NOTE 13. STOCKHOLDERS’ EQUITY

Amendment to Restated Articles of Incorporation

On June 30, 2025, the Company filed the Articles of Amendment with the Louisiana Secretary of State, which became effective as of June 30, 2025, amending the Company’s Restated Articles by establishing and designating the newly authorized Series A Preferred Stock initially consisting of 32,500 authorized shares. 

Series A Preferred Stock

The Company’s Restated Articles give the Company’s Board the authority to issue up to 5,000,000 shares of preferred stock, which are considered “blank check” preferred stock. This type of preferred stock allows the Board to fix the designations, preferences and relative, participating, optional or other special rights, and qualifications and limitations or restrictions of any series of preferred stock without further shareholder approval.

On  July 1, 2025, the Company completed a private placement of 32,500 shares of its newly designated Series A Preferred Stock at a purchase price of $1,000 per share pursuant to securities purchase agreements (collectively, the “Securities Purchase Agreements”) with certain institutional and other accredited investors, for aggregate gross proceeds to the Company of $32.5 million. The net proceeds of the private placement were $30.4 million, after deducting placement agent fees and other offering-related expenses. The Company utilized the net proceeds from the offering to support the acquisition of WFB and for general corporate purposes including organic growth and other potential acquisitions. The Series A Preferred Stock was classified as permanent equity in the accompanying consolidated balance sheets and is intended to qualify as additional Tier 1 capital of the Company. At December 31, 2025 and 2024, there were 32,500 and no preferred shares outstanding, respectively.

The relative preferences, rights and limitations of the Series A Preferred Stock are set forth in the Company’s Restated Articles. Pursuant to the Restated Articles, holders of the Series A Preferred Stock are entitled to receive, when, as and if authorized by the Board, on a non-cumulative basis, quarterly cash dividends at an annual rate equal to 6.5% on the liquidation preference of $1,000 per share, payable in arrears on  January 1,  April 1,  July 1 and  October 1 of each year commencing on  October 1, 2025. Subject to certain exceptions, the Company is prohibited from paying dividends on, or repurchasing or redeeming its common stock, unless full dividends for the Series A Preferred Stock’s most recently completed dividend period have been declared and paid on all outstanding shares of Series A Preferred Stock. Holders of Series A Preferred Stock have the right, at any time and from time to time, at such holder’s option to convert all or any portion of their Series A Preferred Stock into shares of the Company’s common stock at the rate of 47.619 shares of common stock per share of Series A Preferred Stock (subject to certain adjustments) (the “Conversion Rate”), plus cash in lieu of fractional shares of common stock. The maximum number of shares of common stock that  may be issued upon conversion is 1,600,000 (subject to certain adjustments as described in the Restated Articles). In addition, subject to certain conditions, on or after  July 1, 2028, the Company will have the right, at its option, from time to time on any dividend payment date, to cause some or all of the Series A Preferred Stock to be converted into shares of the Company’s common stock at the Conversion Rate if, for 20 trading days within a period of 30 consecutive trading days, the closing price of the Company’s common stock exceeds $26.25 per share (subject to certain adjustments). The Series A Preferred Stock has no maturity date and is perpetual unless redeemed by the Company or converted in accordance with the Restated Articles. Subject to certain conditions, the Company  may redeem, from time to time, in whole or in part, shares of Series A Preferred Stock on any dividend payment date occurring on or after  July 1, 2030 at a redemption price of $1,000 per share, plus all declared but unpaid dividends thereon, without regard to, or accumulation of, any undeclared dividends. Holders of the Series A Preferred Stock have no voting rights, except with respect to certain changes in the terms of the Series A Preferred Stock, certain fundamental business transactions and as otherwise required by applicable law.

If the Company voluntarily or involuntarily liquidates, dissolves or winds up, each holder will be entitled to receive, before any distribution of assets or proceeds is made to holders of the Company’s common stock, cash liquidating distributions in an amount equal to the greater of (i) the liquidation preference of $1,000 per share of, plus all declared but unpaid dividends thereon, without regard to, or accumulation of, any undeclared dividends, and (ii) the amount that such holder would have received in respect of the common stock issuable upon conversion of the Series A Preferred Stock had such holder converted such share of Series A Preferred Stock immediately prior to such time. Upon the occurrence of specified “Reorganization Events” as defined in the Restated Articles, such as a merger in which the Company’s common stock is converted into other consideration, each share of Series A Preferred Stock outstanding immediately prior to such Reorganization Event will be entitled to receive, before any distribution of such assets or proceeds is made to holders of the Company’s common stock, in full, the greater of (i) the amount per share equal to the liquidation value of $1,000 per share, plus all declared but unpaid dividends thereon, without regard to, or accumulation of, any undeclared dividends, and (ii) the amount equal to the distribution amount of such assets or proceeds of the Company as was receivable by a holder of the number of shares of the Company’s common stock into which such share of Series A Preferred Stock was convertible immediately prior to such Reorganization Event.

The Securities Purchase Agreements contain representations and warranties, covenants, and indemnification provisions that are customary for private placements of shares of convertible preferred stock by companies that have securities registered with the SEC. In connection with the execution of the Securities Purchase Agreements, the Company and each of the purchasers entered into a Registration Rights Agreement, pursuant to which the Company agreed at its expense, subject to certain exceptions, to file with the SEC a registration statement to register the resale of the shares of the Company’s common stock issuable to the holders of the Series A Preferred Stock upon conversion thereof. The Company’s obligation to have an effective registration statement covering the resale of the shares of common stock underlying the Series A Preferred Stock continues until such securities (i) are sold or otherwise transferred under an effective registration statement under the Securities Act, (ii) cease to be outstanding, (iii) are transferred in a transaction in which the purchaser’s rights are not assigned to the transferee of the securities, (iv) are sold in accordance with Rule 144 promulgated under the Securities Act (“Rule 144”), or (v) become eligible for resale without volume or manner-of-sale restrictions under Rule 144 (or any successor rule then in effect) and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144.

The Company filed a Registration Statement on Form S-3 with the SEC on  September 2, 2025, registering the resale from time to time by the stockholders named therein of the shares of Company common stock issuable upon conversion of shares of Series A Preferred Stock. The Registration Statement was declared effective by the SEC on  September 17, 2025.

Common Stock

The Company’s Restated Articles of Incorporation give the Company’s Board the authority to issue up to 40,000,000 shares of common stock. At December 31, 2025, there were 9,798,948 common shares outstanding compared to 9,828,413 and 9,748,067 at December 31, 2024 and 2023, respectively.

In addition, the Company repurchased 114,249, 18,621, and 222,448 shares of its common stock through its stock repurchase program at an average price of $19.84, $16.13, and $13.47 per share during the years ended  December 31, 2025, 2024 and 2023, respectively.

Dividend Restrictions. In the ordinary course of business, the Company is dependent upon dividends from the Bank to provide funds for the payment of dividends to shareholders and to provide for other cash requirements. Banking regulations may limit the amount of dividends that may be paid to the Company. Approval by regulatory authorities is required if the effect of the dividend would cause the regulatory capital of the Bank to fall below specified minimum levels. Approval is also required if dividends declared exceed the net profits for that year combined with the retained net profits for the preceding two years. Further, a national bank may not pay a dividend in excess of its undivided profits.

Pursuant to the Company's Restated Articles of Incorporation, subject to certain exceptions, the Company is prohibited from paying dividends on common stock unless full dividends for the Series A Preferred Stock’s most recently completed dividend period have been declared and paid on all outstanding shares of Series A Preferred Stock.

Under the terms of the junior subordinated debentures, assumed through acquisition, the Company has the right at any time during the term of the debentures to defer the payment of interest. In the event that the Company elects to defer interest on the debentures, it may not, with certain exceptions, declare or pay any dividends or distributions on its common stock or purchase or acquire any of its common stock.

Under the terms of the Company’s 2032 Notes, the Company is prohibited from paying dividends upon and during the continuance of any Event of Default under such notes.

These restrictions do not, and are not expected in the future to, materially limit the Company’s ability to pay dividends on common stock to its shareholders in an amount consistent with the Company’s history of paying dividends.

Accumulated Other Comprehensive (Loss) Income

Activity within the balances in accumulated other comprehensive (loss) income, net is shown in the table below (dollars in thousands).