company and expenses of any special audits of the Company’s financial statements incidental to or required by such registration, shall be borne by the Company, except that the Company shall not be required to pay underwriters’ fees, discounts or commissions relating to Registrable Securities.
3. | Registration Procedures |
In the case of each registration affected by the Company pursuant to this Agreement, the Company will keep Investor advised in writing as to the initiation of each registration and as to the completion thereof. At its expense the Company will:
(a) keep such registration pursuant to this Agreement continuously effective until all of such Registrable Securities have been disposed of and to comply with the provisions of the Securities Act with respect to the disposition of such Registrable Securities in accordance with the intended methods of disposition set forth in such registration statement;
(b) promptly prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to comply with the provisions of the Securities Act, and to keep such registration statement effective for that period of time specified in Section 3(a) above;
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(c) at least five (5) business days before filing such registration statement, prospectus or amendments or supplements thereto with the SEC, furnish to Investor copies of such documents proposed to be filed, which documents shall be subject to the reasonable review, comment and approval of Investor;
(d) notify Investor, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed with the SEC;
(e) advise Investor, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the SEC suspending the effectiveness of such registration statement or the initiation or threatening of any proceeding for such purpose and promptly use best efforts to obtain the withdrawal of any order suspending the effectiveness of a registration statement, or the lifting of any suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction, at the earliest possible moment;
(f) cause all Registrable Securities covered by such registrations to be listed on each securities exchange on which similar securities issued by the Company are then listed or, if such securities are not then listed, on a national securities exchange selected by Investor;
(g) notify each selling holder of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event that would cause the prospectus included in such registration statement to contain an untrue statement of a material fact or omit any fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, and, at the request of any such holder, the Company shall prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
(h) make available for inspection by Investor all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “Records”), and cause the Company’s officers, directors and employees to supply all Records requested by Investor in connection with such registration statement;
(i) provide a transfer agent and registrar (which may be the same entity) for all such Registrable Securities not later than the effective date of such registration;
(j) otherwise use its best efforts to comply with all applicable rules and regulations of the SEC and make available to its shareholders an earnings statement (in a form that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities Act or any successor rule thereto) no later than thirty (30) days after the end of the 12-month period beginning with the first day of the Company’s first full fiscal quarter after the effective date of such Registration Statement, which earnings statement shall cover said 12-month period, and which requirement will be deemed to be satisfied if the Company timely files complete and accurate information on Forms 10-K, 10-Q and 8-K under the Securities Exchange Act of 1934, as amended (“Exchange Act”), and otherwise complies with Rule 158 under the Securities Act or any successor rule thereto; and
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(k) enter into such customary agreements (including underwriting agreements in customary form) and take all such other actions as the holders of a majority of the Registrable Securities being sold or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities;
(l) use its best efforts to cause such Registrable Securities to be registered with or approved by such other Governmental Entities as may be necessary by virtue of the business and operations of the Company to enable the holders of such Registrable Securities to consummate the disposition of such Registrable Securities in accordance with their intended method of distribution thereof;
(m) notify Investor promptly of any request by the Commission for the amending or supplementing of such registration statement or prospectus or for additional information;
(n) permit Investor to participate in the preparation of such Registration Statement and to require the insertion therein of language, furnished to the Company in writing, which in the reasonable judgment of such holder and its counsel should be included, if in Investor’s judgment, Investor might be deemed to be an underwriter or a “controlling person” (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) (a “Controlling Person”) of the Company; and
(o) take such other actions as reasonably requested by Investor.
4. | Indemnification |
(a) In the event of a registration of any of the Registrable Securities under the Securities Act pursuant to this Agreement, the Company will (i) indemnify and hold harmless, to the fullest extent permitted by law, Investor, each underwriter of such Registrable Securities thereunder, and any other person acting on behalf of Investor and each other person, if any, who controls such foregoing persons within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which any of the foregoing persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such Registrable Securities were registered under the Securities Act, any preliminary prospectus, free writing prospectus, or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of any rule or regulation promulgated under the Securities Act or any state securities law applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, and (ii) will reimburse such persons, each of their officers, directors and partners, and each person controlling such persons, for any legal and any other expenses incurred in connection with investigating, defending or settling any such claim, loss, damage, liability or action. Notwithstanding the foregoing, the Company will not be liable in any such case to the extent that any such claim, loss, damage or liability arises out of or is based on any untrue statement or omission based upon written information furnished to the Company in an instrument duly executed by Investor or an underwriter, as applicable, specifically for use therein. This indemnity shall be in addition to any liability the Company may otherwise have.
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(b) Investor will, if Registrable Securities held by or issuable to Investor are included in the securities for which such registration is being effected, indemnify and hold harmless, to the fullest extent permitted by law, the Company, each of its directors and officers, each underwriter, if any, of the Company’s securities covered by such registration statement, each person who controls the Company and each underwriter within the meaning of the Securities Act, against all claims, losses, expenses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of a prospectus, in light of the circumstances under with they were made), but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company in an instrument duly executed by Investor specifically for use therein. Notwithstanding the foregoing, the total amount for which Investor, its officers, directors and partners, and any person controlling Investor, shall be liable under this Section 4(b) shall not in any event exceed the net proceeds (after deducting underwriting fees, commissions, and discounts) received by Investor from the sale of its Registrable Securities in such registration. This indemnity shall be in addition to any liability Investor may otherwise have.
(c) Each party entitled to indemnification under this Section 4 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claims as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided, however, that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party’s expense. Notwithstanding the foregoing, the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations hereunder, unless such failure resulted in actual detriment to the Indemnifying Party. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect of such claim or litigation.
(d) Notwithstanding the foregoing, to the extent that the provisions on indemnification contained in the underwriting agreements entered into among Investor, the Company and the underwriters in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall be controlling as to the Registrable Securities included in the public offering.
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(e) The indemnification provided by this Section 4 shall be a continuing right to indemnification and shall survive the registration and sale of any securities by any person entitled to indemnification hereunder and the expiration or termination of this Agreement.
(f) If the indemnification provided for hereunder is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, claim, damage, liability or action referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amounts paid or payable by such Indemnified Party as a result of such loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions which resulted in such loss, claim, damage, liability or action as well as any other relevant equitable considerations; provided, that the maximum amount of liability in respect of such contribution shall be limited, in the case of each holder of Registrable Securities, to an amount equal to the net proceeds (after underwriting fees, commissions or discounts) actually received by such seller from the sale of Registrable Securities effected pursuant to such registration. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties agree that it would not be just and equitable if contribution pursuant hereto were determined by pro rata allocation or by any other method or allocation which does not take account of the equitable considerations referred to herein. No Person guilty or liable of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
5. | REPORTS UNDER the EXCHANGE ACT |
With a view to making available to Investor the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the SEC that may at any time permit Investor to sell securities of the Company to the public without registration, the Company shall:
(a) make and keep public information available, within the meaning of Rule 144, at all times after the effective date of (i) the first registration statement covering an underwritten public offering filed by the Company or (ii) the first registration by the Company under the Exchange Act;
(b) following a public offering or a registration under the Exchange Act, file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and
(c) furnish to Investor forthwith upon request a written statement by the Company that it has complied with the reporting requirements of Rule 144 (at any time after ninety (90) days after the effective date of said first registration statement filed by the Company), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents filed by the Company with the SEC as may be reasonably requested in availing any such holder to take advantage of any rule or regulation of the SEC permitting the selling of any such securities without registration.
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6. | LIMITATIONS IN CONNECTION WITH FUTURE GRANTS OF REGISTRATION RIGHTS |
From and after the date of this Agreement, the Company shall not, without the prior written consent of Investor, enter into any agreement with any holder or prospective holder of any securities of the Company which would allow such holder or prospective holder to include such securities in any registration filed under Section 1 hereof, unless under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of his securities will not reduce the amount of the Registrable Securities of Investor to be included in such registration.
7. | TRANSFER OF REGISTRATION RIGHTS |
The registration rights of Investor (and of any permitted transferee of Investor) under this Agreement with respect to any Registrable Securities may be assigned in whole or in part as provided in Section 8(b) below.
8. | Miscellaneous |
(a) No amendment or waiver of any provision of this Agreement will be effective against any party hereto unless it is in a writing signed by a duly authorized officer of such party.
(b) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors and permitted assigns. This Agreement, and the rights and obligations of Investor hereunder, may be assigned by Investor to any person or entity to which Registrable Securities are transferred by Investor, and such transferee shall be deemed to have acquired all of the rights and obligations of Investor for purposes of this Agreement; provided, that the transferee provides written notice of such assignment to the Company and provided that any such transfer shall be made strictly in accordance with all applicable laws; and provided, further, that such rights may not be held or exercised by more than one transferee at any one time. The Company may not assign its rights under this Agreement except to its successors-in-interest as a result of a merger, reorganization or a sale of all or substantially all of the assets of the Company.
(c) For the convenience of the parties hereto, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement. Executed signature pages to this Agreement may be delivered by facsimile or other electronic transmission and such transmissions shall be deemed as sufficient as if manually signed signature pages had been delivered.
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(d) Any notice, request, instruction or other document to be given hereunder by any party to the other will be in writing and will be deemed to have been duly given (i) on the date of delivery if delivered personally or by e-mail (upon confirmation of receipt), (ii) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service, or (iii) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice.
If to the Company:
Professional Holding Corp.
396 Alhambra Circle, Suite 255
Coral Gables, FL 33146
E-mail: dsheehan@professionalbankfl.com
Attention: Daniel R. Sheehan
Title: Chairman and President
with a copy to:
Gunster, Yoakley & Stewart, P.A.
777 South Flagler Drive, Suite 500 East
West Palm Beach, FL 33401
E-mail: mmitrione@gunster.com
Attention: Michael V. Mitrione
If to Investor:
EJF Sidecar Fund, Series LLC – Series E
2107 Wilson Blvd., Suite 410
Arlington, VA 22201
E-mail: trading@ejfcap.com
Attention: Neal J. Wilson
Title: Chief Operating Officer
with copies to:
(e) If any provision of this Agreement or the application thereof to any person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.
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(f) If, and as often as, there is any change in the Class A Common Stock or Class B Common Stock by way of a stock split, stock dividend, combination or reclassification, or through a merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions hereof so that the rights and privileges granted hereby shall continue with respect to the Class A Common Stock and Class B Common Stock as so changed.
(g) This Agreement will be governed by and construed in accordance with the Laws of the State of Florida applicable to contracts made and to be performed entirely within such jurisdiction.
(h) The parties hereby agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the federal or state courts located in Miami-Dade County, Florida, so long as such court shall have subject matter jurisdiction over such suit, action or proceeding, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by Law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 8(h) shall be deemed effective service of process on such party. The parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the state and federal courts referred to above for any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby.
(i) THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR UNDER ANY AGREEMENT, INSTRUMENT OR OTHER DOCUMENT CONTEMPLATED HEREBY OR RELATED HERETO AND IN ANY ACTION DIRECTLY OR INDIRECTLY RELATED TO OR CONNECTED WITH THE OBLIGATIONS OF THIS AGREEMENT. THE PARTIES ACKNOWLEDGE THAT THIS WAIVER MAY DEPRIVE EACH OF THEM AN IMPORTANT RIGHT AND THAT SUCH WAIVER HAS BEEN KNOWINGLY AND VOLUNTARILY MADE BY THE PARTIES AFTER CONSULTATION WITH THEIR LEGAL COUNSEL.
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(j) The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date set forth above.
COMPANY: | ||
PROFESSIONAL HOLDING CORP. | ||
By: | /s/ Daniel R. Sheehan | |
Name: | Daniel R. Sheehan | |
Title: | Chairman and President | |
INVESTOR: | ||
EJF SIDECAR FUND, SERIES LLC – SERIES E | ||
By: | /s/ Emmanuel J. Friedman | |
Name: | Emmanuel J. Friedman | |
Title: | Chief Executive Officer |
[Signature Page to Registration Rights Agreement]
Exhibit 10.23
EXECUTION VERSION
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of February 17, 2017, by and between Professional Holding Corp., a Florida corporation and the parent company of Professional Bank (the “Company”), and the undersigned Investor (the “Investor”). Capitalized terms not defined in this Agreement shall have the meaning ascribed in that certain Stock Purchase Agreement dated February 17, 2017 by and between the Company and certain investors, including Investor (the “Purchase Agreement”).
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and Investor hereby mutually agree as follows:
1. | Registration RIGHTS |
(a) Any time after the fourth (4th) anniversary of the date of this Agreement, Investor may request one registration (the “Demand Registration”) under the Securities Act of 1933, as amended (the “Securities Act”), of its Registrable Securities (as defined below). The Demand Registration shall be on such form as the Company shall select. The Demand Registration shall specify the number of Registrable Securities to be registered. The Company shall use best efforts to cause a registration statement to be filed within 180 days after the date on which the initial request by Investor is received by the Company and shall use its best efforts to cause such registration statement to be declared effective by the U.S. Securities and Exchange Commission (“SEC”) as soon as practicable thereafter. The Company shall use best efforts to keep such Demand Registration current and effective until the Registrable Securities registered thereby cease to be Registrable Securities.
(b) As long as Investor holds Registrable Securities, if at any time or from time to time, the Company shall determine to register any of its securities under the Securities Act (except for the registration of securities to be offered pursuant to an employee benefit plan on Form S-8 or pursuant to a registration made on Form S-4, or any successor forms then in effect) and the registration form to be used may be used for the registration of the Registrable Securities (a “Piggyback Registration”), the Company shall:
(1) Provide thirty (30) calendar days’ advance written notice to Investor prior to filing the registration statement (the “Registration Rights Notice”); and
(2) include in such registration, and in any underwriting involved therein, all the Registrable Securities specified in a written request made by Investor within fifteen (15) calendar days after receipt of the Registration Rights Notice from the Company, except as set forth in Section 1(c) below.
(c) If the registration is for a registered public offering involving an underwriting, the Company shall so advise Investor as a part of the Registration Rights Notice. In such event, the right of Investor to registration shall be conditioned upon Investor’s participation in such underwriting and the inclusion of Investor’s Registrable Securities in the underwriting to the extent provided herein. If Investor proposes to distribute its securities through such underwriting, it shall (together with the Company and any other holders distributing their securities through such underwriting) enter into an underwriting agreement in the form agreed to by the Company with the underwriter(s) selected for such underwriting by the Company. Notwithstanding any other provision of this Agreement, if the managing underwriters advise the Company and Investor in writing that in their reasonable and good faith opinion the number of securities requested to be included in such offering exceeds the number which can be sold without adversely affecting the per share offering price of the securities, the Company will include in such registration (i) first, the securities that the Company proposes to sell; (ii) second, the Registrable Securities requested to be included therein by Investor, allocated pro rata among all such holders on the basis of the number of Registrable Securities owned by each such holder or in such manner as they may otherwise agree; and (iii) third, the securities requested to be included therein by holders of securities other than holders of Registrable Securities, allocated among such holders in such manner as they may agree. If Investor disapproves of the terms of any such underwriting, Investor may elect to withdraw therefrom by written notice to the Company and the managing underwriter.
(d) For purposes of this Agreement, “Registrable Securities” shall mean any and all shares of (i) Company Stock issued pursuant to the Purchase Agreement (including Class A Common Stock issued or issuable upon exchange of Class B Common Stock), (ii) Capital Stock issued in respect of the Company Stock in any reorganization of the Company, and (iii) Capital Stock issued in respect of the stock referred to in clause (i) or (ii) above as a result of a stock split, stock dividend, recapitalization or combination.
2. | Expenses of Registration |
All expenses incurred in connection with the registrations pursuant to Section 1 hereof, including all registration, filing and qualification fees, printing expenses, fees and disbursements of counsel for the Company and expenses of any special audits of the Company’s financial statements incidental to or required by such registration, shall be borne by the Company, except that the Company shall not be required to pay underwriters’ fees, discounts or commissions relating to Registrable Securities.
3. | Registration Procedures |
In the case of each registration affected by the Company pursuant to this Agreement, the Company will keep Investor advised in writing as to the initiation of each registration and as to the completion thereof. At its expense the Company will:
(a) keep such registration pursuant to this Agreement continuously effective until all of such Registrable Securities have been disposed of and to comply with the provisions of the Securities Act with respect to the disposition of such Registrable Securities in accordance with the intended methods of disposition set forth in such registration statement;
(b) promptly prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to comply with the provisions of the Securities Act, and to keep such registration statement effective for that period of time specified in Section 3(a) above;
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(c) at least five (5) business days before filing such registration statement, prospectus or amendments or supplements thereto with the SEC, furnish to Investor copies of such documents proposed to be filed, which documents shall be subject to the reasonable review, comment and approval of Investor;
(d) notify Investor, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed with the SEC;
(e) advise Investor, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the SEC suspending the effectiveness of such registration statement or the initiation or threatening of any proceeding for such purpose and promptly use best efforts to obtain the withdrawal of any order suspending the effectiveness of a registration statement, or the lifting of any suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction, at the earliest possible moment;
(f) cause all Registrable Securities covered by such registrations to be listed on each securities exchange on which similar securities issued by the Company are then listed or, if such securities are not then listed, on a national securities exchange selected by Investor;
(g) notify each selling holder of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event that would cause the prospectus included in such registration statement to contain an untrue statement of a material fact or omit any fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, and, at the request of any such holder, the Company shall prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
(h) make available for inspection by Investor all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “Records”), and cause the Company’s officers, directors and employees to supply all Records requested by Investor in connection with such registration statement;
(i) provide a transfer agent and registrar (which may be the same entity) for all such Registrable Securities not later than the effective date of such registration;
(j) otherwise use its best efforts to comply with all applicable rules and regulations of the SEC and make available to its shareholders an earnings statement (in a form that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities Act or any successor rule thereto) no later than thirty (30) days after the end of the 12-month period beginning with the first day of the Company’s first full fiscal quarter after the effective date of such Registration Statement, which earnings statement shall cover said 12-month period, and which requirement will be deemed to be satisfied if the Company timely files complete and accurate information on Forms 10-K, 10-Q and 8-K under the Securities Exchange Act of 1934, as amended (“Exchange Act”), and otherwise complies with Rule 158 under the Securities Act or any successor rule thereto; and
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(k) enter into such customary agreements (including underwriting agreements in customary form) and take all such other actions as the holders of a majority of the Registrable Securities being sold or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities;
(l) use its best efforts to cause such Registrable Securities to be registered with or approved by such other Governmental Entities as may be necessary by virtue of the business and operations of the Company to enable the holders of such Registrable Securities to consummate the disposition of such Registrable Securities in accordance with their intended method of distribution thereof;
(m) notify Investor promptly of any request by the Commission for the amending or supplementing of such registration statement or prospectus or for additional information;
(n) permit Investor to participate in the preparation of such Registration Statement and to require the insertion therein of language, furnished to the Company in writing, which in the reasonable judgment of such holder and its counsel should be included, if in Investor’s judgment, Investor might be deemed to be an underwriter or a “controlling person” (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) (a “Controlling Person”) of the Company; and
(o) take such other actions as reasonably requested by Investor.
4. | Indemnification |
(a) In the event of a registration of any of the Registrable Securities under the Securities Act pursuant to this Agreement, the Company will (i) indemnify and hold harmless, to the fullest extent permitted by law, Investor, each underwriter of such Registrable Securities thereunder, and any other person acting on behalf of Investor and each other person, if any, who controls such foregoing persons within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which any of the foregoing persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such Registrable Securities were registered under the Securities Act, any preliminary prospectus, free writing prospectus, or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of any rule or regulation promulgated under the Securities Act or any state securities law applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, and (ii) will reimburse such persons, each of their officers, directors and partners, and each person controlling such persons, for any legal and any other expenses incurred in connection with investigating, defending or settling any such claim, loss, damage, liability or action. Notwithstanding the foregoing, the Company will not be liable in any such case to the extent that any such claim, loss, damage or liability arises out of or is based on any untrue statement or omission based upon written information furnished to the Company in an instrument duly executed by Investor or an underwriter, as applicable, specifically for use therein. This indemnity shall be in addition to any liability the Company may otherwise have.
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(b) Investor will, if Registrable Securities held by or issuable to Investor are included in the securities for which such registration is being effected, indemnify and hold harmless, to the fullest extent permitted by law, the Company, each of its directors and officers, each underwriter, if any, of the Company’s securities covered by such registration statement, each person who controls the Company and each underwriter within the meaning of the Securities Act, against all claims, losses, expenses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of a prospectus, in light of the circumstances under with they were made), but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company in an instrument duly executed by Investor specifically for use therein. Notwithstanding the foregoing, the total amount for which Investor, its officers, directors and partners, and any person controlling Investor, shall be liable under this Section 4(b) shall not in any event exceed the net proceeds (after deducting underwriting fees, commissions, and discounts) received by Investor from the sale of its Registrable Securities in such registration. This indemnity shall be in addition to any liability Investor may otherwise have.
(c) Each party entitled to indemnification under this Section 4 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claims as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided, however, that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party’s expense. Notwithstanding the foregoing, the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations hereunder, unless such failure resulted in actual detriment to the Indemnifying Party. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect of such claim or litigation.
(d) Notwithstanding the foregoing, to the extent that the provisions on indemnification contained in the underwriting agreements entered into among Investor, the Company and the underwriters in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall be controlling as to the Registrable Securities included in the public offering.
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(e) The indemnification provided by this Section 4 shall be a continuing right to indemnification and shall survive the registration and sale of any securities by any person entitled to indemnification hereunder and the expiration or termination of this Agreement.
(f) If the indemnification provided for hereunder is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, claim, damage, liability or action referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amounts paid or payable by such Indemnified Party as a result of such loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions which resulted in such loss, claim, damage, liability or action as well as any other relevant equitable considerations; provided, that the maximum amount of liability in respect of such contribution shall be limited, in the case of each holder of Registrable Securities, to an amount equal to the net proceeds (after underwriting fees, commissions or discounts) actually received by such seller from the sale of Registrable Securities effected pursuant to such registration. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties agree that it would not be just and equitable if contribution pursuant hereto were determined by pro rata allocation or by any other method or allocation which does not take account of the equitable considerations referred to herein. No Person guilty or liable of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
5. | REPORTS UNDER the EXCHANGE ACT |
With a view to making available to Investor the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the SEC that may at any time permit Investor to sell securities of the Company to the public without registration, the Company shall:
(a) make and keep public information available, within the meaning of Rule 144, at all times after the effective date of (i) the first registration statement covering an underwritten public offering filed by the Company or (ii) the first registration by the Company under the Exchange Act;
(b) following a public offering or a registration under the Exchange Act, file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and
(c) furnish to Investor forthwith upon request a written statement by the Company that it has complied with the reporting requirements of Rule 144 (at any time after ninety (90) days after the effective date of said first registration statement filed by the Company), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents filed by the Company with the SEC as may be reasonably requested in availing any such holder to take advantage of any rule or regulation of the SEC permitting the selling of any such securities without registration.
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6. | LIMITATIONS IN CONNECTION WITH FUTURE GRANTS OF REGISTRATION RIGHTS |
From and after the date of this Agreement, the Company shall not, without the prior written consent of Investor, enter into any agreement with any holder or prospective holder of any securities of the Company which would allow such holder or prospective holder to include such securities in any registration filed under Section 1 hereof, unless under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of his securities will not reduce the amount of the Registrable Securities of Investor to be included in such registration.
7. | TRANSFER OF REGISTRATION RIGHTS |
The registration rights of Investor (and of any permitted transferee of Investor) under this Agreement with respect to any Registrable Securities may be assigned in whole or in part as provided in Section 8(b) below.
8. | Miscellaneous |
(a) No amendment or waiver of any provision of this Agreement will be effective against any party hereto unless it is in a writing signed by a duly authorized officer of such party.
(b) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors and permitted assigns. This Agreement, and the rights and obligations of Investor hereunder, may be assigned by Investor to any person or entity to which Registrable Securities are transferred by Investor, and such transferee shall be deemed to have acquired all of the rights and obligations of Investor for purposes of this Agreement; provided, that the transferee provides written notice of such assignment to the Company and provided that any such transfer shall be made strictly in accordance with all applicable laws; and provided, further, that such rights may not be held or exercised by more than one transferee at any one time. The Company may not assign its rights under this Agreement except to its successors-in-interest as a result of a merger, reorganization or a sale of all or substantially all of the assets of the Company.
(c) For the convenience of the parties hereto, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement. Executed signature pages to this Agreement may be delivered by facsimile or other electronic transmission and such transmissions shall be deemed as sufficient as if manually signed signature pages had been delivered.
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(d) Any notice, request, instruction or other document to be given hereunder by any party to the other will be in writing and will be deemed to have been duly given (i) on the date of delivery if delivered personally or by e-mail (upon confirmation of receipt), (ii) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service, or (iii) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice.
If to the Company:
Professional Holding Corp.
396 Alhambra Circle, Suite 255
Coral Gables, FL 33146
E-mail: dsheehan@professionalbankfl.com
Attention: Daniel R. Sheehan
Title: Chairman and President
with a copy to:
Gunster, Yoakley & Stewart, P.A.
777 South Flagler Drive, Suite 500 East
West Palm Beach, FL 33401
E-mail: mmitrione@gunster.com
Attention: Michael V. Mitrione
If to Investor:
BayBoston Capital L.P.
1280 Centre Street, Suite 2
Newton Center, MA 02459
E-mail: carlos@bayboston.com
Attention: Carlos Garcia
Title: Chief Executive Officer
with copies to: | ||
Attention: |
(e) If any provision of this Agreement or the application thereof to any person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, will remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.
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(f) If, and as often as, there is any change in the Class A Common Stock or Class B Common Stock by way of a stock split, stock dividend, combination or reclassification, or through a merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions hereof so that the rights and privileges granted hereby shall continue with respect to the Class A Common Stock and Class B Common Stock as so changed.
(g) This Agreement will be governed by and construed in accordance with the Laws of the State of Florida applicable to contracts made and to be performed entirely within such jurisdiction.
(h) The parties hereby agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the federal or state courts located in Miami-Dade County, Florida, so long as such court shall have subject matter jurisdiction over such suit, action or proceeding, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by Law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 8(h) shall be deemed effective service of process on such party. The parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the state and federal courts referred to above for any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby.
(i) THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR UNDER ANY AGREEMENT, INSTRUMENT OR OTHER DOCUMENT CONTEMPLATED HEREBY OR RELATED HERETO AND IN ANY ACTION DIRECTLY OR INDIRECTLY RELATED TO OR CONNECTED WITH THE OBLIGATIONS OF THIS AGREEMENT. THE PARTIES ACKNOWLEDGE THAT THIS WAIVER MAY DEPRIVE EACH OF THEM AN IMPORTANT RIGHT AND THAT SUCH WAIVER HAS BEEN KNOWINGLY AND VOLUNTARILY MADE BY THE PARTIES AFTER CONSULTATION WITH THEIR LEGAL COUNSEL.
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(j) The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date set forth above.
COMPANY: | ||
PROFESSIONAL HOLDING CORP. | ||
By: | /s/ Daniel R. Sheehan | |
Name: | Daniel R. Sheehan | |
Title: | Chairman and President | |
INVESTOR: | ||
BAYBOSTON Capital L.P. | ||
By: | /s/ Carlos M. Garcia | |
Name: | Carlos M. Garcia | |
Title: | its manager of the general partner, BayBoston Capital GP LLC |
[Signature Page to Registration Rights Agreement]
Exhibit 10.24
EXECUTION VERSION
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of February 17, 2017, by and between Professional Holding Corp., a Florida corporation and the parent company of Professional Bank (the “Company”), and the undersigned Investor (the “Investor”). Capitalized terms not defined in this Agreement shall have the meaning ascribed in that certain Stock Purchase Agreement dated February 17, 2017 by and between the Company and certain investors, including Investor (the “Purchase Agreement”).
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and Investor hereby mutually agree as follows:
1. | Registration RIGHTS |
(a) Any time after the fourth (4th) anniversary of the date of this Agreement, Investor may request one registration (the “Demand Registration”) under the Securities Act of 1933, as amended (the “Securities Act”), of its Registrable Securities (as defined below). The Demand Registration shall be on such form as the Company shall select. The Demand Registration shall specify the number of Registrable Securities to be registered. The Company shall use best efforts to cause a registration statement to be filed within 180 days after the date on which the initial request by Investor is received by the Company and shall use its best efforts to cause such registration statement to be declared effective by the U.S. Securities and Exchange Commission (“SEC”) as soon as practicable thereafter. The Company shall use best efforts to keep such Demand Registration current and effective until the Registrable Securities registered thereby cease to be Registrable Securities.
(b) As long as Investor holds Registrable Securities, if at any time or from time to time, the Company shall determine to register any of its securities under the Securities Act (except for the registration of securities to be offered pursuant to an employee benefit plan on Form S-8 or pursuant to a registration made on Form S-4, or any successor forms then in effect) and the registration form to be used may be used for the registration of the Registrable Securities (a “Piggyback Registration”), the Company shall:
(1) Provide thirty (30) calendar days’ advance written notice to Investor prior to filing the registration statement (the “Registration Rights Notice”); and
(2) include in such registration, and in any underwriting involved therein, all the Registrable Securities specified in a written request made by Investor within fifteen (15) calendar days after receipt of the Registration Rights Notice from the Company, except as set forth in Section 1(c) below.
(c) If the registration is for a registered public offering involving an underwriting, the Company shall so advise Investor as a part of the Registration Rights Notice. In such event, the right of Investor to registration shall be conditioned upon Investor’s participation in such underwriting and the inclusion of Investor’s Registrable Securities in the underwriting to the extent provided herein. If Investor proposes to distribute its securities through such underwriting, it shall (together with the Company and any other holders distributing their securities through such underwriting) enter into an underwriting agreement in the form agreed to by the Company with the underwriter(s) selected for such underwriting by the Company. Notwithstanding any other provision of this Agreement, if the managing underwriters advise the Company and Investor in writing that in their reasonable and good faith opinion the number of securities requested to be included in such offering exceeds the number which can be sold without adversely affecting the per share offering price of the securities, the Company will include in such registration (i) first, the securities that the Company proposes to sell; (ii) second, the Registrable Securities requested to be included therein by Investor, allocated pro rata among all such holders on the basis of the number of Registrable Securities owned by each such holder or in such manner as they may otherwise agree; and (iii) third, the securities requested to be included therein by holders of securities other than holders of Registrable Securities, allocated among such holders in such manner as they may agree. If Investor disapproves of the terms of any such underwriting, Investor may elect to withdraw therefrom by written notice to the Company and the managing underwriter.
(d) For purposes of this Agreement, “Registrable Securities” shall mean any and all shares of (i) Company Stock issued pursuant to the Purchase Agreement (including Class A Common Stock issued or issuable upon exchange of Class B Common Stock), (ii) Capital Stock issued in respect of the Company Stock in any reorganization of the Company, and (iii) Capital Stock issued in respect of the stock referred to in clause (i) or (ii) above as a result of a stock split, stock dividend, recapitalization or combination.
2. | Expenses of Registration |
All expenses incurred in connection with the registrations pursuant to Section 1 hereof, including all registration, filing and qualification fees, printing expenses, fees and disbursements of counsel for the Company and expenses of any special audits of the Company’s financial statements incidental to or required by such registration, shall be borne by the Company, except that the Company shall not be required to pay underwriters’ fees, discounts or commissions relating to Registrable Securities.
3. | Registration Procedures |
In the case of each registration affected by the Company pursuant to this Agreement, the Company will keep Investor advised in writing as to the initiation of each registration and as to the completion thereof. At its expense the Company will:
(a) keep such registration pursuant to this Agreement continuously effective until all of such Registrable Securities have been disposed of and to comply with the provisions of the Securities Act with respect to the disposition of such Registrable Securities in accordance with the intended methods of disposition set forth in such registration statement;
(b) promptly prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to comply with the provisions of the Securities Act, and to keep such registration statement effective for that period of time specified in Section 3(a) above;
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(c) at least five (5) business days before filing such registration statement, prospectus or amendments or supplements thereto with the SEC, furnish to Investor copies of such documents proposed to be filed, which documents shall be subject to the reasonable review, comment and approval of Investor;
(d) notify Investor, promptly after the Company receives notice thereof, of the time when such registration statement has been declared effective or a supplement to any prospectus forming a part of such registration statement has been filed with the SEC;
(e) advise Investor, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the SEC suspending the effectiveness of such registration statement or the initiation or threatening of any proceeding for such purpose and promptly use best efforts to obtain the withdrawal of any order suspending the effectiveness of a registration statement, or the lifting of any suspension of the qualification of any of the Registrable Securities for sale in any jurisdiction, at the earliest possible moment;
(f) cause all Registrable Securities covered by such registrations to be listed on each securities exchange on which similar securities issued by the Company are then listed or, if such securities are not then listed, on a national securities exchange selected by Investor;
(g) notify each selling holder of such Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event that would cause the prospectus included in such registration statement to contain an untrue statement of a material fact or omit any fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading, and, at the request of any such holder, the Company shall prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
(h) make available for inspection by Investor all financial and other records, pertinent corporate documents and properties of the Company (collectively, the “Records”), and cause the Company’s officers, directors and employees to supply all Records requested by Investor in connection with such registration statement;
(i) provide a transfer agent and registrar (which may be the same entity) for all such Registrable Securities not later than the effective date of such registration;
(j) otherwise use its best efforts to comply with all applicable rules and regulations of the SEC and make available to its shareholders an earnings statement (in a form that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities Act or any successor rule thereto) no later than thirty (30) days after the end of the 12-month period beginning with the first day of the Company’s first full fiscal quarter after the effective date of such Registration Statement, which earnings statement shall cover said 12-month period, and which requirement will be deemed to be satisfied if the Company timely files complete and accurate information on Forms 10-K, 10-Q and 8-K under the Securities Exchange Act of 1934, as amended (“Exchange Act”), and otherwise complies with Rule 158 under the Securities Act or any successor rule thereto; and
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(k) enter into such customary agreements (including underwriting agreements in customary form) and take all such other actions as the holders of a majority of the Registrable Securities being sold or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities;
(l) use its best efforts to cause such Registrable Securities to be registered with or approved by such other Governmental Entities as may be necessary by virtue of the business and operations of the Company to enable the holders of such Registrable Securities to consummate the disposition of such Registrable Securities in accordance with their intended method of distribution thereof;
(m) notify Investor promptly of any request by the Commission for the amending or supplementing of such registration statement or prospectus or for additional information;
(n) permit Investor to participate in the preparation of such Registration Statement and to require the insertion therein of language, furnished to the Company in writing, which in the reasonable judgment of such holder and its counsel should be included, if in Investor’s judgment, Investor might be deemed to be an underwriter or a “controlling person” (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) (a “Controlling Person”) of the Company; and
(o) take such other actions as reasonably requested by Investor.
4. | Indemnification |
(a) In the event of a registration of any of the Registrable Securities under the Securities Act pursuant to this Agreement, the Company will (i) indemnify and hold harmless, to the fullest extent permitted by law, Investor, each underwriter of such Registrable Securities thereunder, and any other person acting on behalf of Investor and each other person, if any, who controls such foregoing persons within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which any of the foregoing persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such Registrable Securities were registered under the Securities Act, any preliminary prospectus, free writing prospectus, or final prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of any rule or regulation promulgated under the Securities Act or any state securities law applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, and (ii) will reimburse such persons, each of their officers, directors and partners, and each person controlling such persons, for any legal and any other expenses incurred in connection with investigating, defending or settling any such claim, loss, damage, liability or action. Notwithstanding the foregoing, the Company will not be liable in any such case to the extent that any such claim, loss, damage or liability arises out of or is based on any untrue statement or omission based upon written information furnished to the Company in an instrument duly executed by Investor or an underwriter, as applicable, specifically for use therein. This indemnity shall be in addition to any liability the Company may otherwise have.
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(b) Investor will, if Registrable Securities held by or issuable to Investor are included in the securities for which such registration is being effected, indemnify and hold harmless, to the fullest extent permitted by law, the Company, each of its directors and officers, each underwriter, if any, of the Company’s securities covered by such registration statement, each person who controls the Company and each underwriter within the meaning of the Securities Act, against all claims, losses, expenses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of a prospectus, in light of the circumstances under with they were made), but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company in an instrument duly executed by Investor specifically for use therein. Notwithstanding the foregoing, the total amount for which Investor, its officers, directors and partners, and any person controlling Investor, shall be liable under this Section 4(b) shall not in any event exceed the net proceeds (after deducting underwriting fees, commissions, and discounts) received by Investor from the sale of its Registrable Securities in such registration. This indemnity shall be in addition to any liability Investor may otherwise have.
(c) Each party entitled to indemnification under this Section 4 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claims as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom; provided, however, that counsel for the Indemnifying Party, who shall conduct the defense of such claim or litigation, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party’s expense. Notwithstanding the foregoing, the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations hereunder, unless such failure resulted in actual detriment to the Indemnifying Party. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect of such claim or litigation.
(d) Notwithstanding the foregoing, to the extent that the provisions on indemnification contained in the underwriting agreements entered into among Investor, the Company and the underwriters in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall be controlling as to the Registrable Securities included in the public offering.
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(e) The indemnification provided by this Section 4 shall be a continuing right to indemnification and shall survive the registration and sale of any securities by any person entitled to indemnification hereunder and the expiration or termination of this Agreement.
(f) If the indemnification provided for hereunder is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, claim, damage, liability or action referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amounts paid or payable by such Indemnified Party as a result of such loss, claim, damage, liability or action in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions which resulted in such loss, claim, damage, liability or action as well as any other relevant equitable considerations; provided, that the maximum amount of liability in respect of such contribution shall be limited, in the case of each holder of Registrable Securities, to an amount equal to the net proceeds (after underwriting fees, commissions or discounts) actually received by such seller from the sale of Registrable Securities effected pursuant to such registration. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties agree that it would not be just and equitable if contribution pursuant hereto were determined by pro rata allocation or by any other method or allocation which does not take account of the equitable considerations referred to herein. No Person guilty or liable of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
5. | REPORTS UNDER the EXCHANGE ACT |
With a view to making available to Investor the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the SEC that may at any time permit Investor to sell securities of the Company to the public without registration, the Company shall:
(a) make and keep public information available, within the meaning of Rule 144, at all times after the effective date of (i) the first registration statement covering an underwritten public offering filed by the Company or (ii) the first registration by the Company under the Exchange Act;
(b) following a public offering or a registration under the Exchange Act, file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and
(c) furnish to Investor forthwith upon request a written statement by the Company that it has complied with the reporting requirements of Rule 144 (at any time after ninety (90) days after the effective date of said first registration statement filed by the Company), and of the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), a copy of the most recent annual or quarterly report of the Company, and such other reports and documents filed by the Company with the SEC as may be reasonably requested in availing any such holder to take advantage of any rule or regulation of the SEC permitting the selling of any such securities without registration.
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6. | LIMITATIONS IN CONNECTION WITH FUTURE GRANTS OF REGISTRATION RIGHTS |
From and after the date of this Agreement, the Company shall not, without the prior written consent of Investor, enter into any agreement with any holder or prospective holder of any securities of the Company which would allow such holder or prospective holder to include such securities in any registration filed under Section 1 hereof, unless under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of his securities will not reduce the amount of the Registrable Securities of Investor to be included in such registration.
7. | TRANSFER OF REGISTRATION RIGHTS |
The registration rights of Investor (and of any permitted transferee of Investor) under this Agreement with respect to any Registrable Securities may be assigned in whole or in part as provided in Section 8(b) below.
8. | Miscellaneous |
(a) No amendment or waiver of any provision of this Agreement will be effective against any party hereto unless it is in a writing signed by a duly authorized officer of such party.
(b) This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, legal representatives, successors and permitted assigns. This Agreement, and the rights and obligations of Investor hereunder, may be assigned by Investor to any person or entity to which Registrable Securities are transferred by Investor, and such transferee shall be deemed to have acquired all of the rights and obligations of Investor for purposes of this Agreement; provided, that the transferee provides written notice of such assignment to the Company and provided that any such transfer shall be made strictly in accordance with all applicable laws; and provided, further, that such rights may not be held or exercised by more than one transferee at any one time. The Company may not assign its rights under this Agreement except to its successors-in-interest as a result of a merger, reorganization or a sale of all or substantially all of the assets of the Company.
(c) For the convenience of the parties hereto, this Agreement may be executed in any number of separate counterparts, each such counterpart being deemed to be an original instrument, and all such counterparts will together constitute the same agreement. Executed signature pages to this Agreement may be delivered by facsimile or other electronic transmission and such transmissions shall be deemed as sufficient as if manually signed signature pages had been delivered.
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(d) Any notice, request, instruction or other document to be given hereunder by any party to the other will be in writing and will be deemed to have been duly given (i) on the date of delivery if delivered personally or by e-mail (upon confirmation of receipt), (ii) on the first Business Day following the date of dispatch if delivered by a recognized next-day courier service, or (iii) on the third Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered as set forth below, or pursuant to such other instructions as may be designated in writing by the party to receive such notice.
If to the Company:
Professional Holding Corp.
396 Alhambra Circle, Suite 255
Coral Gables, FL 33146
E-mail: dsheehan@professionalbankfl.com
Attention: Daniel R. Sheehan
Title: Chairman and President
with a copy to:
Gunster, Yoakley & Stewart, P.A.
777 South Flagler Drive, Suite 500 East
West Palm Beach, FL 33401
E-mail: mmitrione@gunster.com
Attention: Michael V. Mitrione
If to Investor:
with copies to:
(e) If any provision of this Agreement or the application thereof to any person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon a suitable and equitable substitute provision to effect the original intent of the parties.
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(f) If, and as often as, there is any change in the Class A Common Stock or Class B Common Stock by way of a stock split, stock dividend, combination or reclassification, or through a merger, consolidation, reorganization or recapitalization, or by any other means, appropriate adjustment shall be made in the provisions hereof so that the rights and privileges granted hereby shall continue with respect to the Class A Common Stock and Class B Common Stock as so changed.
(g) This Agreement will be governed by and construed in accordance with the Laws of the State of Florida applicable to contracts made and to be performed entirely within such jurisdiction.
(h) The parties hereby agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in the federal or state courts located in Miami-Dade County, Florida, so long as such court shall have subject matter jurisdiction over such suit, action or proceeding, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by Law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 8(h) shall be deemed effective service of process on such party. The parties hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the state and federal courts referred to above for any actions, suits or proceedings arising out of or relating to this Agreement and the transactions contemplated hereby.
(i) THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR UNDER ANY AGREEMENT, INSTRUMENT OR OTHER DOCUMENT CONTEMPLATED HEREBY OR RELATED HERETO AND IN ANY ACTION DIRECTLY OR INDIRECTLY RELATED TO OR CONNECTED WITH THE OBLIGATIONS OF THIS AGREEMENT. THE PARTIES ACKNOWLEDGE THAT THIS WAIVER MAY DEPRIVE EACH OF THEM AN IMPORTANT RIGHT AND THAT SUCH WAIVER HAS BEEN KNOWINGLY AND VOLUNTARILY MADE BY THE PARTIES AFTER CONSULTATION WITH THEIR LEGAL COUNSEL.
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(j) The article, section, paragraph and clause captions herein are for convenience of reference only, do not constitute part of this Agreement and will not be deemed to limit or otherwise affect any of the provisions hereof.
[Signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date set forth above.
COMPANY: | ||
PROFESSIONAL HOLDING CORP. | ||
By: | ||
Name: | Daniel R. Sheehan | |
Title: | Chairman and President | |
INVESTOR: | ||
[INVESTOR] | ||
By: | ||
Name: | ||
Title: |
[Signature Page to Registration Rights Agreement]
Exhibit 10.25
SHAREHOLDER VOTING AGREEMENT
This Shareholder Voting Agreement (this “Agreement”) is entered into as of the 9th day of August, 2019, by and between Marquis Bancorp, Inc., a Florida corporation (“MBI”), and the undersigned holder (“Shareholder”) of Common Stock (as defined herein).
RECITALS
WHEREAS, as of the date hereof, Shareholder “beneficially owns” (as such term is defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended) and is entitled to dispose of (or to direct the disposition of) and to vote (or to direct the voting of) the number of shares of Class A voting common stock, $0.01 par value per share (the “Common Stock”), of Professional Holding Corp (“PHC”), indicated on the signature page of this Agreement under the heading “Total Number of Shares of Common Stock Subject to this Agreement” (such shares of Common Stock, which for the avoidance of doubt shall not include any shares of Common Stock underlying PHC stock options) together with any other shares of Common Stock the voting power over which is acquired by Shareholder during the period from and including the date hereof through and including the date on which this Agreement is terminated in accordance with its terms, are collectively referred to herein as the “Shares”);
WHEREAS, MBI and PHC propose to enter into an Agreement and Plan of Merger, dated as of the date hereof (the “Merger Agreement”; for purposes of this Agreement, capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to them in the Merger Agreement), pursuant to which, among other things, MBI will merge with and into PHC (the “Merger”); and
WHEREAS, as a condition to the willingness of MBI to enter into the Merger Agreement, Shareholder is executing this Agreement;
NOW, THEREFORE, in consideration of, and as a material inducement to, MBI entering into the Merger Agreement and proceeding with the transactions contemplated thereby, and in consideration of the expenses incurred and to be incurred by MBI in connection therewith, Shareholder and MBI, intending to be legally bound, hereby agree as follows:
1. Agreement to Vote SharesShareholder agrees that, while this Agreement is in effect, at any meeting of shareholders of PHC, however called, or at any adjournment thereof, or in any other circumstances in which Shareholder is entitled to vote, consent or give any other approval, except as otherwise agreed to in writing in advance by MBI, Shareholder shall:
(a) appear at each such meeting or otherwise cause the Shares to be counted as present thereat for purposes of calculating a quorum; and
(b) vote (or cause to be voted), in person or by proxy, all the Shares as to which Shareholder has, directly or indirectly, the right to vote or direct the voting, (i) in favor of the issuance of Common Stock in connection with the Merger and the other transactions contemplated by the Merger Agreement (“the Stock Issuance”); (ii) against any action or agreement that would result in a breach of any covenant, representation or warranty or any other obligation or agreement of PHC contained in the Merger Agreement or of Shareholder contained in this Agreement; and (iii) against any action, agreement or transaction that is intended, or could reasonably be expected, to impede, interfere or be inconsistent with, delay, postpone, discourage or materially and adversely affect consummation of the Merger, the Stock Issuance or the other transactions contemplated by the Merger Agreement or this Agreement.
Shareholder further agrees not to vote or
execute any written consent to rescind or amend in any manner any prior vote or written consent, as a shareholder of PHC, to approve
the Stock Issuance unless this Agreement shall have been terminated in accordance with its terms.
2. No Transfers. While this Agreement is in effect, Shareholder agrees not to, directly or indirectly, sell, transfer, pledge, assign or otherwise dispose of, or enter into any contract option, commitment or other arrangement or understanding with respect to the sale, transfer, pledge, assignment or other disposition of, any of the Shares; provided, however, that the following transfers shall be permitted: (a) transfers by will or operation of law, in which case this Agreement shall bind the transferee; (b) transfers pursuant to any pledge agreement, subject to the pledgee agreeing in writing, prior to such transfer, to be bound by the terms of this Agreement; (c) transfers in connection with estate and tax planning purposes, including transfers to relatives, trusts and charitable organizations, subject to each transferee agreeing in writing, prior to such transfer, to be bound by the terms of this Agreement; (d) disposing of or surrendering Shares in connection with the vesting, settlement or exercise of PHC stock options or restricted shares of Common Stock for the payment of taxes thereon or, in the case of PHC stock options, the exercise price; and (e) such transfers as MBI may otherwise permit in its sole discretion. Any transfer or other disposition in violation of the terms of this Section 2 shall be null and void.
3. Representations and Warranties of Shareholder. Shareholder represents and warrants to and agrees with MBI as follows:
(a) Shareholder has all requisite capacity and authority to enter into and perform his, her or its obligations under this Agreement.
(b) This Agreement has been duly executed and delivered by Shareholder, and assuming the due authorization, execution and delivery by MBI, constitutes the valid and legally binding obligation of Shareholder enforceable against Shareholder in accordance with its terms, except as may be limited by bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or similar laws of general applicability relating to or affecting the rights of creditors generally and subject to general principles of equity.
(c) The execution and delivery of this Agreement by Shareholder does not, and the performance by Shareholder of his, her or its obligations hereunder and the consummation by Shareholder of the transactions contemplated hereby will not, violate or conflict with, or constitute a default under, any agreement, instrument, contract or other obligation or any order, arbitration award, judgment or decree to which Shareholder is a party or by which Shareholder is bound, or any statute, rule or regulation to which Shareholder is subject or, in the event that Shareholder is a corporation, limited liability company, partnership, trust or other entity, any charter, bylaw or other organizational document of Shareholder.
-2- |
(d) Shareholder is the beneficial owner of the Shares. Shareholder does not own, of record or beneficially, any shares of capital stock of PHC other than the Shares or any other securities convertible into or exercisable or exchangeable for such capital stock, other than any PHC stock options. Shareholder has the right to vote the Shares, and none of the Shares is subject to any voting trust or other agreement, arrangement or restriction with respect to the voting of the Shares, except as contemplated by this Agreement or provided by the FBCA.
4. Prohibited Actions. From and after the date hereof until the termination of this Agreement pursuant to Section 7 hereof, Shareholder, in his, her or its capacity as a shareholder of PHC, shall not, nor shall Shareholder authorize any shareholder, member, partner, officer, director, advisor or representative of Shareholder or any of his, her or its affiliates to (and, to the extent applicable to Shareholder, such Shareholder shall use commercially reasonable efforts to not permit any of his, her or its representatives or affiliates to) encourage or assist any party in taking or planning any action that would compete with, restrain or otherwise serve to interfere with or inhibit the timely consummation of the Merger in accordance with the terms of the Merger Agreement. For avoidance of doubt, the parties acknowledge and agree that nothing in this Agreement shall limit or restrict Shareholder or any of his, her or its affiliates who is or becomes during the term hereof a member of the Board of Directors or an officer of PHC or any of its Subsidiaries from acting, omitting to act or refraining from taking any action, solely in such person’s capacity as a member of the Board of Directors or as an officer of PHC (or as an officer or director of any of its Subsidiaries), including without limitation actions taken consistent with his or her fiduciary duties in such capacity under applicable law.
5. Proxy. Subject to the last sentence of this Section 5, by execution of this Agreement, Shareholder does hereby appoint MBI with full power of substitution and resubstitution, as Shareholder’s true and lawful attorney and proxy, to the full extent of Shareholder’s rights with respect to the Shares, to vote each of such Shares that Shareholder shall be entitled to so vote with respect to the matters set forth in Section 1 hereof at any meeting of the shareholders of PHC, and at any adjournment or postponement thereof, and in connection with any action of the shareholders of PHC taken by written consent. Shareholder hereby revokes any proxy previously granted by Shareholder with respect to the Shares. Notwithstanding anything contained herein to the contrary, this proxy shall automatically terminate and be revoked upon the termination of this Agreement.
6. Specific Performance; Remedies; Attorneys’ Fees. Shareholder acknowledges that it is a condition to the willingness of MBI to enter into the Merger Agreement that Shareholder execute and deliver this Agreement and that it will be impossible to measure in money the damage to MBI if Shareholder fails to comply with the obligations imposed by this Agreement and that, in the event of any such failure, MBI will not have an adequate remedy at law or in equity. Accordingly, Shareholder agrees that injunctive relief or other equitable remedy is the appropriate remedy for any such failure and will not oppose the granting of such relief on the basis that MBI has an adequate remedy at law. In addition, MBI shall have the right to inform any third party that MBI reasonably believes to be, or to be contemplating, participating with Shareholder or receiving from Shareholder assistance in violation of this Agreement, of the terms of this Agreement and of the rights of MBI hereunder, and that participation by any such thirty party with Shareholder in activities in violation of Shareholder’s agreement with MBI set forth in this Agreement may give rise to claims by MBI against such third party. In any legal action or other proceeding relating to this Agreement and the transactions contemplated hereby or if the enforcement of any provision of this Agreement is brought against either Party, the prevailing Party in such action or proceeding shall be entitled to recover all reasonable expenses relating thereto (including reasonable attorneys’ fees and expenses, court costs and expenses incident to arbitration, appellate and post-judgment proceedings) from the Party against which such action or proceeding is brought, in addition to any other relief to which such prevailing Party may be entitled.
-3- |
7. Term of Agreement; Termination. The term of this Agreement shall commence on the date hereof. This Agreement may be terminated at any time prior to consummation of the transactions contemplated by the Merger Agreement by the written consent of the parties hereto, and this Agreement shall be automatically terminated upon termination of the Merger Agreement or the consummation of the Merger. Upon such termination, no party shall have any further obligations or liabilities hereunder; provided, however, that such termination shall not relieve any party from liability for any willful and material breach of this Agreement prior to such termination.
8. Entire Agreement; Amendments. This Agreement supersedes all prior agreements, written or oral, among the parties hereto with respect to the subject matter hereof and contains the entire agreement among the parties with respect to the subject matter hereof. This Agreement may not be amended, supplemented or modified, and no provision hereof may be modified or waived, except by an instrument in writing signed by each party hereto. No waiver of any provision hereof by either party shall be deemed a waiver of any other provision hereof by any such party, nor shall any such waiver be deemed a continuing waiver of any provision hereof by such party.
9. Severability. In the event that any one or more provisions of this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect by any court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, and the parties shall use their reasonable best efforts to substitute a valid, legal and enforceable provision which, insofar as practical, implements the purpose and intents of this Agreement.
10. Capacity as Shareholder. This Agreement shall apply to Shareholder solely in his, her or its capacity as a shareholder of PHC, and it shall not apply in any manner to Shareholder in any capacity as a director, officer or employee of PHC or its Subsidiaries or in any other capacity, and shall not limit or affect any actions taken by Shareholder in such capacity.
11. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of Florida, without regard to any applicable conflicts of law principles or any other principle that could require the application of the law of any other jurisdiction.
12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT. EACH OF THE PARTIES HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.
-4- |
13. Waiver of Appraisal Rights; Further Assurances. To the extent permitted by applicable law, Shareholder hereby waives any rights of appraisal or rights to dissent from the Merger or to demand fair value for his, her or its Shares in connection with the Merger, in each case, that Shareholder may have under applicable law. Shareholder further agrees not to commence or participate in, and to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against PHC, MBI or any of their respective successors relating to the negotiation, execution or delivery of this Agreement or the Merger Agreement or the consummation of the Merger. From time to time prior to the termination of this Agreement, at MBI’s request and without further consideration, Shareholder shall execute and deliver such additional documents and take all such further action as may be reasonably necessary or desirable to effect the actions and consummate the transactions contemplated by this Agreement.
14. Disclosure. Shareholder hereby permits MBI and PHC to publish and disclose in the Proxy Statement and Form S-4 (including, without limitation, all related documents and schedules filed with the Securities and Exchange Commission) his, her or its identity and ownership of shares of Common Stock and the nature of Shareholder’s commitments, arrangements and understandings pursuant to this Agreement.
15. Counterparts. This Agreement may be executed in counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Executed counterparts may be delivered by facsimile or other electronic transmission.
[Signature page follows.]
-5- |
IN WITNESS WHEREOF, MBI has caused this Agreement to be duly executed, and Shareholder has duly executed this Agreement, all as of the day and year first above written.
MARQUIS BANCORP, INC. | |||
By: | |||
Javier J. Holtz | |||
Chairman and Chief Executive Officer | |||
SHAREHOLDER: | |||
Printed Name: | |||
Total Number of Shares of Common Stock Subject to this Agreement: ________________________________ | |||
[Signature Page to PHC Voting Agreement]
Exhibit 10.26
SHAREHOLDER VOTING AGREEMENT
This Shareholder Voting Agreement (this “Agreement”) is entered into as of the 9th day of August, 2019, by and between Professional Holding Corp, a Florida corporation (“PHC”), and the undersigned holder (“Shareholder”) of Common Stock (as defined herein).
RECITALS
WHEREAS, as of the date hereof, Shareholder “beneficially owns” (as such term is defined in Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended) and is entitled to dispose of (or to direct the disposition of) and to vote (or to direct the voting of) the number of shares of voting common stock, $5.00 par value per share (the “Common Stock”), of Marquis Bancorp, Inc. (“MBI”), indicated on the signature page of this Agreement under the heading “Total Number of Shares of Common Stock Subject to this Agreement” (such shares of Common Stock, which for the avoidance of doubt shall not include any shares of Common Stock underlying MBI Stock Options) together with any other shares of Common Stock the voting power over which is acquired by Shareholder during the period from and including the date hereof through and including the date on which this Agreement is terminated in accordance with its terms, are collectively referred to herein as the “Shares”);
WHEREAS, PHC and MBI propose to enter into an Agreement and Plan of Merger, dated as of the date hereof (the “Merger Agreement”; for purposes of this Agreement, capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to them in the Merger Agreement), pursuant to which, among other things, MBI will merge with and into PHC (the “Merger”); and
WHEREAS, as a condition to the willingness of PHC to enter into the Merger Agreement, Shareholder is executing this Agreement;
NOW, THEREFORE, in consideration of, and as a material inducement to, PHC entering into the Merger Agreement and proceeding with the transactions contemplated thereby, and in consideration of the expenses incurred and to be incurred by PHC in connection therewith, Shareholder and PHC, intending to be legally bound, hereby agree as follows:
1. Agreement to Vote Shares. Shareholder agrees that, while this Agreement is in effect, at any meeting of shareholders of MBI, however called, or at any adjournment thereof, or in any other circumstances in which Shareholder is entitled to vote, consent or give any other approval, except as otherwise agreed to in writing in advance by PHC, Shareholder shall:
(a) | appear at each such meeting or otherwise cause the Shares to be counted as present thereat for purposes of calculating a quorum; and |
(b) | vote (or cause to be voted), in person or by proxy, all the Shares as to which Shareholder has, directly or indirectly, the right to vote or direct the voting, (i) in favor of adoption and approval of the Merger Agreement and the transactions contemplated thereby (including, without limitation, any amendments or modifications of the terms thereof adopted in accordance with the terms thereof); (ii) against any action or agreement that would result in a breach of any covenant, representation or warranty or any other obligation or agreement of MBI contained in the Merger Agreement or of Shareholder contained in this Agreement; and (iii) against any Acquisition Proposal or any other action, agreement or transaction that is intended, or could reasonably be expected, to impede, interfere or be inconsistent with, delay, postpone, discourage or materially and adversely affect consummation of the transactions contemplated by the Merger Agreement or this Agreement. |
Shareholder further agrees not to vote or execute any written consent to rescind or amend in any manner any prior vote or written consent, as a shareholder of MBI, to approve or adopt the Merger Agreement unless this Agreement shall have been terminated in accordance with its terms.
2. No Transfers. While this Agreement is in effect, Shareholder agrees not to, directly or indirectly, sell, transfer, pledge, assign or otherwise dispose of, or enter into any contract option, commitment or other arrangement or understanding with respect to the sale, transfer, pledge, assignment or other disposition of, any of the Shares; provided, however, that the following transfers shall be permitted: (a) transfers by will or operation of law, in which case this Agreement shall bind the transferee; (b) transfers pursuant to any pledge agreement, subject to the pledgee agreeing in writing, prior to such transfer, to be bound by the terms of this Agreement; (c) transfers in connection with estate and tax planning purposes, including transfers to relatives, trusts and charitable organizations, subject to each transferee agreeing in writing, prior to such transfer, to be bound by the terms of this Agreement; (d) disposing of or surrendering Shares in connection with the vesting, settlement or exercise of MBI Stock Options or MBI Restricted Shares for the payment of taxes thereon or, in the case of MBI Stock Options, the exercise price or in connection with the repurchase, redemption or cancellation of any MBI Restricted Shares as permitted pursuant to the Merger Agreement; and (e) such transfers as PHC may otherwise permit in its sole discretion. Any transfer or other disposition in violation of the terms of this Section 2 shall be null and void.
3. Representations and Warranties of Shareholder. Shareholder represents and warrants to and agrees with PHC as follows:
(a) | Shareholder has all requisite capacity and authority to enter into and perform his, her or its obligations under this Agreement. |
(b) | This Agreement has been duly executed and delivered by Shareholder, and assuming the due authorization, execution and delivery by PHC, constitutes the valid and legally binding obligation of Shareholder enforceable against Shareholder in accordance with its terms, except as may be limited by bankruptcy, insolvency, fraudulent transfer, moratorium, reorganization or similar laws of general applicability relating to or affecting the rights of creditors generally and subject to general principles of equity. |
(c) | The execution and delivery of this Agreement by Shareholder does not, and the performance by Shareholder of his, her or its obligations hereunder and the consummation by Shareholder of the transactions contemplated hereby will not, violate or conflict with, or constitute a default under, any agreement, instrument, contract or other obligation or any order, arbitration award, judgment or decree to which Shareholder is a party or by which Shareholder is bound, or any statute, rule or regulation to which Shareholder is subject or, in the event that Shareholder is a corporation, limited liability company, partnership, trust or other entity, any charter, bylaw or other organizational document of Shareholder. |
(d) | Shareholder is the beneficial owner of the Shares. Shareholder does not own, of record or beneficially, any shares of capital stock of MBI other than the Shares or any other securities convertible into or exercisable or exchangeable for such capital stock, other than any MBI Stock Options. Shareholder has the right to vote the Shares, and none of the Shares is subject to any voting trust or other agreement, arrangement or restriction with respect to the voting of the Shares, except as contemplated by this Agreement or provided by the FBCA. |
4. No Solicitation. From and after the date hereof until the termination of this Agreement pursuant to Section 7 hereof, Shareholder, in his, her or its capacity as a shareholder of MBI, shall not, nor shall Shareholder authorize any shareholder, member, partner, officer, director, advisor or representative of Shareholder or any of his, her or its affiliates to (and, to the extent applicable to Shareholder, such Shareholder shall use commercially reasonable efforts to not permit any of his, her or its representatives or affiliates to), (a) initiate, solicit, induce or knowingly encourage, or knowingly take any action to facilitate the making of, any inquiry, offer or proposal which constitutes, or could reasonably be expected to lead to, an Acquisition Proposal, (b) participate in any discussions or negotiations regarding any Acquisition Proposal, or furnish, or otherwise afford access, to any person (other than PHC) any information or data with respect to MBI or otherwise relating to an Acquisition Proposal, (c) enter into any agreement, agreement in principle, letter of intent, memorandum of understanding or similar arrangement with respect to an Acquisition Proposal, (d) solicit proxies with respect to an Acquisition Proposal (other than the Merger and the Merger Agreement) or otherwise encourage or assist any party in taking or planning any action that would compete with, restrain or otherwise serve to interfere with or inhibit the timely consummation of the Merger in accordance with the terms of the Merger Agreement, or (e) initiate a shareholders’ vote or action by consent of MBI’s shareholders with respect to an Acquisition Proposal, in each case, except to the extent that at such time MBI is permitted to take such action pursuant to Section 6.7 of the Merger Agreement. For avoidance of doubt, the parties acknowledge and agree that nothing in this Agreement shall limit or restrict Shareholder or any of his, her or its affiliates who is or becomes during the term hereof a member of the Board of Directors or an officer of MBI or any of its Subsidiaries from acting, omitting to act or refraining from taking any action, solely in such person’s capacity as a member of the Board of Directors or as an officer of MBI (or as an officer or director of any of its Subsidiaries), including without limitation actions taken consistent with his or her fiduciary duties in such capacity under applicable law.
5. Proxy. Subject to the last sentence of this Section 5, by execution of this Agreement, Shareholder does hereby appoint PHC with full power of substitution and resubstitution, as Shareholder’s true and lawful attorney and proxy, to the full extent of Shareholder’s rights with respect to the Shares, to vote each of such Shares that Shareholder shall be entitled to so vote with respect to the matters set forth in Section 1 hereof at any meeting of the shareholders of MBI, and at any adjournment or postponement thereof, and in connection with any action of the shareholders of MBI taken by written consent. Shareholder hereby revokes any proxy previously granted by Shareholder with respect to the Shares. Notwithstanding anything contained herein to the contrary, this proxy shall automatically terminate and be revoked upon the termination of this Agreement.
6. Specific Performance; Remedies; Attorneys’ Fees. Shareholder acknowledges that it is a condition to the willingness of PHC to enter into the Merger Agreement that Shareholder execute and deliver this Agreement and that it will be impossible to measure in money the damage to PHC if Shareholder fails to comply with the obligations imposed by this Agreement and that, in the event of any such failure, PHC will not have an adequate remedy at law or in equity. Accordingly, Shareholder agrees that injunctive relief or other equitable remedy is the appropriate remedy for any such failure and will not oppose the granting of such relief on the basis that PHC has an adequate remedy at law. In addition, PHC shall have the right to inform any third party that PHC reasonably believes to be, or to be contemplating, participating with Shareholder or receiving from Shareholder assistance in violation of this Agreement, of the terms of this Agreement and of the rights of PHC hereunder, and that participation by any such thirty party with Shareholder in activities in violation of Shareholder’s agreement with PHC set forth in this Agreement may give rise to claims by PHC against such third party. In any legal action or other proceeding relating to this Agreement and the transactions contemplated hereby or if the enforcement of any provision of this Agreement is brought against either Party, the prevailing Party in such action or proceeding shall be entitled to recover all reasonable expenses relating thereto (including reasonable attorneys’ fees and expenses, court costs and expenses incident to arbitration, appellate and post-judgment proceedings) from the Party against which such action or proceeding is brought, in addition to any other relief to which such prevailing Party may be entitled.
7. Term of Agreement; Termination. The term of this Agreement shall commence on the date hereof. This Agreement may be terminated at any time prior to consummation of the transactions contemplated by the Merger Agreement by the written consent of the parties hereto, and this Agreement shall be automatically terminated upon termination of the Merger Agreement or the consummation of the Merger. Upon such termination, no party shall have any further obligations or liabilities hereunder; provided, however, that such termination shall not relieve any party from liability for any willful and material breach of this Agreement prior to such termination.
8. Entire Agreement; Amendments. This Agreement supersedes all prior agreements, written or oral, among the parties hereto with respect to the subject matter hereof and contains the entire agreement among the parties with respect to the subject matter hereof. This Agreement may not be amended, supplemented or modified, and no provision hereof may be modified or waived, except by an instrument in writing signed by each party hereto. No waiver of any provision hereof by either party shall be deemed a waiver of any other provision hereof by any such party, nor shall any such waiver be deemed a continuing waiver of any provision hereof by such party.
9. Severability. In the event that any one or more provisions of this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect by any court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, and the parties shall use their reasonable best efforts to substitute a valid, legal and enforceable provision which, insofar as practical, implements the purpose and intents of this Agreement.
10. Capacity as Shareholder. This Agreement shall apply to Shareholder solely in his, her or its capacity as a shareholder of MBI, and it shall not apply in any manner to Shareholder in any capacity as a director, officer or employee of MBI or its Subsidiaries or in any other capacity, and shall not limit or affect any actions taken by Shareholder in such capacity.
11. Governing Law. This Agreement shall be governed and construed in accordance with the laws of the State of Florida, without regard to any applicable conflicts of law principles or any other principle that could require the application of the law of any other jurisdiction.
12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT. EACH OF THE PARTIES HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12.
13. Waiver of Appraisal Rights; Further Assurances. To the extent permitted by applicable law, Shareholder hereby waives any rights of appraisal or rights to dissent from the Merger or to demand fair value for his, her or its Shares in connection with the Merger, in each case, that Shareholder may have under applicable law. Shareholder further agrees not to commence or participate in, and to take all actions necessary to opt out of any class in any class action with respect to, any claim, derivative or otherwise, against PHC, MBI or any of their respective successors relating to the negotiation, execution or delivery of this Agreement or the Merger Agreement or the consummation of the Merger. From time to time prior to the termination of this Agreement, at PHC’s request and without further consideration, Shareholder shall execute and deliver such additional documents and take all such further action as may be reasonably necessary or desirable to effect the actions and consummate the transactions contemplated by this Agreement.
14. Disclosure. Shareholder hereby permits PHC and MBI to publish and disclose in the Proxy Statement and Form S-4 (including, without limitation, all related documents and schedules filed with the Securities and Exchange Commission) his, her or its identity and ownership of shares of Common Stock and the nature of Shareholder’s commitments, arrangements and understandings pursuant to this Agreement.
15. Counterparts. This Agreement may be executed in counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement. Executed counterparts may be delivered by facsimile or other electronic transmission.
[Signature page follows.]
IN WITNESS WHEREOF, PHC has caused this Agreement to be duly executed, and Shareholder has duly executed this Agreement, all as of the day and year first above written.
PROFESSIONAL HOLDING CORP | ||
By: | ||
Daniel R. Sheehan | ||
Chairman and Chief Executive Officer | ||
SHAREHOLDER: | |||
Printed Name: | |||
Total Number of Shares of Common Stock Subject to this Agreement: | |||
Exhibit 21.1
Subsidiaries of the Registrant
Professional Bank (Florida)
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the use in this Registration Statement of Professional Holding Corp. on Form S-4 of our report dated September 26, 2019 on the consolidated financial statements of Professional Holding Corp. and to the reference to us under the heading "Experts" in the prospectus.
/s/ Crowe LLP
Fort Lauderdale, Florida
January 27, 2020
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITOR
We consent to the use in this Registration Statement of Professional Holding Corp. on Form S-4 of our report dated March 18, 2019, except Note 7, as to which the date is December 12, 2019, on the consolidated financial statements of Marquis Bancorp, Inc., and to the reference to our firm under the heading “Experts” in the prospectus.
/s/ Crowe LLP
Miami, Florida
January 27, 2020
Exhibit 99.3
[Insert Stephens Inc. Letterhead]
Consent of Stephens Inc.
We hereby consent to the inclusion of our opinion letter dated August 9, 2019 to the board of directors of Professional Holding Corp. (“Professional”) as Appendix C to the Proxy Statement/Prospectus relating to the proposed merger of Professional with Marquis Bancorp, Inc. contained in the Registration Statement on Form S-4 of Professional, and to the references to our firm and such opinion in such Proxy Statement/Prospectus and Registration Statement.
In giving such consent, we do not admit, and we disclaim, that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission promulgated thereunder, nor do we admit that we are experts with respect to any part of such Proxy Statement/Prospectus and Registration Statement within the meaning of the terms “experts” as used in the Securities Act of 1933, as amended, or the rules and regulations of the Securities and Exchange Commission thereunder.
/s/ Stephens Inc.
January 27, 2020
Exhibit 99.4
January 23, 2020
Marquis Bancorp, Inc.
355 Alhambra Circle
Suite 1200
Coral Gables, FL 33134
Re: | Fairness Opinion Consent |
To whom it may concern,
We hereby consent to the inclusion of our opinion letter to the board of directors of Marquis Bancorp, Inc. (“Marquis”) as an Appendix to the Form S-4, relating to the proposed merger of Marquis with Professional described in the Form S-4, and to the references to our firm and such opinion in such Form S-4. In giving such consent, we do not admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended (the “Act”), or the rules and regulations of the Securities and Exchange Commission thereunder (the “Regulations”), nor do we admit that we are experts with respect to any part of such Form S-4 within the meaning of the term “experts” as used in the Act or the Regulations.
Very truly yours,
/s/ Janney Montgomery Scott LLC
JANNEY MONTGOMERY SCOTT LLC
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