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As filed with the Securities and Exchange Commission on October 2, 2026.
Registration No. 333-      ​
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
GEORGIA BANKING COMPANY, INC.
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(Exact name of registrant as specified in its charter)
Georgia
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(State or other jurisdiction of incorporation or organization)
6022
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(Primary Standard Industrial Classification Code Number)
58-2382447
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(I.R.S. Employer Identification Number)
1776 Peachtree Street NW, Suite 300,
Atlanta, GA 30309
(866) 711-4530
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(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Bartow Morgan, Jr.
Chief Executive Officer
Georgia Banking Company, Inc.
1776 Peachtree Street NW, Suite 300,
Atlanta, GA 30309
(866) 711-4530
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(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies to:
James Stevens
Brenna Sheffield
Troutman Pepper Locke LLP
600 Peachtree Street, NE, Suite 3000
Atlanta, Georgia 30308
(404) 885-3000
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.
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If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box: ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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Emerging growth company
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, or until this registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
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The information in this preliminary prospectus is not complete and may be changed. We may not, and the Registered Shareholders may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Preliminary ProspectusSubject to Completion, dated October 2, 2026
7,040,514 Shares
[MISSING IMAGE: lg_gbc-4clr.jpg]
Common Stock
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This prospectus relates to the registration of the resale of up to 7,040,514 shares of our voting common stock (our “common stock”) by shareholders identified in this prospectus (the “Registered Shareholders”) of Georgia Banking Company, Inc., a Georgia corporation and the bank holding company for Georgia Banking Company, a wholly owned subsidiary and Georgia bank (the “Bank”). Shares of our non-voting common stock (our “non-voting common stock”) offered by the Registered Shareholders will automatically convert into common stock upon transfer.
Unlike an initial public offering, the resale by the Registered Shareholders is not being underwritten by any investment bank. The Registered Shareholders may, or may not, elect to sell their common stock covered by this prospectus, as and to the extent they may determine. If the Registered Shareholders utilize a broker-dealer in the sale of the common stock being offered by this prospectus on the Nasdaq Capital Market (“Nasdaq”), such broker-dealer may receive remuneration in the form of discounts, concessions, or commissions. See “Plan of Distribution.” If the Registered Shareholders choose to sell their common stock, we will not receive any proceeds from the sale of common stock by the Registered Shareholders.
No established public trading market for our common stock currently exists. However, our shares of common stock have a limited history of trading in private transactions. In 2026, 2,298,970 primary and secondary shares of our common stock were sold at a price of $30.00 per share in private placements. For more information, see “Sale Price History of Our Capital Stock.” Recent purchase prices of our common stock in private transactions may have little or no relation to the opening public price of shares of our common stock on Nasdaq or the subsequent trading price of shares of our common stock on Nasdaq. As a result, you should not place undue reliance on these historical sales prices as they may differ materially from the public prices of our shares of common stock on Nasdaq. Further, the listing of our common stock on Nasdaq without a firm-commitment underwritten offering may cause the trading volume and price of our common stock to be more volatile than if our common stock was initially listed in connection with an initial public offering underwritten on a firm-commitment basis.
On the day that shares of our common stock are initially listed on Nasdaq, The Nasdaq Stock Market LLC (“Nasdaq Stock Market”) will begin accepting, but not executing, pre-opening buy and sell orders and will begin to continuously generate the indicative Current Reference Price (as defined below) on the basis of such accepted orders. During a 10-minute “Display Only” period, market participants may enter quotes and orders for our common stock in Nasdaq Stock Market’s systems and such information is disseminated, along with other indicative imbalance information, to Performance Trust Capital Partners, LLC (“Performance Trust”), our designated financial advisor with respect to certain other matters relating to our listing, and other market participants by Nasdaq Stock Market on its NOII and BookViewer tools. Following the “Display Only” period, a “Pre-Launch” period begins, during which Performance Trust, in its capacity as our designated financial advisor, will perform the functions under Nasdaq Stock Market Rule 4120(c)(8) and must notify Nasdaq Stock Market that our shares are “ready to trade.” Once Performance Trust has notified Nasdaq Stock Market that shares of our common stock are ready to trade, Nasdaq Stock Market will calculate the Current Reference Price for shares of our common stock, in accordance with Nasdaq Stock Market’s exchange rules. If Performance Trust then approves proceeding at the Current Reference Price, Nasdaq Stock Market will conduct a price validation test in accordance with Nasdaq Stock Market Rule 4120(c)(8). As part of conducting such price validation test, Nasdaq Stock Market may consult with Performance Trust, if the price bands need to be modified, to select the new price bands for purposes of applying such test iteratively until the validation tests yield a price within such bands. Upon completion of such price validation checks, the applicable orders that have been entered will then be executed at such price and regular trading of shares of our common stock on Nasdaq will commence. Under the Nasdaq Stock Market exchange rules, the “Current Reference Price” means: (i) the single price at which the maximum number of orders to buy or sell shares of our common stock can be matched; (ii) if more than one price exists under clause (i), then the price that minimizes the number of shares of our common stock for which orders cannot be matched; (iii) if more than one price exists under clause (ii), then the entered price (i.e. the specified price entered in an order by a customer to buy or sell) at which shares of our common stock will remain unmatched (i.e. will not be bought or sold); and (iv) if more than one price exists under clause (iii), a price determined by Nasdaq Stock Market after consultation with Performance Trust. Performance Trust will exercise any consultation rights only to the extent that it may do so consistent with the anti-manipulation provisions of the federal securities laws, including Regulation M (to the extent applicable), or applicable relief granted thereunder. Neither the Company nor Registered Shareholders will be involved in Nasdaq Stock Market’s price-setting mechanism, including any decision to delay or proceed with trading, nor will they control or influence Performance Trust, in carrying out its role as financial advisor. Performance Trust will determine when shares of our common stock are ready to trade and approve proceeding at the Current Reference Price primarily based on consideration of volume, timing, and price. In particular, Performance Trust will determine, based primarily on pre-opening buy and sell orders, when a reasonable amount of volume will cross on the opening trade such that sufficient price discovery has been made to open trading at the Current Reference Price. For more information, see “Plan of Distribution.”
We have applied to list our common stock on Nasdaq under the symbol “GBC.” This offering is contingent on approval of our listing application. No assurance can be given that our Nasdaq application will be approved and that our common stock will be listed on Nasdaq. If our Nasdaq application is not approved or we otherwise determine that we will not be able to secure the listing of our common stock on Nasdaq, we will not complete this direct listing. We expect our common stock to begin trading on Nasdaq on or about            , 2026.
We are an “emerging growth company” and a “smaller reporting company” as defined under the U.S. federal securities laws and are subject to reduced public company reporting requirements.
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Investing in our common stock involves risk. See “Risk Factors” beginning on page 14 to read about factors you should consider before investing in our common stock.
None of the Securities and Exchange Commission (the “SEC”), any state securities or banking commission, the Federal Deposit Insurance Corporation (the “FDIC”), the Board of Governors of the Federal Reserve System (the “Federal Reserve”) nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
These securities are not deposits, savings accounts or other obligations of any bank or savings association and are not insured or guaranteed by the FDIC or any other governmental agency and are subject to investment risks, including the possible loss of the entire amount you invest.
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Prospectus dated            , 2026

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ABOUT THIS PROSPECTUS
You should rely only on the information contained in this prospectus or in any free writing prospectus that we authorize to be delivered to you. Neither we nor any of the Registered Shareholders have authorized anyone to provide you with different or additional information. Neither we nor any of the Registered Shareholders are making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.
Unless we state as much or the context otherwise requires, references in this prospectus to “we,” “our,” “us,” “ourselves,” the “company,” “GBC” and the “Company” refer to Georgia Banking Company, Inc., a Georgia corporation, and its consolidated wholly owned banking subsidiary, Georgia Banking Company, a Georgia bank.
This prospectus describes the specific details regarding this offering and the terms and conditions of our voting common stock being offered hereby (our “common stock”) and the risks of investing in our common stock. Shares of our non-voting common stock (our “non-voting common stock”) offered by the Registered Shareholders will automatically convert into common stock upon transfer. For additional information, please see the section entitled “Where You Can Find Additional Information.”
You should not interpret the contents of this prospectus to be legal, business, investment or tax advice. You should consult with your own advisors for that type of advice and consult with them about the legal, tax, business, financial and other issues that you should consider before investing in our common stock.
For investors outside the United States:   Neither we nor any of the Registered Shareholders have done anything that would permit the use of or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the shares of our common stock by the Registered Shareholders and the distribution of this prospectus outside the United States.
Market and Industry Data
Within this prospectus, we reference certain market, industry and demographic data and other statistical information. We have obtained this data and information from various independent, third-party industry sources and publications. None of such reports or other third-party sources were commissioned by or on behalf of the Company, and none of the information contained therein was prepared in connection with, or specifically for use in, this prospectus. Nothing in the data or information used or derived from third-party sources should be construed as advice. Some data and other information are also based on our good faith estimates, which are derived from our review of external surveys and independent sources. We believe that these external sources and estimates are reliable but have not independently verified them. Statements as to our market position are based on market data currently available to us. Although we are not aware of any misstatements regarding the economic, employment, industry and other market data presented herein, these estimates involve inherent risks and uncertainties and are based on assumptions that are subject to change.
Basis of Presentation
Certain monetary amounts, percentages and other figures included elsewhere in this prospectus have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables or charts may not be the arithmetic aggregation of the figures that precede them, and figures expressed as percentages in the text may not total 100% or, as applicable, when aggregated may not be the arithmetic aggregation of the percentages that precede them.
Unless otherwise indicated, all information in this prospectus relating to the number of shares of common stock outstanding is based on 10,340,809 shares of our common stock and 331,341 shares of our non-voting common stock outstanding as of September 30, 2026 and:
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excludes 146,463 shares of our common stock issuable upon the exercise of outstanding stock options (all of which are exercisable) as of September 30, 2026;
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excludes 124,232 shares of our common stock issuable upon the future vesting of 124,232 restricted stock units outstanding as of September 30, 2026;
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excludes 529,722 shares of our common stock and non-voting common stock issuable upon the exercise of outstanding warrants (all of which are exercisable) as of September 30, 2026; and
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excludes 176,777 shares of our common stock issuable under our Deferred Compensation Plan (defined below) as of September 30, 2026.
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Trademarks
Our and our Bank’s logos and other trademarks referred to and included in this prospectus belong to us. Solely for convenience, we refer to our trademarks in this prospectus without the “®,” “SM” or the “™” symbols, but such references are not intended to indicate that we will not assert, to the fullest extent under applicable law, our rights to our trademarks. Other service marks, trademarks and trade names referred to in this prospectus, if any, are the property of their respective owners, although for presentation convenience we may not use the “®,” “SM” or the “™” symbols to identify such trademarks.
Implications of Being an Emerging Growth Company and a Smaller Reporting Company
As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012, or the “JOBS Act.” An emerging growth company may take advantage of reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. Among other factors, as an emerging growth company we:
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may present as few as two years of audited financial statements, two years of related management discussion and analysis of financial condition and results of operations;
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are exempt from the requirement to provide an opinion from our auditors on the design and operating effectiveness of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002, as amended, or the “Sarbanes-Oxley Act;”
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are permitted to provide less extensive disclosure about our executive compensation arrangements pursuant to the rules applicable to smaller reporting companies, which means we do not have to include a compensation discussion and analysis and certain other disclosures regarding our executive compensation; and
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are not required to hold non-binding advisory votes on executive compensation or golden parachute arrangements.
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In addition to the relief described above, the JOBS Act permits us an extended transition period for complying with new or revised accounting standards affecting public companies. We have irrevocably determined to take advantage of this extended transition period, which means that when a standard is issued or revised, and it has different application dates for public or private companies, we can adopt the new or revised standard at the time private companies adopt the new or revised standard. Therefore, our financial statements may not be comparable to the financial statements of public companies that comply with such new or revised accounting standards on a non-delayed basis.
We will remain an emerging growth company until the earliest of (i) the end of the fiscal year during which we have total annual gross revenues of  $1.235 billion or more, (ii) the end of the fiscal year following the fifth anniversary of the completion of this offering, (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt and (iv) the date on which we are deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
We are also a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act. Smaller reporting companies may take advantage of many of the same exemptions from disclosure requirements as emerging growth companies, including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We will remain a smaller reporting company until the end of the fiscal year in which (1) we have a public common equity float of more than $250 million, or (2) we have annual revenues for the most recently completed fiscal year of more than $100 million and a public common equity float or public float of more than $700 million. We also would not be eligible for status as a smaller reporting company if we become an investment company, an asset-backed issuer or a majority-owned subsidiary of a parent company that is not a smaller reporting company.
In this prospectus, we have elected to take advantage of the reduced disclosure requirements relating to financial statements and executive compensation and may elect to take advantage of other reduced reporting requirements in future filings for so long as we qualify. As a result, the information that we provide to our shareholders may be different from what you might receive from other public reporting companies in which you hold equity interests.
 
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PROSPECTUS SUMMARY
This summary highlights selected information contained in greater detail elsewhere in this prospectus. This summary may not contain all of the information that you should consider before investing in our securities. You should carefully read this entire prospectus, including the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the notes related thereto before making an investment decision. Some of the statements in this prospectus constitute forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements.”
The Company
Georgia Banking Company, Inc. is a bank holding company headquartered in Atlanta, Georgia. Through our bank subsidiary, Georgia Banking Company, we provide a broad suite of commercial banking, community banking, private banking, commercial real estate banking, mortgage warehouse and treasury services to businesses, professionals, entrepreneurs and consumers concentrated in the Atlanta-Sandy Springs-Roswell, Georgia Metropolitan Statistical Area (the “Atlanta MSA”). As of June 30, 2026, the Company had approximately $3.3 billion in total assets and operated a diversified mix of lending, deposit and fee-generating businesses through 10 full-service banking offices and three loan production offices, all of which are in the Atlanta MSA.
We believe our success is largely driven by a differentiated relationship banking model that combines local decision-making authority, senior-level responsiveness, personal relationships and exceptional service with the products, expertise, technology and lending capacity associated with larger institutions. This model allows us to serve the complex financial needs of small and middle-market businesses while maintaining the service culture and accessibility that define community banking. We serve businesses, professionals, entrepreneurs, and families throughout the Atlanta MSA via a platform designed for disciplined growth, relationship depth and long-term shareholder value creation.
Our current strategy was established following a transformative recapitalization completed in 2021, led by the Company’s Chief Executive Officer, Bartow Morgan, Jr., and supported by a mix of local and institutional investors. Mr. Morgan previously served as Chief Executive Officer and a director of Brand Group Holdings and The Brand Banking Company (“BrandBank”) from 2001 until its sale in 2018 and led BrandBank’s growth from a local community bank into one of the largest privately held banks headquartered in the Atlanta MSA.
Mr. Morgan and a number of other like-minded investors identified an opportunity in the Atlanta MSA for a locally headquartered bank with between $2 billion and $10 billion in total assets due to a large number of mergers and acquisitions involving banks in this asset class between 2015 and 2018. Through a $125 million private placement and a subsequent $55 million subordinated debt offering, the Company raised approximately $180 million of capital in 2021 (the “Recapitalization”) and began a comprehensive strategic transformation of the franchise. Since that time, we have evolved from a specialty-oriented institution with approximately $650 million in assets into what we believe is a premier community banking franchise in Georgia with approximately $3.3 billion in assets as of June 30, 2026.
Since the Recapitalization, we have expanded our market presence, strengthened our operating platform, increased core funding and diversified our balance sheet. Notable progress includes:
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Recruiting experienced bankers across diverse business lines with an attractive rewards and recognition program;
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Investing in technology and infrastructure;
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Revamping branding and marketing strategy;
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Expanding into attractive Atlanta MSA sub-markets and broadening our product capabilities with seven new branch locations opened since 2021;
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Growing assets from approximately $650 million in 2021 to approximately $3.3 billion as of June 30, 2026, including approximately $2.6 billion in loans;
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Growing deposits from approximately $525 million in 2021 to approximately $2.8 billion as of June 30, 2026;
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Completing and integrating two strategic whole-bank acquisitions;
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Establishing robust service standards; and
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Being recognized by The Atlanta Journal-Constitution as a Top Workplace for three consecutive years and as a Top Workplace by Axios Atlanta for one year (based on employee surveys administered by a third-party research firm).
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Key Strengths
We are focused on becoming the premier relationship-oriented commercial bank serving small and middle-market businesses throughout the Atlanta MSA. We believe this focus has helped us rapidly grow and diversify while maintaining strong credit quality and capital, which has positioned us to generate consistent, high-quality earnings. We believe the breadth of our product capabilities allows us to compete for complex commercial relationships that small community banks cannot fully serve, while our high-quality, relationship-based service allows us to take share from larger regional and national institutions. Our key strengths include:
Locally headquartered in one of the nation’s most attractive banking markets.   We believe the Atlanta MSA is one of the country’s most dynamic metropolitan markets, supported by population growth, business formation, corporate investment, entrepreneurial activity and a diversified regional economy. At the same time, consolidation across the banking industry has reduced the number of locally headquartered institutions with the scale, talent and product breadth needed to serve growing companies. From the second quarter of 2009 through the second quarter of 2025, the Atlanta MSA deposit market (excluding the top five deposit holders) increased by approximately $34.3 billion. We believe this creates a compelling opportunity for the Company with its headquarters in and focus on the Atlanta MSA.
Proven ability to recruit and retain top banking talent.   A cornerstone of our strategy has been attracting experienced bankers who want a client-focused platform supported by local decision-making and an entrepreneurial culture. Many of the Company’s senior leaders held previous leadership roles with high performing banks operating within the Atlanta MSA. These leaders and our relationship managers have extensive experience serving Atlanta businesses and long-standing customer relationships. We believe continued consolidation and restructuring within the banking industry create opportunities to recruit talented bankers throughout our market.
Scalable platform for future growth.   Over the past five years, we have invested meaningfully in personnel, technology, treasury services infrastructure, digital banking capabilities and operational support functions. We believe these investments have helped us create a scalable platform capable of supporting future growth while generating operating leverage and enhancing profitability, enabling us to serve customers for the long-term as they grow and their financial needs become more complex.
Strong credit culture and risk management.   Strong credit quality is a core component of our culture. We believe our credit performance reflects a disciplined underwriting philosophy, experienced lenders, relationship-based client selection and consistent risk oversight. Our relationship-centric approach provides deeper insight into customer operations, which we believe helps us assess risk and manage portfolio performance throughout economic cycles.
Our Strategy
We believe our key strengths position us for continued growth and drive long-term shareholder value creation. To capitalize on these key strengths, we leverage the following strategies:
Differentiated relationship banking model.   We have built a culture centered on long-term client relationships, local decision-making, and direct access to experienced bankers and senior leaders. Our bankers and credit officers operate with meaningful local authority, allowing us to make timely decisions and deliver customized solutions based on each client’s needs. We believe this model is especially valuable to small and middle-market businesses that need sophisticated banking solutions but still want responsive service and relationship continuity. We believe this approach distinguishes us from larger competitors and supports stronger client retention, referral activity, and relationship depth.
Diversified lines of business.   Our platform includes commercial banking, community banking, private banking, commercial real estate banking, mortgage warehouse, treasury services and retail mortgage. These complementary businesses provide multiple sources of loan growth, deposit generation, fee income, and customer acquisition while supporting deeper relationships across the franchise. We plan to grow these lines of business and opportunistically add others to drive future balance sheet growth and profitability.
 
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Balanced and disciplined growth strategy.   Our growth initiatives combine organic expansion with selective strategic acquisitions. Organically, we seek to deepen existing client relationships, expand commercial banking teams, grow focused business lines and penetrate attractive Atlanta sub-markets. We plan to complement this organic growth through selective acquisitions of institutions that share our relationship-oriented culture. We intend to continue to employ a disciplined approach to acquisitions, seeking to partner only with institutions that offer attractive market share, low-cost deposit funding and complementary capabilities.
Our Market Opportunity
Why Atlanta
We focus our banking operations on the Atlanta MSA, which we believe represents one of the most attractive banking markets in the United States and provides a compelling foundation for our long-term growth strategy. The Atlanta MSA is home to more than 6.4 million residents, making it the sixth-largest metropolitan area in the country, and the region added approximately 64,400 residents between 2024 and 2025. On a percentage basis, the region’s population grew by approximately 0.96% over the 12 months ended June 30, 2025, outpacing the national growth rate of approximately 0.52%, and metropolitan Atlanta has added nearly 400,000 residents since 2020. We believe the region’s sustained population growth reflects its economic vitality, relative affordability and quality of life, and we expect these attributes to continue to generate demand for banking services we offer.
The Atlanta MSA’s growth is supported by a diversified economy that includes financial services, technology, payments, healthcare, logistics, professional services, consumer products, manufacturing, and real estate. The Atlanta MSA generates gross domestic product of approximately $385.0 billion, which ranks among the largest metropolitan economies in the United States, and the region hosts one of the nation’s largest concentrations of Fortune 500 company headquarters. We believe this breadth of industry reduces the region’s exposure to any single sector and supports a deep and resilient base of commercial banking customers. The Atlanta MSA also exhibits favorable household economics relative to state and national benchmarks, with a projected 2026 median household income of approximately $95,900, compared to a Georgia median of approximately $83,400 and a national median of approximately $86,700, and projected population growth of approximately 4.2% from 2026 to 2031, compared to a national average of approximately 2.6%. We believe these demographic strengths, including the size of the market as measured by population and number of operating businesses and its historical and projected growth, provide meaningful opportunities for us to aggregate clients and grow our balance sheet.
The region also benefits from the presence of Hartsfield-Jackson Atlanta International Airport, which supports business activity, transportation connectivity, and continued investment across the Southeast. We believe Atlanta’s role as a transportation and logistics hub reinforces its status as a magnet for corporate operations and small-business formation, which in turn drives demand for commercial credit, treasury management, and depository services. Although we compete in this market against community banks as well as regional and national financial institutions of substantially greater size and resources, we believe the scale and dynamism of the Atlanta MSA leave meaningful room for a locally led relationship banking franchise to gain market share over time.
Consolidation in Our Market
The Atlanta MSA banking landscape has been reshaped over the past decade by sustained industry consolidation that has materially reduced the number of locally headquartered banks with between $2.0 billion and $10.0 billion in total assets. The number of banks headquartered in Georgia declined from 364 in 2000 to 139 in 2025, a decrease of approximately 61.8%, and we believe this contraction has been especially pronounced among locally headquartered institutions comparable to the Company operating in the Atlanta MSA. We believe these institutions have disappeared not because the market is small or shrinking, but because scale, rising compliance costs and merger-and-acquisition activity remain powerful consolidating forces.
A series of transactions since 2015 illustrates this trend, as almost all of the banks headquartered in the Atlanta MSA between $2.0 billion to $10.0 billion in assets have been acquired, combined or repositioned under out of market ownership. Notable examples include the acquisition of Community & Southern Holdings, Inc. by Bank of the Ozarks, Inc. in 2016; the acquisition of Hamilton State Bancshares, Inc. by Ameris Bancorp in 2018; the acquisition of Brand Group Holdings,
 
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Inc. (parent of BrandBank) by Renasant Corporation in 2018; the acquisition of State Bank Financial Corporation by Cadence Bancorporation in 2019; the acquisition of Fidelity Southern Corporation by Ameris Bancorp in 2019; the acquisition of Atlantic Capital Bancshares, Inc. by SouthState Corporation in 2022; the acquisition of Heritage Southeast Bancorporation, Inc. by The First Bancshares, Inc. in 2023; and the acquisition of Piedmont Bancorp, Inc. by United Bankshares, Inc. in 2025.
On June 30, 2015, before significant consolidation, locally headquartered banks with total assets between $2.0 billion and $10.0 billion held approximately $11.9 billion, or 8.15%, of the $146.1 billion total deposits in the Atlanta MSA. As of June 30, 2025, the most recent data available from the FDIC Summary of Deposits, the Atlanta MSA deposit market totaled approximately $239.8 billion, of which approximately $187.9 billion, or roughly 78.4%, was held by banking organizations with more than $10.0 billion in total assets. By contrast, the identified segment of locally relevant banks with $2.0 billion to $10.0 billion in total assets held only approximately $6.5 billion, or 2.71%, of deposits in the market.
Customer Displacement and Addressable Market
We believe the consolidation in the Atlanta MSA banking market has displaced an identifiable segment of customers who previously relied on banks headquartered in the Atlanta MSA with $2.0 billion to $10.0 billion in assets and who are now underserved by both large national institutions and small community banks. This displaced segment consists principally of small-to-mid-size businesses, professionals and professional-service firms and real estate developers and investors that value local decision-making, relationship continuity, and senior-level responsiveness, but that also require larger balance-sheet capacity, treasury management services, and specialized credit capabilities. We believe that when a locally headquartered bank is acquired by a larger, out-of-market institution, credit decisions, pricing authority, and relationship management frequently migrate away from the local market, disrupting the continuity that these customers value.
While they offer broad product sets, we believe large national and super-regional banks often are unable to replicate the local knowledge, speed and relationship-oriented banking partnership Atlanta businesses seek. At the same time, we believe the small community banks in the Atlanta MSA frequently lack the balance-sheet scale, product breadth and treasury and payments capabilities required to serve larger and more complex middle-market relationships. This dynamic, in our view, has left a widening gap in the market between the largest institutions and the smallest, precisely in the segment historically occupied by locally headquartered banks with $2.0 billion to $10.0 billion in total assets. Consistent with our own experience and that of comparable institutions in our market, we also believe we have benefited, and may continue to benefit, from market dislocation caused by these mergers and acquisitions, as customers choose to move their banking relationships in the aftermath of a sale, and as experienced bankers choose to join, or have relocated to, institutions like ours.
We believe these factors present a significant market opportunity to serve this segment of the Atlanta MSA. This is further compounded with the rapid growth of the Atlanta MSA resulting in a wide breadth of the market that is not being adequately served. To frame the scale of this opportunity, the Atlanta MSA represented approximately $239.8 billion of deposits at June 30, 2025, yet the identified $2.0 billion to $10.0 billion local-bank segment accounted for only approximately $6.5 billion, or approximately 2.71%, of that total. There are only seven institutions with an Atlanta MSA presence in the $2.0 billion to $10.0 billion asset range, of which only three are headquartered in the Atlanta MSA and within the narrower $3.0 billion to $5.0 billion band only two locally owned institutions operate — one of which is us. We believe this scarcity, measured against the depth of the overall deposit market, indicates that the addressable opportunity for a locally led, mid-size platform is substantial and materially larger than our current share. We are in the early stages of capturing this opportunity.
Recent Acquisitions
On March 1, 2025, we completed the acquisition of Primary Bancshares Corporation (“Georgia Primary”), the parent company of Georgia Primary Bank, in a transaction valued at approximately $27.1 million, with consideration consisting of approximately 18% cash and 82% common stock. The merger expanded the Company’s presence within key Atlanta MSA sub-markets by adding two full-service branch locations in Fulton and Forsyth Counties, while contributing additional scale, deposits, and commercial banking relationships. The merger added approximately $341.1 million in total assets, $254.8 million in loans, and $301.4 million in deposits to the Bank at the completion of the acquisition. We believe the
 
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merger represented a pivotal moment for us, allowing us to capitalize on our existing infrastructure while rapidly engaging with a merged customer base.
On June 1, 2026, we completed the acquisition of Tandem Bancorp, Inc. (“Tandem”), the parent company of Tandem Bank, in a transaction valued at approximately $35.5 million, with consideration consisting of approximately 30.4% cash and 69.6% common stock. The merger expanded the Company’s footprint across the Atlanta MSA by adding a full-service branch in DeKalb County and three loan production offices in Cherokee, DeKalb and Gwinnett Counties. At the completion of the acquisition, based on preliminary fair value adjustments, the merger added approximately $321.3 million in total assets, $240.1 million in loans, and $254.0 million in deposits. We believe the combination strengthens our ability to serve clients throughout metro Atlanta while enhancing future growth opportunities.
Recent Developments
On June 17, 2026, we completed a $77.7 million private placement of our common stock led by Fortress Investment Group at a price of $30.00 per share (the “June 2026 Private Placement”). The transaction attracted broad participation from institutional investors. We intend to use the net proceeds from primary shares sold in the June 2026 Private Placement — one half of the total proceeds — to support organic growth, strengthen our capital position, and enhance our strategic flexibility to pursue future growth opportunities. We did not receive any proceeds from the sale of shares by selling shareholders.
On August 12, 2026, we completed a $1.22 million private placement of common stock at a price of $30.00 per share (the “August 2026 Private Placement”) to individual accredited investors. We issued 40,683 shares of our common stock. We intend to use the net proceeds from the sale of the primary shares sold in the August 2026 Private Placement to support organic growth, strengthen our capital position, and enhance our strategic flexibility to pursue future growth opportunities.
On August 21, 2026, we completed the offering and sale of $55.0 million in aggregate principal amount of our 6.75% fixed-to-floating rate subordinated notes due 2036 (the “2036 Notes Offering”). The subordinated notes in the 2036 Notes Offering were structured to comply with requirements for Tier 2 capital treatment. The subordinated notes in the 2036 Notes Offering have a fixed rate period for five years and a floating rate for the remaining five years. We used the net proceeds from the sale of the subordinated notes in the 2036 Notes Offering to redeem the 4.125% fixed-to-floating rate subordinated notes due 2031 issued in May 2021; a notice of redemption was delivered to the holders of such existing subordinated notes on August 14, 2026, pursuant to which the notes were redeemed on September 15, 2026.
Risks Relating to Our Company and an Investment in Our Common Stock
An investment in our common stock involves substantial risks and uncertainties. Investors should carefully consider all of the information in this prospectus, including the detailed discussion of these and other risks under “Risk Factors” beginning on page 14, prior to investing in our common stock. Some of the significant risks include the following:
•
Changes and instability in economic conditions, geopolitical matters and financial markets, including a contraction of economic activity, could adversely impact our business, results of operations and financial condition.
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•
Our geographic concentration in the Atlanta MSA, if combined with recessionary conditions, could result in heightened credit risk and increases in our level of nonperforming loans, which could adversely impact our results of operations and financial condition.
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•
We are subject to interest rate risk, which could adversely affect our profitability.
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•
A flat or inverted yield curve, changes in the shape of the yield curve, or sustained interest rate volatility may reduce our net interest margin and adversely affect our loan and investment portfolios.
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•
Our decisions regarding credit risk could be inaccurate and our allowance for credit losses may be inadequate, which could have a material adverse effect on our business, financial condition, results of operations and future prospects.
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•
Our largest loan relationships currently make up a significant percentage of our total loans held-for-investment portfolio.
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•
We have a material concentration of commercial real estate loans, which subjects us to heightened credit risk and could increase regulatory scrutiny and impose potential limitations on our growth.
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•
We may have more credit risk and higher credit losses to the extent loans are concentrated by location or industry of the borrowers or collateral.
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•
We are subject to the credit risk of our merchant clients, which may result in significant financial losses if merchants are unable to satisfy customer chargebacks.
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•
We are subject to environmental liability risk associated with our lending activities.
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•
Liquidity is essential to our business model and a lack of liquidity, or an increase in the cost of liquidity, could materially impair our ability to fund our operations and jeopardize our results of operation, financial condition and cash flows.
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•
The proportion of our deposit account balances that exceed FDIC insurance limits may expose us to enhanced liquidity risk in times of financial distress.
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•
We face intense competition from traditional financial institutions, financial technology companies, digital asset providers, and other non-bank competitors, which could adversely affect our growth and profitability.
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•
Our rapid growth may strain our infrastructure, management resources, and internal controls, and we may not be able to manage our growth effectively.
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•
We may not be able to overcome the integration and other risks associated with any past or future acquisitions, which could have an adverse effect on our ability to implement our business strategy.
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•
The payment services we offer subject us to operational, regulatory, and competitive risks distinct from our traditional banking activities, and failure to keep pace with technological change could adversely affect our business.
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•
Our retail mortgage warehouse program is subject to various risks that could adversely impact our results of operations and financial condition.
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•
New lines of business or new products and services may subject us to additional risk.
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•
Our internal controls may be ineffective.
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•
Competition and regulatory developments relating to financial technology, digital assets and stablecoins could adversely affect our business.
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•
Use of artificial intelligence (“AI”) and machine learning (“ML”) technologies subjects us to additional risks, including model risk, regulatory uncertainty and potential bias.
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•
Fraud is a major, and increasing, operational risk for us.
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•
Our business continuity plans or data security systems could prove to be inadequate, resulting in cyberattacks, other data or security breaches or a material interruption in, or disruption to, our business and a negative impact on our results of operations.
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•
Security breaches or system failures involving our or our merchants’ point-of-sale systems could result in significant regulatory fines and litigation.
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•
We depend on key personnel, including our Chief Executive Officer, and the loss of key employees could adversely affect our business.
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•
We rely on Independent Sales Organizations (“ISOs”) and Third-Party Payment Processors (“TPPPs”) to source merchants, which increases our exposure to compliance and operational failures.
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•
We are dependent upon outside third parties for the processing and handling of our records and data.
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•
We may be adversely affected by the soundness of other financial institutions.
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•
Our industry is highly regulated, and the regulatory framework, together with any future legislative or regulatory changes, may have a materially adverse effect on our operations.
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•
Monetary policies and regulations of the Federal Reserve could have an adverse effect on our business, financial condition and results of operations.
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•
Federal and state banking agencies periodically conduct examinations of our business, including for compliance with laws and regulations, and our failure to comply with any supervisory actions to which we are or become subject as a result of such examinations may adversely affect us.
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•
We are subject to stringent capital requirements, which could have an adverse effect on our operations.
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•
We are subject to numerous laws and regulations designed to protect consumers, and failure to comply with these laws could lead to a wide variety of sanctions.
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•
We are subject to laws regarding the privacy, information security and protection of personal information and any violation of these laws or another incident involving personal, confidential, or proprietary information of individuals could damage our reputation and otherwise adversely affect our business.
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•
Our merchant acquiring services depend on our continued certification by, and registration with, Visa, Mastercard, and other payment networks.
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•
We are a bank holding company and are dependent upon the Bank for cash flow, and the Bank’s ability to make cash distributions is restricted.
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•
The Bank is our principal asset, and all of the Bank’s outstanding stock has been pledged to secure a line of credit to the Company from an unrelated lender.
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•
The Federal Reserve may require us to commit capital resources to support the Bank.
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•
We face a risk of noncompliance and enforcement action with the Bank Secrecy Act (“BSA”) and other anti-money laundering statutes and regulations.
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•
The Bank’s FDIC deposit insurance premiums and assessments may increase.
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•
Our risk management framework may not be effective in mitigating all risks inherent in our diverse business activities.
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•
Our listing differs significantly from an initial public offering conducted on a firm-commitment basis.
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•
The trading price of our common stock, upon listing on Nasdaq Capital Market (“Nasdaq”), may have little or no relationship to the historical sales prices of our capital stock in private transactions, and such private transactions have been limited.
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•
An active, liquid trading market for our common stock may not develop, and you may not be able to sell your common stock at or above your purchase price, or at all.
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•
The price of our common stock could be volatile.
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•
Purchasers of our common stock in the open market following this listing may be unable to trace their shares to this registration statement, which could limit their ability to bring claims under the Securities Act.
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•
The reduced disclosures and relief from certain other significant disclosure requirements that are available to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors.
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•
The obligations associated with being a public company will require significant resources and management attention, which may divert from our business operations.
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•
Our dividend policy may change without notice and any payment of dividends in the future is subject to the discretion of our board of directors (our “Board”).
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•
If equity research analysts do not publish research or reports about our business, or if they do publish such reports but issue unfavorable commentary or downgrade our common stock, the price and trading volume of our common stock could decline.
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•
If a substantial number of shares become available for sale and are sold in a short period of time, the market price of our common stock could decline.
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•
A future issuance of stock could dilute the value of our common stock.
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•
Our common stock is subordinate to our existing and future indebtedness.
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•
We may issue shares of preferred stock in the future which adversely affect holders of our common stock and depress the price of our common stock.
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•
Our Articles of Incorporation and Bylaws, and certain banking laws applicable to us, could have an anti-takeover effect that decreases our chances of being acquired, even if our acquisition is in our shareholders’ best interests.
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•
An investment in our common stock is not an insured deposit and is not guaranteed by the FDIC, so you could lose some or all of your investment.
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Corporate Information
We were incorporated in 1998 as a Georgia corporation. Our principal executive offices are located at 1776 Peachtree Street NW, Suite 300, Atlanta, GA 30309 and our telephone number at that address is (866) 711-4530. Our website address is www.georgiabanking.com. The information contained on our website is not a part of, or incorporated by reference into, this prospectus.
 
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SUMMARY HISTORICAL FINANCIAL INFORMATION
The summary consolidated statements of operations data for the six months ended June 30, 2026 and June 30, 2025 as well as the years ended December 31, 2025 and December 31, 2024 and the balance sheet data as of December 31, 2025 and December 31, 2024 and as of June 30, 2026 and June 30, 2025 are presented below. The summary consolidated statement of operations and balance sheet data for years ended and as of December 31, 2025 and December 31, 2024 have been derived from the audited financial statements of the Company included elsewhere in this prospectus.
The summary consolidated statement of operations for six months ended June 30, 2026 and June 30, 2025 and selected balance sheet data as of June 30, 2026 have been derived from the unaudited interim financial statements of the Company included elsewhere in this prospectus. The selected balance sheet data as of June 30, 2025 has been derived from our internal financial statements not included in this prospectus. In the opinion of management, such information contains all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for such periods. Historical results for any prior period are not necessarily indicative of results to be expected in any future period. The below summary of consolidated financial and other data presented should be read in conjunction with the information included under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the related notes included elsewhere in this prospectus.
​ ​ ​
As of and for the
Six Months Ended
June 30,
​ ​
As of and for the
Year Ended
December 31,
​
(dollars in thousands, except per share amounts)
​ ​
2026
​ ​
2025
​ ​
2025
​ ​
2024
​
​ ​ ​
(unaudited)
​ ​ ​ ​
Income Statement Data: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest income
​ ​ ​ $ 84,691 ​ ​ ​ ​ $ 77,322 ​ ​ ​ ​ $ 164,872 ​ ​ ​ ​ $ 130,412 ​ ​
Interest expense
​ ​ ​ ​ 28,768 ​ ​ ​ ​ ​ 30,463 ​ ​ ​ ​ ​ 62,494 ​ ​ ​ ​ ​ 58,728 ​ ​
Net interest income
​ ​ ​ $ 55,923 ​ ​ ​ ​ $ 46,859 ​ ​ ​ ​ $ 102,378 ​ ​ ​ ​ $ 71,684 ​ ​
Provision for credit losses
​ ​ ​ ​ 2,208 ​ ​ ​ ​ ​ 3,171 ​ ​ ​ ​ ​ 4,521 ​ ​ ​ ​ ​ 8,321 ​ ​
Noninterest income
​ ​ ​ ​ 6,437 ​ ​ ​ ​ ​ 6,208 ​ ​ ​ ​ ​ 10,339 ​ ​ ​ ​ ​ 7,306 ​ ​
Noninterest expense
​ ​ ​ ​ 42,180 ​ ​ ​ ​ ​ 40,800 ​ ​ ​ ​ ​ 78,357 ​ ​ ​ ​ ​ 59,384 ​ ​
Income before tax expense
​ ​ ​ $ 17,972 ​ ​ ​ ​ $ 9,096 ​ ​ ​ ​ $ 29,839 ​ ​ ​ ​ $ 11,285 ​ ​
Income tax expense
​ ​ ​ ​ 4,676 ​ ​ ​ ​ ​ 2,365 ​ ​ ​ ​ ​ 7,759 ​ ​ ​ ​ ​ 2,829 ​ ​
Net income
​ ​ ​ $ 13,296 ​ ​ ​ ​ $ 6,731 ​ ​ ​ ​ $ 22,080 ​ ​ ​ ​ $ 8,456 ​ ​
Adjusted net income(1)
​ ​ ​ ​ 15,903 ​ ​ ​ ​ ​ 11,580 ​ ​ ​ ​ ​ 27,062 ​ ​ ​ ​ ​ 8,456 ​ ​
Pretax pre-provision net revenue (PPNR)(2)
​ ​ ​ ​ 20,180 ​ ​ ​ ​ ​ 12,267 ​ ​ ​ ​ ​ 34,360 ​ ​ ​ ​ ​ 19,606 ​ ​
Pretax pre-provision adjusted net revenue (Adj. PPNR)(2)
​ ​ ​ ​ 23,703 ​ ​ ​ ​ ​ 18,820 ​ ​ ​ ​ ​ 41,092 ​ ​ ​ ​ ​ 19,606 ​ ​
Per Share Data: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Basic earnings per share
​ ​ ​ $ 1.51 ​ ​ ​ ​ $ 0.84 ​ ​ ​ ​ $ 2.68 ​ ​ ​ ​ $ 1.15 ​ ​
Adjusted basic earnings per share(3)
​ ​ ​ $ 1.80 ​ ​ ​ ​ $ 1.44 ​ ​ ​ ​ $ 3.28 ​ ​ ​ ​ $ 1.15 ​ ​
Diluted earnings per share
​ ​ ​ $ 1.45 ​ ​ ​ ​ $ 0.82 ​ ​ ​ ​ $ 2.62 ​ ​ ​ ​ $ 1.12 ​ ​
Adjusted diluted earnings per share(3)
​ ​ ​ $ 1.74 ​ ​ ​ ​ $ 1.40 ​ ​ ​ ​ $ 3.21 ​ ​ ​ ​ $ 1.12 ​ ​
Tangible book value per share(4)
​ ​ ​ $ 24.36 ​ ​ ​ ​ $ 21.01 ​ ​ ​ ​ $ 23.03 ​ ​ ​ ​ $ 21.14 ​ ​
Shares of common stock and non-voting common stock outstanding
​ ​ ​ ​ 10,609,235 ​ ​ ​ ​ ​ 8,439,081 ​ ​ ​ ​ ​ 8,444,343 ​ ​ ​ ​ ​ 7,358,356 ​ ​
Weighted average diluted shares
​ ​ ​ ​ 9,155,163 ​ ​ ​ ​ ​ 8,243,927 ​ ​ ​ ​ ​ 8,442,809 ​ ​ ​ ​ ​ 7,532,802 ​ ​
 
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​ ​ ​
As of and for the
Six Months Ended
June 30,
​ ​
As of and for the
Year Ended
December 31,
​
(dollars in thousands, except per share amounts)
​ ​
2026
​ ​
2025
​ ​
2025
​ ​
2024
​
​ ​ ​
(unaudited)
​ ​ ​ ​
Balance Sheet Data: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total assets
​ ​ ​ $ 3,262,344 ​ ​ ​ ​ $ 2,598,616 ​ ​ ​ ​ $ 2,702,332 ​ ​ ​ ​ $ 2,263,623 ​ ​
Securities available-for-sale, at fair value
​ ​ ​ ​ 75,087 ​ ​ ​ ​ ​ 54,677 ​ ​ ​ ​ ​ 51,796 ​ ​ ​ ​ ​ 69,708 ​ ​
Loans held for investment, net unearned fees
​ ​ ​ ​ 2,089,860 ​ ​ ​ ​ ​ 1,726,373 ​ ​ ​ ​ ​ 1,724,934 ​ ​ ​ ​ ​ 1,312,293 ​ ​
Loans held for sale
​ ​ ​ ​ 500,560 ​ ​ ​ ​ ​ 518,239 ​ ​ ​ ​ ​ 505,360 ​ ​ ​ ​ ​ 498,227 ​ ​
Allowance for credit losses
​ ​ ​ ​ (28,955) ​ ​ ​ ​ ​ (25,092) ​ ​ ​ ​ ​ (25,574) ​ ​ ​ ​ ​ (20,600) ​ ​
Goodwill
​ ​ ​ ​ 9,732 ​ ​ ​ ​ ​ 4,809 ​ ​ ​ ​ ​ 4,809 ​ ​ ​ ​ ​ — ​ ​
Other intangible assets
​ ​ ​ ​ 10,477 ​ ​ ​ ​ ​ 5,964 ​ ​ ​ ​ ​ 5,656 ​ ​ ​ ​ ​ — ​ ​
Deposits
​ ​ ​ ​ 2,838,622 ​ ​ ​ ​ ​ 2,071,890 ​ ​ ​ ​ ​ 2,359,685 ​ ​ ​ ​ ​ 1,828,625 ​ ​
Federal Home Loan Bank advances
​ ​ ​ ​ — ​ ​ ​ ​ ​ 200,000 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 150,000 ​ ​
Other borrowings(5)
​ ​ ​ ​ 82,622 ​ ​ ​ ​ ​ 71,015 ​ ​ ​ ​ ​ 71,216 ​ ​ ​ ​ ​ 61,888 ​ ​
Tangible common equity(6)
​ ​ ​ ​ 258,450 ​ ​ ​ ​ ​ 177,409 ​ ​ ​ ​ ​ 194,449 ​ ​ ​ ​ ​ 155,528 ​ ​
Total shareholders’ equity
​ ​ ​ ​ 278,659 ​ ​ ​ ​ ​ 188,182 ​ ​ ​ ​ ​ 204,914 ​ ​ ​ ​ ​ 155,528 ​ ​
​
(1)
We calculate adjusted net income as excluding items that are not part of core business operations, net of income taxes, which incorporate impacts to noninterest income and noninterest expense. This measure helps management and users of the financial statements to understand how core business operations are performing. Adjusted net income is a non-GAAP financial measure. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption “Summary Historical Financial Information — Non-GAAP Financial Measure Reconciliation.”
​
(2)
We calculate pretax pre-provision net revenue as income before tax expense plus the provision for credit losses. We calculate pretax pre-provision adjusted net revenue as income before tax expense plus provision for credit losses and merger expenses. Pretax pre-provision revenue and pretax pre-provision adjusted net revenue are non-GAAP financial measures. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption “Summary Historical Financial Information — Non-GAAP Financial Measure Reconciliation.”
​
(3)
We calculate basic and diluted adjusted earnings per share by dividing adjusted net income by the weighted-average number of common shares and fully diluted weighted-average number of common shares, respectively. Basic and diluted adjusted earnings per share are non-GAAP financial measures. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption “Summary Historical Financial Information — Non-GAAP Financial Measure Reconciliation.”
​
(4)
We calculate tangible book value per common share as total shareholders’ equity less goodwill and other intangibles, divided by the outstanding number of our shares of common stock and non-voting common stock at the end of the relevant period. Tangible book value per common share is a non-GAAP financial measure. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption “Summary Historical Financial Information — Non-GAAP Financial Measure Reconciliation.”
​
(5)
Other borrowings include subordinated notes, net and outstanding junior subordinated debentures. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Liabilities — Other Borrowings” for more details.
​
(6)
We calculate tangible common equity as total shareholders’ equity less goodwill and other intangibles. This is a non-GAAP financial measure. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption “Summary Historical Financial Information — Non-GAAP Financial Measure Reconciliation.”
​
​ ​ ​
As of and for the
Six Months Ended
June 30,
​ ​
As of and for the
Year Ended
December 31,
​
​ ​ ​
2026
​ ​
2025
​ ​
2025
​ ​
2024
​
Performance Ratios: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Return on average assets (ROAA)(7)
​ ​ ​ ​ 1.00% ​ ​ ​ ​ ​ 0.57% ​ ​ ​ ​ ​ 0.88% ​ ​ ​ ​ ​ 0.45% ​ ​
Adjusted return on average assets (Adj. ROAA)(7)(8)
​ ​ ​ ​ 1.19 ​ ​ ​ ​ ​ 0.99 ​ ​ ​ ​ ​ 1.08 ​ ​ ​ ​ ​ 0.45 ​ ​
Return on average common equity(7)
​ ​ ​ ​ 12.23 ​ ​ ​ ​ ​ 7.68 ​ ​ ​ ​ ​ 11.96 ​ ​ ​ ​ ​ 5.69 ​ ​
Adjusted return on average common equity(7)
​ ​ ​ ​ 14.62 ​ ​ ​ ​ ​ 13.22 ​ ​ ​ ​ ​ 14.66 ​ ​ ​ ​ ​ 5.69 ​ ​
Return on average tangible common equity (ROATCE)(7)(8)
​ ​ ​ ​ 12.93 ​ ​ ​ ​ ​ 8.02 ​ ​ ​ ​ ​ 12.57 ​ ​ ​ ​ ​ 5.69 ​ ​
Adjusted return on average tangible common equity
(Adj. ROATCE)(7)(8)
​ ​ ​ ​ 15.47 ​ ​ ​ ​ ​ 13.79 ​ ​ ​ ​ ​ 15.41 ​ ​ ​ ​ ​ 5.69 ​ ​
 
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​ ​ ​
As of and for the
Six Months Ended
June 30,
​ ​
As of and for the
Year Ended
December 31,
​
​ ​ ​
2026
​ ​
2025
​ ​
2025
​ ​
2024
​
Yield on total loans
​ ​ ​ ​ 6.96 ​ ​ ​ ​ ​ 7.23 ​ ​ ​ ​ ​ 7.26 ​ ​ ​ ​ ​ 7.65 ​ ​
Cost of total deposits(9)​
​ ​ ​ ​ 2.29 ​ ​ ​ ​ ​ 2.72 ​ ​ ​ ​ ​ 2.61 ​ ​ ​ ​ ​ 3.33 ​ ​
Cost of interest-bearing deposits
​ ​ ​ ​ 3.08 ​ ​ ​ ​ ​ 3.52 ​ ​ ​ ​ ​ 3.42 ​ ​ ​ ​ ​ 4.00 ​ ​
Net interest spread(10)​
​ ​ ​ ​ 3.37 ​ ​ ​ ​ ​ 3.19 ​ ​ ​ ​ ​ 3.32 ​ ​ ​ ​ ​ 3.10 ​ ​
Net interest margin(11)​
​ ​ ​ ​ 4.36 ​ ​ ​ ​ ​ 4.17 ​ ​ ​ ​ ​ 4.26 ​ ​ ​ ​ ​ 3.97 ​ ​
Efficiency ratio(12)​
​ ​ ​ ​ 67.64 ​ ​ ​ ​ ​ 76.88 ​ ​ ​ ​ ​ 69.52 ​ ​ ​ ​ ​ 75.18 ​ ​
Loans to deposits
​ ​ ​ ​ 91.26 ​ ​ ​ ​ ​ 108.33 ​ ​ ​ ​ ​ 94.52 ​ ​ ​ ​ ​ 99.01 ​ ​
LHFI to deposits
​ ​ ​ ​ 73.62 ​ ​ ​ ​ ​ 83.32 ​ ​ ​ ​ ​ 73.10 ​ ​ ​ ​ ​ 71.76 ​ ​
Noninterest bearing deposits to total deposits
​ ​ ​ ​ 23.51 ​ ​ ​ ​ ​ 22.89 ​ ​ ​ ​ ​ 26.16 ​ ​ ​ ​ ​ 21.53 ​ ​
Asset Quality Data: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net charge-offs to average loans(7)(13)​
​ ​ ​ ​ 0.10% ​ ​ ​ ​ ​ 0.00% ​ ​ ​ ​ ​ 0.06% ​ ​ ​ ​ ​ 0.43% ​ ​
Total allowance for credit losses to gross LHFI
​ ​ ​ ​ 1.39 ​ ​ ​ ​ ​ 1.45 ​ ​ ​ ​ ​ 1.48 ​ ​ ​ ​ ​ 1.56 ​ ​
Nonperforming loans to gross LHFI(14)​
​ ​ ​ ​ 0.83 ​ ​ ​ ​ ​ 0.85 ​ ​ ​ ​ ​ 0.85 ​ ​ ​ ​ ​ 0.57 ​ ​
Nonperforming assets to total assets(15)​
​ ​ ​ ​ 0.53 ​ ​ ​ ​ ​ 0.54 ​ ​ ​ ​ ​ 0.54 ​ ​ ​ ​ ​ 0.33 ​ ​
Balance Sheet Ratios: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Loan-to-deposit ratio
​ ​ ​ ​ 91.26% ​ ​ ​ ​ ​ 108.33% ​ ​ ​ ​ ​ 94.52% ​ ​ ​ ​ ​ 99.01% ​ ​
Noninterest bearing deposits to total deposits
​ ​ ​ ​ 23.51 ​ ​ ​ ​ ​ 22.89 ​ ​ ​ ​ ​ 26.16 ​ ​ ​ ​ ​ 21.53 ​ ​
Tangible common equity to tangible assets(16)​
​ ​ ​ ​ 7.97 ​ ​ ​ ​ ​ 6.86 ​ ​ ​ ​ ​ 7.22 ​ ​ ​ ​ ​ 6.87 ​ ​
Capital Ratios:(17)​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Tier 1 leverage ratio
​ ​ ​ ​ 10.78% ​ ​ ​ ​ ​ 9.33% ​ ​ ​ ​ ​ 9.37% ​ ​ ​ ​ ​ 8.22% ​ ​
Common equity Tier 1 ratio
​ ​ ​ ​ 11.83 ​ ​ ​ ​ ​ 10.41 ​ ​ ​ ​ ​ 11.52 ​ ​ ​ ​ ​ 9.98 ​ ​
Tier 1 risk-based capital ratio
​ ​ ​ ​ 11.83 ​ ​ ​ ​ ​ 10.41 ​ ​ ​ ​ ​ 11.52 ​ ​ ​ ​ ​ 9.98 ​ ​
Total risk-based capital ratio
​ ​ ​ ​ 13.05 ​ ​ ​ ​ ​ 11.57 ​ ​ ​ ​ ​ 12.74 ​ ​ ​ ​ ​ 11.19 ​ ​
Other: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Number of branches
​ ​ ​ ​ 10 ​ ​ ​ ​ ​ 9 ​ ​ ​ ​ ​ 9 ​ ​ ​ ​ ​ 7 ​ ​
Number of full-time equivalent employees
​ ​ ​ ​ 275 ​ ​ ​ ​ ​ 228 ​ ​ ​ ​ ​ 229 ​ ​ ​ ​ ​ 189 ​ ​
​
(7)
Represents annualized June 30, 2026 and 2025 data.
​
(8)
This is a non-GAAP financial measure. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption “Summary Historical Financial Information — Non-GAAP Financial Measure Reconciliation.”
​
(9)
Includes the impact of noninterest-bearing deposits.
​
(10)
Net interest spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities for the periods.
​
(11)
Net interest margin represents net interest income as a percent of average interest-earning assets for the periods presented.
​
(12)
Efficiency ratio represents noninterest expense divided by sum of net interest income and noninterest income.
​
(13)
We calculate the net charge-offs to average loans based upon the average daily balance of the outstanding loan principal balance.
​
(14)
Nonperforming loans includes nonaccrual loans and loans 90 days and more past due.
​
(15)
Nonperforming assets include all nonperforming loans and other real estate owned, or OREO, properties acquired through or in lieu of foreclosure.
​
(16)
We calculate tangible common equity as total shareholders’ equity less goodwill and other intangibles; we calculate tangible assets as total assets less goodwill and other intangibles. This is a non-GAAP financial measure. See our reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measures under the caption “Summary Historical Financial Information — Non-GAAP Financial Measure Reconciliation.”
​
(17)
Capital ratios are for the Bank only. See “Liquidity Management and Capital Adequacy — Capital Requirements” for consolidated capital ratios.
​
Non-GAAP Financial Measure Reconciliation
Our accounting and reporting policies conform to GAAP and the prevailing practices in the banking industry. However, we also evaluate our performance based on certain additional non-GAAP measures. Our management, banking
 
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regulators, many financial analysts and other investors use these non-GAAP financial measures to compare the capital adequacy of banking organizations with significant amounts of goodwill or other intangible assets, which typically stem from the use of the purchase accounting method of accounting for mergers and acquisitions. Management uses these non-GAAP measures because it believes they may provide useful supplemental information for evaluating our operations and performance over periods of time, as well as in managing and evaluating our business and in discussions about our operations and performance. Management believes these non-GAAP measures may also provide users of our financial information with a meaningful measure for assessing our financial results and credit trends, as well as a comparison to financial results for prior periods.
Non-GAAP measures should not be considered in isolation or as a substitute for measures determined in accordance with GAAP or any other metric calculated in accordance with GAAP. Instead, these non-GAAP measures should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP and are not necessarily comparable to other similarly titled measures used by other companies. Moreover, the manner in which we calculate these non-GAAP measures may differ from that of other companies reporting measures with similar names.
The following table reconciles net income (on a GAAP basis), as of the dates set forth below, to the calculation of the adjusted net income. Adjusted net income excludes, as applicable, merger-related costs, net of tax. Management will often make adjustments to our results of operations when completing analysis of our operations in order to exclude certain items that we do not consider to be indicative of our core banking operations. For the tables below, net income is adjusted as displayed in the following table to remove merger related expenses as well as gains or losses on sales of securities and other nonrecurring income sources, when applicable. While we acknowledge that these items are likely to recur in future periods, they are not considered to be indicative of our core banking operations, and therefore, management believes these adjustments provide useful supplemental information regarding the performance of the Company’s core banking operations.
​ ​ ​
As of and for the Six Months
Ended June 30,
​ ​
As of and for the Year Ended
December 31,
​
(dollars in thousands)
​ ​
2026
​ ​
2025
​ ​
2025
​ ​
2024
​
Net income
​ ​ ​ $ 13,296 ​ ​ ​ ​ $ 6,731 ​ ​ ​ ​ $ 22,080 ​ ​ ​ ​ $ 8,456 ​ ​
Merger expenses, net of tax
​ ​ ​ ​ 2,607 ​ ​ ​ ​ ​ 4,849 ​ ​ ​ ​ ​ 4,982 ​ ​ ​ ​ ​ — ​ ​
Adjusted net income
​ ​ ​ $ 15,903 ​ ​ ​ ​ $ 11,580 ​ ​ ​ ​ $ 27,062 ​ ​ ​ ​ $ 8,456 ​ ​
The following table reconciles net income (on a GAAP basis), as of the dates set forth below, to the calculation of the pre-tax, pre-provision net revenue (“PPNR”) and pre-tax, pre-provision adjusted net revenue (“Adjusted PPNR”). PPNR is calculated by adjusting for the income tax expense and the provision for credit losses to net income and Adjusted PPNR is calculated by adjusting for the income tax expense, the provision for credit losses and merger expenses to the net income. We believe these measures are useful to investors because they present the earnings capacity of our core banking operations before the impact of credit costs and income taxes, both of which can vary significantly from period to period, and other one-time expenses, thereby enhancing investors’ ability to evaluate our operating results and capacity to generate pre-provision earnings available to absorb potential future credit losses.
​ ​ ​
As of and for the Six Months
Ended June 30,
​ ​
As of and for the Year Ended
December 31,
​
(dollars in thousands)
​ ​
2026
​ ​
2025
​ ​
2025
​ ​
2024
​
Pre-Tax, Pre-Provision Net Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net income
​ ​ ​ $ 13,296 ​ ​ ​ ​ $ 6,731 ​ ​ ​ ​ $ 22,080 ​ ​ ​ ​ $ 8,456 ​ ​
Income tax expense
​ ​ ​ ​ 4,676 ​ ​ ​ ​ ​ 2,365 ​ ​ ​ ​ ​ 7,759 ​ ​ ​ ​ ​ 2,829 ​ ​
Income before tax expense
​ ​ ​ $ 17,972 ​ ​ ​ ​ $ 9,096 ​ ​ ​ ​ $ 29,839 ​ ​ ​ ​ $ 11,285 ​ ​
Provision for credit losses
​ ​ ​ ​ 2,208 ​ ​ ​ ​ ​ 3,171 ​ ​ ​ ​ ​ 4,521 ​ ​ ​ ​ ​ 8,321 ​ ​
Pre-tax, pre-provision net revenue
​ ​ ​ $ 20,180 ​ ​ ​ ​ $ 12,267 ​ ​ ​ ​ $ 34,360 ​ ​ ​ ​ $ 19,606 ​ ​
Adjusted Pre-Tax, Pre-Provision Net Revenue: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Income before tax expense
​ ​ ​ $ 17,972 ​ ​ ​ ​ $ 9,096 ​ ​ ​ ​ $ 29,839 ​ ​ ​ ​ $ 11,285 ​ ​
Provision for credit losses
​ ​ ​ ​ 2,208 ​ ​ ​ ​ ​ 3,171 ​ ​ ​ ​ ​ 4,521 ​ ​ ​ ​ ​ 8,321 ​ ​
Merger expenses
​ ​ ​ ​ 3,523 ​ ​ ​ ​ ​ 6,553 ​ ​ ​ ​ ​ 6,732 ​ ​ ​ ​ ​ — ​ ​
Pre-tax, pre-provision adjusted net revenue
​ ​ ​ $ 23,703 ​ ​ ​ ​ $ 18,820 ​ ​ ​ ​ $ 41,092 ​ ​ ​ ​ $ 19,606 ​ ​
 
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The following table reconciles our adjusted basic earnings per share and adjusted diluted earnings per share, as adjusted, for the periods set forth below. We define adjusted earnings per share as adjusted net income divided by the weighted average common shares outstanding at the end of the period, reflecting the dilution that may occur if equity-based awards are converted into common stock equivalents as calculated using the treasury stock method. We use adjusted diluted earnings per share as an internal performance measure in the management of our operations because we believe it gives our management and other users of our financial information useful insight into our results of operations and our underlying business performance.
​ ​ ​
As of and for the Six Months
Ended June 30,
​ ​
As of and for the Year Ended
December 31,
​
(dollars in thousands, except share data)
​ ​
2026
​ ​
2025
​ ​
2025
​ ​
2024
​
Net income
​ ​ ​ $ 13,296 ​ ​ ​ ​ $ 6,731 ​ ​ ​ ​ $ 22,080 ​ ​ ​ ​ $ 8,456 ​ ​
Adjusted net income
​ ​ ​ ​ 15,903 ​ ​ ​ ​ ​ 11,580 ​ ​ ​ ​ ​ 27,062 ​ ​ ​ ​ ​ 8,456 ​ ​
Weighted average common shares outstanding at end of period – basic
​ ​ ​ ​ 8,819,729 ​ ​ ​ ​ ​ 8,036,547 ​ ​ ​ ​ ​ 8,238,252 ​ ​ ​ ​ ​ 7,334,994 ​ ​
Basic earnings per share
​ ​ ​ $ 1.51 ​ ​ ​ ​ $ 0.84 ​ ​ ​ ​ $ 2.68 ​ ​ ​ ​ $ 1.15 ​ ​
Weighted average common shares outstanding at end of period – diluted
​ ​ ​ ​ 9,155,163 ​ ​ ​ ​ ​ 8,243,927 ​ ​ ​ ​ ​ 8,442,809 ​ ​ ​ ​ ​ 7,532,802 ​ ​
Diluted earnings per share
​ ​ ​ $ 1.45 ​ ​ ​ ​ $ 0.82 ​ ​ ​ ​ $ 2.62 ​ ​ ​ ​ $ 1.12 ​ ​
Adjusted basic earnings per share
​ ​ ​ $ 1.80 ​ ​ ​ ​ $ 1.44 ​ ​ ​ ​ $ 3.28 ​ ​ ​ ​ $ 1.15 ​ ​
Adjusted diluted earnings per share
​ ​ ​ $ 1.74 ​ ​ ​ ​ $ 1.40 ​ ​ ​ ​ $ 3.21 ​ ​ ​ ​ $ 1.12 ​ ​
The following table reconciles, as of the dates set forth below, shareholders’ equity (on a GAAP basis) to tangible equity and total assets (on a GAAP basis) to tangible assets and calculates our tangible book value per share and tangible common equity to tangible assets ratio. Tangible common equity is defined as total shareholders’ equity less goodwill and other intangible assets. Tangible book value per share is defined as tangible common equity divided by total common shares outstanding. We believe this measure is important because it shows changes from period to period in book value per share exclusive of changes in intangible assets. Tangible common equity to tangible assets is defined as the ratio of tangible common equity divided by total tangible assets. We calculate tangible assets as total assets less goodwill and other intangibles. We believe this measure is important because it shows relative changes from period to period in equity and total assets, each exclusive of changes in intangible assets.
​ ​ ​
As of and for the Six Months Ended
June 30,
​ ​
As of and for the Year Ended
December 31,
​
(dollars in thousands, except share data)
​ ​
2026
​ ​
2025
​ ​
2025
​ ​
2024
​
Tangible Common Equity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total shareholders’ equity
​ ​ ​ $ 278,659 ​ ​ ​ ​ $ 188,182 ​ ​ ​ ​ $ 204,914 ​ ​ ​ ​ $ 155,528 ​ ​
Less: goodwill and intangibles
​ ​ ​ ​ 20,209 ​ ​ ​ ​ ​ 10,773 ​ ​ ​ ​ ​ 10,465 ​ ​ ​ ​ ​ — ​ ​
Tangible common equity
​ ​ ​ $ 258,450 ​ ​ ​ ​ $ 177,409 ​ ​ ​ ​ $ 194,449 ​ ​ ​ ​ $ 155,528 ​ ​
Common stock and non-voting common stock outstanding
​ ​ ​ ​ 10,609,235 ​ ​ ​ ​ ​ 8,443,220 ​ ​ ​ ​ ​ 8,444,343 ​ ​ ​ ​ ​ 7,358,356 ​ ​
Book value per common share
​ ​ ​ ​ 26.27 ​ ​ ​ ​ ​ 22.29 ​ ​ ​ ​ ​ 24.27 ​ ​ ​ ​ ​ 21.14 ​ ​
Tangible book value per common
share
​ ​ ​ ​ 24.36 ​ ​ ​ ​ ​ 21.01 ​ ​ ​ ​ ​ 23.03 ​ ​ ​ ​ ​ 21.14 ​ ​
Tangible Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total assets
​ ​ ​ $ 3,262,344 ​ ​ ​ ​ $ 2,598,616 ​ ​ ​ ​ $ 2,702,332 ​ ​ ​ ​ $ 2,263,623 ​ ​
Less: goodwill and intangibles
​ ​ ​ ​ 20,209 ​ ​ ​ ​ ​ 10,773 ​ ​ ​ ​ ​ 10,465 ​ ​ ​ ​ ​ — ​ ​
Tangible assets
​ ​ ​ $ 3,242,135 ​ ​ ​ ​ $ 2,587,843 ​ ​ ​ ​ $ 2,691,867 ​ ​ ​ ​ $ 2,263,623 ​ ​
Tangible common equity to tangible assets
​ ​ ​ ​ 7.97% ​ ​ ​ ​ ​ 6.86% ​ ​ ​ ​ ​ 7.22% ​ ​ ​ ​ ​ 6.87% ​ ​
The following table reconciles our adjusted return on average assets for the periods set forth below. Each is calculated as a respective ratio of net income or revenue, as applicable, to average assets. The resulting return on average assets and adjusted return on average assets as of June 30, 2026 and 2025 are annualized.
 
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​ ​ ​
As of and for the Six Months Ended
June 30,
​ ​
As of and for the Year Ended
December 31,
​
(dollars in thousands)
​ ​
2026
​ ​
2025
​ ​
2025
​ ​
2024
​
Return on Average Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net income
​ ​ ​ $ 13,296 ​ ​ ​ ​ $ 6,731 ​ ​ ​ ​ $ 22,080 ​ ​ ​ ​ $ 8,456 ​ ​
Average assets
​ ​ ​ $ 2,684,812 ​ ​ ​ ​ $ 2,365,169 ​ ​ ​ ​ $ 2,496,736 ​ ​ ​ ​ $ 1,886,868 ​ ​
Return on average assets
​ ​ ​ ​ 1.00% ​ ​ ​ ​ ​ 0.57% ​ ​ ​ ​ ​ 0.88% ​ ​ ​ ​ ​ 0.45% ​ ​
Adjusted Return on Average Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Adjusted net income
​ ​ ​ $ 15,903 ​ ​ ​ ​ $ 11,580 ​ ​ ​ ​ $ 27,062 ​ ​ ​ ​ $ 8,456 ​ ​
Average assets
​ ​ ​ $ 2,684,812 ​ ​ ​ ​ $ 2,365,169 ​ ​ ​ ​ $ 2,496,736 ​ ​ ​ ​ $ 1,886,868 ​ ​
Adjusted return on average assets
​ ​ ​ ​ 1.19% ​ ​ ​ ​ ​ 0.99% ​ ​ ​ ​ ​ 1.08% ​ ​ ​ ​ ​ 0.45% ​ ​
The following table reconciles our adjusted return on average common equity for the periods set forth below. We compute our adjusted return on average common equity as the ratio of adjusted net income to average common equity. The resulting return on average common equity and adjusted return on average common equity as of June 30, 2026 and 2025 are annualized.
​ ​ ​
As of and for the Six Months Ended
June 30,
​ ​
As of and for the Year Ended
December 31,
​
(dollars in thousands)
​ ​
2026
​ ​
2025
​ ​
2025
​ ​
2024
​
Return on Average Common Equity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net income
​ ​ ​ $ 13,296 ​ ​ ​ ​ $ 6,731 ​ ​ ​ ​ $ 22,080 ​ ​ ​ ​ $ 8,456 ​ ​
Average common equity
​ ​ ​ $ 219,304 ​ ​ ​ ​ $ 176,643 ​ ​ ​ ​ $ 184,590 ​ ​ ​ ​ $ 148,656 ​ ​
Return on average common equity
​ ​ ​ ​ 12.23% ​ ​ ​ ​ ​ 7.68% ​ ​ ​ ​ ​ 11.96% ​ ​ ​ ​ ​ 5.69% ​ ​
Adjusted Return on Average Common Equity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Adjusted net income
​ ​ ​ $ 15,903 ​ ​ ​ ​ $ 11,580 ​ ​ ​ ​ $ 27,062 ​ ​ ​ ​ $ 8,456 ​ ​
Average common equity
​ ​ ​ $ 219,304 ​ ​ ​ ​ $ 176,643 ​ ​ ​ ​ $ 184,590 ​ ​ ​ ​ $ 148,656 ​ ​
Adjusted return on average common equity
​ ​ ​ ​ 14.62% ​ ​ ​ ​ ​ 13.22% ​ ​ ​ ​ ​ 14.66% ​ ​ ​ ​ ​ 5.69% ​ ​
The following table reconciles, as of the dates set forth below, the calculation of the return on average tangible equity and the calculation of the adjusted return on average tangible equity. We compute our return on average tangible common equity as the ratio of net income to average tangible common equity, which is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill and other intangibles from our average total shareholders’ equity. We compute our adjusted return on average tangible common equity as the ratio of adjusted net income to average tangible common equity, which is calculated by subtracting (and thereby effectively excluding) amounts related to the effect of goodwill and other intangibles from our average total shareholders’ equity. The resulting return on average tangible common equity and adjusted return on average tangible common equity as of June 30, 2026 and 2025 are annualized.
​ ​ ​
As of and for the Six Months Ended
June 30,
​ ​
As of and for the Year Ended
December 31,
​
(dollars in thousands)
​ ​
2026
​ ​
2025
​ ​
2025
​ ​
2024
​
Average Tangible Common Equity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net income
​ ​ ​ $ 13,296 ​ ​ ​ ​ $ 6,731 ​ ​ ​ ​ $ 22,080 ​ ​ ​ ​ $ 8,456 ​ ​
Average common equity
​ ​ ​ ​ 219,304 ​ ​ ​ ​ ​ 176,643 ​ ​ ​ ​ ​ 184,590 ​ ​ ​ ​ $ 148,656 ​ ​
Less: Average goodwill and intangibles
​ ​ ​ $ 12,001 ​ ​ ​ ​ $ 7,296 ​ ​ ​ ​ ​ 8,976 ​ ​ ​ ​ ​ — ​ ​
Average tangible common equity
​ ​ ​ ​ 207,303 ​ ​ ​ ​ ​ 169,347 ​ ​ ​ ​ $ 175,614 ​ ​ ​ ​ $ 148,656 ​ ​
Return on average tangible common equity
​ ​ ​ ​ 12.93% ​ ​ ​ ​ ​ 8.02% ​ ​ ​ ​ ​ 12.57% ​ ​ ​ ​ ​ 5.69% ​ ​
Adjusted Return on Average Tangible Common Equity: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Adjusted net income
​ ​ ​ $ 15,903 ​ ​ ​ ​ $ 11,580 ​ ​ ​ ​ $ 27,062 ​ ​ ​ ​ $ 8,456 ​ ​
Average tangible common equity
​ ​ ​ $ 207,303 ​ ​ ​ ​ $ 169,347 ​ ​ ​ ​ $ 175,614 ​ ​ ​ ​ $ 148,656 ​ ​
Adjusted return on average tangible common equity
​ ​ ​ ​ 15.47% ​ ​ ​ ​ ​ 13.79% ​ ​ ​ ​ ​ 15.41% ​ ​ ​ ​ ​ 5.69% ​ ​
 
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RISK FACTORS
Investing in our common stock involves a significant degree of risk. The material risks and uncertainties that management believes affect us are described below. Before investing in our common stock, you should carefully read and consider the risk factors described below as well as the other information included in this prospectus. Any of these risks, if they are realized, could have a material adverse effect on our business, financial condition, results of operations, and consequently, the value of our common stock. In any such case, you could lose all or a portion of your original investment. Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also adversely affect us. Further, to the extent that any of the information in this prospectus constitutes forward-looking statements, the risk factors below are cautionary statements identifying important factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by us or on our behalf. See “Cautionary Note Regarding Forward-Looking Statements.”
Economic Condition Risks
Changes and instability in economic conditions, geopolitical matters and financial markets, including a contraction of economic activity, could adversely impact our business, results of operations and financial condition.
Our success depends, to a certain extent, upon global, domestic and local economic and political conditions, as well as governmental monetary policies. Our traditional community banking operations primarily serve individuals, businesses and municipalities in the Atlanta MSA. Conditions such as changes in interest rates, money supply, levels of employment and other factors beyond our control may have a negative impact on economic activity. Any contraction of economic activity, including an economic recession, particularly any economic slowdown in the Atlanta MSA, may adversely affect our asset quality, deposit levels and loan demand and, therefore, our earnings. Changes in trade policies by the United States or other countries, such as tariffs or retaliatory tariffs, may cause inflation which could impact the prices of products sold by our borrowers to repay their loans.
Interest rates are highly sensitive to many factors that are beyond our control, including global, domestic and local economic conditions and the policies of various governmental and regulatory agencies and, specifically, the Federal Reserve. Although interest rates increased significantly in 2022 and through the first half of 2023 as the Federal Reserve attempted to slow economic growth and counteract rising inflation, the Federal Reserve lowered the federal funds rate in September, November and December of 2024. The Federal Reserve raised the federal fund rate in September of 2026 to address elevated inflation. Changes to interest rates in the future are less certain and any further reduction in rates is likely contingent upon improving inflationary conditions and other economic factors. Further changes in interest rates and monetary policy are dependent upon the Federal Reserve’s assessment of economic data as it becomes available.
The Federal Reserve may maintain higher interest rates to counteract persistent inflationary price pressures, which could push down asset prices and weaken economic activity. A deterioration in economic conditions in the United States and our markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in turn, would adversely affect our business, financial condition and results of operations. Conversely, lower interest rates may reduce our realized yield on variable rate loans and investment securities and on new loans and securities, which would reduce our interest income and cause downward pressure on net interest income and net interest margin. A significant reduction in our net interest income could have a material adverse impact on our capital, financial condition and results of operations. The Company cannot predict the nature or timing of future changes in monetary, economic, or other policies, or the effect that changes will have on the Company’s business activities, financial condition and results of operations.
Our geographic concentration in the Atlanta MSA, if combined with recessionary conditions, could result in heightened credit risk and increases in our level of nonperforming loans, which could adversely impact our results of operations and financial condition.
Our traditional community banking operations are concentrated exclusively in the Atlanta MSA. This geographic concentration means that our business is significantly influenced by economic conditions, real estate markets, and employment trends within this single metropolitan area. A deterioration of economic conditions, a downturn in the real estate market, significant employer relocations away from the Atlanta MSA, natural disasters, or other adverse events specifically affecting the Atlanta MSA could disproportionately impact our asset quality, deposit levels, loan demand, and overall financial performance relative to institutions with more geographically diversified operations. As we have a meaningful amount of real estate loans in the Atlanta MSA, decreases in real estate values in the Atlanta MSA could adversely affect the value of property used as collateral, which, in turn, can adversely affect the value of our loan and investment portfolios.
 
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Credit performance over the medium- and long-term is susceptible to economic and market forces specific to our market area and therefore forecasts remain uncertain. Instability and uncertainty in the commercial and residential real estate markets within the Atlanta MSA, as well as in the broader commercial and retail credit markets, could have a material adverse effect on our financial condition and results of operations. A weakening or worsening of the local economy or employment market in the Atlanta MSA could result in an increase in the number of borrowers who default on their loans and a reduction in the value of the collateral securing their loans, which in turn could have an adverse effect on our profitability. Although we might not have significant exposure to all the businesses in the Atlanta MSA, the downturn in any of these businesses could have a negative impact on local economic conditions, real estate collateral values generally and the ability of our borrowers to repay loans, which could negatively affect our financial condition, results of operations and the value of our common stock.
We are subject to interest rate risk, which could adversely affect our profitability.
Our profitability, like that of most financial institutions, depends to a large extent on our net interest income, which is the difference between our interest income on interest earning assets, such as loans and investment securities, and our interest expense on interest-bearing liabilities, such as deposits and borrowings. We have positioned our balance sheet to perform adequately in either a higher or lower interest rate environment, but this may not remain true in the future. Our interest sensitivity profile was asset sensitive as of June 30, 2026 and December 31, 2025, generally meaning that our net interest income would decrease more from falling short-term interest rates than from increasing short-term interest rates.
Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions and policies of various governmental and regulatory agencies and, in particular, the Federal Reserve. Changes in monetary policy, including changes in interest rates, could influence not only the interest we receive on loans and securities and the interest we pay on deposits and borrowings, but such changes could affect our ability to originate loans and obtain deposits, the fair value of our assets and liabilities and the average duration of our assets and liabilities. Any substantial, unexpected or prolonged change in market interest rates could have an adverse effect on our business, financial condition and results of operations. As of June 30, 2026, 68.2% of our earning assets and 48.9% of our interest-bearing liabilities were variable-rate, where our variable rate liabilities reprice at a slower rate than our variable rate assets. If the interest rates paid on deposits and other borrowings increase at a faster rate than the interest rates received on loans and other investments, our net interest income, and therefore earnings, could be adversely affected. Earnings could also be adversely affected if the interest rates received on loans and other investments fall more quickly than the interest rates paid on deposits and other borrowings. Any substantial, unexpected, prolonged change in market interest rates could have a material adverse effect on our business, financial condition, results of operations and prospects.
Because of the differences in maturities and repricing characteristics of our interest-earning assets and interest-bearing liabilities, changes in interest rates do not produce equivalent changes in interest income earned on interest-earning assets and interest paid on interest-bearing liabilities. Accordingly, fluctuations in interest rates could adversely affect our net interest income and, in turn, our profitability. In addition, loan volumes are affected by market interest rates on loans. Rising interest rates generally are associated with a lower volume of loan originations while lower interest rates are usually associated with higher loan originations. Conversely, in rising interest rate environments, loan repayment rates will typically decline and in falling interest rate environments, loan repayment rates will typically increase. Accordingly, changes in market interest rates could materially and adversely affect our net interest income, asset quality and loan origination volume. These circumstances could not only result in increased loan defaults, foreclosures and charge-offs, but also necessitate further increases to the allowance for credit losses which could have a material adverse effect on our business, results of operations, financial condition, prospects and the value of our common stock.
A flat or inverted yield curve, changes in the shape of the yield curve, or sustained interest rate volatility may reduce our net interest margin and adversely affect our loan and investment portfolios.
The yield curve is a reflection of interest rates applicable to short and long-term debt. The yield curve is steep when short-term rates are much lower than long-term rates; it is flat when short-term rates and long-term rates are nearly the same; and it is inverted when short-term rates exceed long-term rates. Historically, the yield curve is usually upward sloping. However, the yield curve can be relatively flat or inverted, which has happened several times in the past few years. A flat or inverted yield curve, which tends to decrease net interest margin, would adversely impact our lending businesses and investment portfolio. In addition, rapid shifts in the shape of the yield curve can create mismatches between the duration of our assets and liabilities, potentially resulting in unrealized losses in our investment securities portfolio and increased funding costs that may not be immediately offset by higher asset yields.
 
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Credit Risks
Our decisions regarding credit risk could be inaccurate and our allowance for credit losses may be inadequate, which could have a material adverse effect on our business, financial condition, results of operations and future prospects.
Our earnings are affected by our ability to make loans, and thus we could sustain significant loan losses and consequently significant net losses if we incorrectly assess (i) the creditworthiness of our borrowers resulting in loans to borrowers who fail to repay their loans in accordance with the loan terms or (ii) the value of the collateral securing the repayment of their loans, or we fail to detect or respond to a deterioration in our loan quality in a timely manner. Management makes various assumptions and judgments about the collectability of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans.
We maintain an allowance for credit losses that we consider adequate to absorb losses inherent in the loan portfolio based on our assessment of the information available. In determining the size of our allowance for credit losses, we rely on an analysis of our loan portfolio based on historical loss experience, current conditions, reasonable and supportable forecasts, and other pertinent information. The determination of the appropriate level of the allowance for credit losses involves a high degree of subjectivity and judgment and requires us to make significant estimates of current credit risks and future trends, all of which may undergo material changes. We cannot be certain that our allowance will be adequate over time to cover credit losses in our portfolio because of unanticipated adverse changes in the economy, market conditions or events adversely affecting specific customers, industries or markets, or borrowers repaying their loans. We target small and medium-sized businesses as loan customers. Because of their size, these borrowers may be less able to withstand competitive or economic pressures than larger borrowers in periods of economic weakness. We believe our allowance for credit losses is adequate, but if the credit quality of our customer base or their debt service behavior materially decreases, if the risk profile of a market, industry or group of customers declines or weakness in the real estate market were to arise, or if our allowance for credit losses on loans is not adequate, our business, financial condition, including our liquidity and capital, and results of operations, could be materially adversely affected.
Our allowance for credit losses as of June 30, 2026, was $29.0 million, or 1.39% of total gross loans held-for-investment. Our allowance for credit losses as of December 31, 2025, was $25.6 million, or 1.48% of total gross loans held-for-investment. If our assumptions are inaccurate, we may incur loan losses in excess of our current allowance for credit losses and be required to make material additions to our allowance for credit losses, which could have a material adverse effect on our business, financial condition, results of operations and prospects. However, even if our assumptions are accurate, federal and state regulators periodically review our allowance for credit losses and could require us to materially increase our allowance for credit losses or recognize further loan charge-offs based on judgments different than those of our management. Any material increase in our allowance for credit losses or loan charge-offs as required by these regulatory agencies could have a material adverse effect on our business, financial condition, results of operations and prospects.
Our largest loan relationships currently make up a significant percentage of our total loans held-for-investment portfolio.
As of June 30, 2026, our 10 largest loan relationships totaled approximately $255.0 million of loans outstanding, or approximately 12.14% of our total LHFI portfolio. Each of the loans associated with these relationships has been underwritten in accordance with our underwriting policies and limits. The concentration risk associated with having a small number of relatively large loan relationships is that, if one or more of these relationships were to become delinquent or suffer default, we could be at risk of material losses. The allowance for credit losses may not be adequate to cover losses associated with any of these relationships, and any loss or increase in the allowance could have a material adverse effect on our business, financial condition, results of operations and prospects.
We have a material concentration of commercial real estate loans, which subjects us to heightened credit risk and could increase regulatory scrutiny and impose potential limitations on our growth.
Our credit risk and credit losses can increase if our loan portfolio becomes concentrated to borrowers engaged in the same or similar activities or to borrowers who as a group may be uniquely or disproportionately affected by economic or market conditions. As of June 30, 2026, our commercial real estate loan portfolio, which includes commercial construction and commercial real estate mortgage loans, was $1.2 billion, or 58.8% of the LHFI portfolio. Our commercial real estate concentration as a percentage of total risk-based capital does not currently exceed the informal supervisory thresholds established under the 2006 Interagency Guidance on Concentrations in Commercial Real Estate Lending, which identifies institutions with total CRE loans exceeding 300% of total risk-based capital, or construction and land development loans exceeding 100% of total risk-based capital, as warranting heightened supervisory attention. While we maintain what we believe to be robust credit risk management practices, including portfolio monitoring, stress testing, and enhanced underwriting standards for CRE credits, there can be no
 
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assurance that these measures will be sufficient to prevent losses. The federal bank regulatory agencies have indicated their view that banks with high concentrations of loans secured by commercial real estate are subject to increased risk and should hold higher capital than regulatory minimums to maintain an appropriate cushion against loss that is commensurate with the perceived risk. Were we to exceed the informal supervisory thresholds established under the 2006 Interagency Guidance on Concentrations in Commercial Real Estate Lending, we may be required to hold higher capital than regulatory minimums. A change in the regulatory capital requirements applicable to us could limit our ability to leverage our capital. If general negative economic conditions in the market areas in which we operate impact this customer sector, our results of operations and financial condition may be adversely affected. Further, the deterioration of borrowers’ businesses may hinder their ability to repay their loans with the Bank, which could have a material adverse effect on our financial condition, results of operations and prospects.
We may have more credit risk and higher credit losses to the extent loans are concentrated by location or industry of the borrowers or collateral.
Our credit risk and credit losses could increase if our loans are concentrated to borrowers engaged in the same or similar activities or to borrowers who as a group may be uniquely or disproportionately affected by economic or market conditions. Deterioration in economic conditions, housing conditions and commodity and real estate values in certain states or locations could result in materially higher credit losses if loans are concentrated in those locations. Our largest concentrations within our LHFI portfolio are loans secured by office and industrial properties. As of June 30, 2026, our loan portfolio had approximately $165.0 million and $194.0 million of commercial loans secured by office and industrial properties, respectively, which represented approximately 7.86% and 9.30% of the LHFI portfolio, respectively. While the Bank does not currently have any non-performing loans within the office or industrial sectors, loans secured by real estate within these sectors are generally characterized by substantial equity requirements at the time of closing, moderate loan to cost and loan to value metrics and are underwritten to debt yields meaningfully higher than the current capitalization rates for properties within these asset classes. The absence of current non-performing loans reflects present conditions and is not indicative of future performance; problem loans and losses may emerge with limited warning, particularly if economic or real estate conditions weaken. If the risks associated with our concentrations materialize, we could experience higher levels of non-performing loans for loans concentrated in these sectors along with increased loan delinquencies, charge-offs and provisions for credit losses, and impairment or declines in the value of collateral securing our loans. These developments could reduce our net income and earnings, adversely affect our liquidity and cause deterioration in our regulatory capital ratios.
We are subject to the credit risk of our merchant clients, which may result in significant financial losses if merchants are unable to satisfy customer chargebacks.
A portion of our treasury services revenue is generated by processing card-based payment transactions on behalf of merchant clients. In the ordinary course of this business, we assume a degree of credit risk with respect to those merchants. When a cardholder disputes a transaction, the amount of the disputed transaction is generally charged back to the merchant, and the purchase price is refunded to the cardholder by the card-issuing institution. Chargebacks arise for a variety of reasons, including cardholder fraud, processing errors, and, most significantly, the merchant’s failure to deliver the goods or services purchased. If we or our sponsoring arrangements are unable to collect the amount of a chargeback from the merchant’s account, or if the merchant refuses or is financially unable to reimburse us for the chargeback, we bear the loss for the amount of the refund paid to the cardholder. Our exposure is heightened for merchants that sell goods or services that are delivered, or expected to be delivered, well after the cardholder is charged, because a cardholder may seek to reverse a payment after we have remitted settlement funds to the merchant. If chargeback losses exceed our reserves, or if we are required to increase our reserves materially, our business, financial condition, results of operations, and reputation could be materially and adversely affected.
We are subject to environmental liability risk associated with our lending activities.
In the course of our business, from time to time, we may choose to foreclose on and take title to real estate in order to recover value from collateral securing the real estate loans we make. Although we have policies and procedures that require us to perform an environmental review before initiating any foreclosure action on nonresidential real property, these reviews may not be sufficient to detect all potential environmental hazards. As a result, we could be subject to environmental liabilities with respect to these properties. We may be held liable to a governmental entity or to third parties for property damage, personal injury, investigation and clean-up costs incurred by these parties in connection with environmental contamination or may be required to investigate or clean up hazardous or toxic substances or chemical releases at a property. The costs associated with investigation or remediation activities could be substantial. In addition, if we are the owner or former owner of a contaminated site, we may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination
 
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emanating from the property. Any significant environmental liabilities could have a material adverse effect on our business, financial condition, results of operations and prospects.
Liquidity and Funding Risks
Liquidity is essential to our business model and a lack of liquidity, or an increase in the cost of liquidity, could materially impair our ability to fund our operations and jeopardize our results of operation, financial condition and cash flows.
Liquidity represents an institution’s ability to provide funds to satisfy demands from depositors, borrowers and other creditors by either converting assets into cash or accessing new or existing sources of incremental funds. Liquidity risk arises from the possibility that we may be unable to satisfy current or future funding requirements and needs. Deposit levels may be affected by several factors, including rates paid by competitors, general interest rate levels, returns available to customers on alternative investments, general economic and market conditions, customer concerns about the safety and soundness of our bank, whether real or perceived, or the U.S. banking system in general and other factors. Loan repayments are a relatively stable source of funds but are subject to the borrowers’ ability to repay loans, which can be adversely affected by a number of factors including changes in general economic conditions, adverse trends or events affecting business industry groups or specific businesses, declines in real estate values or markets, business closings or lay-offs, inclement weather, natural disasters and other factors. Furthermore, loans generally are not readily convertible to cash.
We anticipate we will continue to rely primarily on deposits, loan repayments, and cash flows from our investment securities to provide liquidity. However, from time to time, secondary sources may be used to augment our primary funding sources. Such secondary sources may include FHLB advances, brokered deposits, repurchase agreements, secured and unsecured federal funds lines of credit from correspondent banks, Federal Reserve borrowings and/or accessing the equity or debt capital markets. The availability of these secondary funding sources is subject to broad economic conditions, to regulation and to investor assessment of our financial strength and, as such, the cost of funds may fluctuate significantly and/or the availability of such funds may be restricted, thus impacting our net interest income, our immediate liquidity and/or our access to additional liquidity. Additionally, if we fail to remain “well-capitalized,” our ability to utilize brokered deposits may be restricted.
We rely in part on wholesale and non-core funding sources, including brokered deposits and FHLB advances. As of June 30, 2026, brokered deposits represented approximately $131.3 million, or approximately 4.6% of total deposits. In addition, as of June 30, 2026, although we consider our 10 largest depositor relationships to be core deposit relationships, those relationships totaled $818.4 million of deposits, or approximately 28.8% of our total deposits. The concentration risk associated with having a small number of relatively large deposit relationships is that, if one or more of these relationships were to utilize our competitors or otherwise move funds outside of deposit accounts at the Bank, we could be at risk of material negative impact to our operations. Our wholesale and non-core funding relationships and some of our large core deposit relationships are generally not governed by long-term contracts, and these customers may reduce or withdraw their deposits at any time. They could choose to do so for many reasons beyond our control, including more attractive interest rates or terms offered by competitors, dissatisfaction with our products or level of service, a deterioration in their own financial condition or a change in their liquidity needs, concerns (whether or not well founded) about our financial condition or reputation or about the banking industry generally, the departure of relationship managers or other personnel who maintain these relationships, or the availability of alternative investments such as money market funds or U.S. Treasury securities offering higher yields.
Because our deposit base is somewhat concentrated, the loss of, or a significant reduction in deposits from, any one or more of them could have a disproportionate effect on us compared to a financial institution with a more diversified deposit base. If one or more of our large depositors were to withdraw a substantial portion of their funds, we could be required to replace those deposits with higher-cost funding source or obtain replacement funding on less favorable terms such as brokered deposits, FHLB advances or borrowings from the Federal Reserve; sell investment securities or other assets, potentially at a loss, to meet liquidity needs; or curtail our lending and other growth initiatives. In addition, if we cease to be “well-capitalized,” our ability to accept, renew, or roll over brokered deposits would be restricted absent an FDIC waiver. Any of these actions could increase our cost of funds, compress our net interest margin, reduce our net income and limit our ability to grow.
An inability to maintain or raise funds (including the inability to access secondary funding sources) in amounts necessary to meet our liquidity needs would have a substantial negative effect, individually or collectively, on our liquidity. Our access to funding sources in amounts adequate to finance our activities, or on terms attractive to us, could be impaired by factors that affect us specifically or the financial services industry in general. For example, factors that could detrimentally impact our access to liquidity sources include our financial results, a decrease in the level of our business activity due to a market downturn or adverse regulatory action against us, a reduction in our credit rating, any damage to our reputation, counterparty availability, changes in the activities of our business partners, changes affecting our loan portfolio or other assets, or any other event that could cause
 
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a decrease in depositor or investor confidence in our creditworthiness and business. Our access to liquidity could also be impaired by factors that are not specific to us, such as general business conditions, interest rate fluctuations, severe volatility or disruption of the financial markets or negative views and expectations about the prospects for the financial services industry as a whole, or legal, regulatory, accounting, and tax environments governing our funding transactions. In addition, our ability to raise funds is strongly affected by the general state of the U.S. and world economies and financial markets as well as the policies and capabilities of the U.S. government and its agencies, and may remain or become increasingly difficult due to economic and other factors beyond our control. Any such event or failure to manage our liquidity effectively could affect our competitive position, increase our borrowing costs and the interest rates we pay on deposits, limit our access to the capital markets, or cause us to sell investment securities and incur losses from those sales, any or all of which could have a material adverse effect on our results of operations or financial condition.
The proportion of our deposit account balances that exceed FDIC insurance limits may expose us to enhanced liquidity risk in times of financial distress.
Uninsured deposits historically have been viewed by the FDIC as less stable than insured deposits. According to statements made by the FDIC staff and the leadership of the federal banking agencies, customers with larger uninsured deposit account balances often are small- and mid-sized businesses that rely upon deposit funds for payment of operational expenses and, as a result, are more likely to closely monitor the financial condition and performance of their depository institutions. As a result, in the event of financial distress, uninsured depositors historically have been more likely to withdraw their deposits.
If a significant portion of our deposits were to be withdrawn within a short period of time such that additional sources of funding would be required to meet withdrawal demands, we may be unable to obtain funding at favorable terms, which may have an adverse effect on our net interest margin. Moreover, obtaining adequate funding to meet our deposit obligations may be more challenging during periods of elevated prevailing interest rates, such as the present period. Our ability to attract depositors during a time of actual or perceived distress or instability in the marketplace may be limited. Further, interest rates paid for borrowings generally exceed the interest rates paid on deposits. This spread may be exacerbated by higher prevailing interest rates. In addition, because our investment securities lose value when interest rates rise, after-tax proceeds resulting from the sale of such assets may be diminished during periods when interest rates are elevated. While we believe we maintain adequate access to liquidity across a number of third-party funding sources, under such circumstances, we may be required to access funding from sources such as the Federal Reserve’s discount window in order to manage our liquidity risk.
Operational Risks
We face intense competition from traditional financial institutions, financial technology companies, digital asset providers, and other non-bank competitors, which could adversely affect our growth and profitability.
We face substantial competition in all areas of our operations from a variety of different competitors, both within and beyond our principal markets, many of which are larger and may have more financial resources. Such competitors primarily include national, regional, and community banks within the various markets in which we operate. We also face competition from many other types of financial institutions, including, without limitation, credit unions, finance companies, brokerage firms, insurance companies, and other financial services providers, such as financial technology and payments companies. In addition, we increasingly compete with digital asset and cryptocurrency platforms, stablecoin issuers, and decentralized finance protocols that offer payment, lending, and deposit-like services outside the traditional banking system. The financial services industry could become even more competitive as a result of legislative and regulatory changes, including any federal stablecoin legislation that may create new competitors for payment flows and deposit funding. Technology has lowered barriers to entry and made it possible for nonbanks to offer products and services traditionally provided by banks, such as automatic transfer and automatic payment systems, peer-to-peer payments, and embedded finance solutions. Many of our competitors, particularly large technology companies and fintech firms, have fewer regulatory constraints and may have lower cost structures. Additionally, due to their size, many competitors may be able to achieve economies of scale and, as a result, may offer a broader range of products and services as well as better pricing for those products and services than we can.
Our ability to compete successfully depends on a number of factors, including, among other things:
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the ability to develop, maintain, and build upon long-term customer relationships based on top quality service, high ethical standards, and safe, sound assets;
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the ability to expand our market position;
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the scope, relevance, and pricing of products and services offered to meet customer needs and demands;
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the rate at which we introduce new products and services relative to our competitors; and
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customer satisfaction with our level of service.
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Failure to perform in any of these areas could significantly weaken our competitive position, which could adversely affect our growth and profitability, which, in turn, could have a material adverse effect on our financial condition and results of operations.
Our rapid growth may strain our infrastructure, management resources, and internal controls, and we may not be able to manage our growth effectively.
We have experienced significant growth in recent years, including crossing $3.0 billion in consolidated assets as of June 30, 2026. Continued rapid growth places significant demands on our management, operational infrastructure, technology systems, risk management framework, and internal controls. If we are unable to manage our growth effectively, we may experience operational inefficiencies, increased compliance costs, elevated credit risk from loan growth that outpaces our risk management capabilities, technology system capacity constraints, and difficulty maintaining our service quality and corporate culture. Our growth strategy, including expansion of our treasury services group and continued origination of commercial real estate and mortgage warehouse loans, requires sustained investment in personnel, technology, and compliance infrastructure. If our revenues do not increase commensurately with these investments, or if we experience unexpected loan losses or operational disruptions during periods of rapid expansion, our profitability and financial condition could be materially adversely affected. There can be no assurance that we will be able to manage our growth successfully or that growth will continue at historical rates.
We may not be able to overcome the integration and other risks associated with any past or future acquisitions, which could have an adverse effect on our ability to implement our business strategy.
In the ordinary course of business, we routinely evaluate and pursue acquisition opportunities that we believe complement our activities and have the ability to enhance our profitability and provide attractive risk-adjusted returns. We intend to continue to routinely evaluate and pursue such acquisition opportunities. Our future acquisition activities could be material to our business and involve a number of risks, including the following:
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intense competition from other banking organizations and other acquirers for potential merger candidates;
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market pricing for desirable acquisitions resulting in returns that are less attractive than we have traditionally sought to achieve;
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incurring time and expense associated with identifying and evaluating potential acquisitions and negotiating potential transactions, resulting in our attention being diverted from the operation of our existing business;
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using inaccurate estimates and judgments to evaluate credit, operations, management and market risks with respect to the target institution or assets;
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potential exposure to unknown or contingent liabilities of banks and businesses we acquire, including consumer compliance issues;
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the time and expense required to integrate the operations and personnel of the combined businesses;
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experiencing higher operating expenses relative to operating income from the new operations;
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losing key employees and customers;
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reputational issues if the target’s management does not align with our culture and values;
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significant problems relating to the conversion of the financial and customer data of the target;
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integration of acquired customers into our financial and customer product systems;
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risks of impairment to goodwill; or
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regulatory timeframes for review of applications may limit the number and frequency of transactions we may be able to consummate.
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Depending on the condition of any institution or assets or liabilities that we may acquire, that acquisition may, at least in the near term, adversely affect our capital and earnings and, if not successfully integrated with our organization, may continue to have such effects over a longer period. We may not be successful in overcoming these risks or any other problems encountered
 
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in connection with pending or potential acquisitions, and any acquisition we may consider will be subject to prior regulatory approval. Our inability to overcome these risks could have an adverse effect on our ability to implement our business strategy, which, in turn, could have an adverse effect on our business, financial condition and results of operations.
The payment services we offer subject us to operational, regulatory, and competitive risks distinct from our traditional banking activities, and failure to keep pace with technological change could adversely affect our business.
An integrated component of our treasury services group is our payments team, which provides services to payroll providers and other customers that facilitate payment processing. This activity subjects us to risks related to transaction processing errors, system outages, network compliance requirements, settlement failures, and the potential for significant fraud losses associated with high-volume payment transactions. The payments industry is subject to rapid technological change, evolving regulatory requirements, and intense competition from large commercial banks, specialty providers of electronic payments processing, ACH processors and financial technology companies. Many of these competitors are larger, have greater resources, and may leverage relationships and economies of scale that we cannot match. Our success in this area depends on our ability to maintain reliable technology infrastructure, comply with network rules and payment industry standards, attract and retain customers and technology partners, and continuously innovate our product offerings. The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services, including those related to or involving AI, blockchain, and other distributed ledger technologies. Failure to successfully manage the risks inherent in our treasury services group, or to keep pace with technological change affecting the financial services and payments industries, could have a material adverse impact on our business and, in turn, our financial condition and results of operations.
Our retail mortgage warehouse program is subject to various risks that could adversely impact our results of operations and financial condition.
We have a nationwide retail mortgage warehouse program that provides short term funding primarily to non-bank mortgage loan originators. Short-term funding is provided via a whole-loan purchase by the Bank and subsequent sale of each whole-loan to an approved investor. Under this form of warehouse lending, the Bank purchases individual mortgage loans directly from our non-bank mortgage clients. The Bank does not provide financing directly to the non-bank mortgage loan originators, nor is it under any obligation to buy from the mortgage originator. Substantially all single-family mortgage loans we acquire through this program have a known secondary market takeout at the time of purchase by an investor approved by the Bank. The Bank takes physical possession of the notes and allonges at the time of purchase and the loans typically remain on our balance sheet for less than 30 days. At June 30, 2026, we had 61 approved mortgage originators, and 129 mortgage investors. Of these mortgage originators, 59 had mortgages purchased by the Bank as of June 30, 2026. At June 30, 2026, there was $500.6 million in loans held for sale outstanding, compared to $505.4 million and $498.2 million outstanding at December 31, 2025 and 2024, respectively.
There are numerous risks associated with retail mortgage warehouse lending, which include, without limitation, (i) credit risks relating to the mortgage loans that are purchased from our clients, (ii) the risk of intentional misrepresentation or fraud by any of these mortgage originators or the underlying borrowers, (iii) changes in the market value of mortgage loans acquired by the Bank, the sale of which is the expected source of repayment to the Bank, (iv) unsalable or impaired mortgage loans originated, which could lead to decreased collateral value and the failure of an investor to purchase the loan from the Bank, (v) secondary market liquidity for mortgages, including securitization markets, that may impact the demand for mortgage loans from investors, and (vi) the volatility of mortgage loan originations. Failure to successfully manage these risks could have a material adverse effect on our business and our financial condition and results of operations.
New lines of business or new products and services may subject us to additional risk.
From time to time, we may implement new lines of business or offer new products and services within existing lines of business. There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed. We may invest significant time and resources in these efforts. Initial timetables for the introduction and development of new lines of business and/or new products or services may not be achieved, and pricing and profitability targets may not prove feasible. External factors, such as compliance with regulations, competitive alternatives, and shifting market preferences, may also impact the successful implementation of a new line of business and/or a new product or service. Furthermore, any new line of business and/or new product or service could have a significant impact on the effectiveness of our system of internal controls. Failure to successfully manage these risks in the development and implementation of new lines of business and/or new products or services could have a material adverse effect on our business and, in turn, our financial condition and results of operations.
 
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Our internal controls may be ineffective.
Management regularly reviews and updates our internal controls, disclosure controls and procedures, and corporate governance policies and procedures. Any system of controls, however well designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the objectives of the controls are met. Any failure or circumvention of our controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on our business, results of operations, and financial condition.
Failure to achieve and maintain an effective internal control environment could prevent us from accurately reporting our financial results, preventing or detecting fraud or providing timely and reliable financial information pursuant to our reporting obligations, which could result in a material weakness in our internal controls over financial reporting and the restatement of previously filed financial statements and could have a material adverse effect on our business, financial condition and results of operations. Further, ineffective internal controls could cause our investors to lose confidence in our financial information, which could affect the trading price of our common stock.
Competition and regulatory developments relating to financial technology, digital assets and stablecoins could adversely affect our business.
The financial services industry is subject to rapid technological change and increasing competition from financial technology companies, payment providers, and issuers of digital assets and stablecoins, some of which operate under different regulatory regimes than we do. Recent federal legislation and rulemaking establishing a regulatory framework for payment stablecoins, together with evolving state and federal regulation of digital assets, may increase competition for deposits and payments activity, create new compliance obligations if we choose to participate in these activities, and introduce risks that are novel and not fully understood. Our failure to respond effectively to these developments, or to manage the associated legal, compliance, and operational risks, could adversely affect our competitive position, deposits, and results of operations.
Use of AI and ML technologies subjects us to additional risks, including model risk, regulatory uncertainty and potential bias.
We use, and expect to increasingly rely upon, AI and ML technologies in various aspects of our business, including credit underwriting and due diligence, fraud detection, customer service, payment processing, and to enhance our operational efficiency. These technologies are subject to risks including the potential for biased or inaccurate outputs, lack of transparency in AI and ML outputs (sometimes referred to as the “black box” problem), data quality issues, and the possibility that AI-generated outputs could result in decisions by the Bank that lead to unfair lending practices or other regulatory violations. Federal and state banking regulators, as well as the CFPB, are actively developing supervisory expectations and potential regulations governing the use of AI in financial services, and the regulatory landscape remains uncertain. New or evolving regulatory requirements may limit our ability to deploy AI technologies, require costly modifications to our systems, or expose us to enforcement actions if our AI tools produce outcomes that are deemed discriminatory or otherwise harmful to consumers.
We also utilize, and expect to continue utilizing, third-party vendors and technology partners for a significant portion of our AI and ML capabilities. We engage other vendors and service providers that may themselves utilize AI or ML technologies in delivering their products and services to us, in some cases without disclosure of their use of AI or ML. Our use of, and exposure to, third-party AI usage reduces our visibility into and control over the design, training data, and decision logic of those systems, which can make it difficult to validate their outputs, detect bias or errors or explain the basis for decisions they inform. Under applicable interagency guidance on third-party relationships, we remain responsible for managing the risks arising from these arrangements and for the outcomes those tools produce, even though we did not develop them and, in some cases, may not control or be aware of their use of AI or ML. Our reliance on a limited number of key AI and ML technology providers also exposes us to concentration and continuity risk. Further, exchanging information with third-party AI systems and third parties who utilize AI tools, heightens our data-privacy and information-security risks. These risks could directly impact our operations, relationship with our customers and vendors which might result in adverse effects to our financial condition.
Our competitors, particularly large technology companies and AI-native fintech firms, may develop and deploy AI or ML technologies more rapidly or effectively than we can, which could place us at a competitive disadvantage. Failure to appropriately govern, validate, and monitor our AI and ML systems could result in financial losses, reputational harm, regulatory sanctions, or litigation that could have a material adverse effect on our business, financial condition and results of operations.
Fraud is a major, and increasing, operational risk for us.
Deposit and loan fraud continue to be major sources of fraud attempts and loss. The sophistication and methods used to perpetrate fraud continue to evolve as technology changes. In addition to cybersecurity risk, new technologies have made it
 
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easier for bad actors to obtain and use personal client information, mimic signatures and otherwise create false documents that look genuine. The industry fraud threat continues to evolve, including but not limited to card fraud, check fraud, social engineering and phishing attacks for identity theft, business and email compromise and account takeover. Additionally, the use of AI and ML could exacerbate many of these risks. Our anti-fraud measures are both preventive and, when necessary, responsive; however, some level of fraud loss is unavoidable, and the risk of a major loss cannot be eliminated.
Fraud is also an inherent and unavoidable risk of the merchant acquiring services and payments team within our treasury services group, and the methods used to perpetrate fraud are increasingly sophisticated and constantly evolving. We are exposed to fraud committed by cardholders, by merchants, by our ISOs, TPPPs, by our employees, and by third parties, including the submission of fraudulent or unauthorized transactions, the use of stolen or counterfeit card credentials, merchant collusion and transaction laundering, and identity theft. Fraud losses often correlate with, and compound, our chargeback and merchant credit exposure, because fraudulent transactions frequently result in chargebacks that an insolvent or complicit merchant is unable or unwilling to fund. With respect to chargeback-related losses specifically, we benefit from a loss structure pursuant to which a dedicated chargeback reserve bears the first loss, losses exceeding the chargeback reserve are absorbed by our merchant acquiring counterparty, and we bear any remaining losses only after both the chargeback reserve and the counterparty’s loss absorption capacity have been exhausted. Notwithstanding this structure, there can be no assurance that our chargeback reserve or the financial capacity of our merchant acquiring counterparty will be sufficient to fully absorb chargeback-related losses under all circumstances. We seek to manage fraud risk more broadly through underwriting, transaction monitoring, fraud detection systems, reserves, and the prompt termination of offending relationships, but these measures may fail to detect or prevent fraudulent activity in a timely manner, and our reserves may prove inadequate.
A significant increase in fraud losses, whether due to a failure of our controls, our inability to recover fraud losses from our counterparties, a rise in the general level of fraud or the actions of a particular third-party, affiliate or partner, could result in financial losses, fines and assessments, increased compliance and monitoring costs and reputational harm, all of which could materially and adversely affect our financial condition and results of operations.
Our business continuity plans or data security systems could prove to be inadequate, resulting in cyberattacks, other data or security breaches or a material interruption in, or disruption to, our business and a negative impact on our results of operations.
We rely heavily on communications and information systems to conduct our business. Our daily operations depend on the operational effectiveness of our technology to accurately track and record our assets and liabilities. Any failure, interruption, or breach in security of our computer systems or outside vendor technology could result in failures or disruptions in general ledger, deposit, loan, customer relationship management, and other systems leading to inaccurate financial records. While we have disaster recovery, business continuity and other policies and procedures designed to prevent or limit the effect of any failure, interruption, or security breach of our information systems, there can be no assurance that any such failures, interruptions, or security breaches will not occur or, if they do occur, that they will be adequately addressed. The occurrence of any failures, interruptions, or security breaches of our information systems could damage our reputation, result in a loss of customer business, subject us to additional regulatory scrutiny, or expose us to civil litigation and possible financial liability, any of which could have a material adverse effect on our results of operations.
Cybersecurity risks for lenders have significantly increased in recent years, in part, because of the proliferation of new technologies, the use of the internet and telecommunications technologies to conduct financial transactions, and the increased sophistication and activities of computer hackers, organized crime, terrorists, and other external parties, including foreign state actors. We, our clients and loan applicants, regulators and other third parties have been subject to, and are likely to continue to be the target of, cyberattacks. These cyberattacks could include computer viruses, malicious or destructive code, phishing attacks, denial of service or information, improper access by team members or third-party vendors or other security breaches that have or could in the future result in the unauthorized release, gathering, monitoring, misuse, loss or destruction of confidential, proprietary and other information of ours, our team members, our clients and loan applicants or of third parties, or otherwise materially disrupt our or our clients’ and loan applicants’ or other third parties’ network access or business operations.
In addition, the Bank provides its customers with the ability to bank online and through mobile banking. The secure transmission of confidential information over the internet is a critical element of online and mobile banking. While we use qualified third-party vendors to test and audit our network, our network could become vulnerable to unauthorized access, computer viruses, phishing schemes, and other security issues. The Bank may be required to spend significant capital and other resources to alleviate problems caused by security breaches or computer viruses. To the extent that the Bank’s activities or the activities of its customers involve the storage and transmission of confidential information, security breaches and viruses
 
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could expose the Bank to claims, litigation, and other potential liabilities. Any inability to prevent security breaches or computer viruses could also cause existing customers to lose confidence in the Bank’s systems and could adversely affect its reputation and its ability to generate deposits.
Additionally, we outsource the processing of our core data system, as well as other systems such as online banking, to third-party vendors. Prior to establishing an outsourcing relationship, and on an ongoing basis thereafter, management monitors key vendor controls and procedures related to information technology, which includes reviewing reports of service auditor’s examinations. If our third-party vendor encounters difficulties or if we have difficulty in communicating with such third party, it will significantly affect our ability to adequately process and account for customer transactions, which would significantly affect our business operations.
Security breaches or system failures involving our or our merchants’ point-of-sale systems could result in significant regulatory fines and litigation.
Our merchant acquiring services involve the collection, transmission, processing, and storage of large volumes of sensitive information, including cardholder account numbers, personal information, and transaction data. We and our merchants, ISOs, TPPPs and other service providers rely on point-of-sale terminals, payment gateways, networks, and information technology systems that may be targeted by criminals and other malicious actors. Despite security measures, our systems and those of the parties with which we do business are subject to the risk of unauthorized access or other forms of cyberattacks. A breach or failure of the point-of-sale systems used by our merchants is largely outside of our control yet may expose cardholder data that passes through our processing environment and could result in liability to us. A security breach could also result in the exposure or theft of cardholder and personal data and trigger notification obligations under a patchwork of federal and state data breach notification laws, as well as under the rules of the networks and the requirements of our regulators, increased regulatory scrutiny, imposition of civil monetary penalties and private litigation. We could incur substantial costs for investigation and remediation, litigation and the enhancement of our security systems. We could also suffer significant operational and reputational harm and loss of merchant and partner relationships.
We depend on key personnel, including our Chief Executive Officer, and the loss of key employees could adversely affect our business.
Our success depends, in large part, on our ability to attract and retain skilled people. Competition for the best people in most activities engaged in by us can be intense, and we may not be able to hire sufficiently skilled people or to retain them. We are particularly dependent upon the services of Bartow Morgan, Jr., our Chief Executive Officer, who has been instrumental in developing our business strategy, building key client relationships, and establishing our market position in the Atlanta MSA. Mr. Morgan’s deep relationships with our customers and his standing in the Atlanta business community are central to our continued success. Loss of a key employee with such customer relationships may lead to the loss of business if the customers were to follow that employee to a competitor or otherwise choose to transition to another financial services provider. While we believe our relationship with our key personnel is good, we cannot guarantee that all of our key personnel will remain with our organization. Loss of such key personnel could result in the loss of some of our customers and have a material adverse effect on our business, financial condition and results of operations.
We rely on ISOs and TPPPs to source merchants, which increases our exposure to compliance and operational failures.
We rely to a significant degree on ISOs, TPPPs and other third-party distribution partners to market our merchant acquiring services, to source and refer merchant clients, and, in certain cases, to perform underwriting, boarding, customer service, and other operational functions on our behalf. This distribution model allows us to expand our merchant base without incurring the full cost of a direct sales force, but it also means that a meaningful portion of our merchant relationships originates through parties that we do not control and whose conduct we cannot fully oversee. We remain responsible to the card networks and to our regulators for the merchants sourced through these channels and for the acts and omissions of the ISOs and TPPPs through which those merchants are boarded. While we conduct meaningful due diligence on our third-party partners, monitor their activities on an ongoing basis, and hold them to the same standards of conduct, data security, and consumer protection to which we are subject, if an ISO or TPPP fails to comply with applicable network rules or laws, engages in improper sales and underwriting practices, engages in illegal or high-risk activity, or mishandles cardholder or merchant data, we may be held responsible. Any of these outcomes could materially and adversely affect our business, financial condition, results of operations, and reputation.
 
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We are dependent upon outside third parties for the processing and handling of our records and data.
We rely on software developed by third-party vendors to process various transactions. In some cases, we have contracted with third parties to run their proprietary software on our behalf. These systems include, but are not limited to, general ledger, payroll, employee benefits, payment processing and securities portfolio accounting. While we perform a review of controls instituted by the applicable vendors over these programs in accordance with industry standards and perform our own testing of user controls, we must rely on the continued maintenance of controls by these third-party vendors, including safeguards over the security of customer data. In addition, we maintain, or contract with third parties to maintain daily backups of key processing outputs in the event of a failure on the part of any of these systems. Nonetheless, we may incur a temporary disruption in our ability to conduct business or process transactions, or incur damage to our reputation, if the third-party vendor fails to adequately maintain internal controls or institute necessary changes to systems. Such a disruption or breach of security may have a material adverse effect on our business.
A security breach related to use of third-party software or systems, or the loss or corruption of confidential customer information could adversely affect our ability to provide timely and accurate financial information in compliance with legal and regulatory requirements. Any such failures could result in sanctions from regulatory authorities, significant reputational harm and a decrease in our customers’ confidence in us. Additionally, security breaches or the loss, theft or corruption of customer information such as social security numbers, credit card numbers, or other information could result in customer losses, litigation, regulatory sanctions, losses in revenue, increased costs and reputational harm. Our ability to recoup our losses may be limited legally or practically in many situations.
We may be adversely affected by the soundness of other financial institutions.
Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services companies are interrelated as a result of trading, clearing, counterparty, and other relationships. We have exposure to different industries and counterparties, and through transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, and other institutional clients. Our transactions with other financial institutions expose us to credit risk in the event of a default of a counterparty. The soundness of many financial services companies may be closely interrelated as a result of credit, trading, clearing and other relationships between such financial services companies. As a result, defaults by, or even rumors or questions about, one or more financial services companies, or the financial services industry generally, can lead, and have led, to market-wide liquidity problems and could lead to losses or defaults by us or by other institutions. These losses or defaults could have a material adverse effect on our business, financial condition, results of operations and prospects. In addition, our credit risk may be exacerbated when the collateral held by us cannot be realized or is liquidated at prices insufficient to recover the full amount of the loan or derivative exposure due to us. Any such losses could materially and adversely affect our results of operations or earnings.
Legal and Regulatory Risks
Our industry is highly regulated, and the regulatory framework, together with any future legislative or regulatory changes, may have a materially adverse effect on our operations.
The banking industry is highly regulated and supervised under both federal and state laws and regulations that are intended primarily for the protection of depositors, customers, the public, the banking system as a whole or the FDIC’s Deposit Insurance Fund (“DIF”), not for the protection of our shareholders and creditors. We are subject to regulation and supervision by the Federal Reserve, and our Bank is subject to regulation and supervision by the FDIC and the Georgia Department of Banking and Finance (the “GDBF”). Compliance with these laws and regulations can be difficult and costly, and changes to laws and regulations can impose additional compliance costs. The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) which imposed significant regulatory and compliance changes on financial institutions, is an example of this type of federal law.
The laws and regulations applicable to us govern a variety of matters, including permissible types, amounts and terms of loans and investments we may make, the maximum interest rate that may be charged, the amount of reserves we must hold against deposits we take, the types of deposits we may accept and the rates we may pay on such deposits, maintenance of adequate capital and liquidity, changes in control of us and our Bank, transactions between us and our Bank, handling of nonpublic information, restrictions on dividends and establishment of new offices. We must obtain approval from our regulators before engaging in certain activities, and there is risk that such approvals may not be granted, either in a timely manner or at all. These requirements may constrain our operations, and the adoption of new laws and changes to or repeal of existing laws may have an adverse effect on our business, financial condition and results of operations. Also, the burden imposed by those federal and state
 
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regulations may place banks in general, including our Bank in particular, at a competitive disadvantage compared to their non-bank competitors. Compliance with current and potential regulation, as well as supervisory scrutiny by our regulators, may significantly increase our costs, impede the efficiency of our internal business processes, require us to increase our regulatory capital, and limit our ability to pursue business opportunities in an efficient manner by requiring us to expend significant time, effort and resources to ensure compliance and respond to any regulatory inquiries or investigations. Our failure to comply with any applicable laws or regulations, or regulatory policies and interpretations of such laws and regulations, could result in sanctions by regulatory agencies, civil money penalties or damage to our reputation, all of which could have an adverse effect on our business, financial condition and results of operations.
Applicable laws, regulations, interpretations, enforcement policies and accounting principles have been subject to significant changes in recent years, and may be subject to significant future changes. Additionally, federal and state regulatory agencies may change the manner in which existing regulations are applied. We cannot predict the substance or effect of pending or future legislation or regulation or changes to the application of laws and regulations to us. Future changes may have an adverse effect on our business, financial condition and results of operations.
In addition, given the current economic and financial environment, regulators may elect to alter standards or the interpretation of the standards used to measure regulatory compliance or to determine the adequacy of liquidity, risk management or other operational practices for financial service companies in a manner that impacts our ability to implement our strategy and could affect us in substantial and unpredictable ways, and could have an adverse effect on our business, financial condition and results of operations. Furthermore, the regulatory agencies have broad discretion in their interpretation of laws and regulations and their assessment of the quality of our loan portfolio, securities portfolio and other assets. Based on our regulators’ assessment of the quality of our assets, operations, lending practices, investment practices, capital structure or other aspects of our business, we may be required to take additional charges or undertake, or refrain from taking, actions that could have an adverse effect on our business, financial condition and results of operations.
See the discussion below at “Supervision and Regulation” for an additional discussion of the extensive regulation and supervision to which the Company and the Bank are subject.
Monetary policies and regulations of the Federal Reserve could have an adverse effect on our business, financial condition and results of operations.
Our earnings and growth are affected by the policies of the Federal Reserve. An important function of the Federal Reserve is to regulate the money supply and credit conditions. Among the instruments used by the Federal Reserve to implement these objectives are open market purchases and sales of U.S. government securities, adjustments of the discount rate and changes in banks’ reserve requirements against bank deposits. These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits. Their use also affects interest rates charged on loans or paid on deposits.
The monetary policies and regulations of the Federal Reserve have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future. The effects of such policies upon our business, financial condition and results of operations cannot be predicted.
Federal and state banking agencies periodically conduct examinations of our business, including for compliance with laws and regulations, and our failure to comply with any supervisory actions to which we are or become subject as a result of such examinations may adversely affect us.
Federal and state regulators periodically examine our business and may require us to remediate adverse examination findings or may take enforcement action against us. The FDIC and the GDBF periodically examine our business, including our compliance with laws and regulations. If, as a result of an examination, the FDIC or the GDBF were to determine that our financial condition, capital resources, asset quality, earnings prospects, management, liquidity or other aspects of any of our operations had become unsatisfactory, or that we were in violation of any law or regulation, they may take a number of different remedial actions as they deem appropriate. These actions may include requiring us to remediate any such adverse examination findings.
In addition, these agencies have the power to take enforcement action against us to enjoin “unsafe or unsound” practices, to require affirmative action to correct any conditions resulting from any violation of law or regulation or unsafe or unsound practice, to issue an administrative order that can be judicially enforced, to direct an increase in our capital, to direct the sale of subsidiaries or other assets, to limit dividends and distributions, to restrict our growth, to assess civil money penalties against us or
 
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our officers or directors, to remove officers and directors and, if it is concluded that such conditions cannot be corrected or there is imminent risk of loss to depositors, to terminate our deposit insurance and place our Bank into receivership or conservatorship. Any regulatory enforcement action against us could have an adverse effect on our business, financial condition and results of operations.
We are subject to stringent capital requirements, which could have an adverse effect on our operations.
Federal regulations establish minimum capital requirements for insured depository institutions, including minimum risk-based capital and leverage ratios, and define “capital” for calculating these ratios. The capital rules require bank holding companies and banks to maintain a common equity Tier 1 capital to risk-weighted assets ratio of at least 7.0% (a minimum of 4.5% plus a capital conservation buffer of 2.5%), a Tier 1 capital to risk-weighted assets ratio of at least 8.5% (a minimum of 6.0% plus a capital conservation buffer of 2.5%), a total capital to risk-weighted assets ratio of at least 10.5% (a minimum of 8.0% plus a capital conservation buffer of 2.5%), and a leverage ratio of Tier 1 capital to total consolidated assets of at least 4.0%. An institution’s failure to exceed the capital conservation buffer with common equity Tier 1 capital would result in limitations on an institution’s ability to make capital distributions and discretionary bonus payments. In addition, for an insured depository institution to be “well-capitalized” under the banking agencies’ prompt corrective action framework, it must have a common equity Tier 1 capital ratio of at least 6.5%, Tier 1 capital ratio of at least 8.0%, a total capital ratio of at least 10.0%, and a leverage ratio of at least 5.0%, and must not be subject to any written agreement, order or capital directive, or prompt corrective action directive issued by its primary federal or state banking regulator to meet and maintain a specific capital level for any capital measure.
Any new or revised standards adopted in the future may require us to maintain materially more capital, with voting common equity as a more predominant component, or manage the configuration of our assets and liabilities to comply with formulaic capital requirements. In addition, as the Company crossed $3.0 billion in consolidated assets as of June 30, 2026, we are now subject to consolidated capital reporting and other regulatory requirements applicable to bank holding companies above that threshold. As we continue to grow, we may become subject to additional regulatory requirements, including enhanced prudential standards, more rigorous stress testing expectations, and heightened supervisory scrutiny that could increase our compliance costs and constrain our operational flexibility. We may not be able to raise additional capital at all, or on terms acceptable to us. Failure to maintain capital to meet current or future regulatory requirements could have an adverse effect on our business, financial condition and results of operations.
We are subject to numerous laws and regulations designed to protect consumers, and failure to comply with these laws could lead to a wide variety of sanctions.
The Equal Credit Opportunity Act (“ECOA”), the Fair Housing Act and other fair lending laws and regulations, including state laws and regulations, prohibit discriminatory lending practices by financial institutions. The Federal Trade Commission Act prohibits unfair or deceptive acts or practices, and the Dodd-Frank Act prohibits unfair, deceptive, or abusive acts or practices by financial institutions. The U.S. Department of Justice, federal and state banking agencies, and other federal and state agencies, including the Consumer Financial Protection Bureau (“CFPB”) are responsible for enforcing these fair and responsible banking laws and regulations. Smaller banks, including the Bank, are subject to rules promulgated by the CFPB but continue to be examined and supervised by federal banking agencies for compliance with federal consumer protection laws and regulations. Accordingly, CFPB rulemaking has the potential to have a significant impact on the operations of the Bank.
A challenge to an institution’s compliance with fair and responsible banking laws and regulations could result in a wide variety of sanctions, including damages and civil money penalties, injunctive relief, restrictions on mergers and acquisitions activity, restrictions on expansion, and restrictions on entering new business lines. Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private litigation, including through class action litigation. Such actions could have an adverse effect on our business, financial condition and results of operations.
We are subject to laws regarding the privacy, information security and protection of personal information and any violation of these laws or another incident involving personal, confidential, or proprietary information of individuals could damage our reputation and otherwise adversely affect our business.
Our business requires the collection and retention of large volumes of customer data, including personally identifiable information (“PII”) in various information systems that we maintain and in those maintained by third party service providers. We also maintain important internal company data such as PII about our employees and information relating to our operations. We are subject to complex and evolving laws and regulations governing the privacy and protection of PII of individuals (including customers, employees, and other third parties). For example, our business is subject to the Gramm-Leach-Bliley Act
 
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(“GLB”), which, among other things: (i) imposes certain limitations on our ability to share nonpublic PII about our customers with nonaffiliated third parties; (ii) requires that we provide certain disclosures to customers about our information collection, sharing and security practices and afford customers the right to “opt out” of any information sharing by us with nonaffiliated third parties (with certain exceptions); and (iii) requires that we develop, implement and maintain a written comprehensive information security program containing appropriate safeguards based on our size and complexity, the nature and scope of our activities, and the sensitivity of customer information we process, as well as plans for responding to data security breaches. Various federal and state banking regulators and states have also enacted data breach notification requirements with varying levels of individual, consumer, regulatory or law enforcement notification in the event of a security breach.
Ensuring that our collection, use, transfer and storage of PII complies with all applicable laws and regulations can increase our costs. Furthermore, we may not be able to ensure that customers and other third parties have appropriate controls in place to protect the confidentiality of the information that they exchange with us, particularly where such information is transmitted by electronic means. If personal, confidential or proprietary information of customers or others were to be mishandled or misused (in situations where, for example, such information was erroneously provided to parties who are not permitted to have the information, or where such information was intercepted or otherwise compromised by third parties), we could be exposed to litigation or regulatory sanctions under privacy and data protection laws and regulations. Concerns regarding the effectiveness of our measures to safeguard PII, or even the perception that such measures are inadequate, could cause us to lose customers or potential customers and thereby reduce our revenues. Accordingly, any failure or perceived failure to comply with applicable privacy or data protection laws and regulations may subject us to inquiries, examinations and investigations that could result in requirements to modify or cease certain operations or practices or in significant liabilities, fines or penalties, and could damage our reputation and otherwise adversely affect our business, financial condition and results of operations.
Our merchant acquiring services depend on our continued certification by, and registration with, Visa, Mastercard, and other payment networks.
Our ability to conduct our merchant acquiring services within our treasury services group depends on our continued good standing with, and adherence to the operating rules of, Visa, Mastercard, and other payment card networks through which we process transactions. To provide merchant acquiring services, we and, where applicable, our sponsored program participants must be registered with and certified by these networks and must maintain that registration and certification on an ongoing basis. The networks impose extensive and evolving operating rules governing virtually every aspect of our merchant acquiring services, including underwriting standards, merchant monitoring, data security, transaction processing, settlement, dispute resolution, and the conduct of the third parties through which we source and service merchants. These rules are complex, are set unilaterally by the networks, are subject to change with limited notice, and are interpreted and enforced by the networks in their discretion. If we fail to comply with the applicable network rules, the networks may impose a range of consequences on us. These include fines, penalties, and assessments, increased audit and reporting obligations, mandatory remediation, restrictions on the merchants or merchant categories we may board, suspension of our ability to register new merchants, and, in the most severe cases, the revocation of our certification or the termination of our registration. Any of these developments could increase our costs of compliance, reduce our revenues, limit our growth and materially and adversely affect our business, financial condition and results of operations.
We are a bank holding company and are dependent upon the Bank for cash flow, and the Bank’s ability to make cash distributions is restricted.
We are a bank holding company with no material activities other than activities incidental to holding the common stock of the Bank. Our principal source of funds to pay distributions on our common stock and service any of our obligations, other than further issuances of securities, is dividends received from the Bank. Furthermore, the Bank is not obligated to pay dividends to us, and any dividends paid to us would depend on the earnings or financial condition of the Bank, various business considerations and applicable law and regulation. As is generally the case for banking institutions, the profitability of the Bank is subject to the fluctuating cost and availability of money, changes in interest rates and economic conditions in general. In addition, various federal and state statutes and regulations limit the amount of dividends that the Bank may pay to the Company without regulatory approval. Moreover, we have pledged all of the stock of the Bank as collateral for a revolving line of credit. If we were to default on this line of credit, the lender of such line of credit could foreclose on the Bank’s stock and we would lose our principal asset.
The Bank is our principal asset, and all of the Bank’s outstanding stock has been pledged to secure a line of credit to the Company from an unrelated lender.
The Bank accounts for substantially all of our consolidated assets and earnings. The Company has a $10.0 million revolving line of credit from ServisFirst Bank. This revolving line of credit matures on June 10, 2027, and is secured by the
 
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Company’s pledge of all of the Bank’s outstanding common stock. An uncured default by the Company under the revolving line of credit or the Company’s inability to repay or refinance the revolving line of credit when it is due, could result in the Company’s loss of the Bank stock that has been pledged as collateral.
The Federal Reserve may require us to commit capital resources to support the Bank.
The Federal Reserve requires a bank holding company to act as a source of financial and managerial strength to its subsidiary banks and to commit resources to support its subsidiary banks. Under the “source of strength” doctrine that was codified by the Dodd-Frank Act, the Federal Reserve may require a bank holding company to make capital injections into a subsidiary bank at times when the bank holding company may not be inclined to do so and may charge the bank holding company with engaging in unsafe and unsound practices for failure to commit resources to such a subsidiary bank. Accordingly, we could be required to provide financial assistance to the Bank if it experiences financial distress.
A capital injection may be required at a time when our resources are limited, and we may be required to borrow the funds or raise capital to make the required capital injection. Any loan by a bank holding company to its subsidiary bank is subordinate in right of payment to deposits and certain other indebtedness of such subsidiary bank. In the event of a bank holding company’s bankruptcy, the bankruptcy trustee will assume any commitment by the holding company to a federal bank regulatory agency to maintain the capital of a subsidiary bank. Moreover, bankruptcy law provides that claims based on any such commitment will be entitled to a priority of payment over the claims of the holding company’s general unsecured creditors, including the holders of any note obligations. Thus, any borrowing by a bank holding company for the purpose of making a capital injection to a subsidiary bank may become more difficult and expensive relative to other corporate borrowings.
We face a risk of noncompliance and enforcement action with the BSA and other anti-money laundering statutes and regulations.
The BSA, the USA PATRIOT Act, and other laws and regulations require financial institutions, among other duties, to institute and maintain an effective anti-money laundering program and to file reports such as suspicious activity reports and currency transaction reports. We are required to comply with these and other anti-money laundering requirements. The payments team within our treasury services group processes high volumes of electronic transactions including ACH transfers, and other payment flows which present elevated fraud and BSA/AML compliance risk due to the speed, volume, and activity of certain payment channels. Monitoring these transactions for suspicious activity requires sophisticated systems and experienced compliance personnel, and the failure to detect fraud and illicit activity through these channels could expose us to significant liability. Our federal and state banking regulators, the Financial Crimes Enforcement Network of the U.S. Treasury Department (“FinCEN”), and other government agencies are authorized to impose significant civil money penalties for violations of anti-money laundering requirements. We are also subject to increased scrutiny of compliance with the regulations issued and enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control, or OFAC, which is responsible for helping to ensure that U.S. entities do not engage in transactions with certain prohibited parties, as defined by various Executive Orders and Acts of Congress. If our program is deemed deficient, we could be subject to liability, including fines, civil money penalties and other regulatory actions, which may include restrictions on our business operations and our ability to pay dividends, restrictions on mergers and acquisitions activity, restrictions on expansion, and restrictions on entering new business lines. Failure to maintain and implement adequate programs to combat money laundering and terrorist financing could also have significant reputational consequences for us. Any of these circumstances could have an adverse effect on our business, financial condition and results of operations.
The Bank’s FDIC deposit insurance premiums and assessments may increase.
Our Bank’s deposits are insured by the FDIC up to legal limits and, accordingly, our Bank is subject to insurance assessments based on our Bank’s average consolidated total assets less its average tangible equity. Our Bank’s regular assessments are determined by its CAMELS composite rating (a supervisory rating system developed to classify a bank’s overall condition by taking into account capital adequacy, assets, management capability, earnings, liquidity and sensitivity to market and interest rate risk), taking into account other factors and adjustments. In order to maintain a strong funding position and the reserve ratios of the DIF required by statute and FDIC estimates of projected requirements, the FDIC has the power to increase deposit insurance assessment rates and impose special assessments on all FDIC-insured financial institutions. Any future increases or special assessments could reduce our profitability and could have an adverse effect on our business, financial condition and results of operations.
If deposits generated through third-party programs are classified as “brokered deposits” under FDIC regulations, such a classification could affect our liquidity metrics, increase our FDIC deposit-insurance assessments, and if we were to cease to be “well-capitalized,” could restrict our ability to accept or renew such deposits. The FDIC has revisited, and may further revise, the
 
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definition of “deposit broker.” In addition, certain program deposits may be held in custodial or “for-benefit-of” accounts on which the availability of “pass-through” deposit insurance to end customers depends on satisfaction of applicable titling and recordkeeping requirements. Failures in recordkeeping or reconciliation, whether by us or by a client or intermediary, could impair the availability of pass-through insurance, expose us to customer and regulatory claims, and cause reputational harm. Any of these outcomes could materially and adversely affect our funding, liquidity, and results of operations.
Our risk management framework may not be effective in mitigating all risks inherent in our diverse business activities.
We operate multiple business lines offering a diverse range of products to our customers including traditional community and commercial banking, treasury services and a nationwide residential mortgage warehouse program, each of which presents distinct risk profiles. In order to manage the significant risks inherent in our business, we must maintain effective policies, procedures, and systems that enable us to identify, monitor, and control our exposure to credit, operational, legal, regulatory, compliance, and reputational risks across all of these activities. Our risk management methods may prove to be ineffective due to their design, their implementation, the degree to which we adhere to them, or as a result of the lack of adequate, accurate, or timely information. If our risk management framework does not keep pace with our growth, complexity, or the evolving threat landscape, we could suffer losses that could have a material adverse effect on our business, financial condition and results of operations. In addition, we could be subject to regulatory criticism, litigation, or sanctions if our risk management practices are deemed inadequate. Our techniques for managing the risks we face may not fully mitigate the risk exposure in all economic or market environments, including exposure to risks that we might fail to identify or anticipate.
Risks Related to Our Common Stock
Our listing differs significantly from an initial public offering conducted on a firm-commitment basis.
This is not an initial public offering of common stock conducted on an underwritten basis. This listing of our common stock on Nasdaq differs from an underwritten initial public offering in several significant ways, which include, but are not limited to, the following:
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There are no underwriters engaged. Consequently, prior to the opening of trading on Nasdaq, there will be no traditional book building process and no price at which underwriters initially sold shares to the public to help inform efficient and sufficient price discovery with respect to the opening trades on Nasdaq. Therefore, buy and sell orders submitted prior to and at the opening of trading of our common stock on Nasdaq will not have the benefit of being informed by a published price range or a price at which the underwriters initially sold shares to the public, as would be the case in an initial public offering underwritten on a firm-commitment basis. Moreover, there will be no underwriters engaged on a firm-commitment underwritten basis assuming risk in connection with the initial resale of shares of our common stock. In an initial public offering underwritten on a firm-commitment basis, the underwriters may engage in “covered” short sales in an amount of shares representing the underwriters’ option to purchase additional shares. To close a covered short position, the underwriters purchase shares in the open market or exercise the underwriters’ option to purchase additional shares. In determining the source of shares to close the covered short position, the underwriters typically consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the underwriters’ option to purchase additional shares. Purchases in the open market to cover short positions, as well as other purchases underwriters may undertake for their own accounts, may have the effect of preventing a decline in the market price of shares. Given that there will be no underwriters’ option to purchase additional shares and no underwriters engaging in stabilizing transactions, there could be greater volatility in the public price of our common stock during the period immediately following the listing.
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There is not a fixed number of securities available for sale. Therefore, there can be no assurance that any Registered Shareholders or other existing shareholders will sell any or all of their common stock and there may initially be a lack of supply of, or demand for, our common stock on Nasdaq. Alternatively, we may have a large number of Registered Shareholders or other existing shareholders who choose to sell their common stock in the near term resulting in an oversupply of our common stock, which could adversely impact the public price of our common stock once listed on Nasdaq.
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None of our Registered Shareholders or other existing shareholders have entered into contractual lock-up agreements or other contractual restrictions on transfer, however, our directors, named executive officers and certain other shareholders are subject to restrictions as to the number of shares of common stock each may dispose of in any given period. In an underwritten initial public offering, it is customary for an issuer’s officers, directors, and most of its other shareholders to enter into an 180-day contractual lock-up arrangement with the underwriters to help promote orderly trading
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immediately after listing. Consequently, any of our Registered Shareholders, including our directors and officers who own our common stock and other significant shareholders, may sell any or all of their common stock at any time (subject to any restrictions under applicable law), including immediately upon listing. If such sales were to occur in a significant quantum, it may result in an oversupply of our common stock in the market, which could adversely impact the public price of our common stock. Sales of substantial amounts of our common stock in the public markets by insiders, our affiliates or our non-affiliates, or the perception that such sales might occur, could reduce the price that our common stock might otherwise attain and may dilute your voting power and your ownership interest in us.
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We will not conduct a traditional “roadshow” with underwriters prior to the opening of trading on Nasdaq. Instead, we intend to host an investor day, as well as engage in certain other investor education meetings. In advance of the investor day, we will announce the date for such day over financial news outlets in a manner consistent with typical corporate outreach to investors. We will prepare an electronic presentation for this investor day, which will have content similar to a traditional roadshow presentation, and make one version of the presentation publicly available, without restriction, on a website. There can be no guarantees that the investor day and other investor education meetings will have the same impact on investor education as a traditional “roadshow” conducted in connection with a firm-commitment underwritten initial public offering. As a result, there may not be efficient price discovery with respect to our common stock or sufficient demand among investors immediately after our listing, which could result in a more volatile public price of our common stock.
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Such differences from an underwritten initial public offering could result in a volatile market price for our common stock and uncertain trading volume and may adversely affect your ability to sell your common stock.
The trading price of our common stock, upon listing on Nasdaq, may have little or no relationship to the historical sales prices of our capital stock in private transactions, and such private transactions have been limited.
No established public trading market for our common stock currently exists. There has been limited trading of our capital stock historically in private transactions. On the cover of this prospectus and in the section titled “Sale Price History of Our Capital Stock,” we have provided the historical sales prices of our capital stock in private transactions. Given the limited history of sales, this information may have little or no relation to broader market demand for our common stock and thus the initial trading price of our common stock on Nasdaq once trading begins. As a result, you should not place undue reliance on these historical sales prices as they may differ materially from the opening trading prices and subsequent trading prices of our common stock on Nasdaq. For more information about how the initial listing price on Nasdaq will be determined, see “Plan of Distribution.”
An active, liquid trading market for our common stock may not develop, and you may not be able to sell your common stock at or above your purchase price, or at all.
We expect our shares of common stock to be listed and traded on Nasdaq. Prior to the listing on Nasdaq, there has not been a public market for our shares of common stock, and an active market for our shares of common stock may not develop or be sustained after the listing, which could depress the market price of our shares of common stock and could affect the ability of our shareholders to sell our shares of common stock. In the absence of an active public trading market, investors may not be able to liquidate their investments in our shares of common stock. An inactive market may also impair our ability to raise capital by selling our shares of common stock, our ability to motivate our employees through equity incentive awards and our ability to acquire other companies, products or technologies by using our shares of common stock as consideration.
The price of our common stock could be volatile.
The market price of our common stock may be volatile and could be subject to wide fluctuations in price in response to various factors, some of which are beyond our control. These factors include, among other things:
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general economic conditions and overall market fluctuations;
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utilization of the direct listing process rather than traditional underwritten offering;
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actual or anticipated fluctuations in our quarterly or annual operating results;
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changes in accounting standards, policies, guidance, interpretations or principles;
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the public reaction to our press releases, our other public announcements and our filings with the SEC;
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•
changes in financial estimates and recommendations by securities analysts following our stock, or the failure of securities analysts to cover our common stock;
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changes in our ability to meet the estimates of securities analysts;
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the operating and stock price performance of other comparable companies;
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the trading volume of our common stock;
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new technology used, or services offered, by competitors;
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changes in business, legal or regulatory conditions, or other developments affecting the financial services industry, participants in our industry, and publicity regarding our business or any of our significant customers or competitors; and
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future sales of our common stock by us, directors, executives and significant shareholders, including the sale of our common stock by our existing shareholders whose certain resales are subject to the volume, manner-of-sale and holding-period limitations of Rule 144, as described in “Shares Eligible for Future Sale.”
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The realization of any of the risks described in this “Risk Factors” section could have a material adverse effect on the market price of our common stock and cause the value of your investment to decline. In addition, the stock market experiences extreme volatility that has often been unrelated to the operating performance of particular companies. These types of broad market fluctuations may adversely affect investor confidence and could affect the trading price of our common stock over the short, medium or long term, regardless of our actual performance. If the market price of our common stock reaches an elevated level, it may materially and rapidly decline. In the past, following periods of volatility in the market price of a company’s securities, shareholders have often instituted securities class action litigation. If we were to be involved in a class action lawsuit, we could incur substantial costs and it could divert the attention of our management team and have a material adverse effect on our business, financial condition and results of operations.
Purchasers of our common stock in the open market following this listing may be unable to trace their shares to this registration statement, which could limit their ability to bring claims under the Securities Act.
Following the listing of our common stock on Nasdaq, shares of our common stock registered under the registration statement of which this prospectus forms a part will trade on Nasdaq alongside shares that may be sold in transactions exempt from the registration requirements of the Securities Act, including sales by affiliates pursuant to Rule 144, shares issued pursuant to Rule 701 and shares sold in privately negotiated transactions. Because all of these shares will be fungible on Nasdaq and trade under the same ticker symbol, purchasers of our common stock in the open market following this listing may be unable to determine, or “trace,” whether the shares they purchased were registered under this registration statement or were sold in an exempt transaction. This tracing requirement is a precondition to asserting claims under Section 11 of the Securities Act, which provides for liability when a registration statement contains an untrue statement of a material fact or omits a material fact required to be stated therein or necessary to make the statements therein not misleading, and under Section 12(a)(2) of the Securities Act, which provides for liability in connection with a prospectus or oral communication that includes an untrue statement or omission of a material fact. As a result, investors who purchase our common stock in the open market after this listing may have limited, or no, ability to pursue statutory remedies under the Securities Act against us or other parties who might otherwise be liable, which could diminish the value of their investment and their legal recourse in the event of a material misstatement or omission.
The reduced disclosures and relief from certain other significant disclosure requirements that are available to emerging growth companies and smaller reporting companies may make our common stock less attractive to investors.
We are an “emerging growth company,” as defined in the JOBS Act, and we intend to take advantage of certain exemptions from various reporting requirements that apply to other public companies that are not “emerging growth companies.” These exemptions include the following:
•
not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;
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•
less extensive disclosure obligations regarding executive compensation in our periodic reports and proxy statements; and
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•
exemptions from the requirements to hold non-binding advisory votes on executive compensation and shareholder approval of any golden parachute payments not previously approved.
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We will remain an emerging growth company for up to five years, though we may cease to be an emerging growth company earlier under certain circumstances, including if, before the end of such five years, we are deemed to be a large accelerated filer under the rules of the SEC (which depends on, among other things, having a market value of common stock held by non-affiliates in excess of $700.0 million).
We are also a smaller reporting company, as defined in the Exchange Act. Even after we no longer qualify as an emerging growth company, we may still qualify as a smaller reporting company, which would allow us to continue taking advantage of many of the same exemptions from disclosure requirements, including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. In addition, for so long as we continue to qualify as a non-accelerated filer, we will not be required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act.
We cannot predict if investors will find our securities less attractive due to our reliance on these exemptions. If investors were to find our securities less attractive as a result of our election, we may have difficulty raising capital in possible future offerings and the market price of our securities may be more volatile.
The obligations associated with being a public company will require significant resources and management attention, which may divert from our business operations.
As a result of this offering, we will become subject to the reporting requirements of the Exchange Act and the Sarbanes-Oxley Act. The Exchange Act requires that we file annual, quarterly and current reports with respect to our business and financial condition with the SEC. The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for financial reporting. As a result, we will incur significant legal, accounting and other expenses that we did not previously incur. We anticipate that these costs will materially increase our general and administrative expenses. Furthermore, the need to establish the corporate infrastructure demanded of a public company may divert management’s attention from implementing our strategic plan, which could prevent us from successfully implementing our growth initiatives and improving our business, results of operations and financial condition.
As an “emerging growth company” as defined in the JOBS Act, we intend to take advantage of certain temporary exemptions from various reporting requirements, including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and an exemption from the requirement to obtain an attestation from our auditors on management’s assessment of our internal control over financial reporting. When these exemptions cease to apply, we expect to incur additional expenses and devote increased management effort toward ensuring compliance with them. We cannot predict or estimate the amount of additional costs we may incur as a result of becoming a public company or the timing of such costs.
Our dividend policy may change without notice and any payment of dividends in the future is subject to the discretion of our Board.
The holders of our common stock will receive cash dividends if and when declared by our Board out of legally available funds. Any future determination relating to the payment of dividends will be made at the discretion of our Board and will depend on a number of factors, including our future earnings, capital requirements, financial condition, future prospects, regulatory restrictions, and other factors that our Board may deem relevant.
Our principal business operations are conducted through our subsidiary, the Bank. Cash available to pay dividends to our shareholders is derived in part from dividends paid by the Bank to us. The ability of the Bank to pay dividends to us, as well as our ability to pay dividends to our shareholders, will continue to be subject to, and limited by, certain legal and regulatory restrictions. Further, any lenders making loans to us may impose financial covenants that may be more restrictive with respect to dividend payments than the regulatory requirements.
If equity research analysts do not publish research or reports about our business, or if they do publish such reports but issue unfavorable commentary or downgrade our common stock, the price and trading volume of our common stock could decline.
The trading market for our common stock could be affected by whether equity research analysts publish research or reports about us and our business. We cannot predict at this time whether any research analysts will publish research and reports on us and our common stock. If one or more equity analysts do cover us and our common stock and publish research reports about us, the price of our stock could decline if one or more securities analysts downgrade our stock or if those analysts issue other unfavorable commentary or cease publishing reports about us or our business. If any of the analysts who elect to cover us downgrades our stock, our stock price could decline rapidly. If any of these analysts ceases coverage of us, we could lose visibility in the market, which in turn could cause our common stock price or trading volume to decline and our common stock to be less liquid.
 
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If a substantial number of shares become available for sale and are sold in a short period of time, the market price of our common stock could decline.
If our existing shareholders sell substantial amounts of our common stock in the public market following this listing, the market price of our common stock could decrease significantly. The perception in the public market that our existing shareholders might sell shares of common stock could also depress our market price. Based on the number of shares of our common stock outstanding as of September 30, 2026, we had 10,340,809 shares of our common stock outstanding (not including non-voting common stock). Our directors, executive officers and certain other officers, collectively representing 26.48% of our common shares, hold “control securities” subject to the volume and manner-of-sale limitations of Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). Other than these Rule 144 restrictions applicable to affiliates, there are no contractual lock-up agreements or other restrictions on transfer applicable to any of our shareholders. Accordingly, non-affiliate shareholders may sell their shares immediately upon listing without restriction, and affiliate shareholders are limited only by the volume, manner-of-sale, and holding period requirements of Rule 144. The market price of shares of our common stock may drop significantly if a large number of shares are sold in a short period. A decline in the price of shares of our common stock might impede our ability to raise capital through the issuance of additional shares of our common stock or other equity securities and could result in a decline in the value of your investment.
We also intend to file one or more registration statements on Form S-8 under the Securities Act, covering approximately 1,184,070 shares of our common stock, including 573,899 remaining shares that have been reserved for future issuance under our 2021 Stock Incentive Plan (as defined below), 59,070 shares issuable upon exercise of stock options outstanding under our 2017 Long-Term Incentive Plan (as defined below) and 176,777 shares issuable under the Deferred Compensation Plan, and may file future registration statements to register shares that may be issued under equity incentive or other purchase plans. Accordingly, subject to certain vesting requirements, shares registered under those other registration statements will be available for sale in the open market by persons other than our executive officers and directors.
A future issuance of stock could dilute the value of our common stock.
We may sell additional shares of common stock, or securities convertible into or exchangeable for such shares, in subsequent public or private offerings. Future issuance of any new shares could cause further dilution in the value of our outstanding shares of common stock. We cannot predict the size or timing of future issuances of our common stock, or securities convertible into or exchangeable for such shares, or the effect, if any, that future issuances and sales of shares of our common stock will have on the market price of our common stock. Sales of substantial amounts of our common stock (including shares issued in connection with an acquisition), or the perception that such sales could occur, may adversely affect prevailing market prices of our common stock.
Our common stock is subordinate to our existing and future indebtedness.
Shares of our common stock are equity interests and do not constitute indebtedness. As such, our common stock ranks junior to all our customer deposits and indebtedness, and other non-equity claims on us, with respect to assets available to satisfy claims. In addition, the shares of common stock rank junior to the holders of our lines of credit, outstanding subordinated notes and any trust preferred securities. As of June 30, 2026, we had approximately $82.6 million in aggregate principal amount of total debt outstanding. In the event of our liquidation, dissolution, or winding up, holders of our subordinated debt, depositors, and other creditors would receive distributions from our available assets before the holders of our common stock would be entitled to any distributions.
We may issue shares of preferred stock in the future which adversely affect holders of our common stock and depress the price of our common stock.
Our Articles of Incorporation authorize us to issue up to 10 million shares of one or more series of preferred stock. Our Board has the authority to determine the preferences, limitations and relative rights of shares of preferred stock and to fix the number of shares constituting any series and the designation of such series, without any further vote or action by our shareholders. Our preferred stock could be issued with voting, liquidation, dividend and other rights superior to the rights of our common stock. The potential issuance of preferred stock may delay or prevent a change in control of us, discouraging bids for our common stock at a premium over the market price, and materially adversely affect the market price and the voting and other rights of the holders of our common stock.
Our Articles of Incorporation and Bylaws, and certain banking laws applicable to us, could have an anti-takeover effect that decreases our chances of being acquired, even if our acquisition is in our shareholders’ best interests.
Our Articles of Incorporation and our Bylaws could make it more difficult for a third party to acquire us, even if doing so would be perceived to be beneficial by our shareholders. Furthermore, with certain limited exceptions, federal regulations prohibit
 
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a person or company or a group of persons deemed to be “acting in concert” from, directly or indirectly, acquiring 10% or more (5% or more if the acquirer is a bank holding company) of any class of our securities with voting rights or obtaining the ability to control in any manner the election of a majority of our directors or otherwise direct the management or policies of our Company without prior notice or application to and the approval of the Federal Reserve. Accordingly, prospective investors must comply with these requirements, if applicable, in connection with any purchase of shares of our common stock. Collectively, provisions of our Articles of Incorporation and Bylaws and other statutory and regulatory provisions may delay, prevent or deter a merger, acquisition, tender offer, proxy contest or other transaction that might otherwise result in our shareholders receiving a premium over the market price for their common stock. Moreover, the combination of these provisions effectively inhibits certain business combinations, which, in turn, could adversely affect the market price of our common stock.
An investment in our common stock is not an insured deposit and is not guaranteed by the FDIC, so you could lose some or all of your investment.
An investment in our common stock is not a deposit account or other obligation of the Bank and, therefore, is not insured against loss or guaranteed by the FDIC, any other deposit insurance fund or by any other governmental, public or private entity. An investment in our common stock is inherently risky for the reasons described herein. As a result, if you acquire our common stock, you could lose some or all of your investment.
 
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements within the meaning of the federal securities laws. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “might,” “should,” “could,” “predict,” “potential,” “believe,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “strive,” “projection,” “goal,” “target,” “outlook,” “aim,” “would” and “annualized” or the negative version of those words or other comparable words or phrases of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates and projections about our industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond our control. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.
A number of important factors could cause our actual results to differ materially from those indicated in these forward-looking statements, including but not limited to, the following:
•
general economic, business, and financial market conditions, including inflation, changes in interest rates, and conditions affecting the financial services industry nationally and in our primary market areas, particularly the Atlanta metropolitan area and our focus on small and mid-sized businesses;
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•
concentration of our loan portfolio in commercial real estate and other real estate-related credit, and the associated credit risk from changes in real estate values, borrower financial health, and project performance;
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the adequacy of our allowance for credit losses and the methodology used to estimate it;
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our ability to manage growth, maintain asset quality, and achieve profitable operating efficiency as we expand;
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changes in the quality or composition of our loan or investment portfolios;
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our hedging strategies to mitigate risks associated with changes in interest rates;
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the makeup of our asset mix and investments;
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•
our ability to increase our operating efficiency;
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the risk that balance sheet growth, revenue growth, and loan growth expectations may differ from actual results;
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our ability to retain our existing customers and attract and retain new customer relationships;
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our ability to access cost-effective and stable funding sources, including deposits, wholesale funding, and borrowings, and to maintain sufficient liquidity;
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our ability to mitigate credit risk and chargebacks of our merchant clients;
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our reliance on, and the performance of, highly regulated and specialized services such as payment processing and the merchant acquiring services within our treasury services group as well as our residential mortgage warehouse program;
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competition from banks, credit unions, financial technology companies, and other non-bank financial services providers, including with respect to digital assets and emerging technologies, many of which may be subject to different regulations than we are;
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our ability to attract, retain, and manage qualified personnel, including key executive officers;
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our dependence on third-party service providers, ISOs, TPPPs and independent mortgage originators;
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cybersecurity threats, data breaches, fraud, and disruptions to our technology and third-party service provider systems;
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our and others’ utilization of AI and ML technologies and the associated model, operational, and regulatory risks;
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our ability to comply with the extensive regulation of the banking industry, including capital, consumer protection, anti-money laundering, and privacy requirements, and the results of regulatory examinations and enforcement actions;
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our ability to continuously adhere to rules and requirements of payment networks;
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•
inaccuracies or other failures from the use of models, including the failure of assumptions and estimates, as well as differences in, and changes to, economic, market and credit conditions;
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•
changes in monetary, fiscal, and economic policy, including actions by the Federal Reserve and other governmental authorities, and broader macroeconomic and geopolitical developments, including trade and tariff policy;
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•
changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board (“FASB”), the SEC or the Public Company Accounting Oversight Board;
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changes in the scope and cost of FDIC insurance and other coverage;
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risks associated with pursuing acquisitions and integrating acquired businesses, such as Georgia Primary and Tandem;
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•
restraints on the ability of the Bank to pay dividends to us, which could limit our liquidity;
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our ability to maintain adequate internal controls over financial reporting;
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•
litigation, regulatory proceedings, and other contingencies that could result in liability, penalties, or reputational harm;
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risks specific to this offering, including potential volatility in the price of our common stock as a result of it being initially offered through a direct listing without an underwriter, the development of a trading market for our common stock, limited ability to trace certain claims under Section 11 and Section 12 of the Securities Act, our status as an emerging growth company or smaller reporting company, our dividend policy, and dilution to existing shareholders;
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•
inflation and changes in the interest rate environment that can reduce our margins or reduce the fair value of the financial instruments due to changes in consumer spending, borrowing and savings habits;
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political instability or civil unrest and/or acts of war or terrorism;
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the occurrence of significant natural disasters;
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a deterioration of the credit rating for U.S. long-term sovereign debt, actions that the U.S. government may take to avoid exceeding the debt ceiling, and uncertainties surrounding the federal budget and economic policy; and
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•
other risks and factors identified in this prospectus under the heading “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section herein.
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The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this prospectus. Due to these risks and other uncertainties, our actual future results, performance or achievement, or industry results, may be materially different from the results indicated by the forward-looking statements in this prospectus. In addition, our past results of operations are not necessarily indicative of our future results. These forward-looking statements represent our beliefs, assumptions and estimates only as of the dates on which they were made, as predictions of future events. However, the events and circumstances reflected in the forward-looking statements may not be achieved or occur. For example, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. Any forward-looking statement speaks only as of the date on which it is made, and except as required by applicable law, we do not undertake any obligation to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.
These statements are inherently uncertain, and we cannot guarantee future results, performance or achievements. You should read this prospectus and the documents that we reference in this prospectus and have filed with the SEC as exhibits to the registration statement of which this prospectus is a part with the understanding that our actual future results, performance and events and circumstances may be materially different from what we expect. See the section entitled “Where You Can Find Additional Information.”
 
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USE OF PROCEEDS
This prospectus relates to the sale of our common stock by the Registered Shareholders. The Registered Shareholders, at their discretion, may, or may not, elect to sell shares of our common stock covered by this prospectus. To the extent the Registered Shareholders choose to sell their shares of our common stock covered by this prospectus, we will not receive any proceeds from any such sales of our common stock.
We will pay for expenses of this offering, except that the Registered Shareholders will pay any broker discounts or commissions or equivalent expenses and expenses of their legal counsel applicable to the sale of their shares.
 
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MARKET FOR THE COMMON STOCK
Market for Common Stock
Prior to this offering, our common stock has not been traded on an established public trading market, and quotations for our common stock were not reported on any market. As a result, there has been no regular market for our common stock. As of September 30, 2026, there were 601 holders of record of our common stock.
We have applied to list our common stock for trading on Nasdaq under the symbol “GBC.” This offering is contingent on the approval of our listing application.
However, we cannot assure you that a liquid trading market for our common stock will develop or be sustained after this offering. You may not be able to sell your shares quickly or at the market price if trading in our common stock is not active. See the “Plan of Distribution” section for more information regarding the process of directly listing our common stock on Nasdaq and the factors which determine how the initial trading and pricing will occur.
Equity Compensation Plan Information
The following table sets forth the information as of December 31, 2025 with respect to shares of common stock that may be issued under the Company’s equity compensation plans:
Plan Category
​ ​
Number of Securities
to be Issued Upon
Exercise of Outstanding
Options and Rights
(a)
​ ​
Weighted Average
Exercise Price of
Outstanding Options
and Rights
(b)
​ ​
Number of Securities Remaining
available for Future Issuance
Under Equity Compensation
Plan (Excluding Securities
Reflected in Column (a))
(c)
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Equity compensation plans approved by security holders(1)
​ ​ ​ ​ 132,787 ​ ​ ​ ​ $ 21.62(2) ​ ​ ​ ​ ​ 526,304 ​ ​
Equity compensation plans not approved by security holders(3)(4)
​ ​ ​ ​ 59,070 ​ ​ ​ ​ ​ 14.09 ​ ​ ​ ​ ​ 78,495 ​ ​
Total at December 31, 2025
​ ​ ​ ​ 191,857 ​ ​ ​ ​ $ 15.33 ​ ​ ​ ​ ​ 604,799 ​ ​
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(1)
Reflects 11,617 outstanding stock options and 121,170 restricted stock units (“RSUs”) granted under our 2021 Stock Incentive Plan. Shares available for future awards under the 2021 Stock Incentive Plan are reflected in column (c), all of which may be issued pursuant to grants of full-value stock awards. In July 2026, our shareholders approved an amendment to the original 2021 Stock Incentive Plan authorizing and reserving an additional 500,000 shares for a total of 1,026,304 shares reserved for future issuance. In July 2026, our Board then amended and restated our 2021 Stock Incentive Plan, which reserves a total of 1,125,000 shares of our common stock for issuance under the 2021 Stock Incentive Plan.
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(2)
The weighted average exercise price does not take into account the 121,170 RSUs included in column (a), as RSUs have no exercise price.
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(3)
Reflects outstanding stock options granted under the 2017 Long-Term Incentive Plan. Shares available for future awards under the 2017 Long-Term Incentive Plan are reflected in column (c). The 2017 Long-Term Incentive Plan reserves a total of 139,326 shares of our common stock for issuance.
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(4)
In addition to the stock options reflected in the table, approximately 28,009 stock options were outstanding as of December 31, 2025 under individual nonqualified stock option award agreements at a weighted average exercise price of approximately $6.07. There are no shares remaining available for future issuance under these individual arrangements.
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DIVIDEND POLICY
Holders of our common stock are only entitled to receive dividends when, as and if declared by our Board out of funds legally available for dividends. We have not paid any cash dividends on our capital stock since the Recapitalization in 2021, and we do not intend to pay cash dividends for the foreseeable future.
Any future determination to pay cash dividends on our common stock will be made by our Board and will depend on a number of factors, including:
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our historical and projected financial condition, liquidity and results of operations;
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•
our capital levels and requirements;
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•
statutory and regulatory prohibitions and other limitations;
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•
any contractual restriction on our ability to pay cash dividends, including pursuant to the terms of any of our credit agreements or other borrowing arrangements;
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•
our business strategy;
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tax considerations;
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•
any acquisitions or potential acquisitions that we may examine;
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•
general economic conditions; and
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•
other factors deemed relevant by our Board.
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As a Georgia corporation, we may declare and pay dividends in cash or property unless the payment or declaration would be contrary to restrictions contained in our Articles of Incorporation, or unless, after payment of the dividend, we would not be able to pay our debts when they become due in the usual course of our business or our total assets would be less than the sum of our total liabilities.
In addition, the terms of our debt agreements (such as those governing our outstanding subordinated debt securities) may limit our ability to pay dividends in certain circumstances and future agreements governing our indebtedness may similarly limit our ability to pay dividends.
We are also subject to certain restrictions on the payment of cash dividends as a result of banking laws, regulations and policies. The Federal Reserve has issued a policy statement regarding the payment of dividends by bank holding companies. In general, the Federal Reserve’s policy provides that dividends should be paid only to the extent that the company’s net income for the past two years is sufficient to fund the dividends and only if the prospective rate of earnings retention by the bank holding company appears consistent with the organization’s capital needs, asset quality and overall financial condition. The Federal Reserve has the authority to prohibit a bank holding company from paying dividends if such payment is deemed to be an unsafe or unsound practice.
Because we are a bank holding company, we are dependent upon the payment of dividends by the Bank to us as our principal source of funds to pay cash dividends in the future, if any, and to make other payments. The Bank is also subject to various legal, regulatory and other restrictions on its ability to pay dividends and make other distributions and payments to us. A Georgia state bank may generally pay dividends out of retained earnings without the prior approval of the GDBF, but must obtain the GDBF’s approval to pay dividends other than from retained earnings, and in the other circumstances described under “Supervision and Regulation  — Regulation of Company — Payment of Dividends.” The FDIC generally does not require bank dividends to be approved so long as the dividend is in an amount no greater than the Bank’s year-to-date net income plus its retained net income for the prior two years. See the section entitled “Supervision and Regulation” for more information regarding the regulatory dividend restrictions applicable to us and the Bank.
The GDBF and the FDIC have the authority to prohibit the Bank from paying dividends if such payment is deemed to be an unsafe or unsound practice. In addition, as a depository institution the deposits of which are insured by the FDIC, the Bank may not pay dividends or distribute any of its capital assets while it remains in default on any assessment due to the FDIC or if in the FDIC’s opinion, the payment of dividends would constitute an unsafe or unsound practice. To pay a cash dividend, a state bank must also maintain an adequate capital conservation buffer under the regulatory capital rules.
 
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read together with our consolidated financial statements and related notes thereto and other financial information included elsewhere in this prospectus. To the extent that this discussion describes prior performance, the descriptions relate only to the periods listed, which may not be indicative of our future financial outcomes. In addition to containing historical information, this discussion contains forward-looking statements that involve risks, uncertainties and assumptions that could cause results to differ materially from management’s expectations. Factors that could cause such differences are discussed in the sections entitled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors.” We assume no obligation to update any of these forward-looking statements, except to the extent required by law.
The following discussion presents management’s perspective on our results of operations and financial condition on a consolidated basis. However, because we conduct all of our material business operations through the Bank, the discussion and analysis relate primarily to activities conducted by the Bank.
Overview
Fiscal year 2025 and the first six months of 2026 were transformative periods for our Company, during which we advanced our strategic growth objectives through both acquisition and organic expansion. On March 1, 2025, we completed our acquisition of Georgia Primary, which at the time of the completion of the acquisition was a $341.1 million asset bank headquartered in Atlanta, Georgia. Acquiring Georgia Primary added two branch locations, a complementary loan portfolio and a seasoned deposit franchise to our platform. We completed the integration of Georgia Primary during 2025. The transaction resulted in $6.7 million of merger and conversion related expenses, substantially all of which was recognized in the first half of 2025 and materially affected our reported results for that period. On June 1, 2026, we completed our acquisition of Tandem, an approximately $321.3 million asset bank based on preliminary fair value adjustments. This acquisition expanded our geographic footprint across the Atlanta MSA by adding a full-service branch location and three loan production offices. As of June 30, 2026, we had recognized approximately $3.5 million in merger and conversion related expenses, with additional integration costs expected during the remainder of 2026. Notwithstanding these one-time costs, the underlying performance of the combined franchise demonstrated the strategic merit of these acquisitions.
Six Months Ended June 30, 2026 Highlights
For the six months ended June 30, 2026, the Company continued to deliver meaningful growth in key financial and operational metrics. Total assets increased 20.7% to $3.3 billion at June 30, 2026, compared to $2.7 billion at December 31, 2025, with the increase primarily attributable to the completed acquisition of Tandem and continued organic loan growth of approximately $120.1 million. Total gross loans inclusive of held-for-sale reached $2.6 billion at June 30, 2026, representing an increase of $360.1 million, or 16.1%, from December 31, 2025, of which approximately $240.1 million was attributable to loans acquired in the Tandem transaction. Total deposits grew to approximately $2.8 billion as of June 30, 2026. Net interest income increased 19.3% to $55.9 million for the six months ended June 30, 2026, compared to $46.9 million for the six months ended June 30, 2025, driven by a $314.1 million increase in average outstanding loans and interest-earning asset growth that outpaced growth in interest-bearing liabilities. Net interest margin improved to 4.36% for the six months ended June 30, 2026, compared to 4.17% for the six months ended June 30, 2025. Net income for the six months ended June 30, 2026 was $13.3 million, compared to $6.7 million for the six months ended June 30, 2025, representing an increase of $6.6 million. Shareholders’ equity increased $73.7 million to $278.7 million at June 30, 2026, from $204.9 million at December 31, 2025, primarily as a result of the Tandem acquisition and the June 2026 Private Placement that generated net proceeds of $36.6 million. The comparability of our results for the six months ended June 30, 2026 was impacted by the acquisition of Tandem, which was completed in June 2026. As a result, certain changes in net interest income, noninterest income, noninterest expense, loans and deposits reflected in the comparisons below were attributable to acquired balances and operations associated with Tandem, while the remainder reflected organic growth generated by our legacy operations. Where practicable, we have quantified the impact of the Tandem acquisition separately from organic growth.
Asset quality for the six months ended June 30, 2026 remained stable, reflecting the continued benefit of disciplined underwriting and risk management practices. The net charge-off ratio as a percentage of average loans, annualized, was 0.10% for the six months ended June 30, 2026. Nonperforming loans were $17.3 million at June 30, 2026, compared to $14.7 million at December 31, 2025, with the increase primarily attributable to two commercial relationships totaling $5.7 million that migrated to nonaccrual status during the period, partially offset by a $3.7 million relationship that was paid out. The allowance for credit losses was $29.0 million, or 1.39% of total gross loans held for investment, at June 30, 2026, compared to $25.6 million, or 1.48%, at December 31, 2025, with the increase primarily attributable to the Tandem acquisition and the related allowance
 
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associated with acquired loans. At June 30, 2026, the Bank’s capital ratios exceeded all applicable minimum capital requirements and the regulatory standards required to be classified as well-capitalized under applicable regulatory capital frameworks. Management believes that these capital levels, together with the capital raised in June 2026, provide the Company with the flexibility to support continued balance sheet growth, integration of the Tandem acquisition, and ongoing strategic initiatives while maintaining a sound risk profile.
Fiscal Year 2025 Highlights
As a result of the acquisition and continued organic growth, total assets increased 19.4% to $2.7 billion at December 31, 2025, from $2.3 billion at December 31, 2024. Total gross loans held for investment reached $1.7 billion, representing a 31.4% increase year-over-year, and total gross loans inclusive of held-for-sale reached $2.2 billion. Total deposits grew 29.0% to $2.4 billion, with noninterest-bearing demand deposits increasing 56.8% to $617.4 million. Management attributes growth in noninterest-bearing deposits to the continued success of our commercial banking and treasury services initiatives in attracting core operating relationships. Net interest income grew 42.8% to $102.4 million for the year ended December 31, 2025, and total noninterest income increased to $10.3 million from $7.3 million for the prior year period. Net income increased 161% to $22.1 million, or $2.62 diluted earnings per share, compared to $8.5 million, or $1.12 diluted earnings per share, for the year ended December 31, 2024. For the year ended December 31, 2025, the Company generated a return on average assets of 0.88%, a return on average common equity of 11.96%, a net interest margin of 4.26%, and an efficiency ratio of 69.5%. Total shareholders’ equity grew to $204.9 million at December 31, 2025, and tangible book value per share was $23.03. The comparability of our results for 2025 was impacted by the acquisition of Georgia Primary, which was completed in March 2025. As a result, certain changes in net interest income, noninterest income, noninterest expense, loans and deposits reflected in the comparisons below were attributable to acquired balances and operations associated with Georgia Primary, while the remainder reflected organic growth generated by our legacy operations. Where practicable, we have quantified the impact of the Georgia Primary acquisition separately from organic growth.
Asset quality throughout fiscal year 2025 reflected the benefits of our disciplined underwriting standards and risk management framework. Gross charge-offs declined 81.2% to approximately $1.0 million for the year ended December 31, 2025, from $5.5 million for the year ended December 31, 2024, and nonaccrual loans totaled $14.7 million at December 31, 2025. The allowance for credit losses was $25.6 million, or 1.48% of total gross loans held for investment, at December 31, 2025, representing what management believes to be an appropriate reserve relative to the risk profile of the loan portfolio. At December 31, 2025, the Bank was well-capitalized under all applicable regulatory capital frameworks, with a Total Capital to Risk-Weighted Assets ratio of 12.74%, a Tier 1 Capital to Risk-Weighted Assets ratio of 11.52%, a Common Equity Tier 1 Capital ratio of 11.52%, and a Tier 1 Leverage Ratio of 9.37%, each of which exceeded the minimum ratios required to be classified as well-capitalized by a meaningful margin. Management believes that these capital levels provide the Company with the flexibility to support continued balance sheet growth while maintaining a sound risk profile.
Key Factors Affecting Our Business
Interest Rates
Net interest income is the most significant contributor to our net income and is the difference between the interest and fees earned on interest-earning assets and the interest expense incurred in connection with interest-bearing liabilities. Net interest income is primarily a function of the average balances and yields of these interest-earning assets and interest-bearing liabilities. These factors are influenced by internal considerations such as product mix and risk appetite as well as external influences such as economic conditions, competition for loans and deposits and market interest rates.
The cost of our deposits and short-term borrowings is primarily based on short-term interest rates, which are largely driven by the Federal Reserve’s actions and market competition. The yields generated by our loans and securities are typically affected by short-term and long-term interest rates, which are driven by market competition and market rates often impacted by the Federal Reserve’s actions. The level of net interest income is influenced by movements in such interest rates and the pace at which such movements occur.
Operating Efficiency
We have invested significantly in personnel, management resources and core processing systems to support our growth. As we leverage these investments across a larger operating base, we expect our operating efficiency to improve. However, the timing and extent of any improvement will depend on our ability to grow revenue without proportionate increases in operating expenses.
 
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Credit Quality
We have well established loan policies and underwriting practices that have resulted in very low levels of charge-offs and nonperforming assets. We strive to originate quality loans that will maintain the credit quality of our loan portfolio. However, credit trends in the markets in which we operate are largely impacted by economic conditions beyond our control and can adversely impact our financial condition.
Competition
The industry and businesses in which we operate are highly competitive. We may see increased competition in different areas including interest rates, underwriting standards and product offerings and structure. While we seek to maintain an appropriate return on our investments, we anticipate that we will experience continued pressure on our net interest margins as we operate in this competitive environment.
Economic Conditions
Our business and financial performance are affected by economic conditions generally in the United States and more directly in the Southeast, where we primarily operate. The significant economic factors that are most relevant to our business and our financial performance include, but are not limited to, GDP, real estate values, interest rates and unemployment rates.
Public Company Costs
Following the effectiveness of this offering, we expect to incur additional costs associated with operating as a public company, hiring additional personnel, enhancing technology and expanding our capabilities. We expect that these costs will include legal, regulatory, accounting, investor relations and other expenses that we generally did not incur as a private company. The Sarbanes-Oxley Act, as well as rules adopted by the SEC and national securities exchanges, require public companies to implement specified corporate governance practices that are currently inapplicable to us as a private company. These additional rules and regulations will increase our legal, regulatory, accounting and financial compliance costs and will require devotion of additional resources from our management team.
Critical Accounting Policies and Estimates
Our accounting and reporting policies are in accordance with GAAP and conform to general practices within the banking industry. Application of these principles requires management to make estimates, assumptions or judgments that affect the amounts reported in the financial statements and the accompanying notes. These estimates are based on information available as of the date of the financial statements; accordingly, as this information changes, the financial statements could reflect different estimates or judgments. Estimates, assumptions or judgments are necessary when assets and liabilities are required to be recorded at fair value, when a decline in the value of an asset not carried on the financial statements at fair value warrants an impairment write-down or valuation reserve to be established, or when an asset or liability needs to be recorded contingent upon future events. Carrying assets and liabilities at fair value results in more financial statement volatility. The fair values and the information used to record the valuation adjustments for certain assets and liabilities are based either on quoted market prices or are provided by other third-party sources.
Certain policies inherently have a greater reliance on the use of estimates, assumptions or judgments and as such, have a greater possibility of producing results that could be materially different than originally reported. We have identified the determination of our Allowance for Credit Losses (“ACL”), fair value measurements, stock-based compensation, income taxes and goodwill to be the accounting areas that require the most subjective or complex judgments, estimates and assumptions, and where changes in those judgments, estimates and assumptions (based on new or additional information, changes in the economic environment and/or market interest rates, etc.) could have a significant effect on our financial statements. Therefore, we consider these policies and estimates, discussed below, to be critical accounting estimates and discuss them directly with the Audit Committee of our Board.
Our most significant accounting policies are presented in Note 1 of the accompanying consolidated financial statements as of December 31, 2025. These policies, along with the disclosures presented in the other notes to the consolidated financial statements and in this Management’s Discussion and Analysis section, provide information on how significant assets and liabilities are valued in the financial statements and how those values are determined.
 
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Operating Segment
We principally operate in one business segment, which is banking. Accounting standards require that information be reported about a company’s operating segments using a “management approach.” While management monitors the revenue streams of the various products and services, operations are managed, and financial performance is evaluated on a Company-wide basis. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable segment as the current operating model is structured whereby all banking locations serve a similar base of customers utilizing a company-wide offering of similar products and services managed through similar processes and technology platforms. The segment measure of profit or loss is consolidated net income according to the consolidated statements of operations, the measure of segment assets is total assets of the consolidated company according to the consolidated balance sheets, and the accounting policies of the segment are the same as those described in Note 1 to our consolidated financial statements. The segment’s revenues are primarily derived from retail and commercial banking products, and investment income.
Allowance for Credit Losses
The ACL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the ACL when management believes the uncollectibility of a loan balance is confirmed. Accrued interest receivable on loans is excluded from the estimate of credit losses. For the majority of loans, the ACL is calculated using a discounted cash flow methodology applied at the individual loan level. Expected credit losses are estimated over the contractual term of each loan, adjusted for expected prepayments and curtailments. The methodology incorporates reasonable and supportable forecasts over a one-year period, followed by a one-year straight-line reversion to long-term loss expectations. Expected losses are calculated based on forecasted loss rates and recovery assumptions and are aggregated to determine the ACL for collectively evaluated loans.
Management considers the effects of past events, current conditions, and reasonable and supportable forecasts on the collectability of financial assets as of the reporting date. Management will also use relevant forward-looking information and expectations drawn from reasonable and supportable forecasts when estimating the ACL. The information is obtained from internal and external sources relating to past events, current conditions, and reasonable and supportable forecasts. The loss rate methodology is designed to estimate expected credit losses over the contractual life of the loans for the entire portfolio utilizing reasonable and supportable economic forecasts, historical loss experience, expected prepayments and curtailments and qualitative adjustments. By segmenting the loan portfolio by call code, historical loss rates can be utilized from a diversified peer group of banks under similar economic conditions to those in the economic forecast. The model takes into consideration observed historical loss rates from peer banks and combines this with internal and third-party benchmark studies associated with prepayment speeds, curtailment rates, recovery rates and funding projections to estimate historical losses on the portfolio. Qualitative factors, which require management judgment related to various sources of external and internal data, are incorporated into the overall allowance. Adjustments to modeled loss estimates may be made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level or term as well as for changes in environmental conditions, such as changes in economic conditions, property values or other relevant factors.
The ACL is measured on a collective basis when similar risk characteristics exist. The Bank has identified the following portfolio segments and calculates the ACL for each using a discounted cash flow methodology at the loan level based on a forecasted loss rate determined based on underlying assumptions that most closely align with the underlying loans current and expected conditions:
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Construction and land development — Construction and land development loans include commercial construction, land acquisition and land development loans and single-family interim construction loans to small- and medium-sized businesses and individuals. These loans can carry the risk of cost overruns, changes in market demand for property, zoning and/or environmental issues and declines in real estate values.
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Single family residential — Residential loans include permanent mortgage financing and home equity lines of credit secured by first and second deeds on residential properties. These loans are susceptible to weakening general economic conditions, increases in unemployment rates and declining real estate values.
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Commercial real estate — Commercial real estate loans include loans secured by owner-occupied commercial buildings for office, storage, retail, farmland, and warehouse space. They also include non-owner-occupied commercial buildings such as leased retail and office space. Commercial real estate loans may be larger in size and may involve a greater degree of risk than one-to-four family residential mortgage loans. Payments on such loans are often dependent on successful operation or management of the properties.
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•
Multifamily — The Bank’s multifamily residential loans are primarily secured by multi-family properties, such as apartments and condominium buildings. These loans also may be affected by increases in unemployment rates and deteriorating market values of real estate.
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Commercial and financial — Commercial and financial loans are made to businesses and are typically secured by business assets such as accounts receivable, inventory, and equipment, or are unsecured, and include loans to non-depository financial institutions. Repayment generally depends on the successful operation and cash flow of the borrower’s business and may be more sensitive to adverse economic conditions than real estate — secured loans, and the collateral securing these loans may fluctuate in value or be difficult to liquidate.
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Consumer — Consumer loans include automobile loans, revolving credit plans, and other loans to individuals for household, family, and other personal purposes. These loans may be unsecured or secured by rapidly depreciating collateral, and are susceptible to weakening general economic conditions, increases in unemployment rates, and reductions in borrower disposable income.
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Although management believes its process for determining the allowance adequately considers the potential factors that could potentially result in credit losses, the process includes subjective elements and is susceptible to significant change. To the extent actual outcomes are worse than management estimates, additional provision for credit losses could be required that could adversely affect our earnings or financial position in future periods.
Additional information on the loan portfolio and ACL can be found in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Loans.” See Note 1 to the consolidated financial statements included in this prospectus for additional information regarding our accounting policies related to the ACL.
Stock-Based Compensation
We account for share-based compensation awards granted to employees, directors and non-employees in accordance with FASB Accounting Standards Codification (“ASC”) Topic 718, Compensation — Stock Compensation (“ASC 718”). ASC 718 requires compensation cost for share-based payment awards to be measured at fair value on the grant date and recognized in the financial statements over the period during which the grantee is required to provide service in exchange for the award, which is generally the vesting period. The Company measures the grant-date fair value of stock options and other option-type awards using the Black-Scholes option-pricing model, which requires management to make assumptions, including the expected term of the award, expected volatility of our common stock, the risk-free interest rate and expected dividend yield.
We generally measure the grant-date fair value of restricted stock awards and restricted stock units based on the fair value of the Company’s common stock on the date of grant. Compensation cost for service-based awards is recognized on a straight-line basis over the requisite service period for the award, and compensation cost for awards with graded vesting is recognized over the requisite service period for the entire award unless the terms of the award or applicable accounting guidance require recognition for each separately vesting tranche. Compensation cost for awards with performance conditions is recognized when achievement of the performance condition is probable, and the amount recognized is adjusted in subsequent periods if the probability assessment changes. The Company recognizes forfeitures of share-based compensation awards as they occur, and previously recognized compensation cost is reversed in the period in which an award is forfeited before completion of the requisite service period.
Fair Value Measurements
ASC Topic 820, Fair Value Measurement defines fair value as the price that would be received to sell a financial asset or paid to transfer a financial liability in an orderly transaction between market participants at the measurement date. The degree of management judgment involved in determining the fair value of assets and liabilities is dependent upon the availability of quoted market prices or observable market parameters. For financial instruments that trade actively and have quoted market prices or observable market parameters, there is minimal subjectivity involved in measuring fair value. When observable market prices and parameters are not available, management judgment is necessary to estimate fair value.
The fair values for available-for-sale (“AFS”) securities are generally based upon quoted market prices or observable market prices for similar instruments. Management utilizes a third-party pricing service to assist with determining the fair value of our securities portfolio. The pricing service uses observable inputs when available including benchmark yields, reported trades, broker-dealer quotes, issuer spreads, benchmark securities, bids and offers. These values take into account recent market activity as well as other market observable data such as interest rate, spread and prepayment information.
 
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We account for mergers and acquisitions that qualify as a business combination under ASC 805, Business Combinations, which requires the use of the acquisition method of accounting. Under the acquisition method, we record all identifiable assets acquired, including intangible assets and the liabilities assumed at their fair values as of the acquisition date. Determining fair values of net assets acquired often involves estimates based on third-party valuations, such as appraisals or internal valuations based on discounted cash flow analysis or other valuation techniques. These methodologies are inherently subjective and involve significant assumptions, adjustments, and judgment around the selection of assumptions including, among others, discount rates, future expected cash flows, market conditions, and other future events that are highly subjective in nature and subject to change. The determination of the useful lives over which an intangible asset will be amortized is also subjective. While the selected fair values represented our best estimate of fair value as of the acquisition date, these estimates are inherently uncertain. In addition, the acquisition method of accounting allows for a measurement period to adjust acquisition accounting for up to one year after the acquisition date, for new information that existed at the acquisition date but may not have been known or available at that time.
From time to time, we may record assets at fair value on a nonrecurring basis, usually as a result of the write-downs of individual assets due to impairment or to value real estate or property obtained through foreclosure or repossession. In particular, nonaccrual loans may be carried at the fair value of collateral if repayment is expected solely from the collateral. Although management believes its processes for determining the fair value of collateral-dependent loans are appropriate, the processes require management judgment and assumptions and the value of such assets at the time they are revalued or divested may be significantly different from management’s determination of fair value.
In addition, changes in market conditions may reduce the availability of quoted prices or observable data. See Note 21 of our consolidated financial statements as of December 31, 2025, included elsewhere in this prospectus, for a complete discussion of fair value of financial assets and liabilities and their related measurement practices.
Goodwill Impairment
We record goodwill as a result of acquisitions accounted for under the acquisition method of accounting. Under the acquisition method, we are required to allocate the consideration paid for an acquired company to the assets acquired, including identified intangible assets, and liabilities assumed based on their estimated fair values at the date of acquisition. Goodwill represents the excess cost over the fair value of net assets acquired and is not amortized but is tested for impairment when indicators of impairment exist, and, in any case, at least annually.
The value of recorded goodwill is supported by revenue that is driven by the volume of business transacted and our ability to provide quality, cost-effective services in a competitive marketplace. A decline in earnings as a result of a lack of growth or the inability to deliver cost-effective services over sustained periods can lead to impairment of goodwill that could adversely impact earnings in future periods. Goodwill impairment exists when the carrying value of the reporting unit (as defined by GAAP) exceeds its fair value and an impairment loss is recognized in earnings in an amount equal to that excess, limited to the total amount of goodwill allocated to the reporting unit.
The process of evaluating goodwill for impairment involves highly subjective and complex judgments, estimates and assumptions regarding the fair value of our reporting unit and, in some cases, goodwill itself. As a result, changes to these judgments, estimates and assumptions in future periods could result in materially different results. The Company tests goodwill for impairment annually, or more frequently if events or circumstances change, indicating that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. The determination of fair value of the reporting unit may include a discounted cash flow analysis incorporating assumptions regarding projected revenue growth rates, operating margins and weighted average cost of capital. These assumptions are inherently uncertain and could be adversely affected by factors including regulatory changes, macroeconomic conditions, interest rate changes, competitive pressures, changes in customer demand, or deterioration in financial performance. If actual results differ from our assumptions, or if adverse changes in these factors occur, we could be required to record a material goodwill impairment charge in future periods, which could have a material effect on our results of operations and financial condition.
Income Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income
 
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in the period that includes the enactment date. Deferred tax assets are reduced, if necessary, by the amount of such benefits that are more likely than not expected to be realized based upon available evidence.
Emerging Growth Company Considerations
The JOBS Act contains provisions that, among other things, reduce certain reporting and other regulatory requirements for qualifying public companies. As an “emerging growth company,” we have elected under the JOBS Act to retain the ability to delay the adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. In the event we choose in the future to delay adoption of future accounting pronouncements applicable to public companies, our consolidated financial statements as of a particular date and for a particular period in the future may not be comparable to the financial statements as of such date and for such period of a public company situated similarly to us that is neither an emerging growth company nor an emerging growth company that has opted out of the extended transition period. Such financial statements of the other company may be prepared in conformity with new or revised accounting standards then applicable to public companies, but not to private companies, while, if we are then in the extended transition period, our consolidated financial statements would not be prepared in conformity with such new or revised accounting standards. Additionally, we are in the process of evaluating the benefits of relying on the other reduced reporting requirements provided by the JOBS Act.
Subject to certain conditions set forth in the JOBS Act, if, as an emerging growth company, we choose to rely on such exemptions we may not be required to, among other things, (i) provide an auditor’s attestation report of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act, (ii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (auditor discussion and analysis), (iii) provide more extensive disclosures regarding our executive compensation arrangements, including a “compensation discussion and analysis” section and all of the disclosures required under the Dodd-Frank Act, and (iv) hold nonbinding advisory votes on executive compensation and golden parachute arrangements. These exemptions will apply for a period of five years following the effectiveness of the registration statement of which this prospectus is a part or until we are no longer an emerging growth company, whichever is earlier.
Primary Factors Used to Evaluate Our Business
In addition to net income, the primary factors we use to evaluate and manage our results of operations include net interest income, noninterest income and noninterest expense.
Net Interest Income
Net interest income is the most significant contributor to our net income. Net interest income represents interest income from interest earning assets, such as loans and investments, less interest expense on interest-bearing liabilities, such as deposits, FHLB advances, subordinated notes and other borrowings, which are used to fund those assets. In evaluating our net interest income, we measure and monitor yields on our interest-earning assets and interest-bearing liabilities as well as trends in our net interest margin. Net interest margin is a ratio calculated as net interest income divided by average interest-earning assets for the same period. We manage our earning assets and funding sources to maximize this margin while limiting credit risk and interest rate sensitivity to comply with our established risk appetite levels. Changes in market interest rates and competition in our market typically have the largest impact on periodic changes in our net interest margin.
Noninterest Income
Noninterest income is a secondary contributor to our net income. Noninterest income consists primarily of interchange and card revenue, servicing fees, revenue streams such as service charges and other fees on deposit accounts, FHLB dividends, bank-owned life insurance (“BOLI”) income and other miscellaneous income. Certain of the Company’s noninterest revenue streams, such as contracts with customers, are covered by ASC Topic 606, Revenue from Contracts with Customers. See Note 1 of our audited consolidated financial statements for additional information.
Noninterest Expense
Noninterest expense includes salaries and employee benefits, occupancy and equipment costs, Federal deposit insurance expense, communication expenses, data processing and software fees, professional services fees, loan-related costs and other general and administrative expenses. In evaluating our level of noninterest expense, we closely monitor our efficiency ratio. The
 
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efficiency ratio is calculated by dividing noninterest expense by net interest income plus noninterest income. We constantly seek to identify ways to streamline our business and operate more efficiently.
Over the past several years, we have invested significant resources in personnel and infrastructure. We expect that our efficiency ratio will improve due, in part, to our past investment in infrastructure. We believe that we are currently well positioned to continue our growth trajectory without meaningful additions to our cost structure.
Primary Factors Used to Evaluate Financial Condition
The primary factors we use to evaluate and manage our financial condition include asset quality, capital and liquidity.
Asset Quality
We manage the quality of our loans based upon trends at the overall loan portfolio level as well as within specific product type. We measure and monitor key factors that include the level and trend of classified, delinquent, nonaccrual and nonperforming assets, collateral coverage and credit scores and debt service coverage, where applicable. The metrics directly impact our evaluation of the adequacy of our allowance for credit losses.
Capital
We manage our capital by tracking our level and quality of capital with consideration given to our overall financial condition, our asset quality, our level of allowance for credit losses, our geographic and industry concentrations, and other risk factors in our balance sheet, including interest rate sensitivity. Bank holding companies and banks are subject to various regulatory capital requirements administered by federal bank and state regulatory agencies. The Bank is subject to minimum risk-based and leverage capital requirements under federal regulations implementing the Basel III framework, and to regulatory thresholds that must be met for an insured depository institution to be classified as “well-capitalized” under the prompt corrective action framework. Our capital ratios and the capital ratios of the Bank at June 30, 2026, exceeded all applicable minimum capital requirements and the regulatory standards for the Bank to be “well-capitalized.” See the section entitled “Supervision and Regulation” for more information regarding the regulatory capital adequacy requirements applicable to us.
Liquidity
The Bank’s liquidity is a measure of its ability to access funds to support loan growth, withdrawals and maturities of deposits, and other cash outflows in a cost-effective manner. The principal sources of liquidity are deposits, scheduled payments and prepayments of loan principal, maturities and pay-downs of investment securities, access to liquid deposits, and funds provided by operations. While scheduled loan payments and maturing investments are relatively predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. Liquid assets, consisting of cash and due from banks, interest-earning deposits with other banks, federal funds sold, and the fair value of unpledged investment securities, represented 12.7% of total assets on December 31, 2025 and 16.5% of total assets on June 30, 2026.
The Bank strives to maintain a position of liquidity sufficient to fund future loan demand and to satisfy fluctuations in deposit levels. Should the need arise, the Bank would have the capability to sell available-for-sale securities or to borrow funds as necessary. In addition to deposits, the Company utilizes FHLB advances as a supplementary funding source to finance our operations. These FHLB advances are collateralized by securities owned by the Company and held in safekeeping by the FHLB, FHLB stock owned by the Company, and certain qualifying loans secured by real estate, including residential mortgage loans, home equity lines of credit and commercial real estate loans. At June 30, 2026 and December 31, 2025, the Company had no outstanding borrowings with the FHLB. At December 31, 2024, the Company had $150.0 million of adjustable-rate credit advances outstanding with an interest rate of 4.57%. The outstanding advances at December 31, 2024, matured and were repaid during 2025. The advances from the FHLB are collateralized by a blanket lien on all eligible first mortgage loans and other specific loans in addition to FHLB stock. Loans totaling approximately $1.8 billion, $1.5 billion and $1.3 billion were pledged as collateral to the FHLB at June 30, 2026, December 31, 2025 and December 31, 2024, respectively, with lendable collateral value of $324.6 million, $210.5 million and $181.6 million for the same periods. The Bank primarily uses advances from its lines of credit for short-term cash needs, with borrowing terms typically less than 30 days. For additional discussion of the Company’s FHLB advances, see Note 10 of our audited consolidated financial statements and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Liabilities — FHLB Advances.”
 
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Results of Operations — Comparison of Results of Operations for the Six Months Ended June 30, 2026 and 2025
The following discussion of our results of operations compares the six months ended June 30, 2026 and 2025. Our net income for the six months ended June 30, 2026 was $13.3 million compared to net income of $6.7 million for the six months ended June 30, 2025. The increase of $6.6 million was primarily due to an increase in net interest income of $9.1 million partially offset by an increase in non-interest expense of $1.4 million primarily as a result of the Tandem acquisition.
Net Interest Income
For the six months ended June 30, 2026, net interest income increased by $9.1 million, or 19.3%, to $55.9 million, compared to the six months ended June 30, 2025. The increase in net interest income was primarily the result of increases in average outstanding loans of $314.1 million mainly driven by a combination of organic loan growth and the impact of acquisitions, as well as growth in average earning assets that outpaced growth in interest-bearing liabilities. Our net interest margin was 4.36% for the six months ended June 30, 2026, as compared to 4.17% for the six months ended June 30, 2025. Net interest margin experienced a 19 basis point increase during the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily due to interest-earning asset growth outpacing interest-bearing liabilities by $182.1 million during the period along with an increase in non-interest bearing demand deposits of $141.3 million.
The following table discloses the components of net interest income for the six months ended June 30, 2026 and 2025, respectively:
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For the Six Months Ended
June 30,
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Change
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(dollars in thousands)
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2026
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2025
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$
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%
​
Interest Income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Loans held for sale
​ ​ ​ $ 15,003 ​ ​ ​ ​ $ 14,389 ​ ​ ​ ​ $ 614 ​ ​ ​ ​ ​ 4.27% ​ ​
Loans held for investment
​ ​ ​ ​ 63,712 ​ ​ ​ ​ ​ 56,094 ​ ​ ​ ​ ​ 7,618 ​ ​ ​ ​ ​ 13.58 ​ ​
Investment securities
​ ​ ​ ​ 2,247 ​ ​ ​ ​ ​ 2,018 ​ ​ ​ ​ ​ 229 ​ ​ ​ ​ ​ 11.35 ​ ​
Other interest income
​ ​ ​ ​ 3,729 ​ ​ ​ ​ ​ 4,821 ​ ​ ​ ​ ​ (1,092) ​ ​ ​ ​ ​    (22.65) ​ ​
Total interest income
​ ​ ​ ​ 84,691 ​ ​ ​ ​ ​ 77,322 ​ ​ ​ ​ ​ 7,369 ​ ​ ​ ​ ​ 9.53 ​ ​
Interest Expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Deposits
​ ​ ​ ​ 25,797 ​ ​ ​ ​ ​ 26,383 ​ ​ ​ ​ ​ (586) ​ ​ ​ ​ ​ (2.22) ​ ​
FHLB advances
​ ​ ​ ​ 1,223 ​ ​ ​ ​ ​ 2,387 ​ ​ ​ ​ ​ (1,164) ​ ​ ​ ​ ​ (48.76) ​ ​
Other borrowings
​ ​ ​ ​ 1,748 ​ ​ ​ ​ ​ 1,693 ​ ​ ​ ​ ​ 55 ​ ​ ​ ​ ​ 3.25 ​ ​
Total interest expense
​ ​ ​ ​ 28,768 ​ ​ ​ ​ ​ 30,463 ​ ​ ​ ​ ​ (1,695) ​ ​ ​ ​ ​ (5.56) ​ ​
Net interest income before the provision for/ (recovery of) credit losses
​ ​ ​ $ 55,923 ​ ​ ​ ​ $ 46,859 ​ ​ ​ ​ $ 9,064 ​ ​ ​ ​ ​ 19.34% ​ ​
The following table presents, for the periods indicated, information about: (i) weighted average balances, the total dollar amount of interest income from interest-earning assets and the resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rates; (iii) net interest income; (iv) interest rate spread; and (v) net interest margin. The income and yield from non-taxable investment securities were not adjusted for tax equivalency.
 
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​ ​ ​
For the Six Months Ended
​
​ ​ ​
June 30, 2026
​ ​
June 30, 2025
​
(dollars in thousands)
​ ​
Average
Balance
​ ​
Interest and
Fees
​ ​
Yield /​
Rate
​ ​
Average
Balance
​ ​
Interest and
Fees
​ ​
Yield /​
Rate
​
Earning Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest bearing deposits with banks
​ ​ ​ $ 161,578 ​ ​ ​ ​ $ 2,766 ​ ​ ​ ​ ​  3.45% ​ ​ ​ ​ $ 132,328 ​ ​ ​ ​ ​ 2,932 ​ ​ ​ ​ ​  4.47% ​ ​
Federal funds sold and other investments
​ ​ ​ ​ 47,683 ​ ​ ​ ​ ​ 963 ​ ​ ​ ​ ​ 4.07 ​ ​ ​ ​ ​ 80,837 ​ ​ ​ ​ ​ 1,889 ​ ​ ​ ​ ​ 4.71 ​ ​
Securities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
U.S. Treasury/agency securities
​ ​ ​ ​ 14,926 ​ ​ ​ ​ ​ 317 ​ ​ ​ ​ ​ 4.25 ​ ​ ​ ​ ​ 45,831 ​ ​ ​ ​ ​ 1,011 ​ ​ ​ ​ ​ 4.41 ​ ​
Mortgage backed securities
​ ​ ​ ​ 85,663 ​ ​ ​ ​ ​ 1,663 ​ ​ ​ ​ ​ 3.88 ​ ​ ​ ​ ​ 47,191 ​ ​ ​ ​ ​ 799 ​ ​ ​ ​ ​ 3.39 ​ ​
All other securities
​ ​ ​ ​ 12,402 ​ ​ ​ ​ ​ 267 ​ ​ ​ ​ ​ 4.31 ​ ​ ​ ​ ​ 10,222 ​ ​ ​ ​ ​ 208 ​ ​ ​ ​ ​ 4.07 ​ ​
Total securities (cost basis)
​ ​ ​ $ 112,991 ​ ​ ​ ​ $ 2,247 ​ ​ ​ ​ ​ 3.98% ​ ​ ​ ​ $ 103,244 ​ ​ ​ ​ $ 2,018 ​ ​ ​ ​ ​ 3.91% ​ ​
Loans
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Single family residential
​ ​ ​ ​ 287,794 ​ ​ ​ ​ ​ 7,835 ​ ​ ​ ​ ​ 5.44% ​ ​ ​ ​ ​ 249,990 ​ ​ ​ ​ ​ 7,234 ​ ​ ​ ​ ​ 5.79% ​ ​
Other real estate loans
​ ​ ​ ​ 1,045,949 ​ ​ ​ ​ ​ 38,885 ​ ​ ​ ​ ​ 7.44 ​ ​ ​ ​ ​ 798,982 ​ ​ ​ ​ ​ 29,845 ​ ​ ​ ​ ​ 7.47 ​ ​
Commercial & financial loans
​ ​ ​ ​ 417,257 ​ ​ ​ ​ ​ 15,298 ​ ​ ​ ​ ​ 7.33 ​ ​ ​ ​ ​ 465,609 ​ ​ ​ ​ ​ 17,520 ​ ​ ​ ​ ​ 7.53 ​ ​
Consumer loans
​ ​ ​ ​ 51,428 ​ ​ ​ ​ ​ 1,694 ​ ​ ​ ​ ​ 6.59 ​ ​ ​ ​ ​ 43,840 ​ ​ ​ ​ ​ 1,495 ​ ​ ​ ​ ​ 6.82 ​ ​
Loans held for sale
​ ​ ​ ​ 460,994 ​ ​ ​ ​ ​ 15,003 ​ ​ ​ ​ ​ 6.51 ​ ​ ​ ​ ​ 390,935 ​ ​ ​ ​ ​ 14,389 ​ ​ ​ ​ ​ 7.36 ​ ​
Total loans
​ ​ ​ $ 2,263,422 ​ ​ ​ ​ $ 78,716 ​ ​ ​ ​ ​ 6.96% ​ ​ ​ ​ $ 1,949,356 ​ ​ ​ ​ $ 70,483 ​ ​ ​ ​ ​ 7.23% ​ ​
Total earning assets
​ ​ ​ $ 2,585,674 ​ ​ ​ ​ $ 84,691 ​ ​ ​ ​ ​ 6.55% ​ ​ ​ ​ $ 2,265,765 ​ ​ ​ ​ $ 77,322 ​ ​ ​ ​ ​ 6.83% ​ ​
Noninterest-earning assets
​ ​ ​ ​ 99,138 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 99,404 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total assets
​ ​ ​ $ 2,684,812 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 2,365,169 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest Bearing Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Demand deposits – interest bearing
​ ​ ​ $ 302,298 ​ ​ ​ ​ $ 2,478 ​ ​ ​ ​ ​ 1.65% ​ ​ ​ ​ $ 264,032 ​ ​ ​ ​ $ 2,669 ​ ​ ​ ​ ​ 2.04% ​ ​
Savings/Money market
​ ​ ​ ​ 701,855 ​ ​ ​ ​ ​ 10,035 ​ ​ ​ ​ ​ 2.88 ​ ​ ​ ​ ​ 603,881 ​ ​ ​ ​ ​ 9,591 ​ ​ ​ ​ ​ 3.20 ​ ​
Time deposits
​ ​ ​ ​ 682,796 ​ ​ ​ ​ ​ 13,284 ​ ​ ​ ​ ​ 3.92 ​ ​ ​ ​ ​ 645,471 ​ ​ ​ ​ ​ 14,123 ​ ​ ​ ​ ​ 4.41 ​ ​
Total interest-bearing deposits
​ ​ ​ $ 1,686,949 ​ ​ ​ ​ $ 25,797 ​ ​ ​ ​ ​ 3.08 ​ ​ ​ ​ $ 1,513,384 ​ ​ ​ ​ $ 26,383 ​ ​ ​ ​ ​ 3.52 ​ ​
FHLB advances
​ ​ ​ ​ 63,323 ​ ​ ​ ​ ​ 1,223 ​ ​ ​ ​ ​ 3.87 ​ ​ ​ ​ ​ 103,994 ​ ​ ​ ​ ​ 2,387 ​ ​ ​ ​ ​ 4.59 ​ ​
Other borrowed funds
​ ​ ​ ​ 73,365 ​ ​ ​ ​ ​ 1,748 ​ ​ ​ ​ ​ 4.76 ​ ​ ​ ​ ​ 68,461 ​ ​ ​ ​ ​ 1,693 ​ ​ ​ ​ ​ 4.95 ​ ​
Total interest-bearing liabilities
​ ​ ​ $ 1,823,637 ​ ​ ​ ​ $ 28,768 ​ ​ ​ ​ ​ 3.18% ​ ​ ​ ​ $ 1,685,839 ​ ​ ​ ​ $ 30,463 ​ ​ ​ ​ ​ 3.64% ​ ​
Noninterest Bearing Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Noninterest bearing deposits
​ ​ ​ $ 582,641 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 441,312 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Other noninterest-bearing liabilities
​ ​ ​ ​ 59,230 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 61,375 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total noninterest-bearing liabilities
​ ​ ​ $ 641,871 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 502,687 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Shareholders’ equity
​ ​ ​ ​ 219,304 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 176,643 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total liabilities and shareholders’ equity
​ ​ ​ $ 2,684,812 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 2,365,169 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net interest income
​ ​ ​ ​ ​ ​ ​ ​ ​ $ 55,923 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 46,859 ​ ​ ​ ​ ​ ​ ​ ​
Net interest spread
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3.37% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3.19% ​ ​
Net interest margin
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4.36% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4.17% ​ ​
Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-earning assets and interest-bearing liabilities, as well as changes in average interest rates. The following table sets forth the effects of changing interest rates and volumes on our net interest income during the periods indicated. The information is provided with respect to (i) effects on interest income attributable to changes in volume (change in volume multiplied by prior rate) and (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume). Changes applicable to both volume and rate have been allocated to rate.
 
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​ ​ ​
For the Six Months Ended June 30, 2026
Compared to the
Six Months Ended June 30, 2025
Increase (Decrease) Due to Change in:
​
(dollars in thousands)
​ ​
Volume
​ ​
Yield/Rate
​ ​
Total
Change
​
Earning Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest bearing deposits with banks
​ ​ ​ $ 648 ​ ​ ​ ​ $ (815) ​ ​ ​ ​ $ (167) ​ ​
Federal funds sold and other investments
​ ​ ​ ​ (775) ​ ​ ​ ​ ​ (151) ​ ​ ​ ​ ​ (926) ​ ​
Securities
​ ​ ​ ​ 14 ​ ​ ​ ​ ​ 215 ​ ​ ​ ​ ​ 229 ​ ​
Loans
​ ​ ​ ​ 11,244 ​ ​ ​ ​ ​ (3,011) ​ ​ ​ ​ ​ 8,233 ​ ​
Total earning assets
​ ​ ​ $ 11,131 ​ ​ ​ ​ $ (3,762) ​ ​ ​ ​ $ 7,369 ​ ​
Interest-Bearing Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Demand deposits
​ ​ ​ $ 387 ​ ​ ​ ​ $ (578) ​ ​ ​ ​ $ (191) ​ ​
Savings/Money market deposits
​ ​ ​ ​ 1,556 ​ ​ ​ ​ ​ (1,112) ​ ​ ​ ​ ​ 444 ​ ​
Time deposits
​ ​ ​ ​ 817 ​ ​ ​ ​ ​ (1,656) ​ ​ ​ ​ ​ (839) ​ ​
Total interest-bearing deposits
​ ​ ​ $ 2,760 ​ ​ ​ ​ $ (3,346) ​ ​ ​ ​ $ (586) ​ ​
Borrowings
​ ​ ​ ​ (806) ​ ​ ​ ​ ​ (303) ​ ​ ​ ​ ​ (1,109) ​ ​
Total interest-bearing liabilities
​ ​ ​ $ 1,954 ​ ​ ​ ​ $ (3,649) ​ ​ ​ ​ $ (1,695) ​ ​
Net interest income
​ ​ ​ $ 9,177 ​ ​ ​ ​ $ (113) ​ ​ ​ ​ $ 9,064 ​ ​
Net interest income for the six months ended June 30, 2026 was $55.9 million compared to $46.9 million for the six months ended June 30, 2025, respectively, an increase of $9.1 million, or 19.3%. The increase in net interest income was primarily the result of a $314.1 million increase in average outstanding loans, driven by a combination of organic loan growth and the impact of acquisitions, as well as growth in average earning assets that outpaced growth in interest-bearing liabilities.
Total interest income for the six months ended June 30, 2026 was $84.7 million compared to $77.3 million for the six months ended June 30, 2025, an increase of $7.4 million, or 9.5%. The increase during this period was primarily attributable to an increase in average interest earning assets of $319.9 million.
Interest income on investment securities was $2.2 million for the six months ended June 30, 2026, compared to $2.0 million for the six months ended June 30, 2025. The increase was specifically due to an increase of $9.7 million of average balances in investment securities as compared to the same period in 2025. Interest and fees on loans were $78.7 million for the six months ended June 30, 2026, compared to $70.5 million for the six months ended June 30, 2025, an increase of $8.2 million, or 11.7%. The increase was attributable to the overall growth in average loans outstanding of $314.1 million, partially offset by a decline in the overall yield on loans of 27 basis points.
Interest expense for the six months ended June 30, 2026 was $28.8 million compared to $30.5 million for the six months ended June 30, 2025. The decrease over the periods was mainly due to the mix in funding as the Company relied less on higher-cost wholesale funds while benefitting from increases in lower rate deposits. Interest expense on deposits decreased approximately $0.6 million to approximately $25.8 million for the six months ended June 30, 2026 from $26.4 million for the six months ended June 30, 2025. Average interest-bearing deposits increased $173.6 million over the period; however, this increase was offset by a decline in the average interest rate of 44 bps as the Company continued its focus on managing deposit costs. Average borrowings outstanding, excluding federal funds purchased, decreased by approximately $35.8 million, or 20.7%, for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, while interest expense on borrowings decreased by $1.1 million. The decrease was due to a change in the mix of funding that occurred in 2026 as average deposits increased $314.9 million and the Company relied less on borrowings for funding purposes.
Net interest margin for the six months ended June 30, 2026 was 4.36% compared to 4.17% for the six months ended June 30, 2025. Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes on both volume and mix and pricing decisions, and external factors include changes in market interest rates, competition and the shape of the interest rate yield curve.
Provision for Credit Losses
The provision for credit losses is based on management’s assessment of the adequacy of our allowance for credit losses. Factors impacting the provision include inherent risk characteristics in our loan portfolio, the level of nonperforming loans and net charge-offs, both current and historic local economic and credit conditions, the direction of the change in collateral values,
 
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and the funding probability on unfunded lending commitments. The provision for credit losses is charged against earnings to maintain the allowance for credit losses at a level that reflects management’s current estimate of expected credit losses over the contractual lives of the applicable financial assets, which reflects management’s best estimate of probable losses inherent in our loan portfolio at the balance sheet date.
Provision for credit losses for the six months ended June 30, 2026 was $2.2 million compared to $3.2 million for the six months ended June 30, 2025, a decrease of approximately $1.0 million. The decrease was specifically related to the additional provision of $3.1 million made during the six months ended June 30, 2025 in connection with the Georgia Primary acquisition transaction. Our allowance for credit losses as a percentage of gross LHFI at June 30, 2026 and 2025 was 1.39% and 1.45%, respectively.
The Company maintains an ACL for credit losses on unfunded commercial lending commitments and letters of credit to consider the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the ACL for loans, modified to consider the probability of a drawdown on the commitment. The ACL on unfunded loan commitments is classified as a liability on the consolidated balance sheets within other liabilities, while the corresponding provision for these credit losses is recorded as a component of provision for credit losses. The reserve for unfunded loan commitments was $2.1 million as of June 30, 2026 and $986 thousand as of December 31, 2025. The increase in unfunded commitment reserves was driven primarily by an increase in the expected funding rate on loans with unfunded commitments. The bank periodically completes funding rate studies that may lead to changes in the underlying assumption for funding rates on loans with unfunded commitments.
Noninterest Income
Noninterest income for the six months ended June 30, 2026 was $6.4 million and increased by approximately $0.2 million, or 3.7%, as compared to the six months ended June 30, 2025. The increase was primarily due to higher revenue from mortgage banking activity due to the retail mortgage division that began originating loans in late second quarter of 2025.
The following table sets forth the various components of our noninterest income for the periods indicated:
​ ​ ​
For the Six Months Ended
June 30,
​ ​
Change
​
(dollars in thousands)
​ ​
2026
​ ​
2025
​ ​
$
​ ​
%
​
Noninterest Income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Service charges on deposit accounts
​ ​ ​ $ 1,419 ​ ​ ​ ​ $ 1,005 ​ ​ ​ ​ $ 414 ​ ​ ​ ​ ​ 41.19% ​ ​
Mortgage banking activity
​ ​ ​ ​ 2,360 ​ ​ ​ ​ ​ 1,025 ​ ​ ​ ​ ​ 1,335 ​ ​ ​ ​ ​ 130.24 ​ ​
BOLI income
​ ​ ​ ​ 462 ​ ​ ​ ​ ​ 433 ​ ​ ​ ​ ​ 29 ​ ​ ​ ​ ​ 6.70 ​ ​
Gain on sale of loans
​ ​ ​ ​ 908 ​ ​ ​ ​ ​ 1,388 ​ ​ ​ ​ ​ (480) ​ ​ ​ ​ ​ (34.58) ​ ​
Other noninterest income
​ ​ ​ ​ 1,288 ​ ​ ​ ​ ​ 2,357 ​ ​ ​ ​ ​ (1,069) ​ ​ ​ ​ ​ (45.35) ​ ​
Total noninterest income
​ ​ ​ $ 6,437 ​ ​ ​ ​ $ 6,208 ​ ​ ​ ​ $ 229 ​ ​ ​ ​ ​ 3.69% ​ ​
Service charges on deposit accounts increased by $0.4 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was attributable to a higher transaction volume from our treasury services customers.
Mortgage banking related income increased by $1.3 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was due to the origination of loans from the Bank’s retail mortgage operation, which commenced during the latter half of the second quarter of 2025, compared to a full six months of operations in 2026.
BOLI income was approximately $0.5 million for the six months ended June 30, 2026 compared to $0.4 million for the six months ended June 30, 2025.
Net gain on sale of loans was $0.9 million for the six months ended June 30, 2026 compared to $1.4 million for the six months ended June 30, 2025. The decline in the six months ended June 30, 2026 was due to the volume of loans sold, which decreased by $14.3 million as compared to the prior period, due in part to increased competition in home equity line of credit (“HELOC”) originations.
Other noninterest income decreased by $1.1 million to approximately $1.3 million for the six months ended June 30, 2026 compared to $2.4 million for the six months ended June 30, 2025. The decrease was due to BOLI death benefits of $1.0 million received in 2025 compared to benefits received of $0.5 million in 2026.
 
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Noninterest Expense
Noninterest expense for the six months ended June 30, 2026 was $42.2 million, as compared to noninterest expense of $40.8 million for the six months ended June 30, 2025, representing an increase of approximately $1.4 million, or 3.4% from the six months ended June 30, 2025.
The following table sets forth the major components of our noninterest expense for the six months ended June 30, 2026 and 2025, respectively, as well as changes between periods:
​ ​ ​
For the Six Months Ended
June 30,
​ ​
Change
​
(dollars in thousands)
​ ​
2026
​ ​
2025
​ ​
$
​ ​
%
​
Noninterest Expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Salaries and employee benefits
​ ​ ​ $ 24,901 ​ ​ ​ ​ $ 22,058 ​ ​ ​ ​ $ 2,843 ​ ​ ​ ​ ​ 12.89% ​ ​
Occupancy and equipment
​ ​ ​ ​ 4,000 ​ ​ ​ ​ ​ 4,186 ​ ​ ​ ​ ​ (186) ​ ​ ​ ​ ​ (4.44) ​ ​
FDIC insurance and regulatory assessment
​ ​ ​ ​ 1,050 ​ ​ ​ ​ ​ 1,099 ​ ​ ​ ​ ​ (49) ​ ​ ​ ​ ​ (4.46) ​ ​
Other professional services
​ ​ ​ ​ 1,803 ​ ​ ​ ​ ​ 1,516 ​ ​ ​ ​ ​ 287 ​ ​ ​ ​ ​ 18.93 ​ ​
Communications, data processing and equipment
​ ​ ​ ​ 3,139 ​ ​ ​ ​ ​ 2,979 ​ ​ ​ ​ ​ 160 ​ ​ ​ ​ ​ 5.37 ​ ​
Merger and conversion related expenses
​ ​ ​ ​ 3,523 ​ ​ ​ ​ ​ 6,553 ​ ​ ​ ​ ​ (3,030) ​ ​ ​ ​ ​ (46.24) ​ ​
Other noninterest expense
​ ​ ​ ​ 3,764 ​ ​ ​ ​ ​ 2,409 ​ ​ ​ ​ ​  (1,355) ​ ​ ​ ​ ​ 56.25 ​ ​
Total noninterest expense
​ ​ ​ $ 42,180 ​ ​ ​ ​ $ 40,800 ​ ​ ​ ​ $ 1,380 ​ ​ ​ ​ ​ 3.38% ​ ​
Salaries and employee benefits expense for the six months ended June 30, 2026 was $24.9 million compared to $22.1 million for the six months ended June 30, 2025, an increase of $2.8 million, or 12.9%. The additional expenses were due to increased staffing resulting from the Georgia Primary transaction in early 2025 along with launching a retail mortgage operation late in the second quarter of 2025. The number of full-time equivalent employees was 275 as of June 30, 2026 compared to 228 as of June 30, 2025.
Occupancy and equipment expense for the six months ended June 30, 2026 was $4.0 million, compared to $4.2 million for the six months ended June 30, 2025, a decrease of $0.2 million, or 4.4%. The decrease is attributable to additional sublease income received during the six month period ending June 30, 2026.
FDIC insurance and regulatory assessment expense for the six months ended June 30, 2026 was $1.0 million compared to $1.1 million for the six months ended June 30, 2025, a decrease of $49 thousand, or 4.4%.
Other professional services expense for the six months ended June 30, 2026 was $1.8 million compared to $1.5 million for the six months ended June 30, 2025, an increase of approximately $0.3 million or 18.9%. The increase was attributable to additional audit and accounting fees related to enhanced scopes and engagements in connection with our intention to register our common stock with the SEC. Included in other professional services expense for the six months ended June 30, 2026 and 2025 were directors’ fees of approximately $330 thousand and $315 thousand in each period, respectively.
Communications, data processing and equipment expense for the six months ended June 30, 2026 was $3.1 million compared to $3.0 million for the six months ended June 30, 2025, an increase of $0.2 million, or 5.4%. The increase is directly related to additional fees due to increased transaction costs associated with the Company’s core technology systems.
Merger and conversion related expenses of $3.5 million were incurred during the six months ended June 30, 2026 compared to $6.6 million for the six months ended June 30, 2025. The decrease in the six months ended June 30, 2026 was due to the fact that the Tandem transaction was finalized in June 2026 and there are additional expenses expected to be recognized during the remainder of 2026 as we continue with conversion and integration activities related to the acquisition. Management expects the total merger and conversion related expenses for the Tandem merger will be less than the Georgia Primary merger.
Other expenses for the six months ended June 30, 2026 were $3.8 million compared to $2.4 million for the six months ended June 30, 2025, an increase of $1.4 million, or 56.2%. The increase in 2026 was mainly due to the increased activity related to the Georgia Primary and Tandem mergers as advertising and marketing increased $158 thousand, taxes and licenses increased $188 thousand and the core deposit intangible amortization increased by $146 thousand. As it relates to expenses associated with volume increases within the loan portfolio, both held for investment and held for sale, postage, printing and supplies increased by $215 thousand and loan related costs by $451 thousand.
 
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Income Tax Expense
Income tax expense for the six months ended June 30, 2026 and 2025 was $4.7 million and $2.4 million, respectively. Effective tax rates were 26.0% and 26.0% for the six months ended June 30, 2026 and 2025, respectively. We had a net deferred tax asset of $5.0 million and $3.8 million at June 30, 2026 and 2025, respectively.
Impact of Tandem Acquisition
The completion of the Tandem acquisition on June 1, 2026 impacted our results of operations and financial condition for the six months ended June 30, 2026. At acquisition, based on preliminary fair value adjustments, Tandem contributed approximately $240.1 million of loans held for investment, $254.0 million of deposits, and $321.3 million of total assets. As a result, certain changes in net interest income, noninterest income, noninterest expense, loans and deposits reflected in the comparisons above were attributable to acquired balances and operations associated with Tandem, while the remainder reflected organic growth generated by our legacy operations. Where practicable, we have quantified the impact of the Tandem acquisition separately from organic growth. Noninterest expenses in particular increased period-over-period, reflecting a combination of one-time merger and conversion related expenses that are primarily recognized during the second quarter of 2026. We believe the underlying organic growth trends identified and discussed above are reasonably expected to continue, however no assurance can be given that these trends will continue and actual results may be adversely affected by the factors described in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.”
Results of Operations — Comparison of Results of Operations for the Years Ended December 31, 2025 and 2024
The following discussion of our results of operations compares the years ended December 31, 2025 and 2024. We reported net income for the year ended December 31, 2025 of $22.1 million compared to net income of $8.5 million for the year ended December 31, 2024. The increase of $13.6 million was primarily attributable to organic growth in LHFI, a reduction in the provision for credit losses and the merger with Georgia Primary.
Net Interest Income
Net interest income increased by $30.7 million, or 42.8%, to $102.4 million for the year ended December 31, 2025 from $71.7 million for the year ended December 31, 2024. The increase in net interest income during 2025 reflected both the impact of the Georgia Primary acquisition and organic balance sheet growth. Acquired loans and deposits from Georgia Primary contributed to the increase in average earning assets and funding balances during the year. The remainder of the increase was driven by organic loan growth and growth in noninterest-bearing and core deposit balances. Management believes the underlying organic growth in earning assets and core customer relationships remains favorable; however, future net interest income will continue to be affected by interest rate levels, funding costs and competitive conditions. Our net interest margin was 4.26% for the year ended December 31, 2025 compared to 3.97% for the year ended December 31, 2024. The increase in margin was primarily due to our ability to maintain loan pricing and decrease deposit pricing in a declining rate environment.
The following table discloses the components of net interest income for the years ended December 31, 2025 and 2024:
​ ​ ​
For the
Years Ended
December 31,
​ ​
Change
​
(dollars in thousands)
​ ​
2025
​ ​
2024
​ ​
$
​ ​
%
​
Interest Income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Loans held for sale
​ ​ ​ $ 31,880 ​ ​ ​ ​ $ 26,024 ​ ​ ​ ​ $ 5,856 ​ ​ ​ ​ ​ 22.5% ​ ​
Loans held for investment
​ ​ ​ ​ 119,743 ​ ​ ​ ​ ​ 92,049 ​ ​ ​ ​ ​ 27,694 ​ ​ ​ ​ ​ 30.1% ​ ​
Investment securities
​ ​ ​ ​ 4,150 ​ ​ ​ ​ ​ 3,505 ​ ​ ​ ​ ​ 645 ​ ​ ​ ​ ​    18.4% ​ ​
Other interest income
​ ​ ​ ​ 9,099 ​ ​ ​ ​ ​ 8,834 ​ ​ ​ ​ ​ 265 ​ ​ ​ ​ ​ 3.0% ​ ​
Total interest income
​ ​ ​ $ 164,872 ​ ​ ​ ​ $ 130,412 ​ ​ ​ ​ $ 34,460 ​ ​ ​ ​ ​ 26.4% ​ ​
Interest Expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Deposits
​ ​ ​ $ 53,971 ​ ​ ​ ​ $ 50,981 ​ ​ ​ ​ $ 2,990 ​ ​ ​ ​ ​ 5.9% ​ ​
FHLB advances
​ ​ ​ ​ 5,078 ​ ​ ​ ​ ​ 4,645 ​ ​ ​ ​ ​ 433 ​ ​ ​ ​ ​ 9.3% ​ ​
Other borrowings
​ ​ ​ ​ 3,445 ​ ​ ​ ​ ​ 3,102 ​ ​ ​ ​ ​ 343 ​ ​ ​ ​ ​ 11.1% ​ ​
Total interest expense
​ ​ ​ $ 62,494 ​ ​ ​ ​ $ 58,728 ​ ​ ​ ​ $ 3,766 ​ ​ ​ ​ ​ 6.4% ​ ​
Net interest income before the provision for/(recovery of) credit losses
​ ​ ​ $ 102,378 ​ ​ ​ ​ $ 71,684 ​ ​ ​ ​ $ 30,694 ​ ​ ​ ​ ​ 42.8% ​ ​
 
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The following table presents, for the periods indicated, information about: (i) weighted average balances, the total dollar amount of interest income from interest-earning assets and the resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest-bearing liabilities and the resultant average rates; (iii) net interest income; (iv) interest rate spread; and (v) net interest margin. The income and yield from non-taxable investment securities were not adjusted for tax equivalency.
​ ​ ​
For the Years Ended December 31,
​
​ ​ ​
2025
​ ​
2024
​
(dollars in thousands)
​ ​
Average
Balance
​ ​
Interest and
Fees
​ ​
Yield /​
Rate
​ ​
Average
Balance
​ ​
Interest and
Fees
​ ​
Yield /​
Rate
​
Earning Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest bearing deposits with
banks
​ ​ ​ $ 143,171 ​ ​ ​ ​ $ 6,013 ​ ​ ​ ​ ​  4.20% ​ ​ ​ ​ $ 86,386 ​ ​ ​ ​ ​ 4,590 ​ ​ ​ ​ ​  5.31% ​ ​
Federal funds sold and other investments
​ ​ ​ ​ 66,248 ​ ​ ​ ​ ​ 3,086 ​ ​ ​ ​ ​ 4.66 ​ ​ ​ ​ ​ 80,404 ​ ​ ​ ​ ​ 4,244 ​ ​ ​ ​ ​ 5.28 ​ ​
Securities
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
U.S. Treasury/agency securities
​ ​ ​ ​ 38,764 ​ ​ ​ ​ ​ 1,723 ​ ​ ​ ​ ​ 4.44 ​ ​ ​ ​ ​ 47,693 ​ ​ ​ ​ ​ 2,000 ​ ​ ​ ​ ​ 4.19 ​ ​
Mortgage backed securities
​ ​ ​ ​ 52,600 ​ ​ ​ ​ ​ 1,965 ​ ​ ​ ​ ​ 3.74 ​ ​ ​ ​ ​ 41,916 ​ ​ ​ ​ ​ 1,321 ​ ​ ​ ​ ​ 3.15 ​ ​
All other securities
​ ​ ​ ​ 11,081 ​ ​ ​ ​ ​ 462 ​ ​ ​ ​ ​ 4.17 ​ ​ ​ ​ ​ 4,641 ​ ​ ​ ​ ​ 184 ​ ​ ​ ​ ​ 3.96 ​ ​
Total securities (cost basis)
​ ​ ​ $ 102,445 ​ ​ ​ ​ $ 4,150 ​ ​ ​ ​ ​ 4.05% ​ ​ ​ ​ $ 94,250 ​ ​ ​ ​ $ 3,505 ​ ​ ​ ​ ​ 3.72% ​ ​
Loans
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Single family residential
​ ​ ​ ​ 255,876 ​ ​ ​ ​ ​ 14,767 ​ ​ ​ ​ ​ 5.77% ​ ​ ​ ​ ​ 197,692 ​ ​ ​ ​ ​ 10,546 ​ ​ ​ ​ ​ 5.33% ​ ​
Other real estate loans
​ ​ ​ ​ 887,473 ​ ​ ​ ​ ​ 67,118 ​ ​ ​ ​ ​ 7.56 ​ ​ ​ ​ ​ 641,034 ​ ​ ​ ​ ​ 50,394 ​ ​ ​ ​ ​ 7.86 ​ ​
Commercial & financial loans
​ ​ ​ ​ 465,370 ​ ​ ​ ​ ​ 34,876 ​ ​ ​ ​ ​ 7.49 ​ ​ ​ ​ ​ 354,313 ​ ​ ​ ​ ​ 28,485 ​ ​ ​ ​ ​ 8.04 ​ ​
Consumer loans
​ ​ ​ ​ 44,966 ​ ​ ​ ​ ​ 2,982 ​ ​ ​ ​ ​ 6.63 ​ ​ ​ ​ ​ 35,530 ​ ​ ​ ​ ​ 2,624 ​ ​ ​ ​ ​ 7.39 ​ ​
Loans held for sale
​ ​ ​ ​ 435,242 ​ ​ ​ ​ ​ 31,880 ​ ​ ​ ​ ​ 7.32 ​ ​ ​ ​ ​ 314,797 ​ ​ ​ ​ ​ 26,024 ​ ​ ​ ​ ​ 8.27 ​ ​
Total loans
​ ​ ​ $ 2,088,927 ​ ​ ​ ​ $ 151,623 ​ ​ ​ ​ ​ 7.26% ​ ​ ​ ​ $ 1,546,366 ​ ​ ​ ​ $ 118,073 ​ ​ ​ ​ ​ 7.65% ​ ​
Total earning assets
​ ​ ​ $ 2,400,791 ​ ​ ​ ​ $ 164,872 ​ ​ ​ ​ ​ 6.87% ​ ​ ​ ​ $ 1,804,406 ​ ​ ​ ​ $ 130,412 ​ ​ ​ ​ ​ 7.23% ​ ​
Noninterest-earning assets
​ ​ ​ ​ 95,945 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 82,462 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total assets
​ ​ ​ $ 2,496,736 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 1,886,868 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest Bearing Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Demand deposits – interest
bearing
​ ​ ​ $ 270,719 ​ ​ ​ ​ $ 5,251 ​ ​ ​ ​ ​ 1.94% ​ ​ ​ ​ $ 179,804 ​ ​ ​ ​ $ 3,270 ​ ​ ​ ​ ​ 1.82% ​ ​
Savings/Money market
​ ​ ​ ​ 632,313 ​ ​ ​ ​ ​ 19,795 ​ ​ ​ ​ ​ 3.13 ​ ​ ​ ​ ​ 544,009 ​ ​ ​ ​ ​ 20,187 ​ ​ ​ ​ ​ 3.71 ​ ​
Time deposits
​ ​ ​ ​ 674,663 ​ ​ ​ ​ ​ 28,925 ​ ​ ​ ​ ​ 4.29 ​ ​ ​ ​ ​ 551,863 ​ ​ ​ ​ ​ 27,524 ​ ​ ​ ​ ​ 4.99 ​ ​
Total interest-bearing deposits
​ ​ ​ $ 1,577,695 ​ ​ ​ ​ $ 53,971 ​ ​ ​ ​ ​ 3.42 ​ ​ ​ ​ $ 1,275,676 ​ ​ ​ ​ $ 50,981 ​ ​ ​ ​ ​ 4.00 ​ ​
FHLB advances
​ ​ ​ ​ 111,638 ​ ​ ​ ​ ​ 5,078 ​ ​ ​ ​ ​ 4.55 ​ ​ ​ ​ ​ 86,336 ​ ​ ​ ​ ​ 4,645 ​ ​ ​ ​ ​ 5.38 ​ ​
Other borrowed funds
​ ​ ​ ​ 69,811 ​ ​ ​ ​ ​ 3,445 ​ ​ ​ ​ ​ 4.93 ​ ​ ​ ​ ​ 62,565 ​ ​ ​ ​ ​ 3,102 ​ ​ ​ ​ ​ 4.96 ​ ​
Total interest-bearing
liabilities
​ ​ ​ $ 1,759,144 ​ ​ ​ ​ $ 62,494 ​ ​ ​ ​ ​ 3.55% ​ ​ ​ ​ $ 1,424,577 ​ ​ ​ ​ $ 58,728 ​ ​ ​ ​ ​ 4.12% ​ ​
Noninterest Bearing Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Noninterest bearing deposits
​ ​ ​ $ 491,343 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 254,638 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Other noninterest-bearing
liabilities
​ ​ ​ ​ 61,659 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 58,997 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total noninterest-bearing
liabilities
​ ​ ​ $ 553,002 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 313,635 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Shareholders’ equity
​ ​ ​ ​ 184,590 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 148,656 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total liabilities and shareholders’ equity
​ ​ ​ $ 2,496,736 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 1,886,868 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net interest income
​ ​ ​ ​ ​ ​ ​ ​ ​ $ 102,378 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 71,684 ​ ​ ​ ​ ​ ​ ​ ​
Net interest spread
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3.32% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3.10% ​ ​
Net interest margin
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 4.26% ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 3.97% ​ ​
 
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Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest-earning assets and interest-bearing liabilities, as well as changes in average interest rates. The following tables set forth the effects of changing interest rates and volumes on our net interest income during the periods indicated. The information is provided with respect to (i) effects on interest income attributable to changes in volume (change in volume multiplied by prior rate) and (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume). Changes applicable to both volume and rate have been allocated to rate.
​ ​ ​
For the Year Ended December 31, 2025,
Compared to the Year Ended December 31, 2024
Increase (Decrease) Due to Change in:
​
(dollars in thousands)
​ ​
Volume
​ ​
Yield/Rate
​ ​
Total Change
​
Earning Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest bearing deposits with banks
​ ​ ​ $ 3,017 ​ ​ ​ ​ $ (1,594) ​ ​ ​ ​ $ 1,423 ​ ​
Federal funds sold and other investments
​ ​ ​ ​ (747) ​ ​ ​ ​ ​ (411) ​ ​ ​ ​ ​ (1,158) ​ ​
Securities
​ ​ ​ ​ 218 ​ ​ ​ ​ ​ 427 ​ ​ ​ ​ ​ 645 ​ ​
Loans
​ ​ ​ ​ 42,060 ​ ​ ​ ​ ​ (8,510) ​ ​ ​ ​ ​ 33,550 ​ ​
Total earning assets
​ ​ ​ $ 44,548 ​ ​ ​ ​ $ (10,088) ​ ​ ​ ​ $ 34,460 ​ ​
Interest-Bearing Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Demand deposits
​ ​ ​ $ 1,653 ​ ​ ​ ​ $ 328 ​ ​ ​ ​ $ 1,981 ​ ​
Savings/Money market deposits
​ ​ ​ ​ 3,277 ​ ​ ​ ​ ​ (3,669) ​ ​ ​ ​ ​ (392) ​ ​
Time deposits
​ ​ ​ ​ 6,125 ​ ​ ​ ​ ​ (4,724) ​ ​ ​ ​ ​ 1,401 ​ ​
Total interest-bearing deposits
​ ​ ​ $ 11,055 ​ ​ ​ ​ $ (8,065) ​ ​ ​ ​ $ 2,990 ​ ​
Borrowings
​ ​ ​ ​ 1,721 ​ ​ ​ ​ ​ (945) ​ ​ ​ ​ ​ 776 ​ ​
Total interest-bearing liabilities
​ ​ ​ $ 12,776 ​ ​ ​ ​ $ (9,010) ​ ​ ​ ​ $ 3,766 ​ ​
Net interest income
​ ​ ​ $ 31,772 ​ ​ ​ ​ $ (1,078) ​ ​ ​ ​ $ 30,694 ​ ​
Net interest income for the year ended December 31, 2025 was $102.4 million compared to $71.7 million for the year ended December 31, 2024, an increase of $30.7 million, or 42.8%. This increase was primarily due to an increase in the average balance of our total interest-earning assets as it outpaced the growth in average interest-bearing liabilities by $261.8 million. The increase in the average balance for the interest-earning assets was primarily due to an increase in average loans outstanding. The yield on total earning assets and interest-bearing liabilities decreased by 36 and 57 basis points, respectively, during the same period.
Total interest income for the year ended December 31, 2025 was $164.9 million compared to $130.4 million for the year ended December 31, 2024, an increase of $34.5 million, or 26.4%. This increase was primarily due to growth in the average balance of loans, partially offset by a lower average yield on total loans driven by the Georgia Primary portfolio.
Interest income on investment securities was $4.2 million for the year ended December 31, 2025 compared to $3.5 million for the year ended December 31, 2024. This increase was primarily due to the fact that the yield on investment securities increased by 33 basis points as a result of moderate repositioning of the portfolio in the first quarter of 2025. The average balance remained steady during the period. Interest and fees on loans were $151.6 million for the year ended December 31, 2025, compared to $118.1 million for the year ended December 31, 2024, an increase of $33.5 million or 28.4%. This increase was attributable primarily to approximately $255 million of LHFI acquired in the Georgia Primary merger along with increase in loans held for sale production to $2.8 billion during the year ended December 31, 2025. The yield on gross loans decreased by 39 basis points during the period.
Interest expense for the year ended December 31, 2025 was $62.5 million compared to $58.7 million for the year ended December 31, 2024. This increase was primarily attributable to an increase in overall total interest-bearing liabilities commensurate with the Company’s growth. Interest expense on deposits increased approximately $3.0 million to approximately $54.0 million for the year ended December 31, 2025 from $51.0 million for the same period of 2024. This increase is due to successfully capitalizing on market opportunities and commensurate growth in the Bank’s deposit portfolio. Average borrowings, which includes FHLB advances and other borrowed funds, outstanding, excluding federal funds purchased, increased by approximately $32.5 million, or 21.9%, from December 31, 2024 to December 31, 2025, while the average rate paid on borrowings, which includes FHLB advances and other borrowed funds, decreased by 51 basis points. The increase in average borrowings reflected the Company’s funding requirements associated with balance-sheet growth.
 
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Net interest margin for the years ended December 31, 2025 and 2024 was 4.26% and 3.97%, respectively. Net interest margin and net interest income are influenced by internal and external factors. Internal factors include balance sheet changes on both volume and mix and pricing decisions, and external factors include changes in market interest rates, competition and the shape of the interest rate yield curve. This increase in our net interest margin is primarily due to a high-yielding and growing loan book with a continued low-cost noninterest-bearing deposit base.
Provision for Credit Losses
The provision for credit losses is based on management’s assessment of the adequacy of our allowance for credit losses. Factors impacting the provision include inherent risk characteristics in our loan portfolio, the level of nonperforming loans and net charge-offs, both current and historic, local economic and credit conditions, the direction of the change in collateral values, and the funding probability on unfunded lending commitments. The provision for credit losses is charged against earnings to maintain the allowance for credit losses at a level that reflects management’s current estimate of expected credit losses over the contractual lives of the applicable financial assets, which reflects management’s best estimate of probable losses inherent in our loan portfolio at the balance sheet date.
Provision for credit losses for the year ended December 31, 2025 was $4.5 million compared to $8.3 million for the year ended December 31, 2024, a decrease of approximately $3.8 million. This decrease was primarily attributed to lower charge-offs in 2025, partially offset by less favorable modeled economic assumptions and the effect of growth in the loan portfolio. Our allowance for credit losses as a percentage of gross LHFI at December 31, 2025 and 2024 was 1.48% and 1.56%, respectively.
The Company maintains an ACL for credit losses on unfunded commercial lending commitments and letters of credit to consider the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the ACL for loans, modified to consider the probability of a drawdown on the commitment. The ACL on unfunded loan commitments is classified as a liability on the consolidated balance sheets within other liabilities, while the corresponding provision for these credit losses is recorded as a component of provision for credit losses. The reserve for unfunded loan commitments was $986 thousand as of both December 31, 2025 and 2024.
Noninterest Income
Noninterest income for the year ended December 31, 2025 was $10.3 million, an increase of $3.0 million or 41.5%, compared to $7.3 million for the year ended December 31, 2024. The increase reflected a $1.7 million increase in other noninterest income, a $1.0 million increase in service charges on deposit accounts and a $1.0 million increase in mortgage banking income, partially offset by a $0.8 million decrease in gain on sale of loans.
The following table sets forth the various components of our noninterest income for the periods indicated:
​ ​ ​
For the Years Ended
December 31,
​ ​
Change
​
(dollars in thousands)
​ ​
2025
​ ​
2024
​ ​
$
​ ​
%
​
Noninterest Income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Service charges on deposit accounts
​ ​ ​ $ 2,141 ​ ​ ​ ​ $ 1,142 ​ ​ ​ ​ $ 999 ​ ​ ​ ​ ​ 87.48% ​ ​
Mortgage banking activity
​ ​ ​ ​ 2,750 ​ ​ ​ ​ ​ 1,775 ​ ​ ​ ​ ​ 975 ​ ​ ​ ​ ​ 54.93 ​ ​
BOLI income
​ ​ ​ ​ 901 ​ ​ ​ ​ ​ 782 ​ ​ ​ ​ ​ 119 ​ ​ ​ ​ ​ 15.22 ​ ​
Gain on sale of loans
​ ​ ​ ​ 1,564 ​ ​ ​ ​ ​ 2,369 ​ ​ ​ ​ ​ (805) ​ ​ ​ ​ ​ (33.98) ​ ​
Other noninterest income
​ ​ ​ ​ 2,983 ​ ​ ​ ​ ​ 1,238 ​ ​ ​ ​ ​ 1,745 ​ ​ ​ ​ ​ 140.95 ​ ​
Total noninterest income
​ ​ ​ $ 10,339 ​ ​ ​ ​ $ 7,306 ​ ​ ​ ​ $ 3,033 ​ ​ ​ ​ ​ 41.51% ​ ​
Service charges on deposit accounts increased by $999 thousand to $2.1 million for the year ended December 31, 2025 compared to $1.1 million for the year ended December 31, 2024. These service charges are mostly comprised of ACH processing fees and wire fees with the increase driven primarily by the increase in overall ACH processing volume.
Mortgage banking related income increased by $975 thousand to approximately $2.8 million for the year ended December 31, 2025 compared to approximately $1.8 million for the year ended December 31, 2024. This increase was primarily due to higher secondary market mortgage production which is comprised primarily of activity related to the sale of consumer mortgage loans as well as loan origination fees such as closing charges, document review fees, application fees, other loan origination fees, and loan processing fees.
 
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BOLI income increased by $119 thousand to $901 thousand for the year ended December 31, 2025 compared to $782 thousand for the year ended December 31, 2024. This increase was primarily attributable to the $4.4 million of cash value of bank owned life insurance that was acquired as part of the Georgia Primary merger.
Net gain on sale of loans was $1.6 million for the year ended December 31, 2025, compared to $2.4 million for the same period ended 2024. This decrease was a result of a loss of approximately $808 thousand that was recognized in 2025 as a result of the Bank selling a small manufactured home loan portfolio.
Other noninterest income increased by $1.7 million to approximately $3.0 million for the year ended December 31, 2025 compared to $1.2 million for the year ended December 31, 2024. This increase was driven by a recognition of $1.0 million of death benefits under a BOLI policy in 2025.
Noninterest Expense
Noninterest expense for the year ended December 31, 2025 was $78.4 million compared to $59.4 million for the year ended December 31, 2024, an increase of approximately $19.0 million, or 31.9%. The increase was primarily attributable to an $8.1 million increase in salaries and employee benefits expense, $6.7 million of merger and conversion related expenses and a $1.7 million increase in communications, data processing and equipment expense. Noninterest expense growth during 2025 reflected both the inclusion of operating expenses associated with the acquired Georgia Primary franchise and organic investments in personnel, technology and business development activities. Salaries and employee benefits increased in part due to employees added through the acquisition, while other expense categories reflected growth initiatives and increased business activity within legacy operations.
The following table sets forth the major components of our noninterest expense for the years ended December 31, 2025 and 2024:
​ ​ ​
For the Years Ended
December 31,
​ ​
Change
​
(dollars in thousands)
​ ​
2025
​ ​
2024
​ ​
$
​ ​
%
​
Noninterest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Salaries and employee benefits
​ ​ ​ $ 45,922 ​ ​ ​ ​ $ 37,779 ​ ​ ​ ​ $ 8,143 ​ ​ ​ ​ ​ 21.55% ​ ​
Occupancy and equipment
​ ​ ​ ​ 8,496 ​ ​ ​ ​ ​ 8,572 ​ ​ ​ ​ ​ (76) ​ ​ ​ ​ ​ (0.89) ​ ​
FDIC insurance and regulatory assessment
​ ​ ​ ​ 2,255 ​ ​ ​ ​ ​ 1,881 ​ ​ ​ ​ ​ 374 ​ ​ ​ ​ ​ 19.88 ​ ​
Other professional services
​ ​ ​ ​ 3,207 ​ ​ ​ ​ ​ 2,882 ​ ​ ​ ​ ​ 325 ​ ​ ​ ​ ​ 11.28 ​ ​
Communications, data processing and equipment
​ ​ ​ ​ 6,121 ​ ​ ​ ​ ​ 4,402 ​ ​ ​ ​ ​ 1,719 ​ ​ ​ ​ ​ 39.05 ​ ​
Merger and conversion related expenses
​ ​ ​ ​ 6,732 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 6,732 ​ ​ ​ ​ ​ N/A ​ ​
Other noninterest expense
​ ​ ​ ​ 5,624 ​ ​ ​ ​ ​ 3,868 ​ ​ ​ ​ ​ 1,756 ​ ​ ​ ​ ​ 45.40 ​ ​
Total noninterest expense
​ ​ ​ $ 78,357 ​ ​ ​ ​ $ 59,384 ​ ​ ​ ​ $ 18,973 ​ ​ ​ ​ ​ 31.95% ​ ​
Salaries and employee benefits expense for the year ended December 31, 2025 was $45.9 million compared to $37.8 million for the year ended December 31, 2024, an increase of $8.1 million, or 21.6%. This increase was attributable to the Georgia Primary merger increasing our overall headcount while hiring new employees with skills and experience necessary to support our strategic goals and annual salary adjustments. The number of full-time equivalent employees was 229 for the year ended December 31, 2025 compared to 189 for the year ended December 31, 2024.
Occupancy and equipment expense for the year ended December 31, 2025 was $8.5 million compared to $8.6 million for the year ended December 31, 2024, a decrease of $76 thousand, or 0.9%. This minor decrease was a result of stable rental costs, property taxes and depreciation, and upkeep related to the properties.
FDIC insurance and regulatory assessment expense for the year ended December 31, 2025 was $2.3 million compared to $1.9 million for the year ended December 31, 2024, an increase of $374 thousand, or 19.9%. This increase was primarily attributable to increases in capital and changes in asset mix and asset growth rates from 2024 to 2025.
Other professional services expense for the year ended December 31, 2025 was $3.2 million compared to $2.9 million for the year ended December 31, 2024, an increase of $325 thousand, or 11.3%. This increase was primarily in general corporate legal fees and outside professional services. Included in other professional services expense for the years ended December 31, 2025 and 2024 were directors’ fees of approximately $600 thousand in each fiscal year.
 
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Communications, data processing and equipment expense for the year ended December 31, 2025 was $6.1 million compared to $4.4 million for the year ended December 31, 2024, an increase of $1.7 million, or 39.1%. This increase was primarily attributable to higher marketing and advertising expense during the period and higher data processing expense associated with the Company’s growth.
Merger and conversion related expenses of $6.7 million was incurred during the year ended December 31, 2025 in connection with the merger with Georgia Primary. See “Business — Recent Acquisitions” for more information. There was not a comparable or equivalent expense for the year ended December 31, 2024.
Other expenses for the year ended December 31, 2025 were $5.6 million compared to $3.9 million for the year ended December 31, 2024, an increase of $1.8 million, or 45.4%. This increase was primarily attributable to the Georgia Primary merger which included the recognition of $514 thousand from core deposit intangible amortization.
Income Tax Expense
Income tax expense for the years ended December 31, 2025 and 2024 was $7.8 million and $2.8 million, respectively. Effective tax rates were 26.0% and 25.1% for the years ended December 31, 2025 and 2024, respectively, due to strategic transactions we undertook in 2025. We had a net deferred tax asset of $8.2 million and $7.3 million at December 31, 2025 and 2024, respectively.
Impact of Georgia Primary Acquisition
The completion of the Georgia Primary acquisition on March 1, 2025 impacted our results of operations and financial condition for the year ended December 31, 2025. At acquisition, Georgia Primary contributed approximately $254.8 million of loans held for investment, $301.4 million of deposits, and $341.1 million of total assets. As a result, certain changes in net interest income, noninterest income, noninterest expense, loans and deposits reflected in the comparisons above were attributable to acquired balances and operations associated with Georgia Primary, while the remainder reflected organic growth generated by our legacy operations. Where practicable, we have quantified the impact of the Georgia Primary acquisition separately from organic growth. Noninterest expenses increased period-over-period, reflecting a combination of one-time merger and conversion related expenses recognized primarily during the year ended December 31, 2025. We believe the underlying organic growth trends identified and discussed above are reasonably expected to continue, however no assurance can be given that these trends will continue and actual results may be adversely affected by the factors described in “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.”
Financial Condition
The following table summarizes selected components of our balance sheet as of June 30, 2026 and 2025 as well as December 31, 2025 and 2024.
​ ​ ​
As of June 30,
​ ​
As of December 31,
​
(dollars in thousands)
​ ​
2026
​ ​
2025
​ ​
2025
​ ​
2024
​
Total assets
​ ​ ​ $ 3,262,344 ​ ​ ​ ​ $ 2,598,616 ​ ​ ​ ​ $ 2,702,332 ​ ​ ​ ​ $ 2,263,623 ​ ​
Loans held for sale
​ ​ ​ $ 500,560 ​ ​ ​ ​ $ 518,239 ​ ​ ​ ​ $ 505,360 ​ ​ ​ ​ $ 498,227 ​ ​
Total loans, net of allowance for credit losses
​ ​ ​ $ 2,060,905 ​ ​ ​ ​ $ 1,701,281 ​ ​ ​ ​ $ 1,699,360 ​ ​ ​ ​ $ 1,291,693 ​ ​
Total investments
​ ​ ​ $ 127,343 ​ ​ ​ ​ $ 104,418 ​ ​ ​ ​ $ 94,483 ​ ​ ​ ​ $ 105,307 ​ ​
Total deposits
​ ​ ​ $ 2,838,622 ​ ​ ​ ​ $ 2,071,890 ​ ​ ​ ​ $ 2,359,685 ​ ​ ​ ​ $ 1,828,625 ​ ​
Total subordinated notes
​ ​ ​ $ 75,405 ​ ​ ​ ​ $ 63,798 ​ ​ ​ ​ $ 63,999 ​ ​ ​ ​ $ 54,671 ​ ​
Total equity
​ ​ ​ $ 278,659 ​ ​ ​ ​ $ 188,182 ​ ​ ​ ​ $ 204,914 ​ ​ ​ ​ $ 155,528 ​ ​
The following discussion of our financial condition compares as of June 30, 2026 with December 31, 2025 and compares the year ended December 31, 2025 with the year ended December 31, 2024.
Total Assets
Total assets increased $560.0 million, or 20.7%, to $3.3 billion at June 30, 2026 compared to $2.7 billion at December 31, 2025. The increase in total assets was primarily attributable to the completed acquisition of Tandem as of June 1, 2026. Loans held for sale (“LHFS”) decreased to $500.6 million at June 30, 2026 from $505.4 million at December 31, 2025 as a result of slightly lower warehouse volume and loan settlements received at end of period.
 
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Total assets increased $438.7 million, or 19.4%, to $2.7 billion at December 31, 2025 compared to $2.3 billion at December 31, 2024. The increase in total assets was primarily attributable to the Georgia Primary acquisition and organic growth in LHFI. LHFS increased to $505.4 million at December 31, 2025 from $498.2 million at December 31, 2024 as a result of greater mortgage warehouse lending activity.
Loans
Loans represent the largest portion of our earning assets, substantially greater than the securities portfolio or any other category of our assets. Average loans were 87.5% and 87.0% of average earning assets as of June 30, 2026 and December 31, 2025, respectively. Total gross loans inclusive of LHFS was $2.6 billion at June 30, 2026, representing an increase of $360.1 million or 16.1% as compared to December 31, 2025. The increase in total gross loans was attributable to the Tandem transaction that resulted in loans acquired of $240.1 million along with organic loan growth, excluding the Tandem transaction, of $120.1 million.
Average loans were 87.0% and 85.7% of average earning assets for the years ended December 31, 2025 and 2024, respectively. Total gross loans inclusive of LHFS increased $419.8 million, or 23.2%, to $2.2 billion at December 31, 2025 from $1.8 billion at December 31, 2024. Of this increase, approximately $254.8 million was attributable to loans acquired in the Georgia Primary acquisition, with the remaining increase attributable to organic loan growth within the Company's legacy operations. Organic growth was driven principally by continued expansion of commercial real estate, commercial and financial, and mortgage warehouse lending activities. Management believes there are continued growth opportunities within these lending categories; provided, however, future growth rates will depend on market conditions, competitive dynamics and borrower demand.
LHFS are comprised of loans acquired through mortgage warehouse lending activities and origination of mortgage loans. We act as a warehouse lender by purchasing loans originated by third-party mortgage originators and selling these loans to other third-party investors. We also originate mortgage loans with customers and sell these loans to third-party investors. At June 30, 2026, LHFS were $500.6 million compared to $505.4 million at December 31, 2025 and $498.2 million at December 31, 2024.
Gross LHFI increased $364.9 million, or 21.1%, to $2.1 billion as of June 30, 2026 compared to $1.7 billion as of December 31, 2025. The increase in gross LHFI was attributable to the Tandem transaction, which resulted in loans acquired of $240.1 million, along with organic loan growth, of $124.8 million. Gross LHFI year-over-year grew to approximately $1.7 billion as of December 31, 2025 compared to $1.3 billion at December 31, 2024. Growth was driven by successful customer acquisition efforts from our commercial bankers, which contributed to increased originations of commercial and retail loans during 2025 as compared to 2024.
Commercial and Consumer Lending
The Company engages in a full complement of lending activities, including CRE loans, construction loans, Commercial and Financial loans, and consumer purpose loans. As of June 30, 2026 and as of December 31, 2025, real estate secured loans represented 75.4% and 72.8% of gross LHFI, respectively, with the remaining balance consisting primarily of commercial and financial and consumer loans.
The following table presents the balance and associated percentage of each major category in our loan portfolio as of the dates presented:
​ ​ ​ ​ ​ ​
As of December 31,
​
​ ​ ​
As of June 30, 2026
​ ​
2025
​ ​
2024
​
(dollars in thousands)
​ ​
Amount
​ ​
% of
Total
​ ​
Amount
​ ​
% of
Total
​ ​
Amount
​ ​
% of
Total
​
Construction and land
development
​ ​ ​ $ 269,655 ​ ​ ​ ​ ​ 12.87% ​ ​ ​ ​ $ 236,851 ​ ​ ​ ​ ​ 13.69% ​ ​ ​ ​ $ 152,455 ​ ​ ​ ​ ​ 11.57% ​ ​
Single-family residential
​ ​ ​ ​ 348,327 ​ ​ ​ ​ ​ 16.62 ​ ​ ​ ​ ​ 276,719 ​ ​ ​ ​ ​ 15.99 ​ ​ ​ ​ ​ 236,759 ​ ​ ​ ​ ​ 17.98 ​ ​
Commercial
​ ​ ​ ​ 892,007 ​ ​ ​ ​ ​ 42.57 ​ ​ ​ ​ ​ 679,103 ​ ​ ​ ​ ​ 39.25 ​ ​ ​ ​ ​ 483,735 ​ ​ ​ ​ ​ 36.73 ​ ​
Multifamily
​ ​ ​ ​ 70,412 ​ ​ ​ ​ ​ 3.36 ​ ​ ​ ​ ​ 66,341 ​ ​ ​ ​ ​ 3.83 ​ ​ ​ ​ ​ 56,291 ​ ​ ​ ​ ​ 4.27 ​ ​
Total real estate loans
​ ​ ​ $ 1,580,401 ​ ​ ​ ​ ​ 75.42% ​ ​ ​ ​ $ 1,259,014 ​ ​ ​ ​ ​ 72.77% ​ ​ ​ ​ $ 929,240 ​ ​ ​ ​ ​ 70.55% ​ ​
Commercial and financial
​ ​ ​ ​ 460,268 ​ ​ ​ ​ ​ 21.96 ​ ​ ​ ​ ​ 428,006 ​ ​ ​ ​ ​ 24.74 ​ ​ ​ ​ ​ 353,203 ​ ​ ​ ​ ​ 26.82 ​ ​
Consumer
​ ​ ​ ​ 54,844 ​ ​ ​ ​ ​ 2.62 ​ ​ ​ ​ ​ 43,223 ​ ​ ​ ​ ​ 2.50 ​ ​ ​ ​ ​ 34,676 ​ ​ ​ ​ ​ 2.63 ​ ​
Allowance for credit losses
​ ​ ​ ​ (28,955) ​ ​ ​ ​ ​ (1.39)% ​ ​ ​ ​ ​ (25,574) ​ ​ ​ ​ ​ (1.48)% ​ ​ ​ ​ ​ (20,600) ​ ​ ​ ​ ​ (1.56)% ​ ​
Total loans, net of allowance for credit losses on loans and leases(1)
​ ​ ​ $ 2,060,905 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 1,699,360 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 1,291,693 ​ ​ ​ ​ ​ ​ ​ ​
 
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​
(1)
Includes deferred (fees) costs and unamortized (discounts) premiums, net of $(5.7), $(5.3) and $(4.8) million at June 30, 2026, December 31, 2025 and December 31, 2024, respectively.
​
Construction and land development loans are primarily comprised of loans for the purpose of constructing or rehabilitating commercial developments, such as multi-family, industrial and self-storage properties. This category also includes loans to consumers to construct custom homes for owner occupancy, as well as loans to developers to build subdivisions to be held as rental properties. These loans are influenced by the supply and demand for commercial real estate in the markets served by the Company. Changes in market conditions may affect collateral values and borrowers’ ability to repay outstanding loans. Land and land development loans do not represent a significant portion of this category.
Single-family residential real estate loans, including home equity lines of credit, are comprised of loans secured by senior or junior liens on single-family residences. These loans are typically structured to involve a lesser degree of risk than other loan classes due to relative stability of collateral values compared to other collateral types, as well as expected priority of debt payments on a borrower’s primary residence. These loans are susceptible to weakening general economic conditions, increases in unemployment rates and declining real estate values.
Other commercial real estate loans include loans to finance income-producing commercial and multi-family properties. Loans in this category include neighborhood retail centers, single retail stores, medical and professional offices, industrial warehouses and distribution centers, apartments, and student housing facilities. The underwriting of these loans takes into consideration the occupancy, rental rates, and local market demand, as well as the financial health of the borrower and experience of the sponsor. The primary risk associated with loans secured by income-producing property is the inability of that property to produce adequate cash flow to service the debt which is the primary source of repayment for these types of loans. Loans secured by commercial real estate generally involve a greater degree of risk compared to loans secured by single-family residences due to more volatile collateral values and performance due to changes in economic and market conditions. While also in this category, loans secured by farmland represent an insignificant portion.
Multi-family residential loans are primarily secured by multi-family properties, such as apartments and condominium buildings. These loans also may be affected by increases in unemployment rates and deteriorating market values of real estate. At June 30, 2026, December 31, 2025 and December 31, 2024, this loan class is not considered a significant concentration within the Company’s portfolio.
Commercial and financial loans include loans and lines of credit to finance business operations, agricultural purposes, equipment and other non-real estate purchases for operating companies and including certain U.S. Small Business Administration loans. This loan category carries an inherent risk of not being able to closely monitor the condition of the collateral, which often consists of inventory, accounts receivable and other non-real estate assets, leading to volatility in the collateral’s value. Equipment and inventory obsolescence can also pose a risk to these loans as well. Declines in general economic conditions and other events can cause cash flows to fall to levels insufficient to service debt. As a result, personal guarantees from the business owners are generally required for these loans and are often subject to more frequent monitoring requirements.
Consumer loans are comprised of loans and lines of credit to individuals for personal, family or household use. At June 30, 2026, December 31, 2025 and December 31, 2024, this loan class is not considered a significant concentration within the Company’s portfolio and consists of many smaller dollar loans.
The Company maintains a board-approved lending policy that incorporates concentration limits for managing the loan portfolio, including commercial real estate, construction and other loan types. This policy, together with the individual concentration limits established for each loan category, is reviewed and approved by our board of directors on at least an annual basis, and all loan types are currently within their established limits. We use underwriting guidelines to assess the borrowers’ historical cash flow to determine debt service, and we further stress test the debt service under higher interest rate scenarios. Financial and performance covenants are used in commercial lending agreements to allow us to react to a borrower’s deteriorating financial condition, should that occur.
 
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The following tables present the maturity distribution of our loans as of June 30, 2026, December 31, 2025 and December 31, 2024. The tables show the distribution of such loans between those loans with predetermined (fixed) interest rates and those with variable (floating) interest rates:
​ ​ ​
As of June 30, 2026
​
​ ​ ​
Due in One
Year or Less
​ ​
Due after One
Year Through
Five Years
​ ​
Due after Five
Years Through
Fifteen Years
​ ​
Due after
Fifteen Years
​ ​ ​ ​
(dollars in thousands)
​ ​
Fixed
Rate
​ ​
Adjustable
Rate
​ ​
Fixed
Rate
​ ​
Adjustable
Rate
​ ​
Fixed
Rate
​ ​
Adjustable
Rate
​ ​
Fixed
Rate
​ ​
Adjustable
Rate
​ ​
Total
​
Real Estate Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Construction and land development
​ ​ ​ $ 15,892 ​ ​ ​ ​ $ 146,952 ​ ​ ​ ​ $ 15,471 ​ ​ ​ ​ $ 77,005 ​ ​ ​ ​ $ 8,669 ​ ​ ​ ​ $ 3,811 ​ ​ ​ ​ $ 152 ​ ​ ​ ​ $ 1,703 ​ ​ ​ ​ $ 269,655 ​ ​
Single-family residential
​ ​ ​ ​ 10,551 ​ ​ ​ ​ ​ 4,352 ​ ​ ​ ​ ​ 29,312 ​ ​ ​ ​ ​ 3,241 ​ ​ ​ ​ ​ 10,092 ​ ​ ​ ​ ​ 8,013 ​ ​ ​ ​ ​ 95,939 ​ ​ ​ ​ ​ 186,827 ​ ​ ​ ​ ​ 348,327 ​ ​
Commercial
​ ​ ​ ​ 81,738 ​ ​ ​ ​ ​ 158,962 ​ ​ ​ ​ ​ 300,211 ​ ​ ​ ​ ​ 246,206 ​ ​ ​ ​ ​ 51,469 ​ ​ ​ ​ ​ 26,337 ​ ​ ​ ​ ​ 7,977 ​ ​ ​ ​ ​ 14,967 ​ ​ ​ ​ ​ 887,867 ​ ​
Farmland
​ ​ ​ ​ 3,139 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 226 ​ ​ ​ ​ ​ 775 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,140 ​ ​
Multifamily
​ ​ ​ ​ 8,732 ​ ​ ​ ​ ​ 16,964 ​ ​ ​ ​ ​ 9,706 ​ ​ ​ ​ ​ 20,260 ​ ​ ​ ​ ​ 13,090 ​ ​ ​ ​ ​ 1,660 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 70,412 ​ ​
Total real estate loans
​ ​ ​ $ 120,052 ​ ​ ​ ​ $ 327,230 ​ ​ ​ ​ $ 354,700 ​ ​ ​ ​ $ 346,938 ​ ​ ​ ​ $ 84,095 ​ ​ ​ ​ $ 39,821 ​ ​ ​ ​ $ 104,068 ​ ​ ​ ​ $ 203,497 ​ ​ ​ ​ $ 1,580,401 ​ ​
Commercial and Consumer Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Commercial and financial
​ ​ ​ $ 26,025 ​ ​ ​ ​ $ 130,380 ​ ​ ​ ​ $ 31,641 ​ ​ ​ ​ $ 234,829 ​ ​ ​ ​ $ 14,039 ​ ​ ​ ​ $ 21,326 ​ ​ ​ ​ $ 1,934 ​ ​ ​ ​ $ 94 ​ ​ ​ ​ $ 460,268 ​ ​
Consumer
​ ​ ​ ​ 11,122 ​ ​ ​ ​ ​ 29,870 ​ ​ ​ ​ ​ 2,025 ​ ​ ​ ​ ​ 11,827 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 54,844 ​ ​
Total commercial and consumer loans
​ ​ ​ $ 37,147 ​ ​ ​ ​ $ 160,250 ​ ​ ​ ​ $ 33,666 ​ ​ ​ ​ $ 246,656 ​ ​ ​ ​ $ 14,039 ​ ​ ​ ​ $ 21,326 ​ ​ ​ ​ $ 1,934 ​ ​ ​ ​ $ 94 ​ ​ ​ ​ $ 515,112 ​ ​
Gross loans held for investment
​ ​ ​ $ 157,199 ​ ​ ​ ​ $ 487,480 ​ ​ ​ ​ $ 388,366 ​ ​ ​ ​ $ 593,594 ​ ​ ​ ​ $ 98,134 ​ ​ ​ ​ $ 61,147 ​ ​ ​ ​ $ 106,002 ​ ​ ​ ​ $ 203,591 ​ ​ ​ ​ $ 2,095,513 ​ ​
​ ​ ​
As of December 31, 2025
​
​ ​ ​
Due in One
Year or Less
​ ​
Due after One
Year Through
Five Years
​ ​
Due after Five
Years Through
Fifteen Years
​ ​
Due after
Fifteen Years
​ ​ ​ ​
(dollars in thousands)
​ ​
Fixed
Rate
​ ​
Adjustable
Rate
​ ​
Fixed
Rate
​ ​
Adjustable
Rate
​ ​
Fixed
Rate
​ ​
Adjustable
Rate
​ ​
Fixed
Rate
​ ​
Adjustable
Rate
​ ​
Total
​
Real Estate Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Construction and land development
​ ​ ​ $ 4,331 ​ ​ ​ ​ $ 128,199 ​ ​ ​ ​ $ 14,287 ​ ​ ​ ​ $ 86,177 ​ ​ ​ ​ $ 722 ​ ​ ​ ​ $ 3,135 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 236,851 ​ ​
Single-family residential
​ ​ ​ ​ 6,005 ​ ​ ​ ​ ​ 3,571 ​ ​ ​ ​ ​ 16,960 ​ ​ ​ ​ ​ 749 ​ ​ ​ ​ ​ 6,101 ​ ​ ​ ​ ​ 8,145 ​ ​ ​ ​ ​ 133,270 ​ ​ ​ ​ ​ 101,918 ​ ​ ​ ​ ​ 276,719 ​ ​
Commercial
​ ​ ​ ​ 107,668 ​ ​ ​ ​ ​ 77,734 ​ ​ ​ ​ ​ 213,580 ​ ​ ​ ​ ​ 241,970 ​ ​ ​ ​ ​ 26,543 ​ ​ ​ ​ ​ 6,518 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 752 ​ ​ ​ ​ ​ 674,765 ​ ​
Farmland
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,039 ​ ​ ​ ​ ​ 299 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,338 ​ ​
Multifamily
​ ​ ​ ​ 4,549 ​ ​ ​ ​ ​ 16,883 ​ ​ ​ ​ ​ 31,714 ​ ​ ​ ​ ​ 11,979 ​ ​ ​ ​ ​ 1,216 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 66,341 ​ ​
Total real estate loans
​ ​ ​ $ 122,553 ​ ​ ​ ​ $ 226,387 ​ ​ ​ ​ $ 280,580 ​ ​ ​ ​ $ 341,174 ​ ​ ​ ​ $ 34,582 ​ ​ ​ ​ $ 17,798 ​ ​ ​ ​ $ 133,270 ​ ​ ​ ​ $ 102,670 ​ ​ ​ ​ $ 1,259,014 ​ ​
Commercial and Consumer Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Commercial and financial
​ ​ ​ $ 11,989 ​ ​ ​ ​ $ 111,501 ​ ​ ​ ​ $ 26,469 ​ ​ ​ ​ $ 260,223 ​ ​ ​ ​ $ 5,609 ​ ​ ​ ​ $ 10,103 ​ ​ ​ ​ $ 2,112 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 428,006 ​ ​
Consumer
​ ​ ​ ​ 10,451 ​ ​ ​ ​ ​ 20,115 ​ ​ ​ ​ ​ 2,673 ​ ​ ​ ​ ​ 9,984 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 43,223 ​ ​
Total commercial and consumer
loans
​ ​ ​ $ 22,440 ​ ​ ​ ​ $ 131,616 ​ ​ ​ ​ $ 29,142 ​ ​ ​ ​ $ 270,207 ​ ​ ​ ​ $ 5,609 ​ ​ ​ ​ $ 10,103 ​ ​ ​ ​ $ 2,112 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 471,229 ​ ​
Gross loans held for investment
​ ​ ​ $ 144,993 ​ ​ ​ ​ $ 358,003 ​ ​ ​ ​ $ 309,722 ​ ​ ​ ​ $ 611,381 ​ ​ ​ ​ $ 40,191 ​ ​ ​ ​ $ 27,901 ​ ​ ​ ​ $ 135,382 ​ ​ ​ ​ $ 102,670 ​ ​ ​ ​ $ 1,730,243 ​ ​
 
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​ ​ ​
As of December 31, 2024
​
​ ​ ​
Due in One
Year or Less
​ ​
Due after One
Year Through
Five Years
​ ​
Due after Five
Years Through
Fifteen Years
​ ​
Due after
Fifteen Years
​ ​ ​ ​
(dollars in thousands)
​ ​
Fixed
Rate
​ ​
Adjustable
Rate
​ ​
Fixed
Rate
​ ​
Adjustable
Rate
​ ​
Fixed
Rate
​ ​
Adjustable
Rate
​ ​
Fixed
Rate
​ ​
Adjustable
Rate
​ ​
Total
​
Real Estate Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Construction and land development
​ ​ ​ $ 387 ​ ​ ​ ​ $ 100,397 ​ ​ ​ ​ $ 6,914 ​ ​ ​ ​ $ 44,757 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 152,455 ​ ​
Single-family residential
​ ​ ​ ​ 451 ​ ​ ​ ​ ​ 837 ​ ​ ​ ​ ​ 3,754 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 17,224 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 150,679 ​ ​ ​ ​ ​ 63,814 ​ ​ ​ ​ ​ 236,759 ​ ​
Commercial
​ ​ ​ ​ 19,454 ​ ​ ​ ​ ​ 75,861 ​ ​ ​ ​ ​ 196,689 ​ ​ ​ ​ ​ 171,976 ​ ​ ​ ​ ​ 10,978 ​ ​ ​ ​ ​ 4,853 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 479,811 ​ ​
Farmland
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 3,450 ​ ​ ​ ​ ​ 474 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 3,924 ​ ​
Multifamily
​ ​ ​ ​ 2,163 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 22,978 ​ ​ ​ ​ ​ 19,950 ​ ​ ​ ​ ​ 11,200 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 56,291 ​ ​
Total real estate loans
​ ​ ​ $ 22,455 ​ ​ ​ ​ $ 177,095 ​ ​ ​ ​ $ 233,785 ​ ​ ​ ​ $ 237,157 ​ ​ ​ ​ $ 39,402 ​ ​ ​ ​ $ 4,853 ​ ​ ​ ​ $ 150,679 ​ ​ ​ ​ $ 63,814 ​ ​ ​ ​ $ 929,240 ​ ​
Commercial and Consumer Loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Commercial and financial
​ ​ ​ $ 89 ​ ​ ​ ​ $ 107,685 ​ ​ ​ ​ $ 26,434 ​ ​ ​ ​ $ 214,740 ​ ​ ​ ​ $ 2,030 ​ ​ ​ ​ $ 67 ​ ​ ​ ​ $ 2,158 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 353,203 ​ ​
Consumer
​ ​ ​ ​ 2,577 ​ ​ ​ ​ ​ 19,351 ​ ​ ​ ​ ​ 426 ​ ​ ​ ​ ​ 4,717 ​ ​ ​ ​ ​ 7,605 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 34,676 ​ ​
Total commercial and consumer
loans
​ ​ ​ $ 2,666 ​ ​ ​ ​ $ 127,036 ​ ​ ​ ​ $ 26,859 ​ ​ ​ ​ $ 219,457 ​ ​ ​ ​ $ 9,635 ​ ​ ​ ​ $ 67 ​ ​ ​ ​ $ 2,158 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 387,879 ​ ​
Gross loans held for investment
​ ​ ​ $ 25,121 ​ ​ ​ ​ $ 304,131 ​ ​ ​ ​ $ 260,645 ​ ​ ​ ​ $ 456,614 ​ ​ ​ ​ $ 49,037 ​ ​ ​ ​ $ 4,920 ​ ​ ​ ​ $ 152,837 ​ ​ ​ ​ $ 63,814 ​ ​ ​ ​ $ 1,317,119 ​ ​
Mortgage Warehouse Lending
Our mortgage warehouse lending provides short-term funding primarily to independent, non-bank mortgage loan originators and smaller financial institutions to fund residential mortgage loan originations prior to their sale into the secondary market, generating both fee income and interest income while maintaining short-duration balance sheet exposure. Substantially all mortgage loans acquired through this program have a secondary market takeout commitment in place at the time of origination, and such loans typically remain on our balance sheet for less than 30 days before being sold to the designated investor. Loans acquired through this program, together with loans originated and held for sale through our retail and correspondent mortgage channels, are reported as LHFS, which totaled $500.6 million at June 30, 2026 compared to $505.4 million at December 31, 2025 compared to $498.2 million at December 31, 2024. The decrease in LHFS from December 31, 2025 to June 30, 2026 was primarily due to large loan settlements received prior to period end. The increase in LHFS from December 31, 2024 to December 31, 2025 reflects continued growth in the number of approved client originators and their utilization of our purchase facilities. Because loans held in the program are classified as LHFS rather than LHFI, they are not included in our allowance for credit losses on loans, and any credit losses associated with the program would instead be recognized directly through noninterest expense or as a reduction of the carrying value of the affected loans in the period identified.
Our mortgage warehouse consists primarily of loans that are eligible for sale to government-sponsored enterprises or government agencies, which we believe reduces the credit and market risk associated with the program because the ultimate purchaser of each loan is typically identified prior to purchase. We monitor the composition of the portfolio between conventional, government-insured, and jumbo or non-agency collateral because loans that are not agency-eligible generally carry a longer expected holding period and a smaller universe of eligible purchasers, which can increase our exposure to changes in the market value of the underlying collateral during the warehousing period. The mix between purchase-money and refinance loans within the portfolio tends to fluctuate with the interest rate environment, as origination volumes for our client originators, and correspondingly our warehouse lending balances, generally increase when mortgage rates decline and refinance activity picks up, and decrease when rates rise, consistent with broader trends observed across the mortgage warehouse lending sector.
​ ​ ​
Six Months Ended
June 30,
​ ​
Increase (decrease)
​
(dollars in thousands except for originators’ data)
​ ​
2026
​ ​
2025
​ ​
Amount
​ ​
Percent
​
Approved client originators at period end
​ ​ ​ ​ 61 ​ ​ ​ ​ ​ 64 ​ ​ ​ ​ ​ (3) ​ ​ ​ ​ ​ (4.69)% ​ ​
Client originators with loans outstanding at period end
​ ​ ​ ​ 47 ​ ​ ​ ​ ​ 50 ​ ​ ​ ​ ​ (3) ​ ​ ​ ​ ​ (6.00)% ​ ​
Aggregate purchase facility capacity
​ ​ ​ $ 1,142,000 ​ ​ ​ ​ $ 1,135,500 ​ ​ ​ ​ $ 6,500 ​ ​ ​ ​ ​ 0.57% ​ ​
Average outstanding warehouse balance
​ ​ ​ $ 438,000 ​ ​ ​ ​ $ 355,000 ​ ​ ​ ​ $ 83,000 ​ ​ ​ ​ ​ 23.38% ​ ​
Period-end outstanding warehouse balance (included in LHFS)
​ ​ ​ $ 486,000 ​ ​ ​ ​ $ 490,000 ​ ​ ​ ​ $ (4,000) ​ ​ ​ ​ ​ (0.82)% ​ ​
 
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​ ​ ​
Year Ended
December 31,
​ ​
Increase (decrease)
​
(dollars in thousands except for originators’ data)
​ ​
2025
​ ​
2024
​ ​
Amount
​ ​
Percent
​
Approved client originators at period end
​ ​ ​ ​ 62 ​ ​ ​ ​ ​ 67 ​ ​ ​ ​ ​ (5) ​ ​ ​ ​ ​ (7.46)% ​ ​
Client originators with loans outstanding at period end
​ ​ ​ ​ 49 ​ ​ ​ ​ ​ 43 ​ ​ ​ ​ ​ 6 ​ ​ ​ ​ ​ 13.90% ​ ​
Aggregate purchase facility capacity
​ ​ ​ $ 1,189,000 ​ ​ ​ ​ $ 1,175,000 ​ ​ ​ ​ $ 14,000 ​ ​ ​ ​ ​ 1.19% ​ ​
Average outstanding warehouse balance
​ ​ ​ $ 400,000 ​ ​ ​ ​ $ 283,000 ​ ​ ​ ​ $ 117,000 ​ ​ ​ ​ ​ 41.34% ​ ​
Period-end outstanding warehouse balance (included in LHFS)
​ ​ ​ $ 484,000 ​ ​ ​ ​ $ 466,000 ​ ​ ​ ​ $ 18,000 ​ ​ ​ ​ ​ 3.86% ​ ​
Our mortgage warehouse lending experienced strong growth during 2025 and has continued to perform well through the first half of 2026, driven by higher utilization among existing clients despite a modest reduction in the number of approved client originators. Approved client originators totaled 62 at December 31, 2025, a decrease of five client originators, or 7.5%, compared to 67 client originators at December 31, 2024. As of June 30, 2026, approved client originators totaled 61, representing a decrease of 1 client originator, or 1.6%, compared to December 31, 2025. The reduction in client originator count during 2025 was an intentional effort to exit certain client originators and expand market share with client originators that successfully navigated the changing housing finance market. The number of client originators with loans outstanding increased to 49 at December 31, 2025 from 43 at December 31, 2024, reflecting a 13.9% increase in active relationships and indicating stronger engagement and production levels among the client base. As of June 30, 2026, the number of client originators with loans outstanding was 47 as compared to 50 as of June 30, 2025, reflecting a 6.00% decrease in active relationships.
Aggregate uncommitted purchase facility capacity increased modestly to approximately $1.19 billion at December 31, 2025 from $1.18 billion at December 31, 2024, an increase of $14.0 million, or 1.2%. As of June 30, 2026, aggregate uncommitted purchase facility capacity was $1.14 billion, a decrease of $47 million, or 3.95%, compared to December 31, 2025. Average outstandings reached $400.0 million during 2025, compared to $283.0 million in 2024, representing an increase of approximately $117.0 million, or 41.3%. For the six months ended June 30, 2026, average outstandings were $438.0 million as compared to $355.0 million for the six months ended June 30, 2025, representing an increase of approximately $83.0 million, or 23.4%. This increase is primarily a result of stronger mortgage origination activity among clients and an increase in captured market share.
Overall, 2025 was characterized by stronger production volume, improved client utilization, and meaningful growth in average balances, while maintaining stable facility capacity and risk parameters. Through the first half of 2026, production volume remained robust while average balances outstandings are outpacing the same period in 2025. The increase in active clients and utilization levels reflects our efforts to go deeper into existing relationships with successful, well-managed mortgage originators.
The period-end balance of our mortgage warehouse loans is a function of both the number of active client originators and the volume of loans each originator closes and delivers to us for purchase prior to sale into the secondary market, and as a result can vary meaningfully within a given reporting period based on origination seasonality and the interest rate environment. We believe average and peak balances are more meaningful indicators of the ongoing utilization of our warehouse purchase capacity than the period-end balance alone, because the short average holding period of less than 30 days means the period-end balance principally reflects late-period purchase activity rather than the full scale of originations funded during the period. Growth in aggregate purchase facility capacity and in the number of approved client originators has been, and we expect will continue to be, a closely managed aspect of our mortgage warehouse lending business, consistent with our broader strategy of diversifying the Bank’s earning assets. We also monitor our warehouse lending activity relative to our overall balance sheet growth strategy and liquidity position, as further discussed under “Liquidity Management and Capital Adequacy” below, because increases in warehouse purchase volume increases our funding needs on a short-term basis.
Unlike our commercial and retail loan portfolios, credit risk in our mortgage warehouse lending program arises primarily from our reliance on the client originator and the ultimate secondary market purchaser to perform, rather than from the creditworthiness of the underlying mortgage borrower alone, because our expected source of repayment for each warehoused loan is the sale proceeds received from the designated investor rather than payments made by the mortgagor. Concentration risk within the program is accordingly measured principally by reference to the number of active client originators and the extent to which our aggregate outstanding balance is concentrated among our largest relationships, rather than by geographic or property-type concentration as is customary for our held-for-investment real estate portfolios. Since the Recapitalization, we have not recorded any material charge-offs within the mortgage warehouse lending program, consistent with the short average holding period of funded loans, the existence of a secondary market takeout commitment at the time of purchase and our practice of taking physical possession of the underlying notes and allonges, which aligns with the low loss experience generally reported by other financial institutions operating similar mortgage warehouse or mortgage purchase programs. For the same reason,
 
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borrower-level delinquency and past-due metrics are not a meaningful indicator of credit risk in this program, and we do not track them in the manner customary for our held-for-investment portfolios. Instead, we monitor the aging of loans held in the program, that is, loans that remain outstanding beyond their expected sale or settlement date. The volume of such aged loans fluctuates from period to period in the ordinary course, and these loans are generally resolved through curtailment or repurchase by the applicable client originator, or completion of the sale to an investor, before any loss is realized. Our historical charge-off and loss experience is not necessarily indicative of future results, and there can be no assurance that we will not incur charge-offs or other losses within the program in future periods.
We manage the risks associated with our mortgage warehouse lending program through a combination of client eligibility screening, collateral-level controls, and ongoing portfolio monitoring. Before approving a mortgage originator as a client under the program, we perform due diligence on the prospective client’s financial condition, licensing status, quality control practices, and secondary market relationships, and we establish an individual purchase limit for each approved client based on that diligence. Once a client is approved, each loan submitted for purchase is reviewed for compliance with our eligibility criteria, including confirmation that a secondary market purchase commitment is in place, before funds are advanced. We monitor the aging of loans held in the program on an ongoing basis and follow up promptly with the client originator and, where applicable, the designated investor with respect to any loan that remains outstanding beyond its expected sale date, in order to identify and resolve potential collateral or documentation issues before they result in a loss. We also periodically reassess each client’s purchase limit and continued eligibility to participate in the program based on updated financial information, loan performance, and market conditions.
Internally Assigned Grades on LHFI
The Company utilizes an internal loan classification system for the Commercial portfolio that is updated to perpetually grade loans according to certain credit quality indicators. These credit quality indicators include, but are not limited to, recent credit performance, delinquency, liquidity, cash flows, debt coverage ratios, collateral type and LTC/LTV ratios. The Company determines its risk rating classification of the Retail lending portfolio based on nonaccrual and delinquency status in accordance with the Uniform Retail Credit Classification guidance and industry norms. For more information, see Note 4 to the consolidated financial statements.
The Company utilizes an internal risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of 1 to 9. These risk grades are evaluated on an ongoing basis. A description of the general characteristics of the nine risk grades is as follows:
•
Pass (Risk Ratings 1 – 5).   Loans rated Pass include those that are adequately collateralized performing loans which management believe do not have conditions that have occurred or may occur that would result in the loan being downgraded into an inferior category. The Pass category also includes loans rated as “watch,” which include those that management believes have conditions that have occurred, or may occur, which could result in the loan being downgraded to an inferior category.
​
•
Special Mention (Risk Rating 6).   A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan, or in the company’s credit position at some future date. Loans graded special mention may require resolution of specific corporate or financial related events before the associated risk can be adequately evaluated.
​
•
Substandard (Risk Rating 7).   A substandard loan is inadequately protected by the net worth and cash flow capacity of the borrower or of the collateral pledged. Loans so classified must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.
​
•
Doubtful (Risk Rating 8).   Loans classified as doubtful are inadequately protected by the net worth of the borrower or the collateral pledged and repayment in full is improbable based on existing facts, values, and conditions. The possibility of loss is high, but because of certain important and reasonably specific pending factors which may work to the advantage and strengthening of the facility, its classification as an estimated loss is deferred until its more exact status may be determined. These loans are considered classified as value is impaired. A full or partial reserve is warranted. Because of the high probability of loss, nonaccrual accounting treatment is required.
​
•
Loss (Risk Rating 9).   Loans classified as loss are considered uncollectible and continuance as an acceptable asset is not warranted. This classification does not mean that the credit has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this asset even though partial recovery may be affected in the future. These
​
 
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loans are considered classified. Because of the high probability of loss, nonaccrual accounting treatment is required. Losses are to be recorded in the period an obligation becomes uncollectable.
The following table presents the loan portfolio’s amortized cost by class of financing receivable and internal risk grade. There were no loans risk graded doubtful or loss at June 30, 2026, December 31, 2025 and December 31, 2024.
​ ​ ​
As of June 30, 2026
​
(dollars in thousands)
​ ​
Pass
​ ​
Special mention
​ ​
Substandard
​ ​
Total
​
Loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Construction and land development
​ ​ ​ $ 269,655 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 269,655 ​ ​
Single-family residential
​ ​ ​ ​ 344,439 ​ ​ ​ ​ ​ 323 ​ ​ ​ ​ ​ 3,565 ​ ​ ​ ​ ​ 348,327 ​ ​
Commercial real estate
​ ​ ​ ​ 871,732 ​ ​ ​ ​ ​ 19,641 ​ ​ ​ ​ ​ 634 ​ ​ ​ ​ ​ 892,007 ​ ​
Multifamily
​ ​ ​ ​ 70,412 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 70,412 ​ ​
Commercial and financial
​ ​ ​ ​ 432,611 ​ ​ ​ ​ ​ 6,736 ​ ​ ​ ​ ​ 20,921 ​ ​ ​ ​ ​ 460,268 ​ ​
Consumer
​ ​ ​ ​ 54,844 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 54,844 ​ ​
Total
​ ​ ​ $ 2,043,693 ​ ​ ​ ​ $ 26,700 ​ ​ ​ ​ $ 25,120 ​ ​ ​ ​ $ 2,095,513 ​ ​
​ ​ ​
As of December 31, 2025
​
(dollars in thousands)
​ ​
Pass
​ ​
Special mention
​ ​
Substandard
​ ​
Total
​
Loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Construction and land development
​ ​ ​ $ 236,523 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 328 ​ ​ ​ ​ $ 236,851 ​ ​
Single-family residential
​ ​ ​ ​ 272,841 ​ ​ ​ ​ ​ 175 ​ ​ ​ ​ ​ 3,703 ​ ​ ​ ​ ​ 276,719 ​ ​
Commercial real estate
​ ​ ​ ​ 670,376 ​ ​ ​ ​ ​ 8,055 ​ ​ ​ ​ ​ 672 ​ ​ ​ ​ ​ 679,103 ​ ​
Multifamily
​ ​ ​ ​ 66,341 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 66,341 ​ ​
Commercial and financial
​ ​ ​ ​ 403,864 ​ ​ ​ ​ ​ 4,792 ​ ​ ​ ​ ​ 19,350 ​ ​ ​ ​ ​ 428,006 ​ ​
Consumer
​ ​ ​ ​ 43,223 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 43,223 ​ ​
Total
​ ​ ​ $ 1,693,168 ​ ​ ​ ​ $ 13,022 ​ ​ ​ ​ $ 24,053 ​ ​ ​ ​ $ 1,730,243 ​ ​
​ ​ ​
As of December 31, 2024
​
(dollars in thousands)
​ ​
Pass
​ ​
Special mention
​ ​
Substandard
​ ​
Total
​
Loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Construction and land development
​ ​ ​ $ 152,068 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 387 ​ ​ ​ ​ $ 152,455 ​ ​
Single-family residential
​ ​ ​ ​ 235,700 ​ ​ ​ ​ ​ 272 ​ ​ ​ ​ ​ 787 ​ ​ ​ ​ ​ 236,759 ​ ​
Commercial real estate
​ ​ ​ ​ 471,536 ​ ​ ​ ​ ​ 11,098 ​ ​ ​ ​ ​ 1,101 ​ ​ ​ ​ ​ 483,735 ​ ​
Multifamily
​ ​ ​ ​ 56,291 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 56,291 ​ ​
Commercial and financial
​ ​ ​ ​ 340,533 ​ ​ ​ ​ ​ 8,010 ​ ​ ​ ​ ​ 4,660 ​ ​ ​ ​ ​ 353,203 ​ ​
Consumer
​ ​ ​ ​ 33,781 ​ ​ ​ ​ ​ 172 ​ ​ ​ ​ ​ 723 ​ ​ ​ ​ ​ 34,676 ​ ​
Total
​ ​ ​ $ 1,289,909 ​ ​ ​ ​ $ 19,552 ​ ​ ​ ​ $ 7,658 ​ ​ ​ ​ $ 1,317,119 ​ ​
Pass rated loans were approximately 97.5% of total LHFI at June 30, 2026 and 97.9% of total LHFI at December 31, 2025 and 2024. Special mention rated loans were 1.27% of total LHFI at June 30, 2026, 0.75% of total LHFI at December 31, 2025 and 1.48% of total LHFI at December 31, 2024. Substandard loans were 1.20% of total LHFI at June 30, 2026, 1.39% of total LHFI at December 31, 2025 and 0.58% at December 31, 2024. Total special mention and substandard loans increased $14.8 million during the six months ended June 30, 2026 specifically due to one commercial and financial relationship totaling $12.7 million that migrated from watch to special mention in the second quarter. The primary cause of the increase in total special mention and substandard loans from December 31, 2024 to December 31, 2025 was due to the acquisition of Georgia Primary, inclusive of SBA loans in which the government guaranteed portion is reflected in the totals above, negative credit migration of certain commercial and financial loans, offset by positive credit migration of certain commercial real estate loans.
Nonperforming Loans
Loans are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement or any portion thereof remains unpaid after the due date of the scheduled payment. Loans are placed on
 
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nonaccrual status when it becomes probable that interest is not fully collectable or generally when the loan becomes 90 days past due. Once loans are placed on nonaccrual status, previously accrued but unpaid interest is reversed from interest income, and the accrual of interest income is suspended. Future payments received are applied to the principal balance of the loan. If and when borrowers demonstrate the sustained ability to repay such loans in accordance with the loan’s contractual terms, the loan may be returned to accrual status. Loans which are substandard, including loans which are placed on non-accrual status, are reviewed for collectability of principal. Principal amounts deemed uncollectible are charged off against the allowance for credit losses on loans, unless such loans are in the process of modification, collection through repossession, or foreclosure.
Real estate acquired through foreclosure or by deed in lieu of foreclosure is classified as other real estate owned (“OREO”). Upon acquisition, OREO is initially recorded at fair value less estimated costs to sell, which establishes a new cost basis. Fair value is based on independent appraisals. Any excess of the loan’s amortized cost basis over the fair value of the property less estimated costs to sell is charged against the allowance for credit losses.
Subsequent to acquisition, OREO is carried at the lower of its cost basis or fair value less estimated costs to sell. Subsequent adjustments to the value of OREO and costs of holding and maintaining the properties are expensed as incurred. Costs of improvements are capitalized. Gains and losses on disposition are recognized in earnings when control of the property transfers to the buyer, which generally occurs upon execution of the deed.
Nonperforming loans consist of loans on nonaccrual status and loans 90 days or more past due that continue to accrue interest. Nonperforming assets consist of nonperforming loans plus OREO and other repossessed assets, if any. As of June 30, 2026, December 31, 2025 and 2024, we did not have any OREO.
The following table sets forth the allocation of our nonperforming loans among our different asset categories as of the dates presented:
​ ​ ​
As of June 30,
2026
​ ​
As of December 31,
​
(dollars in thousands)
​ ​
2025
​ ​
2024
​
Nonaccrual loans(1)
​ ​ ​ $ 17,268 ​ ​ ​ ​ $ 14,674 ​ ​ ​ ​ $ 7,343 ​ ​
Past due loans 90 days and still accruing
​ ​ ​ ​ 39 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 149 ​ ​
Total nonperforming loans
​ ​ ​ $ 17,307 ​ ​ ​ ​ $ 14,674 ​ ​ ​ ​ $ 7,492 ​ ​
Nonperforming loans to gross LHFI
​ ​ ​ ​ 0.83% ​ ​ ​ ​ ​ 0.85% ​ ​ ​ ​ ​ 0.57% ​ ​
Nonperforming assets to total assets
​ ​ ​ ​ 0.53% ​ ​ ​ ​ ​ 0.54% ​ ​ ​ ​ ​ 0.33% ​ ​
Allowance for credit losses to total LHFI
​ ​ ​ ​ 1.39% ​ ​ ​ ​ ​ 1.48% ​ ​ ​ ​ ​ 1.56% ​ ​
​
(1)
Nonaccrual loans include balances of approximately $5.0 million, $2.6 million, and $0 that are covered by government guarantees for June 30, 2026, December 31, 2025 and December 31, 2024, respectively.
​
Nonperforming loans were $17.3 million, $14.7 million and $7.5 million at June 30, 2026, December 31, 2025 and December 31, 2024, respectively. The increase in nonperforming loans from December 31, 2025 to June 30, 2026 was primarily due to $5.7 million in net new additions to non-accrual status during the six-month period ended June 30, 2026, partially offset by $1.0 million in net charge-offs, $440 thousand of pay downs related to SBA payments on the government guaranteed portion of SBA loans, and approximately $1.70 million split between pay offs, principal pay downs, and upgrades to special mention. The increase in nonperforming loans from December 31, 2024 to December 31, 2025 was primarily due to the acquisition of Georgia Primary, which included SBA 7(a) loans in which the Bank includes the SBA guaranteed portion, if repurchased by the Bank in the secondary market, in its reporting of nonperforming loans, and loans identified as purchased credit deteriorated (“PCD”). The Bank also experienced negative credit migration of certain commercial and financial loans during the year ended December 31, 2025. All loans identified as PCD have specific reserves in an amount we believe is sufficient to cover potential losses.
 
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The following table sets forth the major classifications of nonaccrual loans for the periods presented:
​ ​ ​
As of June 30,
2026
​ ​
As of December 31,
​
(dollars in thousands)
​ ​
2025
​ ​
2024
​
Construction and land development
​ ​ ​ $ — ​ ​ ​ ​ $ 328 ​ ​ ​ ​ $ 387 ​ ​
Single-family residential
​ ​ ​ ​ 3,338 ​ ​ ​ ​ ​ 2,359 ​ ​ ​ ​ ​ 558 ​ ​
Commercial real estate
​ ​ ​ ​ 539 ​ ​ ​ ​ ​ 577 ​ ​ ​ ​ ​ 1,073 ​ ​
Commercial and financial
​ ​ ​ ​ 13,391 ​ ​ ​ ​ ​ 11,410 ​ ​ ​ ​ ​ 4,660 ​ ​
Consumer
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 665 ​ ​
Total nonaccrual loans
​ ​ ​ $ 17,268 ​ ​ ​ ​ $ 14,674 ​ ​ ​ ​ $ 7,343 ​ ​
Allowance for Credit Losses on Loans
The ACL on loans is a valuation allowance estimated at each balance sheet date in accordance with GAAP that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. The ACL represents management’s best estimate of credit losses expected over the life of the loan, adjusted for expected contractual payments and the impact of prepayment expectations. ACL is not required for LHFS and is only recorded for LHFI.
The Company estimates the ACL on loans based on the underlying loans’ amortized cost basis, which is the amount at which the financing receivable is originated or acquired, adjusted for applicable accretion or amortization of premium, discount, and net deferred fees or costs, collection of cash, and charge-offs. In the event that collection of principal becomes uncertain, the Company has policies in place to reverse accrued interest in a timely manner. It is the Company’s policy to write off uncollectible interest receivable of LHFI when it is considered uncollectible, which is generally when an asset is placed on nonaccrual and individually analyzed under the ACL.
Expected credit losses are reflected in the ACL through a charge to provision for credit losses. When the Company deems all or a portion of a loan to be uncollectible the appropriate amount is written off and the ACL is reduced by the same amount. Loans are charged off against the ACL when management believes the collection of the principal is unlikely. Subsequent recoveries of previously charged off amounts, if any, are credited to the ACL when received. See Note 1 of our consolidated financial statements as of December 31, 2025, included elsewhere in this prospectus, for additional information regarding ACL policy.
The allowance for credit losses on loans was $29.0 million as of June 30, 2026 compared to $25.6 million at December 31, 2025. The increase was primarily related to the Tandem acquisition and the related allowance associated with acquired loans.
The allowance for credit losses on loans was $25.6 million at December 31, 2025 compared to $20.6 million at December 31, 2024, an increase of $5.0 million, or 24.1% primarily attributed to the loan portfolio acquired via the merger with Georgia Primary Bank, certain reserves associated with loans identified as PCD, and loan growth within the Bank’s LHFI portfolio.
The following table provides an analysis of the ACL on loans and net charge-offs for the periods presented:
​ ​ ​
As of June 30,
2026
​ ​
As of and for the Year Ended
December 31,
​
(dollars in thousands)
​ ​
2025
​ ​
2024
​
Allowance for credit losses on loans at end of period(1)
​ ​ ​ $ 28,955 ​ ​ ​ ​ $ 25,574 ​ ​ ​ ​ $ 20,600 ​ ​
Loans balances: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total loans held for investment, end of period
​ ​ ​ $ 2,089,860 ​ ​ ​ ​ $ 1,724,934 ​ ​ ​ ​ $ 1,312,293 ​ ​
Average loans held for investment
​ ​ ​ $ 1,802,428 ​ ​ ​ ​ $ 1,653,685 ​ ​ ​ ​ $ 1,227,569 ​ ​
Net charge-offs to average LHFI
​ ​ ​ ​ 0.05% ​ ​ ​ ​ ​ 0.06% ​ ​ ​ ​ ​ 0.43% ​ ​
Allowance for credit losses on loans to total LHFI(1)
​ ​ ​ ​ 1.39% ​ ​ ​ ​ ​ 1.48% ​ ​ ​ ​ ​ 1.56% ​ ​
Nonaccrual loans as a percentage of end of period loans
​ ​ ​ ​ 0.83% ​ ​ ​ ​ ​ 0.85% ​ ​ ​ ​ ​ 0.56% ​ ​
Allowance for credit losses on loans to nonaccrual loans at end of period(1)
​ ​ ​ ​ 167.68% ​ ​ ​ ​ ​ 174.28% ​ ​ ​ ​ ​ 280.54% ​ ​
Allowance for credit losses on loans to total nonperforming loans at end of period(1)
​ ​ ​ ​ 167.31% ​ ​ ​ ​ ​ 174.28% ​ ​ ​ ​ ​ 274.96% ​ ​
​
(1)
Excludes allowance for credit losses for unfunded loans commitments.
​
 
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At June 30, 2026, the ACL on loans totaled $29.0 million, or 1.12% of loans and 1.39% of LHFI, compared to $25.6 million, or 1.15% of loans and 1.48% of LHFI, at December 31, 2025. The decrease in the ACL on loans as a percentage of loans as of June 30, 2026 compared to December 31, 2025 was primarily attributed to our portfolio mix from new production along with the Tandem acquisition.
At December 31, 2025, the ACL on loans totaled $25.6 million, or 1.15% of loans and 1.48% of LHFI, compared to $20.6 million, or 1.14% of loans and 1.56% of LHFI, at December 31, 2024. The decrease in the ACL on loans as a percentage of loans held for investment compared to December 31, 2024, was primarily attributed to overall growth in the Bank’s commercial loan portfolio, partially offset by an increase in specific reserves associated with nonperforming loans.
For the six months ended June 30, 2026, our net charge-off ratio as a percentage of average loans, as annualized, was 0.10%. For the year ended December 31, 2025, our net charge-off ratio as a percentage of average LHFI loans was 0.06%, compared to 0.43% for the year ended December 31, 2024.
As of June 30, 2026, our ratio of nonperforming assets to total assets was 0.53%, compared to 0.54% as of December 31, 2025. As of December 31, 2025, our ratio of nonperforming assets to total assets was 0.54%, compared to 0.33% as of December 31, 2024. The increase in 2025 was largely due to nonperforming loans acquired through the acquisition of Georgia Primary, which were classified as PCD, and an increase in nonaccrual loans.
The following table allocates the allowance for credit losses on loans by loan category for the periods presented:
​ ​ ​
As of June 30,
2026
​ ​
As of December 31,
​
​ ​ ​
2025
​ ​
2024
​
(dollars in thousands)
​ ​
Amount
​ ​
% of
Allowance
​ ​
Amount
​ ​
% of
Allowance
​ ​
Amount
​ ​
% of
Allowance
​
Real Estate Loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Construction and land development
​ ​ ​ $ 4,200 ​ ​ ​ ​ ​ 14.51% ​ ​ ​ ​ $ 4,496 ​ ​ ​ ​ ​ 17.58% ​ ​ ​ ​ $ 2,817 ​ ​ ​ ​ ​ 13.67% ​ ​
Single-family residential
​ ​ ​ ​ 8,313 ​ ​ ​ ​ ​ 28.71 ​ ​ ​ ​ ​ 7,048 ​ ​ ​ ​ ​ 27.56 ​ ​ ​ ​ ​ 6,854 ​ ​ ​ ​ ​ 33.27 ​ ​
Commercial
​ ​ ​ ​ 5,248 ​ ​ ​ ​ ​ 18.12 ​ ​ ​ ​ ​ 4,453 ​ ​ ​ ​ ​ 17.41 ​ ​ ​ ​ ​ 4,014 ​ ​ ​ ​ ​ 19.49 ​ ​
Multifamily
​ ​ ​ ​ 396 ​ ​ ​ ​ ​ 1.37 ​ ​ ​ ​ ​ 514 ​ ​ ​ ​ ​ 2.01 ​ ​ ​ ​ ​ 698 ​ ​ ​ ​ ​ 3.39 ​ ​
Total real estate loans
​ ​ ​ $ 18,157 ​ ​ ​ ​ ​ 62.71% ​ ​ ​ ​ $ 16,511 ​ ​ ​ ​ ​ 64.56% ​ ​ ​ ​ $ 14,383 ​ ​ ​ ​ ​ 69.82% ​ ​
Commercial and Consumer Loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Commercial and financial
​ ​ ​ $ 10,565 ​ ​ ​ ​ ​ 36.49% ​ ​ ​ ​ $ 8,607 ​ ​ ​ ​ ​ 33.66% ​ ​ ​ ​ $ 5,456 ​ ​ ​ ​ ​ 26.49% ​ ​
Consumer
​ ​ ​ ​ 233 ​ ​ ​ ​ ​ 0.80 ​ ​ ​ ​ ​ 456 ​ ​ ​ ​ ​ 1.78 ​ ​ ​ ​ ​ 761 ​ ​ ​ ​ ​ 3.69 ​ ​
Total commercial and consumer loans
​ ​ ​ $ 10,798 ​ ​ ​ ​ ​ 37.29% ​ ​ ​ ​ $ 9,063 ​ ​ ​ ​ ​ 35.44% ​ ​ ​ ​ $ 6,217 ​ ​ ​ ​ ​ 30.18% ​ ​
Total allowance for credit losses on loans
​ ​ ​ $ 28,955 ​ ​ ​ ​ ​ 100.0% ​ ​ ​ ​ $ 25,574 ​ ​ ​ ​ ​ 100.0% ​ ​ ​ ​ $ 20,600 ​ ​ ​ ​ ​ 100.00% ​ ​
Allowance for Credit Losses for Unfunded Commitments
The Company records an ACL for unfunded loan commitments, unless the commitments to extend credit are unconditionally cancelable, through a charge to provision for credit losses in the Company’s Consolidated Statements of Operations. The ACL for unfunded commitment exposures is estimated by loan segment at each balance sheet date under the CECL model using the same methodologies as portfolio loans, taking into consideration the likelihood that funding will occur and assigning expected funding rates to each portfolio category. The ACL for unfunded commitments is included in “other liabilities” on the Company’s Consolidated Balance Sheets.
The ACL for unfunded commitments was $2.1 million at June 30, 2026 and $986 thousand at both December 31, 2025 and December 31, 2024. The allowance is computed using a methodology similar to that used to determine the ACL for loans, modified to consider the probability of a drawdown on the commitment based on periodic updates to the estimated funding rate on loans.
It is management’s policy to maintain the ACL at a level adequate for risks inherent in the loan portfolio. The FDIC and GDBF also review the ACL as an integral part of their examination process. Based on information currently available, management believes that our ACL is adequate. However, the loan portfolio can be adversely affected if economic conditions or the real estate values in our market areas were to weaken. The effect of such events, although uncertain at this time, could result in an increase in the level of nonperforming loans and increased loan losses, which could adversely affect our future growth and profitability. No assurance of the ultimate level of credit losses can be given with any certainty.
 
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Net Charge-offs
The following table summarizes net charge-offs to average loans for each of the periods presented:
​ ​ ​
Six Months Ended June 30, 2026
​ ​
Year Ended December 31, 2025
​ ​
Year Ended December 31, 2024
​
(dollars in thousands)
​ ​
Average
Loans
​ ​
Net Charge-
offs
(Recoveries)
​ ​
Annualized
Net Charge-
offs to
Average
Loans
​ ​
Average
Loans
​ ​
Net Charge-
offs
(Recoveries)
​ ​
Net Charge-
offs to
Average
Loans
​ ​
Average
Loans
​ ​
Net Charge-
offs
(Recoveries)
​ ​
Net Charge-
offs to
Average
Loans
​
Real Estate Loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Construction and land
development
​ ​ ​ $ 234,281 ​ ​ ​ ​ ​  (7) ​ ​ ​ ​ ​ 0.01% ​ ​ ​ ​ $ 194,260 ​ ​ ​ ​ $ 59 ​ ​ ​ ​ ​ 0.03% ​ ​ ​ ​ $ 162,190 ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ 0.00% ​ ​
Single-family residential
​ ​ ​ ​ 287,794 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 0.00% ​ ​ ​ ​ ​ 255,876 ​ ​ ​ ​ ​ 97 ​ ​ ​ ​ ​ 0.04% ​ ​ ​ ​ ​ 197,692 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 0.00% ​ ​
Commercial
​ ​ ​ ​ 745,080 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 0.00% ​ ​ ​ ​ ​ 637,737 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 0.00% ​ ​ ​ ​ ​ 438,620 ​ ​ ​ ​ ​ (6) ​ ​ ​ ​ ​ 0.00% ​ ​
Multifamily
​ ​ ​ ​ 66,588 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 0.00% ​ ​ ​ ​ ​ 55,476 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 0.00% ​ ​ ​ ​ ​ 40,224 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 0.00% ​ ​
Commercial and Consumer Loans:
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Commercial and financial
​ ​ ​ $ 417,257 ​ ​ ​ ​ ​ 1,008 ​ ​ ​ ​ ​ 0.49% ​ ​ ​ ​ $ 465,370 ​ ​ ​ ​ $ 744 ​ ​ ​ ​ ​ 0.16% ​ ​ ​ ​ $ 354,313 ​ ​ ​ ​ $ 5,191 ​ ​ ​ ​ ​ 1.47% ​ ​
Consumer
​ ​ ​ ​ 51,428 ​ ​ ​ ​ ​ (24) ​ ​ ​ ​ ​ (0.09)% ​ ​ ​ ​ ​ 44,966 ​ ​ ​ ​ ​ 11 ​ ​ ​ ​ ​ 0.02% ​ ​ ​ ​ ​ 35,530 ​ ​ ​ ​ ​ 39 ​ ​ ​ ​ ​ 0.11% ​ ​
Total net
charge-offs
​ ​ ​ $ 1,802,428 ​ ​ ​ ​ ​ 977 ​ ​ ​ ​ ​ 0.10% ​ ​ ​ ​ $ 1,653,685 ​ ​ ​ ​ $ 911 ​ ​ ​ ​ ​ 0.06% ​ ​ ​ ​ $ 1,228,569 ​ ​ ​ ​ $ 5,224 ​ ​ ​ ​ ​ 0.43% ​ ​
Net charge-offs were $977 thousand, $911 thousand and $5.2 million for the periods ending June 30, 2026, December 31, 2025 and December 31, 2024, respectively. Charge-offs for 2024 were higher due to the sale of a $7.5 million commercial and financial loan classified as a shared national credit (“SNC”) in which the Bank held a 6.82% interest in the facility. At the time of the sale, the loan had gone materially past due and was placed on non-accrual. The underlying borrower was no longer able to perform on its obligations, and the loan was sold by the bank syndicate to a third-party in lieu of a winddown via bankruptcy. The Company carried a specific reserve related to the loan which was fully charged-off at the time of the loan sale. The Bank has exited substantially all of its SNC exposure.
Investment Portfolio
The securities portfolio is a significant component of our interest earning assets. The portfolio serves the following purposes: (i) to optimize the Bank’s income consistent with the investment portfolio’s liquidity and risk objectives; (ii) to balance market and credit risks of other assets and the Bank’s liability structure; (iii) to profitably deploy funds which are not needed to fulfill loan demand, deposit redemptions or other liquidity purposes; and (iv) provide collateral which the Bank is required to pledge against public funds.
We classify our securities as either available-for-sale or held-to-maturity at the time of purchase. Investment securities not classified as either held-to-maturity or trading are classified as available-for-sale. Debt securities classified as held-to-maturity are carried at amortized cost, excluding accrued interest, when management has the positive intent and ability to hold them to maturity. Debt securities classified as available-for-sale are stated at fair value, with the unrealized gains and losses, net of tax, reported as a separate component of AOCI in the Consolidated Statements of Comprehensive Income. Monthly adjustments are made to reflect changes in the fair value of our available-for-sale securities.
Securities available-for-sale consist primarily of U.S. Treasuries, municipal obligations, mortgage-backed securities and corporate debt securities. No issuer of the available-for-sale securities comprised more than 10% of our shareholders’ equity as of June 30, 2026, December 31, 2025 and December 31, 2024, except FHLMC, FNMA, Ginnie Mae, and U.S. Treasury securities within those periods. Securities held-to-maturity consist primarily of residential mortgage-backed securities, collateralized mortgage obligations and state and political subdivisions.
 
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The following table summarizes the fair value of the available-for-sale securities portfolio as of the dates presented:
​ ​ ​
As of June 30,
2026
​ ​
As of December 31,
​
​ ​ ​
2025
​ ​
2024
​
(dollars in thousands)
​ ​
Amortized
Cost
​ ​
Fair
Value
​ ​
Unrealized
Gain
(Loss)
​ ​
Amortized
Cost
​ ​
Fair
Value
​ ​
Unrealized
Gain
(Loss)
​ ​
Amortized
Cost
​ ​
Fair
Value
​ ​
Unrealized
Gain
(Loss)
​
U.S. Treasuries
​ ​ ​ $ 4,953 ​ ​ ​ ​ $ 4,952 ​ ​ ​ ​ $ (1) ​ ​ ​ ​ $ 21,863 ​ ​ ​ ​ $ 21,912 ​ ​ ​ ​ $ 49 ​ ​ ​ ​ $ 38,511 ​ ​ ​ ​ $ 38,564 ​ ​ ​ ​ $ 53 ​ ​
U.S. government sponsored agencies
​ ​ ​ ​ 2,984 ​ ​ ​ ​ ​ 2,978 ​ ​ ​ ​ ​ (6) ​ ​ ​ ​ ​ 2,978 ​ ​ ​ ​ ​ 2,994 ​ ​ ​ ​ ​ 16 ​ ​ ​ ​ ​ 12,801 ​ ​ ​ ​ ​ 12,809 ​ ​ ​ ​ ​ 8 ​ ​
Mortgage-backed securities
​ ​ ​ ​ 69,392 ​ ​ ​ ​ ​ 65,892 ​ ​ ​ ​ ​ (3,500) ​ ​ ​ ​ ​ 28,740 ​ ​ ​ ​ ​ 25,930 ​ ​ ​ ​ ​ (2,810) ​ ​ ​ ​ ​ 21,429 ​ ​ ​ ​ ​ 17,420 ​ ​ ​ ​ ​ (4,009) ​ ​
Corporate debt securities
​ ​ ​ ​ 1,263 ​ ​ ​ ​ ​ 1,265 ​ ​ ​ ​ ​ 2 ​ ​ ​ ​ ​ 1,000 ​ ​ ​ ​ ​ 960 ​ ​ ​ ​ ​ (40) ​ ​ ​ ​ ​ 1,000 ​ ​ ​ ​ ​ 915 ​ ​ ​ ​ ​ (85) ​ ​
Total available for sale securities
​ ​ ​ $ 78,592 ​ ​ ​ ​ $ 75,087 ​ ​ ​ ​ $ (3,505) ​ ​ ​ ​ $ 54,581 ​ ​ ​ ​ $ 51,796 ​ ​ ​ ​ $ (2,785) ​ ​ ​ ​ $ 73,741 ​ ​ ​ ​ $ 69,708 ​ ​ ​ ​ $ (4,033) ​ ​
The following table summarizes the fair value of the held-to-maturity securities portfolio as of the dates presented:
​ ​ ​
As of June 30,
2026
​ ​
As of December 31,
​
​ ​ ​
2025
​ ​
2024
​
(dollars in thousands)
​ ​
Amortized
Cost
​ ​
Fair
Value
​ ​
Unrealized
Gain
(Loss)
​ ​
Amortized
Cost
​ ​
Fair
Value
​ ​
Unrealized
Gain
(Loss)
​ ​
Amortized
Cost
​ ​
Fair
Value
​ ​
Unrealized
Gain
(Loss)
​
Residential mortgage-backed securities
​ ​ ​ $ 14,846 ​ ​ ​ ​ $ 14,635 ​ ​ ​ ​ $ (211) ​ ​ ​ ​ $ 670 ​ ​ ​ ​ $ 652 ​ ​ ​ ​ $ (18) ​ ​ ​ ​ $ 4,539 ​ ​ ​ ​ $ 4,474 ​ ​ ​ ​ $ (65) ​ ​
Collateralized mortgage obligations
​ ​ ​ ​ 23,537 ​ ​ ​ ​ ​ 23,322 ​ ​ ​ ​ ​ (215) ​ ​ ​ ​ ​ 28,488 ​ ​ ​ ​ ​ 28,747 ​ ​ ​ ​ ​ 259 ​ ​ ​ ​ ​ 18,559 ​ ​ ​ ​ ​ 18,328 ​ ​ ​ ​ ​ (231) ​ ​
State and political subdivisions
​ ​ ​ ​ 10,977 ​ ​ ​ ​ ​ 10,706 ​ ​ ​ ​ ​ (271) ​ ​ ​ ​ ​ 10,944 ​ ​ ​ ​ ​ 10,729 ​ ​ ​ ​ ​ (215) ​ ​ ​ ​ ​ 3,642 ​ ​ ​ ​ ​ 3,370 ​ ​ ​ ​ ​ (272) ​ ​
Total held-to-maturity securities
​ ​ ​ $ 34,514 ​ ​ ​ ​ $ 48,663 ​ ​ ​ ​ $ (697) ​ ​ ​ ​ $ 40,102 ​ ​ ​ ​ $ 40,128 ​ ​ ​ ​ $ 26 ​ ​ ​ ​ $ 26,740 ​ ​ ​ ​ $ 26,172 ​ ​ ​ ​ $ (568) ​ ​
Certain available-for-sale securities have fair values less than amortized cost and, therefore, contain unrealized losses. At June 30, 2026, we evaluated available-for-sale securities which had an unrealized loss to determine whether the decline in the fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors. Any impairment that is not credit related is recognized in other comprehensive income, net of applicable taxes. Credit-related impairment is recognized as an ACL on the balance sheet, limited to the amount by which the amortized cost basis exceeds the fair value with a charge to earnings. Based on an evaluation of available information, including security type, counterparty credit quality, past events, current conditions, and reasonable and supportable forecasts that are relevant to collectability of cash flows, we do not expect to incur credit losses on any security available-for-sale. We do not intend to sell these securities, and it is not more likely than not that we will be required to sell them before recovery of the amortized cost basis, which may be at maturity.
We measure expected credit losses on debt securities classified as held-to-maturity on a collective basis for securities that share similar risk characteristics. Expected credit losses are estimated over the contractual term of each security, adjusted for expected prepayments, and are measured for the entire held-to-maturity portfolio rather than only those securities whose fair value is less than amortized cost. The measurement is not limited by a security's fair value. In estimating expected credit losses, we consider security type and structure, issuer credit quality, historical credit loss experience, current conditions and reasonable and supportable forecasts relevant to the collectibility of contractual cash flows. For additional information, see Note 1 in our consolidated financial statements for the year ended December 31, 2025, included in this prospectus. The allowance is presented as a reduction of the amortized cost basis of the securities, and increases and decreases in the allowance are recognized in earnings through the provision for credit losses. Based on this evaluation, we determined expected credit losses on our held-to-maturity securities were zero, and no allowance for credit losses was recorded or reserve was needed on held-to-maturity securities at any date presented. Unrealized losses on held-to-maturity securities are not recognized in our consolidated financial statements.
The following table sets forth certain information regarding contractual maturities and the weighted average yields of our investment securities as of June 30, 2026, December 31, 2025 and December 31, 2024. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Yields were computed using coupon interest, adding discount accretion or subtracting premium amortization, as appropriate, considering the expected life of each security. The weighted average yield for each maturity range was computed using the amortized cost of each security within the applicable maturity range. The yield on non-taxable investments was not adjusted for tax equivalency.
 
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The following tables summarize the amortized cost and weighted average yield of the available-for-sale securities as of the dates presented:
​ ​ ​
As of June 30, 2026
​
​ ​ ​
Due in One
Year or Less
​ ​
Due after One Year
Through Five Years
​ ​
Due after Five Years
Through Ten Years
​ ​
Due after Ten Years
​
(dollars in thousands)
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​
U.S. Treasuries
​ ​ ​ $ 4,953 ​ ​ ​ ​ ​ 3.97% ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ —% ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ —% ​ ​ ​ ​ $ — ​ ​ ​
—%
​
U.S. government sponsored agencies
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,984 ​ ​ ​ ​ ​ 4.03 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​
—  
​
Mortgage-backed securities
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 972 ​ ​ ​ ​ ​ 1.29 ​ ​ ​ ​ ​ 6,493 ​ ​ ​ ​ ​ 4.34 ​ ​ ​ ​ ​ 61,927 ​ ​ ​
3.99  
​
Corporate debt securities
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,263 ​ ​ ​ ​ ​ 5.89 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​
—  
​
Total available-for-sale securities
​ ​ ​ $ 4,953 ​ ​ ​ ​ ​ 3.97% ​ ​ ​ ​ $ 5,219 ​ ​ ​ ​ ​ 3.97% ​ ​ ​ ​ $ 6,493 ​ ​ ​ ​ ​ 4.34% ​ ​ ​ ​ $ 61,927 ​ ​ ​
3.99%
​
​ ​ ​
As of December 31, 2025
​
​ ​ ​
Due in One
Year or Less
​ ​
Due after One Year
Through Five Years
​ ​
Due after Five Years
Through Ten Years
​ ​
Due after
Ten Years
​
(dollars in thousands)
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​
U.S. Treasuries
​ ​ ​ $ 21,863 ​ ​ ​ ​ ​ 4.60% ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ —% ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ —% ​ ​ ​ ​ $ — ​ ​ ​
—%
​
U.S. government sponsored agencies
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,978 ​ ​ ​ ​ ​ 4.00 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​
—  
​
Mortgage-backed securities
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,067 ​ ​ ​ ​ ​ 1.30 ​ ​ ​ ​ ​ 1,859 ​ ​ ​ ​ ​ 4.30 ​ ​ ​ ​ ​ 25,815 ​ ​ ​
2.80  
​
Corporate debt securities
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,000 ​ ​ ​ ​ ​ 5.40 ​ ​ ​ ​ ​ — ​ ​ ​
—  
​
Total available-for-sale securities
​ ​ ​ $ 21,863 ​ ​ ​ ​ ​ 4.60% ​ ​ ​ ​ $ 4,046 ​ ​ ​ ​ ​ 3.30% ​ ​ ​ ​ $ 2,859 ​ ​ ​ ​ ​ 4.70% ​ ​ ​ ​ $ 25,815 ​ ​ ​
2.80%
​
​ ​ ​
As of December 31, 2024
​
​ ​ ​
Due in One
Year or Less
​ ​
Due after One Year
Through Five Years
​ ​
Due after Five Years
Through Ten Years
​ ​
Due after
Ten Years
​
(dollars in thousands)
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​
U.S. Treasuries
​ ​ ​ $ 16,903 ​ ​ ​ ​ ​ 3.90% ​ ​ ​ ​ $ 21,608 ​ ​ ​ ​ ​ 4.60% ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ —% ​ ​ ​ ​ $ — ​ ​ ​
—%
​
U.S. government sponsored agencies
​ ​ ​ ​ 9,834 ​ ​ ​ ​ ​ 5.00 ​ ​ ​ ​ ​ 2,967 ​ ​ ​ ​ ​ 4.00 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​
—  
​
Mortgage-backed securities
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,117 ​ ​ ​ ​ ​ 1.30 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 20,311 ​ ​ ​
1.70  
​
Corporate debt securities
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,000 ​ ​ ​ ​ ​ 5.40 ​ ​ ​ ​ ​ — ​ ​ ​
—  
​
Total available-for-sale securities
​ ​ ​ $ 26,737 ​ ​ ​ ​ ​ 4.30% ​ ​ ​ ​ $ 25,692 ​ ​ ​ ​ ​ 4.40% ​ ​ ​ ​ $ 1,000 ​ ​ ​ ​ ​ 5.40% ​ ​ ​ ​ $ 20,311 ​ ​ ​
1.70%
​
The following tables summarize the amortized cost and weighted average yield of the held-to-maturity securities as of the dates presented:
​ ​ ​
As of June 30, 2026
​
​ ​ ​
Due in One
Year or Less
​ ​
Due after One Year
Through Five Years
​ ​
Due after Five Years
Through Ten Years
​ ​
Due after
Ten Years
​
(dollars in thousands)
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​
Residential mortgage-backed securities
​ ​ ​ $ — ​ ​ ​ ​ ​ 0.00% ​ ​ ​ ​ $ 7,241 ​ ​ ​ ​ ​ 4.42% ​ ​ ​ ​ $ 7,345 ​ ​ ​ ​ ​ 4.38% ​ ​ ​ ​ $ 260 ​ ​ ​ ​ ​ 3.79% ​ ​
Collateralized mortgage obligations
​ ​ ​ ​ — ​ ​ ​ ​ ​ 0.00 ​ ​ ​ ​ ​ 15,374 ​ ​ ​ ​ ​ 4.71 ​ ​ ​ ​ ​ 4,137 ​ ​ ​ ​ ​ 4.42 ​ ​ ​ ​ ​ 4,026 ​ ​ ​ ​ ​ 4.65 ​ ​
State and political subdivisions
​ ​ ​ ​ — ​ ​ ​ ​ ​ 0.00 ​ ​ ​ ​ ​ 484 ​ ​ ​ ​ ​ 4.22 ​ ​ ​ ​ ​ 3,220 ​ ​ ​ ​ ​ 4.64 ​ ​ ​ ​ ​ 7,273 ​ ​ ​ ​ ​ 3.94 ​ ​
Total held-to-maturity securities
​ ​ ​ $ — ​ ​ ​ ​ ​ 0.00% ​ ​ ​ ​ $ 23,099 ​ ​ ​ ​ ​ 4.61% ​ ​ ​ ​ $ 14,702 ​ ​ ​ ​ ​ 4.44% ​ ​ ​ ​ $ 11,559 ​ ​ ​ ​ ​ 4.18% ​ ​
 
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​ ​ ​
As of December 31, 2025
​
​ ​ ​
Due in One
Year or Less
​ ​
Due after One Year
Through Five Years
​ ​
Due after Five Years
Through Ten Years
​ ​
Due after
Ten Years
​
(dollars in thousands)
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​
Residential mortgage-backed securities
​ ​ ​ $ — ​ ​ ​ ​ ​ 0.00% ​ ​ ​ ​ $ — ​ ​ ​ ​ ​ 0.00% ​ ​ ​ ​ $ 404 ​ ​ ​ ​ ​ 4.74% ​ ​ ​ ​ $ 266 ​ ​ ​ ​ ​ 3.78% ​ ​
Collateralized mortgage obligations
​ ​ ​ ​ — ​ ​ ​ ​ ​ 0.00 ​ ​ ​ ​ ​ 21,746 ​ ​ ​ ​ ​ 4.74 ​ ​ ​ ​ ​ 2,693 ​ ​ ​ ​ ​ 4.39 ​ ​ ​ ​ ​ 4,049 ​ ​ ​ ​ ​ 4.67 ​ ​
State and political subdivisions
​ ​ ​ ​ — ​ ​ ​ ​ ​ 0.00 ​ ​ ​ ​ ​ 481 ​ ​ ​ ​ ​ 4.22 ​ ​ ​ ​ ​ 3,195 ​ ​ ​ ​ ​ 4.64 ​ ​ ​ ​ ​ 7,268 ​ ​ ​ ​ ​ 3.93 ​ ​
Total held-to-maturity securities
​ ​ ​ $ — ​ ​ ​ ​ ​ 0.00% ​ ​ ​ ​ $ 22,227 ​ ​ ​ ​ ​ 4.69% ​ ​ ​ ​ $ 6,292 ​ ​ ​ ​ ​ 4.57% ​ ​ ​ ​ $ 11,583 ​ ​ ​ ​ ​ 4.19% ​ ​
​ ​ ​
As of December 31, 2024
​
​ ​ ​
Due in One
Year or Less
​ ​
Due after One Year
Through Five Years
​ ​
Due after Five Years
Through Ten Years
​ ​
Due after
Ten Years
​
(dollars in thousands)
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​ ​
Amortized
Cost
​ ​
Weighted
Average
Yield
​
Residential mortgage-backed securities
​ ​ ​ $ — ​ ​ ​ ​ ​ 0.00% ​ ​ ​ ​ $ 2,628 ​ ​ ​ ​ ​ 4.49% ​ ​ ​ ​ $ 1,633 ​ ​ ​ ​ ​ 4.74% ​ ​ ​ ​ $ 278 ​ ​ ​ ​ ​ 3.78% ​ ​
Collateralized mortgage obligations
​ ​ ​ ​ — ​ ​ ​ ​ ​ 0.00 ​ ​ ​ ​ ​ 14,259 ​ ​ ​ ​ ​ 4.94 ​ ​ ​ ​ ​ 1,949 ​ ​ ​ ​ ​ 4.57 ​ ​ ​ ​ ​ 2,351 ​ ​ ​ ​ ​ 4.91 ​ ​
State and political subdivisions
​ ​ ​ ​ — ​ ​ ​ ​ ​ 0.00 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 0.00 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 0.00 ​ ​ ​ ​ ​ 3,642 ​ ​ ​ ​ ​ 3.56 ​ ​
Total held-to-maturity securities
​ ​ ​ $ — ​ ​ ​ ​ ​ 0.00% ​ ​ ​ ​ $ 16,887 ​ ​ ​ ​ ​ 4.87% ​ ​ ​ ​ $ 3,582 ​ ​ ​ ​ ​ 4.65% ​ ​ ​ ​ $ 6,271 ​ ​ ​ ​ ​ 4.08% ​ ​
The unrealized losses on securities are attributed to interest rate changes rather than the marketability of the securities or the issuer’s ability to honor redemption of the obligations, as the securities with losses are all obligations of or guaranteed by agencies sponsored by the U.S. government. We have adequate liquidity with the ability and intent to hold these securities to maturity resulting in full recovery of the indicated impairment. The unrealized losses on our investment securities are attributable to changes in interest rates, market spreads and market conditions subsequent to purchase, rather than credit deterioration. We have adequate liquidity with the ability and intent to hold these securities to maturity resulting in full recovery of the indicated impairment Accordingly, no allowance for credit losses on our investment securities was recorded.
Liabilities
Total liabilities as of June 30, 2026 were $3.0 billion and were $2.5 billion and $2.1 billion as of December 31, 2025 and 2024, respectively. Total liabilities increased $486.3 million, or 19.5%, between June 30, 2026 and December 31, 2025, and increased $389.3 million, or 18.5%, between December 31, 2025 and 2024. The increase from December 31, 2025 to June 30, 2026 was primarily driven by the Tandem acquisition with $290.7 million of total liabilities assumed on June 1, 2026, along with growth in deposits during the period of $225.0 million, excluding Tandem. These increases were partially offset by a decrease in FHLB borrowings of $23.0 million that were paid off subsequent to completion of transaction. The increase from December 31, 2024 to December 31, 2025 was primarily driven by a $531.1 million increase in deposits and partially offset by a decrease of $150.0 million in FHLB borrowings during that same period.
Deposits
Deposits represent 95.1% and 94.5% of our total liabilities as of June 30, 2026 and December 31, 2025, respectively, and are the primary source of funds for business operations. We obtain deposits primarily through our treasury services group and branch locations with our bankers targeting new deposit relationships beyond our physical footprint. A variety of deposit products are offered to our clients, including demand deposit accounts, interest-bearing products, savings accounts, and certificates of deposit. We have focused our efforts on gathering noninterest demand deposit accounts through continued outreach to our existing and new loan customers, customer referrals as a result of the quality service we provide and deploying capital to capture strategic opportunities. We take a holistic approach to customer service by deliberately seeking extensive integration of our product offerings with new loan customers and target new deposit relationships with competitive rates on interest bearing accounts. Our bankers are focused on ensuring that we win the entire relationship, including operating accounts, so that we can preserve our attractive mix of deposits.
Total deposits increased $478.9 million, or 20.3%, to $2.8 billion at June 30, 2026 compared to $2.4 billion at December 31, 2025. As of June 30, 2026, 23.5% of total deposits were comprised of noninterest-bearing deposit accounts and 76.5% of interest-bearing deposit accounts compared to 26.2% and 73.8% as of December 31, 2025, respectively. Total deposits increased
 
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$531.1 million, or 29.0%, to $2.4 billion at December 31, 2025 compared to $1.8 billion at December 31, 2024. As of December 31, 2025, 26.2% of total deposits were comprised of noninterest-bearing deposit accounts and 73.8% of interest-bearing deposit accounts compared to 21.5% and 78.5% as of December 31, 2024, respectively. Deposit growth reflected the continued expansion of our branch network. Approximately $301.4 million of the increase at December 31, 2025 was attributable to deposits assumed in the Georgia Primary acquisition, while the remaining increase reflected organic deposit growth arising from new and expanded customer relationships, treasury management initiatives, and leveraging its branch network. Management believes these organic deposit gathering efforts remain an important component of its growth strategy.
At June 30, 2026, we had total brokered deposits of $131.3 million, or 4.6% of total deposits. At December 31, 2025, we had total brokered deposits of $202.7 million, or 8.6% of total deposits, compared to $253.6 million, or 13.9% of total deposits, at December 31, 2024. We use brokered deposits, subject to certain limitations and requirements, as a source of funding to support our asset growth and augment the deposits generated from our commercial and private banking relationships, treasury services group and branch locations. Our level of brokered deposits varies from time to time depending on competitive interest rate conditions and other factors and tends to increase as a percentage of total deposits when brokered deposits are less costly than issuing internet certificates of deposit or borrowing from the FHLB.
At June 30, 2026, our uninsured deposits were $1.3 billion, or 44.1% of total deposits. At December 31, 2025, our uninsured deposits were $1.1 billion, or 46.2% of total deposits, compared to $800.4 million, or 43.8% of total deposits, at December 31, 2024.
The following table summarizes our average deposit balances and weighted average rates as of the dates presented:
​ ​ ​
As of June 30,
2026
​ ​
As of December 31,
​
​ ​ ​
2025
​ ​
2024
​
(dollars in thousands)
​ ​
Average
Balance
​ ​
Weighted
Average Rate
​ ​
Average
Balance
​ ​
Weighted
Average Rate
​ ​
Average
Balance
​ ​
Weighted
Average Rate
​
Noninterest-bearing demand deposits
​ ​ ​ $ 582,641 ​ ​ ​ ​ ​ —% ​ ​ ​ ​ $ 491,343 ​ ​ ​ ​ ​ —% ​ ​ ​ ​ $ 254,638 ​ ​ ​ ​ ​ —% ​ ​
Interest-bearing demand deposits
​ ​ ​ ​ 302,298 ​ ​ ​ ​ ​ 1.65 ​ ​ ​ ​ ​ 270,719 ​ ​ ​ ​ ​ 1.94 ​ ​ ​ ​ ​ 179,804 ​ ​ ​ ​ ​ 1.82 ​ ​
Money market deposits and savings deposits
​ ​ ​ ​ 701,855 ​ ​ ​ ​ ​ 2.88 ​ ​ ​ ​ ​ 632,313 ​ ​ ​ ​ ​ 3.13 ​ ​ ​ ​ ​ 544,009 ​ ​ ​ ​ ​ 3.72 ​ ​
Certificates of deposits
​ ​ ​ ​ 682,796 ​ ​ ​ ​ ​ 3.92 ​ ​ ​ ​ ​ 674,663 ​ ​ ​ ​ ​ 4.29 ​ ​ ​ ​ ​ 551,863 ​ ​ ​ ​ ​ 4.99 ​ ​
Total interest-bearing
deposits
​ ​ ​ $ 1,686,949 ​ ​ ​ ​ ​ 3.08% ​ ​ ​ ​ $ 1,577,695 ​ ​ ​ ​ ​ 3.42% ​ ​ ​ ​ $ 1,275,676 ​ ​ ​ ​ ​ 4.00% ​ ​
Total deposits
​ ​ ​ $ 2,269,590 ​ ​ ​ ​ ​ 2.29% ​ ​ ​ ​ $ 2,069,038 ​ ​ ​ ​ ​ 2.61% ​ ​ ​ ​ $ 1,530,314 ​ ​ ​ ​ ​ 3.33% ​ ​
The following tables set forth the maturity of time deposits as of June 30, 2026, December 31, 2025 and December 31, 2024:
​ ​ ​
As of June 30, 2026 Maturity Within:
​
(dollars in thousands)
​ ​
Three
Months
​ ​
Three to Six
Months
​ ​
Six to Twelve
Months
​ ​
After Twelve
Months
​ ​
Total
​
Time deposits (less than $250,000)
​ ​ ​ $ 60,055 ​ ​ ​ ​ $ 56,179 ​ ​ ​ ​ $ 108,918 ​ ​ ​ ​ $ 85,088 ​ ​ ​ ​ $ 310,240 ​ ​
Time deposits ($250,000 or more)
​ ​ ​ ​ 84,795 ​ ​ ​ ​ ​ 64,713 ​ ​ ​ ​ ​ 84,403 ​ ​ ​ ​ ​ 14,490 ​ ​ ​ ​ ​ 248,401 ​ ​
Brokered CDs
​ ​ ​ ​ 33,005 ​ ​ ​ ​ ​ 28,546 ​ ​ ​ ​ ​ 8,716 ​ ​ ​ ​ ​ 61,044 ​ ​ ​ ​ ​ 131,311 ​ ​
Total time deposits
​ ​ ​ $ 177,855 ​ ​ ​ ​ $ 149,438 ​ ​ ​ ​ $ 202,037 ​ ​ ​ ​ $ 160,622 ​ ​ ​ ​ $ 689,952 ​ ​
​ ​ ​
As of December 31, 2025 Maturity Within:
​
(dollars in thousands)
​ ​
Three
Months
​ ​
Three to Six
Months
​ ​
Six to Twelve
Months
​ ​
After Twelve
Months
​ ​
Total
​
Time deposits (less than $250,000)
​ ​ ​ $ 51,351 ​ ​ ​ ​ $ 50,669 ​ ​ ​ ​ $ 94,785 ​ ​ ​ ​ $ 82,811 ​ ​ ​ ​ $ 279,616 ​ ​
Time deposits ($250,000 or more)
​ ​ ​ ​ 49,566 ​ ​ ​ ​ ​ 40,857 ​ ​ ​ ​ ​ 83,704 ​ ​ ​ ​ ​ 13,249 ​ ​ ​ ​ ​ 187,376 ​ ​
Brokered CDs
​ ​ ​ ​ 98,309 ​ ​ ​ ​ ​ 19,174 ​ ​ ​ ​ ​ 31,980 ​ ​ ​ ​ ​ 53,237 ​ ​ ​ ​ ​ 202,700 ​ ​
Total time deposits
​ ​ ​ $ 199,226 ​ ​ ​ ​ $ 110,700 ​ ​ ​ ​ $ 210,469 ​ ​ ​ ​ $ 149,297 ​ ​ ​ ​ $ 669,692 ​ ​
 
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​ ​ ​
As of December 31, 2024 Maturity Within:
​
(dollars in thousands)
​ ​
Three
Months
​ ​
Three to Six
Months
​ ​
Six to Twelve
Months
​ ​
After Twelve
Months
​ ​
Total
​
Time deposits (less than $250,000)
​ ​ ​ $ 22,793 ​ ​ ​ ​ $ 35,035 ​ ​ ​ ​ $ 58,371 ​ ​ ​ ​ $ 71,408 ​ ​ ​ ​ $ 187,607 ​ ​
Time deposits ($250,000 or more)
​ ​ ​ ​ 22,163 ​ ​ ​ ​ ​ 28,205 ​ ​ ​ ​ ​ 65,882 ​ ​ ​ ​ ​ 13,352 ​ ​ ​ ​ ​ 129,602 ​ ​
Brokered CDs
​ ​ ​ ​ 110,149 ​ ​ ​ ​ ​ 3,778 ​ ​ ​ ​ ​ 50,188 ​ ​ ​ ​ ​ 89,523 ​ ​ ​ ​ ​ 253,638 ​ ​
Total time deposits
​ ​ ​ $ 155,105 ​ ​ ​ ​ $ 67,018 ​ ​ ​ ​ $ 174,441 ​ ​ ​ ​ $ 174,283 ​ ​ ​ ​ $ 570,847 ​ ​
Contractual Obligations
The following tables contain supplemental information regarding our total contractual obligations at June 30, 2026, December 31, 2025 and December 31, 2024:
​ ​ ​
Payments Due at June 30, 2026
​
(dollars in thousands)
​ ​
Within One
Year
​ ​
One to Three
Years
​ ​
Three to Five
Years
​ ​
After Five
Years
​ ​
Total
​
Deposits without a stated maturity
​ ​ ​ $ 2,148,670 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 2,148,670 ​ ​
Time deposits
​ ​ ​ ​ 529,329 ​ ​ ​ ​ ​ 159,263 ​ ​ ​ ​ ​ 1,360 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 689.952 ​ ​
Other borrowings
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 63,472 ​ ​ ​ ​ ​ 19,150 ​ ​ ​ ​ ​ 82,622 ​ ​
Operating lease liabilities
​ ​ ​ ​ 4,220 ​ ​ ​ ​ ​ 8,603 ​ ​ ​ ​ ​ 8,978 ​ ​ ​ ​ ​ 27,778 ​ ​ ​ ​ ​ 49,579 ​ ​
Total contractual obligations
​ ​ ​ $ 2,682,219 ​ ​ ​ ​ $ 167,866 ​ ​ ​ ​ $ 73,810 ​ ​ ​ ​ $ 46,928 ​ ​ ​ ​ $ 2,970,824 ​ ​
​ ​ ​
Payments Due at December 31, 2025
​
(dollars in thousands)
​ ​
Within One
Year
​ ​
One to Three
Years
​ ​
Three to Five
Years
​ ​
After Five
Years
​ ​
Total
​
Deposits without a stated maturity
​ ​ ​ $ 1,689,993 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 1,689,993 ​ ​
Time deposits
​ ​ ​ ​ 520,394 ​ ​ ​ ​ ​ 140,836 ​ ​ ​ ​ ​ 8,462 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 669,692 ​ ​
Other borrowings
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 71,216 ​ ​ ​ ​ ​ 71,216 ​ ​
Operating lease liabilities
​ ​ ​ ​ 4,193 ​ ​ ​ ​ ​ 8,542 ​ ​ ​ ​ ​ 8,899 ​ ​ ​ ​ ​ 29,684 ​ ​ ​ ​ ​ 51,318 ​ ​
Total contractual obligations
​ ​ ​ $ 2,214,580 ​ ​ ​ ​ $ 149,378 ​ ​ ​ ​ $ 17,361 ​ ​ ​ ​ $ 100,900 ​ ​ ​ ​ $ 2,482,219 ​ ​
​ ​ ​
Payments Due at December 31, 2024
​
(dollars in thousands)
​ ​
Within One
Year
​ ​
One to Three
Years
​ ​
Three to Five
Years
​ ​
After Five
Years
​ ​
Total
​
Deposits without a stated maturity
​ ​ ​ $ 1,257,778 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 1,257,778 ​ ​
Time deposits
​ ​ ​ ​ 396,564 ​ ​ ​ ​ ​ 140,982 ​ ​ ​ ​ ​ 33,301 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 570,847 ​ ​
Other borrowings
​ ​ ​ ​ 150,000 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 61,888 ​ ​ ​ ​ ​ 211,888 ​ ​
Operating lease liabilities
​ ​ ​ ​ 4,106 ​ ​ ​ ​ ​ 8,427 ​ ​ ​ ​ ​ 8,710 ​ ​ ​ ​ ​ 34,181 ​ ​ ​ ​ ​ 55,424 ​ ​
Total contractual obligations
​ ​ ​ $ 1,808,448 ​ ​ ​ ​ $ 149,409 ​ ​ ​ ​ $ 42,011 ​ ​ ​ ​ $ 96,069 ​ ​ ​ ​ $ 2,095,937 ​ ​
We believe that we will be able to meet our contractual obligations as they come due through the maintenance of adequate cash levels. We expect to maintain adequate cash levels through profitability, loan and securities repayment and maturity activity and continued deposit gathering activities. We have in place various borrowing mechanisms for both short-term and long-term liquidity needs.
FHLB Advances
From time to time, the Company utilizes FHLB advances as a supplementary funding source to finance our operations. These FHLB advances are collateralized by securities owned by the Company and held in safekeeping by the FHLB, FHLB stock owned by the Company, and certain qualifying loans secured by real estate, including residential mortgage loans, home equity lines of credit and commercial real estate loans.
At June 30, 2026 and December 31, 2025, the Company had no outstanding borrowings with the FHLB. At December 31, 2024, the Company had $150.0 million of adjustable-rate credit advances outstanding with an interest rate of 4.57%. The
 
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outstanding advances at December 31, 2024, matured and were repaid during 2025. The advances from the FHLB are collateralized by a blanket lien on all eligible first mortgage loans and other specific loans in addition to FHLB stock. Loans totaling approximately $1.8 billion, $1.5 billion and $1.3 billion were pledged as collateral to the FHLB at June 30, 2026, December 31, 2025 and December 31, 2024, respectively, with lendable collateral value of $324.6 million, $210.5 million and $181.6 million for the same periods.
At June 30, 2026 and December 31, 2025, no securities were pledged as additional collateral to the FHLB. At December 31, 2024, there were securities with a fair value of $88.8 million and lendable collateral value of $84.7 million were pledged as additional collateral.
Revolving Credit Line
On June 10, 2025, we entered into a Loan and Security Agreement with ServisFirst Bank, an Alabama banking corporation, as lender (“ServisFirst”). The loan agreement provides for a senior secured revolving line of credit in a maximum principal amount of up to $10.0 million (the “Revolving Loan”), which the Company may borrow, repay, and reborrow from time to time prior to maturity. Our obligation to repay the Revolving Loan and accrued interest is evidenced by a revolving promissory note in the principal amount of $10.0 million. Proceeds of the Loan are permitted to be used for growth capital and general corporate purposes. As of June 30, 2026, we had no outstanding borrowings under the Revolving Loan, with $10.0 million of borrowing capacity available under the commitment.
Advances under the Revolving Loan bear interest at a per annum rate equal to the greater of (i) the prime rate minus 0.25%, or (ii) a floor of 5.00%, adjusting concurrently with changes in the prime rate. Interest is calculated on a 360-day-year basis and is payable quarterly in arrears. Following a payment default, amounts more than 10 days past due are subject to a late fee of 3.00% of the overdue installment (subject to a $20 minimum), and the outstanding principal balance after maturity or acceleration bears interest at the otherwise applicable rate plus 2.00% per annum. We also pay an annual non-use fee of 0.20% on the average unused portion of the commitment, unless no default exists and the average outstanding balance is at least $4 million during the applicable period.
The Revolving Loan matures on June 10, 2027, or such earlier date as the maturity may be accelerated following an event of default, and all outstanding principal and accrued interest are due in full at maturity absent renewal or extension by mutual written agreement. The Revolving Loan is secured by a first-priority pledge of 100% of the issued and outstanding capital stock of the Bank pursuant to a related pledge agreement, together with all proceeds and replacements thereof, and we have authorized the filing of financing statements to perfect ServisFirst’s security interest. The terms of the Revolving Loan do not include a guaranty from any third party or subordination arrangement in favor of other creditors, however the agreement restricts the Bank from incurring subordinated debt or non-traditional funding without ServisFirst’s consent. Customary affirmative and negative covenants are applicable to the Company and the Bank under the terms of the Revolving Loan, including requirements that the Bank maintain “well-capitalized” regulatory status, a Tier 1 leverage ratio above 7.0%, a non-performing assets ratio below 25%, and a return on assets ratio above 0.60%, subject to specified cure periods. Additional covenants restrict changes of control, mergers, dispositions of collateral, additional indebtedness above specified thresholds, guaranties of third-party obligations, and dividends during a default, and require the Company to maintain an interest reserve of at least $1.4 million with ServisFirst throughout the term.
Other Borrowings
Subordinated Debt
The Company had approximately $75.4 million of subordinated debt, net of debt costs, as of June 30, 2026, $64.0 million as of December 31, 2025 and approximately $54.7 million as of December 31, 2024.
In March 2025, as the result of our acquisition with Georgia Primary, we assumed $10.0 million in fixed-to-floating rate subordinated notes due 2031 ($750 thousand of which was owned by Tandem and cancelled following our acquisition of Tandem). A discount of $1.0 million was recorded as part of the acquisition for a fair value of $9.0 million on these subordinated notes. At June 30, 2026 and December 31, 2025 the remaining discount on the subordinated notes was $778 thousand and $919 thousand, respectively. The subordinated notes are scheduled to mature on October 6, 2031, and through October 6, 2026, bear a fixed rate of interest of 3.75% per annum, payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year. Beginning October 6, 2026, the interest rate on the subordinated notes will reset quarterly to a floating rate per annum equal to the then-current three-month SOFR plus 2.88%, payable quarterly in arrears on March 31, June 30, September 30, and December 31 of each year up to the maturity date or redemption. Beginning October 6, 2026, we may, at our option and with
 
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proper notice provided, redeem the subordinated notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest.
In June 2026, as the result of our acquisition with Tandem, we assumed $12.0 million in fixed-to-floating rate subordinated notes due 2035. At June 30, 2026 the remaining discount on the subordinated notes was $66 thousand. The subordinated notes are scheduled to mature on July 30, 2035, and through July 30, 2030, bear a fixed rate of interest of 8.00% per annum, payable semi-annually in arrears on January 30 and July 30 of each year. Beginning July 30, 2030, the interest rate on the subordinated notes will reset quarterly to a floating rate per annum equal to the then-current three-month SOFR plus 4.43%, payable quarterly in arrears on January 30, April 30, July 30 and October 30 of each year up to the maturity date or redemption. Beginning July 30, 2030, we may, at our option and with proper notice provided, redeem the subordinated notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest.
In August 2026, we completed the offering and sale of $55.0 million in aggregate principal amount of our 6.75% fixed-to-floating rate subordinated notes due 2036. The subordinated notes are scheduled to mature on September 1, 2036, and through September 1, 2031, bear a fixed rate of interest of 6.75% per annum, payable semi-annually in arrears on March 1 and September 1 of each year. Beginning September 1, 2031, the interest rate on the subordinated notes will reset quarterly to a floating rate per annum equal to the then-current three-month SOFR plus 2.71%, payable quarterly in arrears on March 1, June 1, September 1 and December 1 of each year up to the maturity date or redemption. Beginning September 1, 2031, we may, at our option and with proper notice provided, redeem the subordinated notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest. The debt issuance costs of $1.1 million were netted with proceeds and are being amortized over the term until the redemption date of the notes. On September 15, 2026, we used the proceeds from the sale of the subordinated notes to redeem our 4.125% fixed-to-floating rate subordinated notes due 2031 issued in May 2021.
Junior Subordinated Debentures
On April 15, 2005, we issued, through a wholly owned Delaware statutory trust, Georgia Banking Statutory Trust I (the “Trust”), $7.0 million of preferred beneficial interests in our unsecured junior subordinated debentures (trust preferred securities) that qualify as Tier I capital under Federal Reserve guidelines within certain limitations. We own all the common securities of the Trust. The proceeds from the issuance of the common securities and the trust preferred securities were used by the Trust to purchase $7.2 million of our junior subordinated debentures, which carry a floating rate of interest equal to the three-month SOFR plus 26 basis points tenor spread plus a 2.00% credit spread. At June 30, 2026, this rate was 5.93% and at December 31, 2025 and 2024, this rate was 5.98% and 6.62%, respectively. The proceeds received by us from the sale of the junior subordinated debentures were used to strengthen our capital position and to accommodate current and future growth. The debentures and related accrued interest represent the sole assets of the Trust.
Our trust preferred securities accrue and pay quarterly distributions at an interest rate equal to the three-month SOFR plus 26 basis points plus a 2.00% spread per annum of the stated liquidation value of $1,000 per capital security. We entered contractual arrangements which, taken collectively, fully and unconditionally guarantee payment of accrued and unpaid distributions required to be paid on the trust preferred securities, the redemption price with respect to any trust preferred securities called for redemption by the Trust, and payments due upon a voluntary or involuntary dissolution, winding up, or liquidation of the Trust. The trust preferred securities are mandatorily redeemable upon maturity of the debentures on April 15, 2035, or upon earlier redemption of the debentures as provided in the indenture. We have the right to redeem the debentures purchased by the Trust in whole or in part. As specified in the indenture, if the debentures are redeemed prior to maturity, the redemption price will be the unpaid principal amount and any accrued but unpaid interest. The Trust document provides the Company, upon notification to the trustee, may elect to defer quarterly interest payments for a period as established in the Trust.
Shareholders’ Equity
Shareholders’ equity totaled $278.7 million at June 30, 2026, $204.9 million at December 31, 2025 and $155.5 million at December 31, 2024. The increase in shareholders’ equity for the six months ended June 30, 2026 was primarily attributable to the capital raise that was completed in June 2026 resulting in net proceeds of $36.6 million along with the issuance of our common stock in connection with the closing of the Tandem merger during the same month. The increase in shareholders’ equity between years ended 2025 and 2024 was primarily attributable to additional paid-in capital resulting from the Georgia Primary acquisition and net income recognized during 2025, partially offset by other changes in shareholders’ equity, as applicable.
Off-Balance Sheet Arrangements
The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These transactions include commitments to extend credit and involve, to varying degrees,
 
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elements of credit and interest rate risk in excess of the amount recognized in the balance sheets. The contract or notional amounts of those instruments reflect the extent of involvement we have in particular classes of financial instruments. We use the same credit policies in making commitments and conditional obligations as we do for on-balance sheet instruments. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of conditions established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. We evaluate each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if we deem necessary, upon extension of credit is based on management’s credit evaluation of the borrower. Collateral obtained varies but may include real estate, stocks, bonds, and certificates of deposit.
Standby letters of credit are conditional commitments issued to guarantee a customer’s performance to a third party and have essentially the same credit risk as other lending facilities. Collateral held for commitments to extend credit and letters of credit varies but may include cash, accounts receivable, inventory, property, plant, equipment and income-producing commercial properties.
The following table summarizes the Company’s off-balance-sheet financial instruments as of the dates presented:
​ ​ ​
June 30,
2026
​ ​
December 31,
​
(dollars in thousands)
​ ​
2025
​ ​
2024
​
Financial instruments whose contract amounts represent credit risk: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Commitments to extend credit
​ ​ ​ $ 481,518 ​ ​ ​ ​ $ 388,867 ​ ​ ​ ​ $ 373,504 ​ ​
Letters of credit
​ ​ ​ ​ 5,558 ​ ​ ​ ​ ​ 5,533 ​ ​ ​ ​ ​ 4,748 ​ ​
Total
​ ​ ​ $ 487,076 ​ ​ ​ ​ $ 394,400 ​ ​ ​ ​ $ 378,252 ​ ​
Liquidity Management and Capital Adequacy
Liquidity
Liquidity refers to the measure of our ability to meet cash flow requirements of our depositors and borrowers, while at the same time meeting our current and future operational, capital, and strategic cash flow needs, all at a reasonable cost. We continuously monitor our liquidity position to ensure that assets and liabilities are managed in a manner that will meet all short-term and long-term cash requirements. We manage our liquidity position to meet the daily cash flow needs of customers, while maintaining an appropriate balance between assets and liabilities in order to meet the return on investment objectives of our shareholders. In managing our cash flows, management regularly confronts situations that can give rise to increased liquidity risk. These include funding mismatches, market constraints in accessing sources of funds and the ability to convert assets into cash. Changes in economic conditions or exposure to credit, market, operational, legal and reputational risks also could affect our Bank’s liquidity risk profile and are considered in the assessment of liquidity management. The Company is a corporation separate and apart from our Bank and, therefore, must provide for its own liquidity, including liquidity required to meet its debt service requirements on any notes and junior subordinated debentures. The Company’s main source of cash flow is dividends declared and paid to it by our Bank.
There are statutory and regulatory limitations that affect the ability of our Bank to pay dividends to the Company. See the Sections entitled “Supervision and Regulation” and “Dividend Policy” elsewhere in this prospectus for more information. We believe that these limitations will not impact our ability to meet our ongoing short-term cash obligations. We continually monitor our liquidity position to ensure that our assets and liabilities are managed in a manner to meet all reasonably foreseeable short-term, long-term and strategic liquidity demands. Management has established a comprehensive management process for identifying, measuring, monitoring and controlling liquidity risk.
The Asset/Liability Management Committee (the “ALCO”) of our Board is the primary group responsible for monitoring the Bank’s liquidity position. We have identified various liquidity metrics and ratios, including the volatile funds ratio, non-core funding dependency ratio and loan-to-deposit ratio that the ALCO uses to monitor the Bank’s liquidity position. Further, the ALCO is also responsible for reviewing and monitoring the stress testing of the Bank’s overall liquidity under multiple liquidity stress scenarios. As of June 30, 2026, the Bank was in compliance with all internal policies and guidelines.
Because of its critical importance to the viability of our Bank, liquidity risk management is fully integrated into our risk management processes. Critical elements of our liquidity risk management include: effective corporate governance consisting of oversight by our Board and active involvement by management; appropriate strategies, policies, procedures and limits used to
 
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manage and mitigate liquidity risk; comprehensive liquidity risk measurement and monitoring systems including stress tests that are commensurate with the complexity of our business activities; active management of intraday liquidity and collateral; an appropriately diverse mix of existing and potential future funding sources; adequate levels of highly liquid marketable securities free of legal, regulatory, or operational impediments, that can be used to meet liquidity needs in stressful situations; comprehensive contingency funding plans that sufficiently address potential adverse liquidity events and emergency cash flow requirements; and internal controls and internal audit processes sufficient to determine the adequacy of our Bank’s liquidity risk management process.
The Company considers the maintenance of adequate liquidity to be an important part of managing risk. Consistent with our balance sheet strategy, we have intentionally kept our liquidity primarily in cash and interest-bearing deposits rather than investing heavily in investment securities, which typically includes significant unrealized gains or losses.
Our liquidity position is supported by management of our liquid assets and access to alternative sources of funds. Our liquid assets include cash, interest-bearing deposits in correspondent banks, federal funds sold, and fair value of unpledged investment securities. Other available sources of liquidity include wholesale deposits, and additional borrowings from correspondent banks, FHLB advances, and the Federal Reserve discount window. Our short-term and long-term liquidity requirements are primarily met through cash flow from operations, redeployment of prepaying and maturing balances in our loan and investment portfolios, and new customer deposits. Other alternative sources of funds will supplement these primary sources to the extent necessary to meet additional liquidity requirements on either a short-term or long-term basis.
Capital Requirements
We, by virtue of being a bank holding company with more than $3.0 billion in total consolidated assets, and the Bank are subject to various regulatory capital requirements administered by the federal banking regulators. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material adverse effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. See the section entitled “Supervision and Regulation” for additional information regarding the regulatory capital requirements applicable to us.
Quantitative measures established by regulation to ensure capital adequacy require us and the Bank to maintain minimum ratios. These include a CET1 risk-based capital ratio, a Tier 1 risk-based capital ratio, which includes CET1 and additional Tier 1 capital, and a total risk-based capital ratio, which includes Tier 1 and Tier 2 capital. CET1 is primarily comprised of the sum of common stock instruments and related surplus net of treasury stock plus retained earnings less certain adjustments and deductions, including with respect to goodwill, intangible assets, mortgage servicing assets, and deferred tax assets subject to temporary timing differences. Additional Tier 1 capital is primarily comprised of noncumulative perpetual preferred stock. Tier 2 capital consists of instruments disqualified from Tier 1 capital, including qualifying subordinated debt and a limited amount of loan loss reserves up to a maximum of 1.25% of risk-weighted assets, subject to certain eligibility criteria. The capital rules also define the risk-weights assigned to assets and off-balance sheet items to determine the risk-weighted asset components of the risk-based capital rules, including, for example, certain “high volatility” commercial real estate, past due assets, structured securities, and equity holdings.
We and the Bank are also required to maintain capital at a minimum level based on total assets, which is known as the Tier 1 leverage ratio. The leverage capital ratio is the ratio of Tier 1 capital to quarterly average assets net of goodwill, certain other intangible assets, and certain required deduction items require us and the Bank to maintain: (i) a minimum leverage ratio of Tier 1 capital to average total assets, after certain adjustments, of 4.0%, (ii) a minimum ratio of Tier 1 capital to risk-weighted assets of 6.0%, (iii) a minimum ratio of total capital to risk-weighted assets of 8.0% and, (iv) a minimum ratio of CET1 to risk-weighted assets of 4.5%.
In addition, the capital rules require a capital conservation buffer of 2.5% above each of the minimum risk-based capital ratio requirements (CET1, Tier 1, and total capital), comprised of CET1, which is designed to absorb losses during periods of economic stress. These buffer requirements must be met for a bank or bank holding company to be able to pay dividends, engage in share buybacks, or make discretionary bonus payments to executive management without restriction.
The federal banking agencies have broad powers with which to require companies to take prompt corrective action to resolve problems of insured depository institutions that do not meet minimum capital requirements. The law establishes five
 
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capital categories for this purpose: (i) well-capitalized; (ii) adequately capitalized; (iii) undercapitalized; (iv) significantly undercapitalized; and (v) critically undercapitalized.
To be well-capitalized, we and the Bank must maintain at least the following capital ratios: (i) 6.5% CET1 to risk-weighted assets; (ii) 8.0% Tier 1 capital to risk-weighted assets; (iii) 10.0% Total capital to risk-weighted assets; and (iv) 5.0% Tier 1 leverage ratio.
The table below summarizes the capital requirements applicable to us and the Bank in order to be considered “well-capitalized” from a regulatory perspective, as well as our and the Bank’s capital ratios as of June 30, 2026, December 31, 2025 and December 31, 2024.
​ ​ ​
Ratio at
June 30,
2026
​ ​
Ratio at December 31,
​ ​
Regulatory
Capital
Ratio
Requirements
​ ​
Regulatory
Capital Ratio
Requirements
including
Capital
Conservation
Buffer
​ ​
Minimum
Requirements
for “Well
Capitalized”
Depository
Institution
​
​ ​ ​
2025
​ ​
2024
​
Georgia Banking Company, Inc.
(Bank Holding Company)
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total capital (to risk-weighted assets)
​ ​ ​ ​ 14.32% ​ ​ ​ ​ ​ 13.61% ​ ​ ​ ​ ​ 13.76% ​ ​ ​ ​ ​ 8.00% ​ ​ ​ ​ ​ 10.50% ​ ​ ​ ​ ​ 10.00% ​ ​
Tier 1 capital (to risk-weighted assets)
​ ​ ​ ​ 10.58% ​ ​ ​ ​ ​ 9.39% ​ ​ ​ ​ ​ 9.41% ​ ​ ​ ​ ​ 6.00% ​ ​ ​ ​ ​ 8.50% ​ ​ ​ ​ ​ 8.00% ​ ​
CET1 capital (to risk-weighted assets)
​ ​ ​ ​ 10.29% ​ ​ ​ ​ ​ 9.06% ​ ​ ​ ​ ​ 9.00% ​ ​ ​ ​ ​ 4.50% ​ ​ ​ ​ ​ 7.00% ​ ​ ​ ​ ​ 6.50% ​ ​
Tier 1 leverage
​ ​ ​ ​ 9.43% ​ ​ ​ ​ ​ 7.64% ​ ​ ​ ​ ​ 7.76% ​ ​ ​ ​ ​ 4.00% ​ ​ ​ ​ ​ 4.00% ​ ​ ​ ​ ​ 5.00% ​ ​
Georgia Banking Company
(Bank Subsidiary)
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total capital (to risk-weighted assets)
​ ​ ​ ​ 13.05% ​ ​ ​ ​ ​ 12.74% ​ ​ ​ ​ ​ 11.19% ​ ​ ​ ​ ​ 8.00% ​ ​ ​ ​ ​ 10.50% ​ ​ ​ ​ ​ 10.00% ​ ​
Tier 1 capital (to risk-weighted assets)
​ ​ ​ ​ 11.83% ​ ​ ​ ​ ​ 11.52% ​ ​ ​ ​ ​ 9.98% ​ ​ ​ ​ ​ 6.00% ​ ​ ​ ​ ​ 8.50% ​ ​ ​ ​ ​ 8.00% ​ ​
CET1 capital (to risk-weighted assets)
​ ​ ​ ​ 11.83% ​ ​ ​ ​ ​ 11.52% ​ ​ ​ ​ ​ 9.98% ​ ​ ​ ​ ​ 4.50% ​ ​ ​ ​ ​ 7.00% ​ ​ ​ ​ ​ 6.50% ​ ​
Tier 1 leverage
​ ​ ​ ​ 10.78% ​ ​ ​ ​ ​ 9.37% ​ ​ ​ ​ ​ 8.22% ​ ​ ​ ​ ​ 4.00% ​ ​ ​ ​ ​ 4.00% ​ ​ ​ ​ ​ 5.00% ​ ​
We and the Bank exceeded all regulatory capital requirements and were considered to be “well-capitalized” as of the dates reflected per the table above. There have been no conditions or events since June 30, 2026 that management believes would change this classification.
Impact of Inflation and Changing Prices
Our consolidated financial statements and related notes have been prepared in accordance with GAAP, which require the measurement of financial position and operating results in terms of historical dollars, without considering the changes in the relative purchasing power of money over time due to inflation. The impact of inflation is reflected in the increased cost of operations. Unlike most industrial companies, nearly all of our assets and liabilities are monetary in nature. As a result, interest rates have a greater impact on our performance than the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or to the same extent as the price of goods or services.
Quantitative and Qualitative Disclosures about Market and Interest Rate Risks
Market Risk
Market risk is the risk of loss arising from adverse changes in the fair value of financial instruments due to changes in interest rates, exchange rates, and equity prices. The Company’s market risk is composed primarily of interest rate risk inherent in the normal course of lending and deposit-taking activities. We are also exposed to market risk in our investing activities.
Interest Rate Risk Management
Net interest income is our most significant component of earnings and we consider interest rate risk to be our most significant market risk. Our net interest income results from the difference between the yields we earn on our interest-earning assets, primarily loans and investments, and the rates that we pay on our interest-bearing liabilities, primarily deposits and
 
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borrowings. When interest rates change, the yields we earn on our interest-earning assets and the rates we pay on our interest-bearing liabilities do not necessarily move in tandem with each other because of the differences in their maturities and repricing characteristics and which can negatively impact net interest income.
Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions and policies of various governmental and regulatory agencies and, in particular, the Federal Reserve. Changes in monetary policy, including changes in interest rates, influence not only the interest we receive on loans and investments and the amount of interest we pay on deposits and borrowings, but such changes could also affect the average duration of our loan portfolio, investment securities and other interest-earning assets.
Our goal is to structure our asset/liability composition to maximize net interest income while managing interest rate risk so as to minimize the adverse impact of changes in interest rates on net interest income and capital in either a rising or declining interest rate environment. Profitability is affected by fluctuations in interest rates. A sudden and substantial change in interest rates may impact our earnings adversely because the interest rates of the underlying assets and liabilities do not change at the same speed, to the same extent or on the same basis.
Derivatives and Hedging Activities
We utilize interest rate swap and option agreements as part of our asset liability management strategy to help manage our interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties but is rather determined by reference to the notional amount and the other terms of the individual interest rate swap agreements. We posted collateral of $2.0 million and $62 thousand in the normal course of business related to these contracts as of December 31, 2025 and December 31, 2024, respectively. There was no collateral posted as of June 30, 2026.
In a cash flow hedge, the entire change in the fair value of the interest rate swap or the gain/loss on an interest rate option included in the assessment of hedge effectiveness is initially recorded in other comprehensive income (“OCI”) and subsequently reclassified from OCI to current period earnings in the same period that the hedged item affects earnings. Interest rate hedges with notional amounts totaling $250.0 million, $150.0 million and $100.0 million as of June 30, 2026, December 31, 2025 and December 31, 2024, respectively, were designated as cash flow hedges of certain loans receivable and interest rate contracts and were determined to be effective during all periods presented. We expect the hedges to remain effective during the remaining terms of the hedges. The effect of cash flow hedge accounting on other comprehensive income for the six months ended June 30, 2026 and for years ended December 31, 2025 and 2024 were unrealized losses of $1.1 million, $143 thousand and $367 thousand, respectively.
Interest expense recorded on the cash flow hedges totaled $69 thousand for the six months ended June 30, 2026 and $706 thousand and $819 thousand for the years ended December 31, 2025 and 2024, respectively. Interest expense recorded on the cash flow hedges is reported as a component of interest income on loans. At June 30, 2026, the net unrealized holding gains recorded in AOCI that are expected to be reclassified into earnings within the next 12 months totaled $227 thousand. At December 31, 2025, the net unrealized holding gains recorded in AOCI that are expected to be reclassified into earnings within the next 12 months totaled $184 thousand. Fair value hedges interest rate swaps with notional amounts totaled $76.3 million, $79.2 million and $122.2 million at June 30, 2026, December 31, 2025 and December 31, 2024, respectively. The swaps are designated as fair value hedges of certain time deposits and are considered effective during all periods presented. We expect the hedges to remain effective during the remaining terms of the swaps. Interest expense recorded on these swap transactions totaled $84 thousand for the six months ended June 30, 2026 and $217 thousand and $594 thousand for the years ended December 31, 2025 and 2024, respectively. Interest expense recorded on these swap transactions is reported as a component of interest expense on deposits.
Sensitivity Analysis
One of the tools management uses to estimate and manage the sensitivity of net interest income to changes in interest rates is an asset/liability simulation model. Resulting estimates are based upon multiple assumptions for each scenario, including loan and deposit re-pricing characteristics and the rate of prepayments. The ALCO periodically reviews the assumptions for reasonableness based on historical data and future expectations; however, actual net interest income may differ from model results. The primary objective of the simulation model is to measure the potential change in net interest income over time using multiple interest rate scenarios. The base scenario assumes rates remain flat and is the scenario to which all others are compared, in order to measure the change in net interest revenue. Policy limits are based on immediate rate shock scenarios which are compared to the base scenario. Other scenarios analyzed may include ramped rate shocks, delayed rate shocks, yield curve
 
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steepening or flattening, or other variations in rate movements. While the primary policy scenarios focus on a 12-month time frame, longer time horizons are also modeled.
Our policy is based on the 12-month impact on net interest income of interest rate shocks. Our shock scenario assumes rates immediately change the full amount at the scenario onset. The following table presents our interest sensitivity position at the dates indicated.
​ ​ ​
Net Interest Income Sensitivity
​
​ ​ ​
12 Month Projection
​
(Shock in basis points)
​ ​
-200
​ ​
-100
​ ​
+100
​ ​
+200
​
June 30, 2026
​ ​
(11.46)%
​ ​
(5.65)%
​ ​
4.68%
​ ​
9.05%
​
December 31, 2025
​ ​
(14.82)%
​ ​
(7.35)%
​ ​
6.66%
​ ​
13.35%
​
December 31, 2024
​ ​
(11.14)%
​ ​
(5.88)%
​ ​
4.86%
​ ​
9.40%
​
December 31, 2023
​ ​
(13.38)%
​ ​
(7.12)%
​ ​
6.14%
​ ​
12.29%
​
The Company’s model indicates that it was asset-sensitive at June 30, 2026, as modeled increases in interest rates resulted in increases in projected net interest income and modeled decreases in interest rates resulted in decreases in projected net interest income. With the current interest rate yield curve, modeling of net interest income in changing rate environments presents particular challenges. A flat or inverted interest rate yield curve is an unfavorable interest rate environment for many financial institutions, including the Bank, as short-term interest rates generally drive our deposit pricing and longer-term interest rates generally drive loan pricing. When these rates converge or invert, the profit spread we realize between loan yields and deposit rates narrows, which pressures our NIM.
Economic Value of Equity
We also compute amounts by which the net present value of our assets and liabilities (economic value of equity or “EVE”) would change in the event of a range of assumed changes in market interest rates. This model uses a discounted cash flow analysis to measure the interest rate sensitivity of net portfolio value. The model estimates the economic value of each type of asset, liability and off-balance sheet contract under the assumptions that the yield curve increases or decreases instantaneously, with changes in interest rates representing immediate and permanent, parallel shifts in the yield curve.
The following table sets forth the calculation of the estimated changes in our EVE that would result from the designated immediate changes in the yield curve at the dates indicated.
​ ​ ​
Economic Value of Equity
Sensitivity
​
(Shock in basis points)
​ ​
-200
​ ​
-100
​ ​
+100
​ ​
+200
​
June 30, 2026
​ ​
(8.41)%
​ ​
(3.45)%
​ ​
0.81%
​ ​
0.01%
​
December 31, 2025
​ ​
(14.43)%
​ ​
(6.15)%
​ ​
3.33%
​ ​
5.03%
​
December 31, 2024
​ ​
(10.41)%
​ ​
(4.21)%
​ ​
1.54%
​ ​
1.36%
​
December 31, 2023
​ ​
(9.83)%
​ ​
(4.21)%
​ ​
2.64%
​ ​
3.99%
​
As previously noted, these assumptions are inherently uncertain, and actual results may differ from simulated results. The future path of interest rates remains uncertain and will depend in part on inflation, labor-market conditions and other economic data considered by the Federal Reserve. Further changes to interest rates and monetary policy are dependent upon the Federal Reserve’s assessment of economic data as it becomes available. We would expect net interest income to decline somewhat in a decreasing interest rate environment and to increase in an increasing interest rate environment, as our model reflects that interest-earning assets reprice faster than interest-bearing deposits which is attributable to assumed deposit betas and repricing lags as there is continued strong market competition for core deposits.
Adoption of Recent Accounting Pronouncements
Recently issued accounting pronouncements and their effects are discussed in Note 1 to our consolidated financial statements for the years ended December 31, 2025 and 2024 included elsewhere in this prospectus.
In November 2025, the FASB issued ASU 2025-08, Financial Instruments — Credit Losses (Subtopic 326-20): Purchased Loans (“ASU 2025-08”). The update expands the gross-up approach to most purchased loans, eliminating the recognition of a day-one credit loss expense for acquisitions. ASU 2025-08 introduces a new category of acquired loans and requires an allowance
 
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for expected credit losses to be recorded at acquisition as an adjustment to the amortized cost basis rather than through provision expense. Effective January 1, 2026, the Company adopted ASU 2025-08 on a prospective basis. For loans purchased in connection with the Company’s acquisition of Tandem effective June 1, 2026, the Company recorded an initial allowance for credit losses as an adjustment to the amortized cost basis, consistent with the new standard. See Note 2 to our consolidated financial statements for the six months ended June 30, 2026 and 2025 included elsewhere in this prospectus.
 
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BUSINESS
The Company
Georgia Banking Company, Inc. is a bank holding company headquartered in Atlanta, Georgia. Through our bank subsidiary, Georgia Banking Company, we provide a broad suite of commercial banking, community banking, private banking, commercial real estate banking, mortgage warehouse lending and treasury services to businesses, professionals, entrepreneurs and consumers concentrated in the Atlanta MSA. As of June 30, 2026, the Company had approximately $3.3 billion in total assets and operated a diversified mix of lending, deposit and fee-generating businesses through 10 full-service banking offices and three loan production offices, all of which are in the Atlanta MSA.
We believe our success is largely driven by a differentiated relationship banking model that combines local decision-making authority, senior-level responsiveness, personal relationships and exceptional service with the products, expertise, technology and lending capacity associated with larger institutions. This model allows us to serve the complex financial needs of small and middle-market businesses while maintaining the service culture and accessibility that define community banking. We serve businesses, professionals, entrepreneurs, and families throughout the Atlanta MSA via a platform designed for disciplined growth, relationship depth and long-term shareholder value creation.
Our current strategy was established following a transformative recapitalization completed in 2021, led by the Company’s Chief Executive Officer, Bartow Morgan, Jr., and supported by a mix of local and institutional investors. Mr. Morgan previously served as Chief Executive Officer and a director of Brand Group Holdings and BrandBank from 2001 until its sale in 2018 and led BrandBank’s growth from a local community bank into one of the largest privately held banks headquartered in the Atlanta MSA.
Mr. Morgan and a number of other like-minded investors identified an opportunity in the Atlanta MSA for a locally headquartered bank with between $2 billion and $10 billion in total assets due to a large number of mergers and acquisitions involving banks in this asset class between 2015 and 2018. Following the Recapitalization, we began a comprehensive strategic transformation of the franchise. Since that time, we have evolved from a specialty-oriented institution with approximately $650 million in assets into what we believe is a premier community banking franchise in Georgia with approximately $3.3 billion in assets as of June 30, 2026.
Since the Recapitalization, we have expanded our market presence, strengthened our operating platform, increased core funding and diversified our balance sheet. Notable progress includes:
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Recruiting experienced bankers across diverse business lines with an attractive rewards and recognition program;
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Investing in technology and infrastructure;
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Revamping branding and marketing strategy;
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Expanding into attractive Atlanta MSA sub-markets and broadening our product capabilities with seven new branch locations opened since 2021;
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Growing assets from approximately $650 million in 2021 to approximately $3.3 billion as of June 30, 2026, including approximately $2.6 billion in loans;
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Growing deposits from approximately $525 million in 2021 to approximately $2.8 billion as of June 30, 2026;
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Completing and integrating two strategic whole-bank acquisitions;
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Establishing robust service standards; and
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Being recognized by The Atlanta Journal-Constitution as a Top Workplace for three consecutive years and as a Top Workplace by Axios Atlanta for one year (based on employee surveys administered by a third-party research firm).
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Key Strengths
We are focused on becoming the premier relationship-oriented commercial bank serving small and middle-market businesses throughout the Atlanta MSA. We believe this focus has helped us rapidly grow and diversify while maintaining strong credit quality and capital, which has positioned us to generate consistent, high-quality earnings. We believe the breadth of our product capabilities allows us to compete for complex commercial relationships that small community banks cannot fully serve, while our high-quality, relationship-based service allows us to take share from larger regional and national institutions. Our key strengths include:
 
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Locally headquartered in one of the nation’s most attractive banking markets.   We believe the Atlanta MSA is one of the country’s most dynamic metropolitan markets, supported by population growth, business formation, corporate investment, entrepreneurial activity and a diversified regional economy. At the same time, consolidation across the banking industry has reduced the number of locally headquartered institutions with the scale, talent and product breadth needed to serve growing companies. From the second quarter of 2009 through the second quarter of 2025, the Atlanta MSA deposit market (excluding the top five deposit holders) increased by approximately $34.3 billion. We believe this creates a compelling opportunity for the Company with its headquarters in and focus on the Atlanta MSA.
Proven ability to recruit and retain top banking talent.   A cornerstone of our strategy has been attracting experienced bankers who want a client-focused platform supported by local decision-making and an entrepreneurial culture. Many of the Company’s senior leaders held previous leadership roles with high performing banks operating within the Atlanta MSA. These leaders and our relationship managers have extensive experience serving Atlanta businesses and long-standing customer relationships. We believe continued consolidation and restructuring within the banking industry create opportunities to recruit talented bankers throughout our market.
Scalable platform for future growth.   Over the past five years, we have invested meaningfully in personnel, technology, treasury services infrastructure, digital banking capabilities and operational support functions. We believe these investments have helped us create a scalable platform capable of supporting future growth while generating operating leverage and enhancing profitability, enabling us to serve customers for the long-term as they grow and their financial needs become more complex.
Strong credit culture and risk management.   Strong credit quality is a core component of our culture. We believe our credit performance reflects a disciplined underwriting philosophy, experienced lenders, relationship-based client selection and consistent risk oversight. Our relationship-centric approach provides deeper insight into customer operations, which we believe helps us assess risk and manage portfolio performance throughout economic cycles.
Our Strategy
We believe our key strengths position us for continued growth and drive long-term shareholder value creation. To capitalize on these key strengths, we leverage the following strategies:
Differentiated relationship banking model.   We have built a culture centered on long-term client relationships, local decision-making, and direct access to experienced bankers and senior leaders. Our bankers and credit officers operate with meaningful local authority, allowing us to make timely decisions and deliver customized solutions based on each client’s needs. We believe this model is especially valuable to small and middle-market businesses that need sophisticated banking solutions but still want responsive service and relationship continuity. We believe this approach distinguishes us from larger competitors and supports stronger client retention, referral activity, and relationship depth.
Diversified lines of business.   Our platform includes commercial banking, community banking, private banking, commercial real estate banking, mortgage warehouse, treasury services and retail mortgage. These complementary businesses provide multiple sources of loan growth, deposit generation, fee income, and customer acquisition while supporting deeper relationships across the franchise. We plan to grow these lines of business and opportunistically add others to drive future balance sheet growth and profitability.
Balanced and disciplined growth strategy.   Our growth initiatives combine organic expansion with selective strategic acquisitions. Organically, we seek to deepen existing client relationships, expand commercial banking teams, grow focused business lines and penetrate attractive Atlanta sub-markets. We plan to complement this organic growth through selective acquisitions of institutions that share our relationship-oriented culture. We intend to continue to employ a disciplined approach to acquisitions, seeking to partner only with institutions that offer attractive market share, low-cost deposit funding and complementary capabilities.
Our Market Opportunity
Why Atlanta
We focus our banking operations on the Atlanta MSA, which we believe represents one of the most attractive banking markets in the United States and provides a compelling foundation for our long-term growth strategy. The Atlanta MSA is home to more than 6.4 million residents, making it the sixth-largest metropolitan area in the country, and the region added approximately 64,400 residents between 2024 and 2025. On a percentage basis, the region’s population grew by approximately 0.96% over the 12 months ended June 30, 2025, outpacing the national growth rate of approximately 0.52%, and metropolitan
 
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Atlanta has added nearly 400,000 residents since 2020. We believe the region’s sustained population growth reflects its economic vitality, relative affordability and quality of life, and we expect these attributes to continue to generate demand for banking services we offer.
The Atlanta MSA’s growth is supported by a diversified economy that includes financial services, technology, payments, healthcare, logistics, professional services, consumer products, manufacturing, and real estate. The Atlanta MSA generates gross domestic product of approximately $385.0 billion, which ranks among the largest metropolitan economies in the United States, and the region hosts one of the nation’s largest concentrations of Fortune 500 company headquarters. We believe this breadth of industry reduces the region’s exposure to any single sector and supports a deep and resilient base of commercial banking customers. The Atlanta MSA also exhibits favorable household economics relative to state and national benchmarks, with a projected 2026 median household income of approximately $95,900, compared to a Georgia median of approximately $83,400 and a national median of approximately $86,700, and projected population growth of approximately 4.2% from 2026 to 2031, compared to a national average of approximately 2.6%. We believe these demographic strengths, including the size of the market as measured by population and number of operating businesses and its historical and projected growth, provide meaningful opportunities for us to aggregate clients and grow our balance sheet.
The Atlanta MSA provides a compelling foundation for our long-term growth strategy because of the following:
Robust business formation and middle-market opportunity.   The Atlanta MSA has consistently ranked among the nation’s leading markets for new business formation, entrepreneurial activity, and corporate relocations. Small and middle-market businesses represent the core engine of the regional economy and remain our primary target customer segment. We believe these businesses increasingly seek banking partners capable of delivering sophisticated products and services while maintaining direct access to experienced relationship managers and local decision-makers. Our strategy is designed to serve this segment by combining lending capacity, treasury management capabilities, banking expertise, and personalized service.
Market consolidation creates opportunity.   The Atlanta banking market has undergone significant consolidation over the last decade. According to FDIC market share data, approximately 81 FDIC-insured financial institutions operate within the Atlanta region, while mergers and acquisitions have reduced the number of locally headquartered community banks with sufficient scale to serve growing businesses. As consolidation has accelerated, many businesses have experienced reduced access to local decision-makers and relationship continuity.
Unique competitive positioning.   Following the completion of the Tandem Bank acquisition, we had approximately $3.3 billion in assets and approximately $2.8 billion in deposits at June 30, 2026. The combined franchise represents the third-largest deposit market share among banks headquartered in the Atlanta MSA. Our scale allows us to compete effectively for larger commercial banking relationships while maintaining the entrepreneurial culture, local decision-making authority, and relationship-based service model that distinguish community banking. We believe this combination creates a differentiated value proposition for clients and shareholders.
Long runway for market share growth.   Despite our growth, we believe we remain in the early stages of our market opportunity. As of June 30, 2026, we represented approximately 1.13% of total deposits in the Atlanta market, compared to approximately 0.26% in 2021, reflecting meaningful market share gains over a relatively short period.
The region also benefits from the presence of Hartsfield-Jackson Atlanta International Airport, which supports business activity, transportation connectivity, and continued investment across the Southeast. We believe Atlanta’s role as a transportation and logistics hub reinforces its status as a magnet for corporate operations and small-business formation, which in turn drives demand for commercial credit, treasury management, and depository services. Although we compete in this market against community banks as well as regional and national financial institutions of substantially greater size and resources, we believe the scale and dynamism of the Atlanta MSA leave meaningful room for a locally led relationship banking franchise to gain market share over time.
Consolidation in Our Market
The Atlanta MSA banking landscape has been reshaped over the past decade by sustained industry consolidation that has materially reduced the number of locally headquartered banks with between $2.0 billion and $10.0 billion in total assets. The number of banks headquartered in Georgia declined from 364 in 2000 to 139 in 2025, a decrease of approximately 61.8%, and we believe this contraction has been especially pronounced among locally headquartered institutions comparable to the Company operating in the Atlanta MSA. We believe these institutions have disappeared not because the market is small or shrinking, but because scale, rising compliance costs and merger-and-acquisition activity remain powerful consolidating forces.
 
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A series of transactions since 2015 illustrates this trend, as almost all of the banks headquartered in the Atlanta MSA between $2.0 billion to $10.0 billion in assets have been acquired, combined or repositioned under out of market ownership. Notable examples include the acquisition of Community & Southern Holdings, Inc. by Bank of the Ozarks, Inc. in 2016; the acquisition of Hamilton State Bancshares, Inc. by Ameris Bancorp in 2018; the acquisition of Brand Group Holdings, Inc. (parent of BrandBank) by Renasant Corporation in 2018; the acquisition of State Bank Financial Corporation by Cadence Bancorporation in 2019; the acquisition of Fidelity Southern Corporation by Ameris Bancorp in 2019; the acquisition of Atlantic Capital Bancshares, Inc. by SouthState Corporation in 2022; the acquisition of Heritage Southeast Bancorporation, Inc. by The First Bancshares, Inc. in 2023; and the acquisition of Piedmont Bancorp, Inc. by United Bankshares, Inc. in 2025.
On June 30, 2015, before significant consolidation, locally headquartered banks with total assets between $2.0 billion and $10.0 billion held approximately $11.9 billion, or 8.15%, of the $146.1 billion total deposits in the Atlanta MSA. As of June 30, 2025, the most recent data available from the FDIC Summary of Deposits, the Atlanta MSA deposit market totaled approximately $239.8 billion, of which approximately $187.9 billion, or roughly 78.4%, was held by banking organizations with more than $10.0 billion in total assets. By contrast, the identified segment of locally relevant banks with $2.0 billion to $10.0 billion in total assets held only approximately $6.5 billion, or 2.71%, of deposits in the market.
Customer Displacement and Addressable Market
We believe the consolidation in the Atlanta MSA banking market has displaced an identifiable segment of customers who previously relied on banks headquartered in the Atlanta MSA with $2.0 billion to $10.0 billion in assets and who are now underserved by both large national institutions and small community banks. This displaced segment consists principally of small-to-mid-size businesses, professionals and professional-service firms and real estate developers and investors that value local decision-making, relationship continuity, and senior-level responsiveness, but that also require larger balance-sheet capacity, treasury management services, and specialized credit capabilities. We believe that when a locally headquartered bank is acquired by a larger, out-of-market institution, credit decisions, pricing authority, and relationship management frequently migrate away from the local market, disrupting the continuity that these customers value.
While they offer broad product sets, we believe large national and super-regional banks often are unable to replicate the local knowledge, speed and relationship-oriented banking partnership Atlanta businesses seek. At the same time, we believe the small community banks in the Atlanta MSA frequently lack the balance-sheet scale, product breadth and treasury and payments capabilities required to serve larger and more complex middle-market relationships. This dynamic, in our view, has left a widening gap in the market between the largest institutions and the smallest, precisely in the segment historically occupied by locally headquartered banks with $2.0 billion to $10.0 billion in total assets. Consistent with our own experience and that of comparable institutions in our market, we also believe we have benefited, and may continue to benefit, from market dislocation caused by these mergers and acquisitions, as customers choose to move their banking relationships in the aftermath of a sale, and as experienced bankers choose to join, or have relocated to, institutions like ours.
We believe these factors present a significant market opportunity to serve this segment of the Atlanta MSA. This is further compounded with the rapid growth of the Atlanta MSA resulting in a wide breadth of the market that is not being adequately served. To frame the scale of this opportunity, the Atlanta MSA represented approximately $239.8 billion of deposits at June 30, 2025, yet the identified $2.0 billion to $10.0 billion local-bank segment accounted for only approximately $6.5 billion, or approximately 2.71%, of that total. There are only seven institutions with an Atlanta MSA presence in the $2.0 billion to $10.0 billion asset range, of which only three are headquartered in the Atlanta MSA and within the narrower $3.0 billion to $5.0 billion band only two locally owned institutions operate — one of which is us. We believe this scarcity, measured against the depth of the overall deposit market, indicates that the addressable opportunity for a locally led, mid-size platform is substantial and materially larger than our current share. We are in the early stages of capturing this opportunity.
Recent Acquisitions
On March 1, 2025, we completed the acquisition of Georgia Primary, the parent company of Georgia Primary Bank, in a transaction valued at approximately $27.1 million, with consideration consisting of approximately 18% cash and 82% common stock. The merger expanded the Company’s presence within key Atlanta MSA sub-markets by adding two full-service branch locations in Fulton and Forsyth Counties, while contributing additional scale, deposits, and commercial banking relationships. The merger added approximately $341.1 million in total assets, $254.8 million in loans, and $301.4 million in deposits. We believe the merger represented a pivotal moment for us, allowing us to capitalize on our existing infrastructure while rapidly engaging with a merged customer base.
 
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On June 1, 2026, we completed the acquisition of Tandem, the parent company of Tandem Bank, in a transaction valued at approximately $35.5 million, with consideration consisting of approximately 30.4% cash and 69.6% common stock. The merger expanded the Company’s footprint across the Atlanta MSA by adding a full-service branch in DeKalb County and three loan production offices in Cherokee, DeKalb and Gwinnett Counties. At the completion of the acquisition, based on preliminary fair value adjustments, the merger added approximately $321.3 million in total assets, $240.1 million in loans, and $254.0 million in deposits. We believe the combination strengthens our ability to serve clients throughout metro Atlanta while enhancing future growth opportunities.
Recent Developments
On June 17, 2026, we completed a $77.7 million private placement of our common stock led by Fortress Investment Group at a price of $30.00 per share. The transaction attracted broad participation from institutional investors. We intend to use the net proceeds from primary shares sold in the June 2026 Private Placement — one half of the total proceeds — to support organic growth, strengthen our capital position, and enhance our strategic flexibility to pursue future growth opportunities. We did not receive any proceeds from the sale of shares by selling shareholders.
On August 12, 2026, we completed a $1.22 million private placement of common stock at a price of $30.00 per share to individual accredited investors. We issued 40,683 shares of our common stock. We intend to use the net proceeds from the sale of the primary shares sold in the August 2026 Private Placement to support organic growth, strengthen our capital position, and enhance our strategic flexibility to pursue future growth opportunities.
On August 21, 2026, we completed the offering and sale of $55.0 million in aggregate principal amount of our 6.75% fixed-to-floating rate subordinated notes due 2036. The subordinated notes in the 2036 Notes Offering were structured to comply with requirements for Tier 2 capital treatment. The subordinated notes in the 2036 Notes Offering have a fixed rate period for five years and a floating rate for the remaining five years. We used the net proceeds from the sale of the subordinated notes in the 2036 Notes Offering to redeem the 4.125% fixed-to-floating rate subordinated notes due 2031 issued in May 2021; a notice of redemption was delivered to the holders of such existing subordinated notes on August 14, 2026, pursuant to which the notes were redeemed on September 15, 2026.
Our Growth and Strategic Development
Our growth and strategic development have been guided by a three-phase initial strategic plan we established at the time of the Recapitalization. This plan was intended to build a relationship-focused community banking franchise in the Atlanta market that could fill a gap left in the market where larger community banks were sold to regional banks, limiting banking options for small to medium-sized businesses. Our management team has pursued this plan in a disciplined manner, with an emphasis on building out critical infrastructure to support our lines of business, prudent loan and deposit growth and long-term franchise value. The management team has executed each phase in a disciplined and deliberate manner.
Phase 1 — Post-Acquisition Foundation
The first phase of our initial strategic plan focused on establishing the institutional infrastructure necessary to support a growing community bank. During this phase, we assembled a senior management team with significant banking experience at super community and regional banks in the Atlanta MSA, implemented corporate governance practices appropriate for a publicly registered institution, and deployed excess liquidity and new capital to support our various lines of business, with a focus on commercial and financial (“C&F”) and commercial real estate (“CRE”) loan growth. We also made investments in credit administration, compliance, BSA/AML/CFT, and our overall risk management infrastructure and took steps to reduce our historical reliance on wholesale funding sources, with the objective of establishing a more stable and diversified core-funded deposit franchise.
Phase 2 — Deliberate Market Expansion
The second phase centered on expanding our geographic presence within the Atlanta MSA through deliberate site selection in attractive submarkets. The retail branch network was intentionally designed to reestablish a banking presence in the markets that our bankers had worked in before, including markets of banks previously led by our executive management. We also developed treasury services capabilities that compare to products and services offered by larger, regional banks to deepen relationships with commercial clients and cultivate core funding channels designed to support balance sheet growth while managing deposit costs. During this phase, we also diversified our sources of revenue through the establishment of the payments team within our
 
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treasury services group, the launch of a retail mortgage origination channel and the continued development of our private banking and mortgage warehouse lending businesses.
Phase 3 — Ongoing Growth and Franchise Enhancement
The third and ongoing phase of our initial strategic plan is focused on initiatives that we believe can further enhance long-term franchise value and returns to shareholders. Key priorities include improving operating leverage through increased scale, gaining market share through organic growth and evaluating opportunistic acquisitions, team lift-outs and other strategic initiatives that are consistent with our relationship-banking model and financial objectives. The acquisitions of Georgia Primary Bank and Tandem Bank are consistent with this strategy, and each transaction has extended our presence in complementary Atlanta submarkets.
Additional Detail Regarding Our Lines of Business
Commercial Banking
Our commercial banking group serves small and middle-market businesses throughout metro Atlanta through customized lending, deposit and treasury services. Our experienced bankers focus on establishing long-term relationships with business owners and management teams through a comprehensive understanding of the Company’s operations and business needs. This allows our bankers to provide commercial and financial lending solutions tailored to the specific needs of our commercial banking customers, which we believe is a key differentiator within our market. We offer various commercial loans, including term loans, owner-occupied real estate financing and working capital lines of credit. We enhance these commercial loan product offerings with a suite of treasury management products that enhance the working capital efficiency of our commercial customers. We believe our local market knowledge, focus on understanding the business and operational needs of our customers, and responsive decision-making differentiate us in a highly competitive banking market. This group:
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Drives loan growth;
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Generates core funded operating deposits; and
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Expands small business and middle-market relationships.
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Commercial Banking serves as the foundation of our relationship-driven model and provides opportunities to deepen customer engagement across treasury services, private banking, and other services.
Community Banking
Our community banking group provides relationship-based financial services to consumers, professionals, and small businesses through our branch network and community-focused banking teams. Offerings include consumer and business deposit accounts, retail mortgage lending, personal banking services, and financial solutions designed to support customers through every stage of their financial journey. Our bankers are empowered to deliver local expertise and personalized service while leveraging the resources of a growing banking franchise. This group:
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Generates stable core deposits;
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Expands small business and household relationships; and
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Builds long-term customer loyalty.
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Our community banking group provides a stable funding foundation and may serve as an entry point for customer relationships that can expand into broader banking services over time, depending on customer needs, market conditions, and our ability to retain and deepen those relationships.
Private Banking
Our private banking group provides customized banking and lending solutions for business owners, executives, professionals, and high-net-worth individuals. Services include deposit products, tailored credit solutions, and concierge-style relationship management designed to simplify complex financial needs. Our private banking group works closely with other business lines to deliver coordinated financial solutions and deepen client relationships. This group:
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Attracts affluent customers;
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Deepens relationships with business owners and executives; and
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Expands core-funded deposit gathering opportunities.
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Our private banking group enhances our relationship banking strategy by serving influential clients whose personal banking needs often align with commercial and business relationships throughout the franchise.
Commercial Real Estate
Our commercial real estate banking group provides financing solutions for income-producing properties and commercial development projects throughout the Atlanta market. The team partners with experienced developers, investors, and business owners across multiple asset classes, including retail, industrial, office, multifamily, hospitality and mixed-use properties. Commercial real estate banking has been a significant contributor to our growth through both meaningful loan and deposit relationships and reflects our long-standing expertise in one of the nation’s most dynamic real estate markets. This group:
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Capitalizes on Atlanta market growth;
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Generates attractive loan yields; and
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Leverages asset class experience and expertise.
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Atlanta remains one of the nation’s most attractive real estate markets, and our commercial real estate banking team enables us to participate in this growth through a disciplined approach to commercial real estate lending and focus on consistent long-standing customer relationships.
Mortgage Warehouse
Our mortgage warehouse lending group provides short-term funding facilities to independent mortgage banking originators across the United States. These facilities enable mortgage originators to fund residential mortgage loans to their customers who are acquiring or refinancing a home. We provide this funding under mortgage loan repurchase agreements, pursuant to which we purchase whole loan residential mortgages from the originator and take delivery of and maintain control over the related note and collateral documents which are endorsed to us. Each loan we purchase is generally supported by a purchase commitment from a takeout investor that we have approved in advance, and the originator is obligated to cause each loan to be sold to that approved takeout investor, or if the loan is not so sold, to repurchase the loan, in each case within a short period. This group generates fee income and interest income while maintaining short duration exposure, as the purchased loans typically remain on our balance sheet for less than 30 days before being sold to investors. We believe this business provides a lower-duration, self-liquidating source of interest and fee income, supported by our originator approval and monitoring process, the takeout-investor commitments underlying the loans, and our control of the loan collateral. Led by an experienced management team, this line of business is an important source of earning assets and fee income for us. As of June 30, 2026, we have provided mortgage warehouse financing for more than 28 years and have funded an aggregate of more than $95 billion of residential mortgage loans through multiple interest-rate and housing cycles, without incurring material credit losses in this business. This group:
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Diversifies earnings through different interest and fee income via short term assets;
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Provides national reach; and
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Offers a source of liquidity.
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Mortgage warehouse lending represents a business line that differentiates us from many community bank peers while contributing meaningful scale and revenue diversification.
Treasury Services
Our treasury services solutions group provides cash management, payment processing, merchant acquiring, liquidity management services, fraud prevention, and digital banking solutions primarily to commercial, business banking, private banking, payroll services, payments and other operating-company customers. An integrated component of this group is our payments team, which delivers payroll processing, payment processing, merchant acquiring, receivables and payables automation, high-volume ACH services, and related treasury management solutions to customers with complex payment and money movement needs. We maintain relationships with payment networks (including Visa, Mastercard, and the ACH network operators), third party payment processors that provide transaction routing, authorization, and settlement infrastructure, and independent sales organizations that serve as distribution channels for our merchant-acquiring services. We are subject to the
 
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operating rules and compliance requirements of each payment network with which we maintain membership or sponsorship. We offer a relationship-driven model built around integrated service, subject-matter expertise, and consistent execution across sales, operations, credit, risk, and compliance. We believe this cross-functional approach differentiates us from our competitors by delivering the speed, coordination, and risk discipline required for mission-critical money movement and core treasury banking relationships. The payments team and our treasury services solutions group as a whole:
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Generate low cost, core-funded deposits;
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Create noninterest income through fees associated with treasury management, payment processing, payroll-related services, merchant acquiring, and other transaction-based services, the results of which may fluctuate due to customer transaction volumes; and
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Support customer retention, deepen commercial banking relationships and diversify funding sources.
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Treasury services are an important strategic driver of operating deposits and client engagement, helping transform banking relationships into primary operating relationships.
Retail Mortgage
Our retail mortgage group services individuals seeking financing for housing including retail mortgages and HELOCs. This group:
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Diversifies earnings;
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Expands household relationships; and
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Builds long-term customer loyalty.
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Retail mortgage represents a business line that may serve as an entry point for customer relationships that can expand into broader banking services over time, depending on customer needs, market conditions, and our ability to retain and deepen those relationships.
Competition
The banking and financial services industry in the Atlanta MSA is highly competitive. We compete for loans, deposits, and other financial services with a broad range of financial institutions, including large national banks, super-regional banks, community banks, credit unions, mortgage banking companies, fintech companies, and non-bank financial institutions. Many of our competitors are larger than us, have significantly more resources, greater brand recognition and more extensive and established branch networks or geographic footprints than we do, and may be able to attract customers more effectively than we can. As a result of their scale, many of these competitors can be more aggressive than we can on loan and deposit pricing and may better afford and make broader use of media advertising, support services and technology than we do. Further, many of our non-bank competitors in the fintech space have fewer regulatory constraints and may have lower cost structures compared to us. To offset these competitive disadvantages, we concentrate marketing efforts in the local markets we service within the Atlanta MSA with local advertisements and personal contacts. We depend on our reputation as having greater personal service, consistency, flexibility and the ability to make credit and other business decisions quickly.
We believe we compete effectively by offering clients a focused relationship-based banking experience characterized by responsive, local decision-making authority, accessibility to senior-level banking personnel, and a comprehensive suite of financial products designed to meet the needs of our customers including small and medium-sized businesses. Our competitive positioning is premised on delivering the product breadth and technological capabilities associated with larger institutions while providing the personalized service, community ties, and flexibility that clients seek from a community bank. Management believes this “big-bank products without big-bank bureaucracy” approach, combined with our deep relationships within the Atlanta business community, represents a meaningful and sustainable competitive differentiator.
Human Capital
To facilitate talent attraction and retention, we strive to create an inclusive, safe and healthy workplace with opportunities for our employees to grow and develop in their careers, supported by strong compensation, benefits and health and welfare programs. We are committed to fostering a workplace culture that attracts, develops, and retains high-performing individuals who share our client-centered values and commitment to excellence.
 
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Employee Profile
We employ a team of experienced banking professionals across our branch network, lines of business, and corporate functions. As of June 30, 2026, we had 275 full-time employees and no part-time employees. None of our employees are covered by a collective bargaining agreement. We consider our relationship with our employees to be good and have not experienced interruptions of operations due to labor disagreements.
We have been named a Top Workplace based on employee feedback gathered and analyzed by Energage for four consecutive years. The recognition includes honors from the Atlanta Journal-Constitution Top Workplaces program for three years and Axios Atlanta Top Workplaces for one year. Management believes this recognition reflects our investment in our people and the strength of our organizational culture, both of which are integral to our long-term competitive positioning and growth strategy.
Compensation and Benefits
We provide a competitive compensation and benefits program to help meet the needs of our employees. In addition to salaries, these programs include annual bonus opportunities, a 401(k) plan with an employer matching contribution, healthcare and insurance benefits, tax-advantaged health spending accounts, paid time off, parental and family leave and a team member assistance program.
Learning and Development
We invest in the growth and development of our employees by providing a multi-dimensional approach to learning that empowers, intellectually grows, and professionally develops our colleagues. In particular, we facilitate the educational and professional development of our employees through providing internal programming, including a leadership development academy and a self-directed learning platform. We also provide support to attend conferences and obtain licenses and certifications while employed by us.
Properties
Our principal executive offices are located at 1776 Peachtree Street NW, Suite 300, Atlanta, Georgia 30309. We currently operate 10 full-service branch locations and three loan production offices throughout the Atlanta MSA.
At December 31, 2025 our premises and equipment, net of accumulated depreciation, totaled $18.6 million. Our operating lease right-of-use assets totaled $36.6 million at December 31, 2025, with a weighted average remaining lease term of approximately 12.8 years. We lease our headquarters and substantially all of our branch locations under operating leases with varying remaining terms. The following table sets forth information regarding our full-service banking offices as of the date of this prospectus.
Address
​ ​
Year First
Opened
​ ​
Approximate
Square Footage
​ ​
Owned or
Leased
​
3880 Roswell Rd NE
Atlanta, GA 30342
​ ​ ​ ​ 2007 ​ ​ ​ ​ ​ 10,248 ​ ​ ​ ​ ​ Owned ​ ​
2356 Main Street
Tucker, GA 30084
​ ​ ​ ​ 2019 ​ ​ ​ ​ ​ 7,800 ​ ​ ​ ​ ​ Leased ​ ​
5225 Windward Parkway
Alpharetta, GA 30004
​ ​ ​ ​ 2022 ​ ​ ​ ​ ​ 7,024 ​ ​ ​ ​ ​ Leased ​ ​
1776 Peachtree Street NW, Suite 150
Atlanta, GA 30309
​ ​ ​ ​ 2021 ​ ​ ​ ​ ​ 6,348 ​ ​ ​ ​ ​ Leased ​ ​
1624 North Expressway
Griffin, GA 30223
​ ​ ​ ​ 2006 ​ ​ ​ ​ ​ 5,660 ​ ​ ​ ​ ​ Owned ​ ​
6080 Bethelview Rd
Cumming, GA 30040
​ ​ ​ ​ 2021 ​ ​ ​ ​ ​ 5,416 ​ ​ ​ ​ ​ Owned ​ ​
690 Collins Hill Road
Lawrenceville, GA 30046
​ ​ ​ ​ 2021 ​ ​ ​ ​ ​ 4,743 ​ ​ ​ ​ ​ Leased ​ ​
2827 Peachtree Road NE, Suite 100
Atlanta, GA 30305
​ ​ ​ ​ 2023 ​ ​ ​ ​ ​ 4,500 ​ ​ ​ ​ ​ Leased ​ ​
4895 Lower Roswell Rd.
Marietta, GA 30068
​ ​ ​ ​ 2022 ​ ​ ​ ​ ​ 3,625 ​ ​ ​ ​ ​ Leased ​ ​
6340 Sugarloaf Pkwy, Suite 100
Duluth, GA 30097
​ ​ ​ ​ 2021 ​ ​ ​ ​ ​ 2,500 ​ ​ ​ ​ ​ Leased ​ ​
 
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The following table sets forth information regarding non-branch business offices, which includes our executive, operations and support offices as well as our loan production offices as of the date of this prospectus. These locations are not deposit taking offices.
Address
​ ​
Year First
Opened
​ ​
Approximate
Square Footage
​ ​
Owned or
Leased
​
1776 Peachtree Street NW, Suite 300
Atlanta, GA 30309
​ ​ ​ ​ 2021 ​ ​ ​ ​ ​ 34,156 ​ ​ ​ ​ ​ Leased ​ ​
2827 Peachtree Road NE, Suite 400
Atlanta, GA 30305
​ ​ ​ ​ 2023 ​ ​ ​ ​ ​ 27,850 ​ ​ ​ ​ ​ Leased ​ ​
6340 Sugarloaf Pkwy, Suites 105, 110, 120 & 150
Duluth, GA 30097
​ ​ ​ ​ 2021 ​ ​ ​ ​ ​ 14,518 ​ ​ ​ ​ ​ Leased ​ ​
120 N. Candler Street, Suites 10, 11 & 12
Decatur, GA 30030
​ ​ ​ ​ 2021 ​ ​ ​ ​ ​ 360 ​ ​ ​ ​ ​ Leased ​ ​
107 Technology Pkwy, Suite 413
Peachtree Corners, GA 30092
​ ​ ​ ​ 2020 ​ ​ ​ ​ ​ 240 ​ ​ ​ ​ ​ Leased ​ ​
61 Linton Street, Suite 2400
Woodstock, GA 30188
​ ​ ​ ​ 2020 ​ ​ ​ ​ ​ 110 ​ ​ ​ ​ ​ Leased ​ ​
We believe that our properties are maintained in good operating condition, with acceptable insurance coverage and are suitable and adequate for our operational needs. We do not believe that any individual property is material to our business on a standalone basis or the loss of any single facility would have a material adverse effect on our operations.
Legal Proceedings
We are involved from time to time in various legal proceedings and claims that arise in the normal course of business. Management does not believe that any judgment or settlement resulting from pending or threatened litigation would have a material adverse effect on our consolidated financial position, results of operations, or cash flows. As of the date of this filing, there are no legal proceedings pending or, to the knowledge of management, threatened against us that management believes would be material to our financial condition or results of operations.
Corporate Information
We were incorporated in 1998 as a Georgia corporation. Our principal executive offices are located at 1776 Peachtree Street NW, Suite 300, Atlanta, GA 30309 and our telephone number at that address is (866) 711-4530. Our website address is www.georgiabanking.com. The information contained on our website is not a part of, or incorporated by reference into, this prospectus.
 
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SUPERVISION AND REGULATION
General
We are extensively regulated under federal and state law. The Company is subject to supervision and regulation by the Federal Reserve and the GDBF, and the Bank, as a Georgia state-chartered bank that is not a member of the Federal Reserve System, is regulated, supervised, and regularly examined by the FDIC, as its primary federal banking regulator, and by the GDBF, as its chartering authority. The Bank’s deposits are insured by the DIF up to applicable limits. Rules issued by the CFPB also apply to the Bank; however, because the Bank has less than $10 billion in total assets, the FDIC, rather than the CFPB, supervises and enforces the Bank’s compliance with those consumer financial protection rules.
The following is a brief summary that does not purport to be a complete description of all regulations that affect us or all aspects of those regulations. This discussion is qualified in its entirety by reference to the particular statutory and regulatory provisions described below and is not intended to be an exhaustive description of the statutes or regulations applicable to the Company’s and the Bank’s business. In addition, proposals to change the laws and regulations governing the banking industry are frequently raised at both the state and federal levels. The likelihood and timing of any changes in these laws and regulations, and the impact such changes may have on us and the Bank, are difficult to predict. Further, bank regulatory agencies may issue enforcement actions, policy statements, interpretive letters and similar written guidance applicable to us or the Bank. Changes in applicable laws, regulations or regulatory guidance, or their interpretation by regulatory agencies or courts may have a material adverse effect on our and the Bank’s business, operations, and earnings. Supervision and regulation of banks, their holding companies and affiliates is intended primarily for the protection of depositors and customers, the DIF, and the U.S. banking and financial system rather than holders of our capital stock.
Regulation of the Company
We are registered as a bank holding company with the Federal Reserve under the Bank Holding Company Act of 1956, as amended (the “BHC Act”). As such, we are subject to comprehensive supervision and regulation by the Federal Reserve and are subject to its regulatory reporting requirements. We have not elected to be treated as a “financial holding company” under the BHC Act. As of June 30, 2026, after giving effect to our June 1, 2026 acquisition of Tandem, our total consolidated assets exceeded $3.0 billion. As a result, we are not eligible for the Federal Reserve’s Small Bank Holding Company and Savings and Loan Holding Company Policy Statement and are subject to the Federal Reserve’s consolidated regulatory capital requirements at the holding-company level. Federal law subjects bank holding companies, such as the Company, to particular restrictions on the types of activities in which they may engage, and to a range of supervisory requirements and activities, including regulatory enforcement actions for violations of laws and regulations. Violations of laws and regulations, or other unsafe and unsound practices, may result in regulatory agencies imposing fines or penalties, cease and desist orders, or taking other enforcement actions. Under certain circumstances, these agencies may enforce these remedies directly against officers, directors, employees and other parties participating in the affairs of a bank or bank holding company.
Activity Limitations
Bank holding companies are generally restricted to engaging in the business of banking, managing or controlling banks and certain other activities determined by the Federal Reserve to be closely related to banking. In addition, the Federal Reserve has the power to order a bank holding company or its subsidiaries to terminate any nonbanking activity or terminate its ownership or control of any nonbank subsidiary, when it has reasonable cause to believe that continuation of such activity or such ownership or control constitutes a serious risk to the financial safety, soundness, or stability of any bank subsidiary of that bank holding company. We conduct our business primarily through the Bank and, because we have not elected financial holding company status, our activities are limited to banking and activities that the Federal Reserve has determined to be closely related to banking.
Source of Strength Obligations
A bank holding company is required to act as a source of financial and managerial strength to its subsidiary bank and to maintain resources adequate to support its bank. The term “source of strength” means the ability of a company, such as us, that directly or indirectly owns or controls an insured depository institution, such as the Bank, to provide financial assistance to such insured depository institution in the event of financial distress. The appropriate federal banking agency for the depository institution (in the case of the Bank, this agency is the FDIC) may require reports from us to assess our ability to serve as a source of strength and to enforce compliance with the source of strength requirements by requiring us to provide financial assistance to the Bank in the event of financial distress. If we were to enter bankruptcy or become subject to the orderly liquidation process
 
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established by the Dodd-Frank Act, any commitment by us to a federal bank regulatory agency to maintain the capital of the Bank would be assumed by the bankruptcy trustee or the FDIC, as appropriate, and entitled to a priority of payment.
Acquisitions
The BHC Act permits acquisitions of banks by bank holding companies, such that we and any other bank holding company, whether located in Georgia or elsewhere, may acquire a bank located in any other state, subject to certain deposit-percentage, age of bank charter requirements, and other restrictions. The BHC Act requires that a bank holding company obtain the prior approval of the Federal Reserve before (i) acquiring direct or indirect ownership or control of more than 5% of the voting securities of any additional bank or bank holding company, (ii) taking any action that causes an additional bank or bank holding company to become a subsidiary of the bank holding company, or (iii) merging or consolidating with any other bank holding company. The Federal Reserve may not approve any such transaction that would result in a monopoly or would be in furtherance of any combination or conspiracy to monopolize or attempt to monopolize the business of banking in any section of the United States, or the effect of which may be substantially to lessen competition or to tend to create a monopoly in any section of the country, or that in any other manner would be in restraint of trade, unless the anticompetitive effects of the proposed transaction are clearly outweighed by the public interest in meeting the convenience and needs of the community to be served. The Federal Reserve is also required to consider: (1) the financial and managerial resources of the companies involved, including pro forma capital ratios; (2) the risk to the stability of the United States banking or financial system; (3) the convenience and needs of the communities to be served, including performance under the Community Reinvestment Act (“CRA”), further described below; and (4) the effectiveness of the companies in combatting money laundering.
In addition to the Federal Reserve approvals described above, any merger or acquisition involving the Bank requires the prior approval of the FDIC under the Bank Merger Act of 1960 and of the GDBF under the Georgia Financial Institutions Code. We have grown in part through acquisitions, including our March 1, 2025 merger with Georgia Primary and our June 1, 2026 merger with Tandem, each of which was subject to these regulatory approval requirements.
Change in Control
Federal law restricts the amount of voting securities of a bank holding company or a bank that a person may acquire without the prior approval of banking regulators. Under the Change in Bank Control Act and the regulations thereunder, a person or group must give advance notice to the Federal Reserve before acquiring control of any bank holding company, such as the Company, and the FDIC before acquiring control of the Bank. Upon receipt of such notice, the bank regulatory agencies may approve or disapprove the acquisition. The Change in Bank Control Act creates a rebuttable presumption of control if a person or group acquires the power to vote 10% or more of our outstanding common stock. The overall effect of such laws is to make it more difficult to acquire a bank holding company and a bank by tender offer or similar means than it might be to acquire control of another type of corporation. Consequently, shareholders of the Company may be less likely to benefit from the rapid increases in stock prices that may result from tender offers or similar efforts to acquire control of other companies. Investors should be aware of these requirements when acquiring shares of our stock.
In addition to the Federal Reserve approvals described above applicable to the Company, any change in control involving the Bank requires the prior approval of the FDIC under the Change in Bank Control Act and of the GDBF under the Georgia Financial Institutions Code.
Incentive Compensation
The Dodd-Frank Act required the banking agencies and the SEC to establish joint rules or guidelines for financial institutions with more than $1.0 billion in assets, such as us and the Bank, which prohibit incentive compensation arrangements that the agencies determine to encourage inappropriate risks by the institution. The federal banking agencies issued proposed rules in 2011 and previously issued guidance on sound incentive compensation policies. In 2016, the federal banking agencies also proposed rules that would, depending upon the assets of the institution, directly regulate incentive compensation arrangements and would require enhanced oversight and recordkeeping. As of June 30, 2026, these rules have not been implemented, although the SEC did adopt final rules implementing the clawback provisions of the Dodd-Frank Act in 2022. In connection with the listing of our common stock on Nasdaq, we have adopted a clawback policy providing for the recovery of erroneously awarded incentive-based compensation from our executive officers, consistent with applicable law and Nasdaq listing standards. We and the Bank have undertaken efforts to ensure that our incentive compensation plans do not encourage inappropriate risks, consistent with three key principles — that incentive compensation arrangements should appropriately balance risk and financial rewards, be compatible with effective controls and risk management, and be supported by strong corporate governance.
 
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Shareholder Say-On-Pay Votes
The Dodd-Frank Act requires public companies to take shareholders’ votes on proposals addressing compensation (known as say-on-pay), the frequency of a say-on-pay vote, and the golden parachutes available to executives in connection with change-in-control transactions. Public companies must give shareholders the opportunity to vote on the compensation at least every three years and the opportunity to vote on frequency at least every six years, indicating whether the say-on-pay vote should be held annually, biennially, or triennially. The say-on-pay, the say-on-parachute and the say-on-frequency votes are explicitly nonbinding and cannot override a decision of our Board. However, as an emerging growth company, we are not currently required to hold advisory votes on executive compensation, the frequency of such votes, or golden-parachute compensation, and we intend to rely on that exemption for as long as we qualify as an emerging growth company.
Other Regulatory Matters
We and our subsidiaries are subject to oversight by the SEC, the Financial Industry Regulatory Authority (“FINRA”), the PCAOB, The Nasdaq Stock Market LLC (the “Nasdaq Stock Market”) and various state securities regulators. We and our subsidiaries have from time to time received requests for information from regulatory authorities in various states, including state attorneys general, securities regulators and other regulatory authorities, concerning our business practices. Such requests are considered incidental to the normal conduct of business.
Capital Requirements
The Company and the Bank are each required under federal law to maintain certain minimum capital levels based on ratios of capital to total assets and capital to risk-weighted assets. The required capital ratios are minimums, and the federal banking agencies may determine that a banking organization, based on its size, complexity or risk profile, must maintain a higher level of capital in order to operate in a safe and sound manner. Risks such as concentration of credit risks and the risk arising from non-traditional activities, as well as the institution’s exposure to a decline in the economic value of its capital due to changes in interest rates, and an institution’s ability to manage those risks are important factors that are to be taken into account in assessing an institution’s overall capital adequacy. The following is a brief description of the relevant provisions of these capital rules and their potential impact on our capital levels.
The Company and the Bank are subject to the following risk-based capital ratios: a common equity Tier 1 (“CET1”) risk-based capital ratio, a Tier 1 risk-based capital ratio, which includes CET1 and additional Tier 1 capital, and a total risk-based capital ratio, which includes Tier 1 and Tier 2 capital. CET1 is primarily comprised of the sum of common stock instruments and related surplus net of treasury stock, plus retained earnings, and certain qualifying minority interests, less certain adjustments and deductions, including with respect to goodwill, intangible assets, mortgage servicing assets and deferred tax assets subject to temporary timing differences. Additional Tier 1 capital is primarily comprised of noncumulative perpetual preferred stock, Tier 1 minority interests and grandfathered trust preferred securities. Tier 2 capital consists of instruments disqualified from Tier 1 capital, including qualifying subordinated debt, other preferred stock and certain hybrid capital instruments, and a limited amount of loan loss reserves up to a maximum of 1.25% of risk-weighted assets, subject to certain eligibility criteria. The capital rules also define the risk-weights assigned to assets and off-balance sheet items to determine the risk-weighted asset components of the risk-based capital rules, including, for example, certain “high volatility” commercial real estate, past due assets, structured securities and equity holdings.
The leverage capital ratio, which serves as a minimum capital standard, is the ratio of Tier 1 capital to quarterly average total consolidated assets net of goodwill, certain other intangible assets, and certain required deduction items. The required minimum leverage ratio for all banks is 4%.
Federal banking agencies adopted a community bank leverage ratio (“CBLR”) framework that permits a qualifying depository institution or its holding company with total consolidated assets of less than $10 billion and a leverage ratio of greater than 9% to elect to satisfy its regulatory capital requirements by maintaining a leverage ratio of greater than 9%, in lieu of the generally applicable risk-based and leverage capital requirements. A qualifying institution that elects to use the CBLR framework and maintains a leverage ratio of greater than 9% is considered to have satisfied the well-capitalized ratio requirements under the prompt corrective action framework. The Bank has not opted into the CBLR framework.
In addition, the capital rules require a capital conservation buffer of 2.5%, constituted of CET1, above each of the minimum risk-based capital ratio requirements (CET1, Tier 1, and total risk-based capital), which is designed to absorb losses during periods of economic stress. These buffer requirements must be met for a bank or bank holding company to be able to pay dividends, engage in share buybacks or make discretionary bonus payments to executive management without restriction.
 
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The Federal Deposit Insurance Corporation Improvement Act of 1991 (“FDICIA”), among other things, requires the federal bank regulatory agencies to take “prompt corrective action” regarding depository institutions that do not meet minimum capital requirements. FDICIA establishes five regulatory capital tiers: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized.” A depository institution’s capital tier will depend upon how its capital levels compare to various relevant capital measures and certain other factors, as established by regulation. FDICIA generally prohibits a depository institution from making any capital distribution (including payment of a dividend) or paying any management fee to its holding company if the depository institution would thereafter be undercapitalized.
To be well-capitalized, the Bank must maintain at least the following capital ratios:
•
6.5% CET1 to risk-weighted assets;
​
•
8.0% Tier 1 capital to risk-weighted assets;
​
•
10.0% Total capital to risk-weighted assets; and
​
•
5.0% leverage ratio.
​
The Federal Reserve has not yet revised the well-capitalized standard for bank holding companies to reflect the higher capital requirements imposed under the current capital rules. If the Federal Reserve were to apply the same or a similar well-capitalized standard to bank holding companies as that applicable to the Bank, the Company’s capital ratios as of June 30, 2026 and December 31, 2025 would exceed such revised well-capitalized standard. Also, the Federal Reserve may require bank holding companies, including the Company, to maintain capital ratios substantially in excess of mandated minimum levels, depending upon general economic conditions and a bank holding company’s particular condition, risk profile and growth plans.
Failure to be well-capitalized or to meet minimum capital requirements could result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have an adverse material effect on our operations or financial condition. For example, only a well-capitalized depository institution may accept brokered deposits without prior regulatory approval. Failure to be well-capitalized or to meet minimum capital requirements could also result in restrictions on the Bank’s ability to pay dividends or otherwise distribute capital or to receive regulatory approval of applications or other restrictions on its growth.
As of June 30, 2026 and December 31, 2025 and 2024, the Company’s and the Bank’s regulatory capital ratios were above the applicable well-capitalized standards and met the capital conservation buffer.
The Economic Growth, Regulatory Relief, and Consumer Protection Act (the “Economic Growth Act”) scaled back certain requirements of the Dodd-Frank Act and provided other regulatory relief. Among the provisions of the Economic Growth Act was a requirement that the Federal Reserve raise the asset threshold for those bank holding companies subject to the Federal Reserve’s Small Bank Holding Company Policy Statement to $3.0 billion. As a result, as of the effective date of that change, the Company was no longer required to comply with the risk-based capital rules applicable to the Bank as described above. However, as of June 30, 2026, the Company’s assets exceeded $3.0 billion for the first time, such that the Company now is subject to consolidated risk-based capital requirements.
Payment of Dividends
We are a legal entity separate and distinct from the Bank and our other subsidiaries. Our primary source of cash, other than securities offerings, is dividends from the Bank. Under the laws of the State of Georgia, we, as a business corporation, may declare and pay dividends in cash or property unless the payment or declaration would be contrary to restrictions contained in our Articles of Incorporation, or unless, after payment of the dividend, we would not be able to pay our debts when they become due in the usual course of our business or our total assets would be less than the sum of our total liabilities. In addition, we are also subject to federal regulatory capital requirements that effectively limit the amount of cash dividends that we may pay.
The primary sources of funds for our payment of dividends to our shareholders are cash on hand and dividends from the Bank. Various federal and state statutory provisions and regulations limit the amount of dividends that the Bank and our non-bank subsidiaries may pay. The Bank is a Georgia bank. Under the regulations of the GDBF, a Georgia bank must have approval of the GDBF to pay cash dividends if, at the time of such payment:
•
the ratio of Tier 1 capital to average total assets is less than 6 percent;
​
•
the aggregate amount of dividends to be declared or anticipated to be declared during the current calendar year exceeds 50 percent of its net after-tax profits before dividends for the previous calendar year; or
​
 
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•
its total adversely classified assets in its most recent regulatory examination exceeded 80 percent of its Tier 1 capital plus its allowance for loan and lease losses.
​
The Georgia Financial Institutions Code contains restrictions on the ability of a Georgia bank to pay dividends other than from retained earnings without the approval of the GDBF. As a result of the foregoing restrictions, the Bank may be required to seek approval from the GDBF to pay dividends.
In addition, we and the Bank are subject to various general regulatory policies and requirements relating to the payment of dividends, including requirements to maintain adequate capital above regulatory minimums. The appropriate federal bank regulatory authority may prohibit the payment of dividends where it has determined that the payment of dividends would be an unsafe or unsound practice and to prohibit payment thereof. The FDIC and the Federal Reserve have indicated that paying dividends that deplete a bank’s capital base to an inadequate level would be an unsafe and unsound banking practice. The FDIC and the Federal Reserve have each indicated that depository institutions and their holding companies should generally pay dividends only out of current operating earnings. Prior approval by the FDIC is required if the total of all dividends declared by a bank in any calendar year exceeds the bank’s profits for that year combined with its retained net profits for the preceding two calendar years.
Under a Federal Reserve policy, the board of directors of a bank holding company must consider different factors to ensure that its dividend level is prudent relative to maintaining a strong financial position, and is not based on overly optimistic earnings scenarios, such as potential events that could affect its ability to pay, while still maintaining a strong financial position. As a general matter, the Federal Reserve has indicated that the board of directors of a bank holding company should consult with the Federal Reserve and eliminate, defer or significantly reduce the bank holding company’s dividends if:
•
its net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends;
​
•
its prospective rate of earnings retention is not consistent with its capital needs and overall current and prospective financial condition; or
​
•
it will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios.
​
Regulation of the Bank
The Bank is subject to comprehensive supervision and regulation by the FDIC and is subject to its regulatory reporting requirements. The Bank also is subject to certain Federal Reserve regulations. In addition, as discussed in more detail below, the Bank, by virtue of offering consumer financial products and services, may be subject to regulation and potential supervision by the CFPB. Authority to supervise and examine the Bank for compliance with federal consumer laws remains largely with the FDIC. However, the CFPB may participate in examinations on a “sampling basis” and may refer potential enforcement actions against such institutions to their primary regulators. The CFPB also may participate in examinations of our other direct or indirect subsidiaries that offer consumer financial products or services. In addition, the Dodd-Frank Act permits states to adopt consumer protection laws and regulations that are stricter than those regulations promulgated by the CFPB, and state attorneys general are permitted to enforce certain federal consumer financial protection rules adopted by the CFPB.
The GDBF has extensive enforcement authority over the Bank to correct unsafe or unsound practices and violations of law or regulation. Such authority includes the issuance of cease and desist orders, assessment of civil money penalties and removal of officers and directors. The Commissioner of the GDBF has the authority to appoint a receiver or liquidator of any state-chartered bank under specified circumstances, including where (i) the bank is conducting its business in an unauthorized or unsafe manner, (ii) the bank has suspended payment of its obligations, or (iii) the bank cannot with safety and expediency continue to do business. The Bank is required to file periodic reports with and is subject to periodic examination by the GDBF and FDIC. Federal and state regulations generally require periodic on-site examinations for all depository institutions. The Bank is required to pay an annual assessment to the GDBF to fund the agency’s operations.
Broadly, regulations applicable to the Bank include limitations on loans to a single borrower and to its directors, officers and employees; restrictions on the opening and closing of branch offices; the maintenance of required capital and liquidity ratios; the granting of credit under equal and fair conditions; the disclosure of the costs and terms of such credit; requirements to maintain reserves against deposits and loans; limitations on the types of investment that may be made by the Bank; and requirements governing risk management practices. The Bank is permitted under federal law to branch on a de novo basis across state lines where the laws of that state would permit a bank chartered by that state to open a de novo branch.
 
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Transactions with Affiliates and Insiders
The Bank is subject to restrictions on extensions of credit and certain other transactions between the Bank and the Company or any nonbank affiliate. Sections 23A and 23B of the Federal Reserve Act of 1913, as amended (the “Federal Reserve Act”), govern transactions between an insured depository institution and its affiliates, which includes the Company. The Federal Reserve has adopted Regulation W, which implements and interprets Sections 23A and 23B, in part by codifying prior Federal Reserve interpretations.
An affiliate of a bank is any company or entity that controls, is controlled by or is under common control with the bank. A subsidiary of a bank that is not also a depository institution or a “financial subsidiary” under federal law is not treated as an affiliate of the bank for the purposes of Sections 23A and 23B; however, the Federal Reserve has the discretion to treat subsidiaries of a bank as affiliates on a case-by-case basis. Section 23A limits the extent to which a bank or its subsidiaries may engage in “covered transactions” with any one affiliate to an amount equal to 10% of the bank’s capital stock and surplus. There is an aggregate limit of 20% of the bank’s capital stock and surplus for such transactions with all affiliates. The term “covered transaction” includes, among other things, the making of a loan to an affiliate, a purchase of assets from an affiliate, the issuance of a guarantee on behalf of an affiliate and the acceptance of securities of an affiliate as collateral for a loan. All such transactions are required to be on terms and conditions that are consistent with safe and sound banking practices and no transaction may involve the acquisition of any “low quality asset” from an affiliate unless certain conditions are satisfied. Certain covered transactions, such as loans to or guarantees on behalf of an affiliate, must be secured by collateral in amounts ranging from 100 to 130 percent of the loan amount, depending upon the type of collateral. In addition, Section 23B requires that any covered transaction (and specified other transactions) between a bank and an affiliate must be on terms and conditions that are substantially the same, or at least as favorable, to the bank, as those that would be provided to a non-affiliate.
A bank’s loans to its executive officers, directors, any owner of more than 10% of its stock (each, an “insider”) and certain entities affiliated with any such person (an insider’s “related interest”) are subject to the conditions and limitations imposed by Section 22(h) of the Federal Reserve Act and the Federal Reserve’s Regulation O. The aggregate amount of a bank’s loans to any insider and the insider’s related interests may not exceed the loans-to-one-borrower limit applicable to the Bank. Aggregate loans by a bank to its insiders and insiders’ related interests may not exceed 15% of the bank’s unimpaired capital and unimpaired surplus plus an additional 10% of unimpaired capital and surplus in the case of loans that are fully secured by readily marketable collateral, or when the aggregate amount on all of the extensions of credit outstanding to all of these persons would exceed the bank’s unimpaired capital and unimpaired surplus. With certain exceptions, such as education loans and certain residential mortgages, a bank’s loans to its executive officers may not exceed the greater of $25,000 or 2.5% of the bank’s unimpaired capital and unimpaired surplus, but in no event more than $100,000. Regulation O also requires that any loan to an insider or a related interest of an insider be approved in advance by a majority of the board of directors of the bank, with any interested director not participating in the voting, if the loan, when aggregated with any existing loans to that insider or the insider’s related interests, would exceed the higher of $25,000 or 5% of the bank’s unimpaired capital and surplus. Generally, such loans must be made on substantially the same terms as and follow credit underwriting procedures that are no less stringent than, those that are prevailing at the time for comparable transactions with other persons and must not involve more than a normal risk of repayment. An exception is made for extensions of credit made pursuant to a benefit or compensation plan of a bank that is widely available to employees of the bank and that does not give any preference to insiders of the bank over other employees of the bank.
Reserves
Federal Reserve rules require depository institutions, such as the Bank, to maintain reserves against their transaction accounts, primarily interest bearing and non-interest bearing checking accounts. Although these reserve requirement ratios are currently reduced to zero percent, these reserve requirements are subject to annual adjustment by the Federal Reserve.
FDIC Insurance Assessments and Depositor Preference
The Bank’s deposits are insured by the FDIC’s DIF up to the limits under applicable law, which currently are set at $250,000 per depositor, per insured bank, for each account ownership category. The Bank is subject to FDIC assessments for its deposit insurance. The FDIC uses a risk-based assessment system that imposes insurance premiums as determined by multiplying an insured bank’s assessment base by its assessment rate.
A bank’s deposit insurance assessment base is generally equal to its total assets minus its average tangible equity during the assessment period. For a depository institution that has been insured for more than five years and that has total consolidated assets of less than $10 billion, such as the Bank, the FDIC determines the assessment rate within a range of base assessment rates
 
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based on the bank’s CAMELS composite rating, taking into account other factors and adjustments. The CAMELS rating system is a supervisory rating system developed to classify a bank’s overall condition by taking into account capital adequacy, assets, management capability, earnings, liquidity and sensitivity to market and interest rate risk. The FDIC has the authority to increase insurance assessments. A significant increase in insurance premiums would have an adverse effect on the operating expenses and results of operations of the Bank. The Bank’s total FDIC insurance assessments during 2025 and 2024 were $2.3 million and $1.9 million respectively. We cannot predict what deposit insurance assessment rates will be in the future.
Insurance of deposits may be terminated by the FDIC upon a finding that the institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order or condition imposed by a bank’s federal regulatory agency. In addition, the Federal Deposit Insurance Act provides that, in the event of the liquidation or other resolution of an insured depository institution, the claims of depositors of the institution, including the claims of the FDIC as subrogee of insured depositors, and certain claims for administrative expenses of the FDIC as a receiver, will have priority over other general unsecured claims against the institution, including those of the parent bank holding company.
Standards for Safety and Soundness
The Federal Deposit Insurance Act requires the federal bank regulatory agencies to prescribe, by regulation or guideline, operational and managerial standards for all insured depository institutions relating to: (1) internal controls; (2) information systems and audit systems; (3) loan documentation; (4) credit underwriting; (5) interest rate risk exposure; and (6) asset quality. In general, the guidelines set forth the safety and soundness standards that the federal banking agencies use to identify and address problems at insured depository institutions before capital becomes impaired and require appropriate systems and practices to identify and manage the risks and exposures specified in the guidelines. The guidelines prohibit excessive compensation as an unsafe and unsound practice and describe compensation as excessive when the amounts paid are unreasonable or disproportionate to the services performed by an executive officer, employee, director, or principal shareholder. Federal banking agencies issued the Interagency Guidance on Third-Party Relationships: Risk Management, which replaced their prior separate guidance regarding risks banks may face from third-party relationships (e.g., relationships under which the third-party provides services to the bank). This guidance generally requires the Bank to perform adequate due diligence on the third-party, appropriately document the relationship, and perform adequate oversight and auditing, in order to limit the risks to the Bank.
Prompt Corrective Regulatory Action
Federal law requires that federal bank regulatory authorities take “prompt corrective action” with respect to institutions that do not meet minimum capital requirements. For these purposes, the statute establishes five capital tiers: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized.
As described above, the Bank has not elected to follow the CBLR, so the generally applicable prompt corrective action requirements remain applicable to the Bank. Under prompt corrective action requirements, insured depository institutions are required to meet the following in order to qualify as “well capitalized:” ​(1) a CET1 risk-based capital ratio of 6.5%; (2) a Tier 1 risk-based capital ratio of 8%; (3) a total risk-based capital ratio of 10%; and (4) a Tier 1 leverage ratio of 5%. The Bank was classified as well capitalized at June 30, 2026.
State nonmember banks, such as the Bank, that have insufficient capital are subject to certain mandatory and discretionary supervisory measures. For example, a bank that is “undercapitalized” ​(i.e., fails to comply with any regulatory capital requirement) is subject to growth, capital distribution (including dividend) and other limitations, and is required to submit a capital restoration plan; a holding company that controls such a bank is required to guarantee that the bank complies with the restoration plan. If an undercapitalized institution fails to submit an acceptable plan, it is treated as if it is “significantly undercapitalized.” A “significantly undercapitalized” bank is subject to additional restrictions. State nonmember banks deemed by the FDIC to be “critically undercapitalized” also may not make any payment of principal or interest on certain subordinated debt, extend credit for a highly leveraged transaction, or enter into any material transactions outside the ordinary course of business after 60 days of obtaining such status, and are subject to the appointment of a receiver or conservator within 270 days after obtaining such status.
Anti-Money Laundering
A continued focus of governmental policy relating to financial institutions in recent years has been combating money laundering and terrorist financing. The USA PATRIOT Act broadened the application of anti-money laundering regulations to apply to additional types of financial institutions such as broker-dealers, investment advisors and insurance companies, and
 
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strengthened the ability of the U.S. Government to help prevent, detect and prosecute international money laundering and the financing of terrorism. The principal provisions of Title III of the USA PATRIOT Act require that regulated financial institutions, including insured depository institutions such as the Bank: (i) establish an anti-money laundering program that includes training and audit components; (ii) comply with regulations regarding the verification of the identity of any person seeking to open an account; (iii) take additional required precautions with non-U.S. owned accounts; and (iv) perform certain verification and certification of money laundering risk for their foreign correspondent banking relationships. Failure of a financial institution to comply with the USA PATRIOT Act’s requirements could have serious legal and reputational consequences for the institution. The Bank has augmented its systems and procedures to meet the requirements of these regulations and will continue to revise and update its policies, procedures and controls to reflect changes required by law.
FinCEN has adopted rules that require financial institutions to obtain beneficial ownership information with respect to legal entities with which such institutions conduct business, subject to certain exclusions and exemptions. Bank regulators are focusing their examinations on anti-money laundering compliance, and we continue to monitor and augment, where necessary, our anti-money laundering compliance programs.
Banking regulators will consider compliance with the Act’s money laundering provisions in acting upon acquisition and merger proposals. Bank regulators routinely examine institutions for compliance with these obligations and have been active in imposing cease and desist and other regulatory orders and money penalty sanctions against institutions found to be violating these obligations. Sanctions for violations of the Act can be imposed in an amount equal to twice the sum involved in the violating transaction, up to $1.0 million. On January 1, 2021, Congress passed federal legislation that made sweeping changes to federal anti-money laundering laws, subject to pending implementation by regulatory rulemaking. In 2024, U.S. federal regulators proposed amendments to modernize Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) program requirements. Aligned with the Anti-Money Laundering Act of 2020, the rules mandate a risk-based approach requiring institutions to identify, evaluate, and document risks based on business activities and national priorities.
Economic Sanctions
The Office of Foreign Assets Control (“OFAC”) is responsible for helping to ensure that U.S. entities do not engage in transactions with certain prohibited parties, as defined by various Executive Orders and acts of Congress. OFAC publishes, and routinely updates, lists of names of persons and organizations suspected of aiding, harboring or engaging in terrorist acts, including the Specially Designated Nationals and Blocked Persons List. If we find a name on any transaction, account or wire transfer that is on an OFAC list, we must undertake certain specified activities, which could include blocking or freezing the account or transaction requested, and we must notify the appropriate authorities.
Concentrations in Lending
State commercial banks have authority to originate and purchase any type of loan, including commercial, commercial real estate, residential mortgages or consumer loans. Aggregate loans by a state commercial bank to any single borrower or group of related borrowers are generally limited to 15% of the Bank’s unimpaired capital, but may be increased to 25% of the Bank’s unimpaired capital if the loan is fully secured.
The federal banking agencies adopted uniform regulations prescribing standards for extensions of credit that are secured by liens or interests in real estate or made for the purpose of financing permanent improvements to real estate. Under these regulations, all insured depository institutions, such as the Bank, must adopt and maintain written policies establishing appropriate limits and standards for extensions of credit that are secured by liens or interests in real estate or are made for the purpose of financing permanent improvements to real estate. These policies must establish loan portfolio diversification standards, prudent underwriting standards (including LTV limits) that are clear and measurable, loan administration procedures, and documentation, approval and reporting requirements. The real estate lending policies must reflect consideration of the federal bank regulators’ Interagency Guidelines for Real Estate Lending Policies that have been adopted.
Federal bank regulatory agencies released the Interagency Guidance on Concentrations in Commercial Real Estate Lending; Sound Risk Management Practices (the “CRE Guidance”) and advised financial institutions of the risks posed by CRE lending concentrations. The CRE Guidance requires that appropriate processes be in place to identify, monitor and control risks associated with real estate lending concentrations. Higher allowances for credit losses and capital levels may also be required. The CRE Guidance is triggered when CRE loan concentrations exceed either:
•
Total reported loans for construction, land development, and other land of 100% or more of a bank’s total risk based capital; or
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•
Total reported loans secured by multifamily and nonfarm nonresidential properties and loans for construction, land development, and other land of 300% or more of a bank’s total risk based capital.
​
The CRE Guidance also applies when a bank has a sharp increase in CRE loans or has significant concentrations of CRE secured by a particular property type. We have consistently had exposures to loans secured by CRE due to the nature of our markets and the loan needs of both retail and commercial customers. Commercial real estate lending is a significant part of our business. As of June 30, 2026, our total commercial real estate loans were approximately 289.7% of the Bank’s total risk-based capital, and our construction, land and land development loans were approximately 81.2% of the Bank’s total risk-based capital. Because of the significance of commercial real estate to our loan portfolio, we maintain enhanced risk-management practices, including Board-approved concentration limits by asset class, monthly portfolio monitoring, semi-annual stress testing of our commercial real estate portfolio, annual portfolio reviews, and disciplined underwriting focused on project cash flow, including a stress testing of underwritten cash flow, valuation, minimum equity requirements and sponsor strength. We believe our long-term experience in CRE lending, underwriting policies, internal controls and other policies currently in place, as well as our loan and credit monitoring and administration procedures, are generally appropriate to managing our concentrations as required under the CRE Guidance.
Community Reinvestment Act
The Bank is subject to the provisions of the CRA, which imposes a continuing and affirmative obligation, consistent with their safe and sound operation, to help meet the credit needs of entire communities where the bank accepts deposits, including low- and moderate-income neighborhoods. The FDIC’s assessment of the Bank’s CRA record is made available to the public. Further, a less than satisfactory CRA rating will slow, if not preclude, expansion of banking activities. Following the enactment of the GLB, a bank that enters into a covered written agreement in connection with the CRA must make that agreement available to the public and file annual reports concerning the agreement with its primary federal banking regulator. Federal CRA regulations require, among other things, that evidence of discrimination against applicants on a prohibited basis, and illegal or abusive lending practices be considered in the CRA evaluation. Rather than being evaluated under the large-bank performance tests otherwise applicable under the CRA, the Bank has elected to be evaluated under a strategic plan (the “CRA Strategic Plan”) that it developed with community input and that has been approved by the FDIC. The CRA Strategic Plan establishes measurable goals for helping to meet the credit needs of the Bank’s assessment area, including low- and moderate-income neighborhoods, through lending, qualified investments, and community development services. The Bank received a rating of “Satisfactory” in its most recent CRA performance evaluation, dated October 30, 2023, and that rating remains in effect until the Bank’s next CRA examination. The Bank’s current CRA Strategic Plan has a term beginning January 1, 2026 through December 31, 2028 and was approved by the FDIC on February 18, 2026, with an effective date of January 1, 2026.
Privacy and Data Security
The GLB generally prohibits disclosure of consumer information to non-affiliated third parties unless the consumer has been given the opportunity to object and has not objected to such disclosure. Financial institutions are further required to disclose their privacy policies to customers annually. Under an exception added by the Fixing America’s Surface Transportation Act of 2015, a financial institution that provides nonpublic personal information to nonaffiliated third parties only in accordance with the exceptions under the GLB for which no opt-out is required, and that has not changed its privacy policies and practices since its most recent disclosure to consumers, is not required to deliver an annual privacy notice. The Bank qualifies for this exception and therefore does not deliver annual privacy notices to its customers. Financial institutions, however, will be required to comply with state law if it is more protective of consumer privacy than the GLB. The GLB also directed federal regulators, including the FDIC, to prescribe standards for the security of consumer information. The Bank is subject to such standards, as well as standards for notifying customers in the event of a security breach. Under federal law, the Bank must disclose its privacy policy to consumers, permit customers to opt out of having nonpublic customer information disclosed to third parties in certain circumstances, and allow customers to opt out of receiving marketing solicitations based on information about the customer received from another subsidiary. States may adopt more extensive privacy protections. We are similarly required to have an information security program to safeguard the confidentiality and security of customer information and to ensure proper disposal. Customers must be notified when unauthorized disclosure involves sensitive customer information that may be misused.
Consumer Regulation
Activities of the Bank are subject to a variety of statutes and regulations designed to protect consumers. These laws and regulations include, among numerous other things, provisions that:
 
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•
limit the interest and other charges collected or contracted for by the Bank, including new rules respecting the terms of credit cards and of debit card overdrafts;
​
•
govern the Bank’s disclosures of credit terms to consumer borrowers;
​
•
require the Bank to provide information to enable the public and public officials to determine whether it is fulfilling its obligation to help meet the housing needs of the community it serves;
​
•
prohibit the Bank from discriminating on the basis of race, creed or other prohibited factors when it makes decisions to extend credit;
​
•
govern the manner in which the Bank may collect consumer debts; and
​
•
prohibit unfair, deceptive or abusive acts or practices in the provision of consumer financial products and services.
​
While consumer lending is not currently a significant focus of our business, we are subject to numerous laws and regulations intended to protect consumers, in addition to those discussed above, when lending or offering deposit products to consumers. These laws include, among others: the Truth in Lending Act, Truth in Savings Act, Electronic Funds Transfer Act, Expedited Funds Availability Act, Equal Credit Opportunity Act, Fair and Accurate Credit Transactions Act, Fair Housing Act, Fair Credit Reporting Act, Fair Debt Collection Practices Act, the GLB, Home Mortgage Disclosure Act, Right to Financial Privacy Act, Real Estate Settlement Procedures Act, laws regarding unfair and deceptive acts and practices and usury laws. Additionally, the Dodd-Frank Act created the CFPB, which has authority to issue regulations prohibiting unfair, deceptive or abusive acts or practices.
Mortgage Regulation
The CFPB has issued rules to implement requirements of the Dodd-Frank Act pertaining to mortgage loan origination (including with respect to loan originator compensation and loan originator qualifications) as well as integrated mortgage disclosure rules. In addition, the CFPB has issued rules that require servicers to comply with new standards and practices with regard to: error correction; information disclosure; force-placement of insurance; information management policies and procedures; requiring information about mortgage loss mitigation options be provided to delinquent borrowers; providing delinquent borrowers access to servicer personnel with continuity of contact about the borrower’s mortgage loan account; and evaluating borrowers’ applications for available loss mitigation options. These rules also address initial rate adjustment notices for adjustable-rate mortgages, periodic statements for residential mortgage loans, and prompt crediting of mortgage payments and response to requests for payoff amounts.
S.A.F.E. Act
Regulations issued under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the “S.A.F.E. Act”) require residential mortgage loan originators who are employees of institutions regulated by the foregoing agencies to meet the registration requirements of the S.A.F.E. Act. The S.A.F.E. Act requires residential mortgage loan originators who are employees of regulated financial institutions to register with the Nationwide Mortgage Licensing System and Registry, a database created by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators to support the licensing of mortgage loan originators by the states. The S.A.F.E. Act generally prohibits employees of regulated financial institutions from originating residential mortgage loans unless they obtain and annually maintain registration as a registered mortgage loan originator.
The Bank conducts all its mortgage origination and warehouse finance activities directly from the Bank itself, and is exempt from most state, but not all, licensing requirements by virtue of being a state-chartered bank.
Homeowner Association Super Priority Liens May Take Priority Over the Mortgage Liens
In some states it is possible that the first lien of the mortgages may be extinguished by super priority liens of homeowner associations (“HOA”), potentially resulting in a loss of the mortgage loan’s outstanding principal balance. In at least 20 states, and the District of Columbia, HOA or condominium association assessment liens can take priority over first lien mortgages under certain circumstances. The number of these so called “super lien” states has increased in the past few decades and may increase further. Rulings by several highest state courts have held that the “super lien statute” provides the HOA or condominium association with a true lien priority rather than a payment priority from the proceeds of the sale, creating the ability to extinguish the senior mortgage and greatly increasing the risk of losses on mortgage loans secured by homes whose owners fail to pay HOA or condominium fees.
 
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The laws of these “super lien” states that provide for HOA super liens vary in terms of (a) the duration of the priority period (with many at six months and some with no limitations); (b) the assessments secured by the HOA lien (charges can include not only unpaid HOA assessments, but also late charges, collection costs, attorneys’ fees, foreclosure costs, fines, and interest); (c) whether the HOA must give lenders with liens encumbering the mortgaged property notice of the homeowner’s failure to pay the assessment; and (d) the statute of limitations on HOA foreclosure rights.
Predatory Lending Laws/High Cost Loans
Various federal, state and local laws have been enacted to discourage predatory lending practices. The federal Home Ownership and Equity Protection Act of 1994 (“HOEPA”), amends the Truth in Lending Act of 1968 (“TILA”) to prohibit inclusion of certain provisions in mortgage loans that have mortgage rates or origination costs in excess of prescribed levels, and require that borrowers be given certain disclosures prior to the origination of mortgage loans. Some states have enacted, similar laws or regulations, which in some cases impose restrictions and requirements greater than those in HOEPA.
In addition, under federal law and the anti-predatory lending laws of some states, the origination of certain mortgage loans (including loans that are not classified as “high cost” loans under applicable law) must satisfy a net tangible benefits test with respect to the related borrower. This test may be highly subjective and open to interpretation. As a result, a court may determine that a mortgage loan does not meet the test even if the related originator reasonably believed that the test was satisfied.
Failure to comply with these laws, to the extent applicable to any of the mortgage loans, could subject the originator and its assignees to monetary penalties and could result in the voiding or rescission of the affected mortgage loans. Lawsuits have been brought in various states making claims against assignees of high-cost loans for violations of state law. Named defendants in these cases have included numerous participants within the secondary mortgage market, including some securitization trusts.
“Know Before You Owe” TRID Disclosures
All of our mortgage loans are subject to the CFPB’s Know Before You Owe; TILA-RESPA Integrated Disclosure Rule (the “TRID Rule”), which became effective for mortgage loans whose applications were received on or after October 3, 2015. The purpose of the TRID Rule was to reconcile overlapping disclosure obligations under TILA and Real Estate Settlement Procedures Act of 1974 (“RESPA”) and to provide for integrated closing disclosure and loan estimate forms that would satisfy those requirements under both TILA and RESPA.
Regular instances of potential non-compliance with the TRID Rule have been reported in the marketplace since it became effective. Certain TILA-based disclosure provisions of the TRID Rule carry assignee liability. Violations of TILA-based disclosure provisions of the TRID Rule are limited in individual actions to actual damages, statutory damages for certain violations of not more than $4,000 per mortgage loan plus attorney’s fees and court costs, and can potentially result in liability for assignees where the violation is apparent on the face of the disclosure and the assignment was voluntary. While the statute of limitations under TILA is generally one year from the date of origination for most TRID Rule violations, mortgagors may raise a violation of the TRID Rule as a matter of defense by recoupment or set-off to an action to collect the debt beyond the one-year period, if permitted by state law. Further, for certain mortgage loans, while not changed by TRID Rule requirements, TILA’s right of rescission may be extended to three years from consummation if there are errors in certain “material disclosures” such as the required disclosures of finance charges and payment schedule, which are contained within the TRID Rule closing disclosure.
Debt Repayment
TILA provides that subsequent purchasers of mortgage loans originated in violation of certain requirements specified in TILA that require lenders to consider consumers’ “ability to repay” before extending them credit may have liability for such violations. The CFPB issued implementing regulations, which became effective January 10, 2014 for mortgage loans for which the application from the related mortgagor was taken on or after January 10, 2014, specifying the standards for a “qualified mortgage” that would have the benefit of a safe harbor from such liability if certain requirements are satisfied, or a rebuttable presumption of compliance with respect to such liability if certain requirements are satisfied and the annual percentage rate of the loan exceeds certain thresholds. The regulations apply to mortgage loans made for a personal, family, or household purpose secured by a one-to-four unit dwelling for which the application from the related mortgagor was taken on or after January 10, 2014.
Non-Discrimination Policies
The Bank is also subject to, among other things, the provisions of the ECOA and the Fair Housing Act (the “FHA”), both of which prohibit discrimination based on race or color, religion, national origin, sex, and familial status in any aspect of a
 
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consumer or commercial credit or residential real estate transaction. The Department of Justice (the “DOJ”), and the federal bank regulatory agencies have issued an Interagency Policy Statement on Discrimination in Lending that provides guidance to financial institutions in determining whether discrimination exists, how the agencies will respond to lending discrimination, and what steps lenders might take to prevent discriminatory lending practices. The DOJ has increased its efforts to prosecute what it regards as violations of the ECOA and FHA.
Cybersecurity
Federal banking regulators regularly issue new guidance and standards, and update existing guidance and standards regarding cybersecurity intended to enhance cyber risk management among financial institutions. Financial institutions are expected to comply with such guidance and standards and to accordingly develop appropriate security controls and risk management processes. If we fail to observe such regulatory guidance or standards, we could be subject to various regulatory sanctions, including financial penalties. The SEC has adopted a rule that requires disclosure of material cybersecurity incidents, as well as cybersecurity risk management, strategy and governance. Under this rule, which will apply to us following the completion of this offering, banking organizations that are SEC registrants must generally disclose information about a material cybersecurity incident within four business days of determining it is material with periodic updates as to the status of the incident in subsequent filings as necessary.
Federal banking agencies additionally require banking organizations to notify their primary banking regulator within 36 hours of determining that a “computer-security incident” has materially disrupted or degraded, or is reasonably likely to materially disrupt or degrade, the banking organization’s ability to carry out banking operations or deliver banking products and services to a material portion of its customer base, its businesses and operations that would result in material loss, or its operations that would impact the stability of the United States.
State regulators have also been increasingly active in implementing privacy and cybersecurity standards and regulations. Recently, several states have adopted regulations requiring certain financial institutions to implement cybersecurity programs and many states, including Georgia, have also recently implemented or modified their data breach notification, information security and data privacy requirements. We expect this trend of state-level activity in those areas to continue and are continually monitoring developments in the states in which our customers are located.
Risks and exposures related to cybersecurity attacks, including litigation and enforcement risks, are expected to be elevated for the foreseeable future due to the rapidly evolving nature and sophistication of these threats, as well as due to the expanding use of Internet banking, mobile banking and other technology-based products and services by us and our customers.
Emerging Growth Company Status and Smaller Reporting Company Status
We are an emerging growth company under the JOBS Act. For as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to public companies. These exemptions include, but are not limited to, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. As an emerging growth company, we will also not be subject to Section 404(b) of the Sarbanes-Oxley Act, which would require that our independent auditors audit our internal control over financial reporting. We have also elected to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies. Such an election is irrevocable during the period a company is an emerging growth company.
We will cease to be an emerging growth company upon the earliest of: (i) the end of the fiscal year following the fifth anniversary of the completion of this offering; (ii) the first fiscal year after our annual gross revenues are $1.235 billion (adjusted for inflation) or more; (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; or (iv) the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700.0 million at the end of the second quarter of that fiscal year. We expect to lose our status as an emerging growth company at the end of the fifth year after the expected completion date of this offering.
We are also a “smaller reporting company” as defined in Rule 12b-2 of the Exchange Act. Smaller reporting companies may take advantage of many of the same exemptions from disclosure requirements as emerging growth companies, including reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements. We will remain a smaller reporting company until the end of the fiscal year in which (i) we have a public common equity float of more than $250 million, or (ii) we have annual revenues for the most recently completed fiscal year of more than $100.0 million and a public
 
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common equity float or public float of more than $700 million. We also would not be eligible for status as a smaller reporting company if we become an investment company, an asset-backed issuer or a majority-owned subsidiary of a parent company that is not a smaller reporting company.
Sarbanes-Oxley Act
The Sarbanes-Oxley Act is intended to improve corporate responsibility, to provide enhanced penalties for accounting and auditing improprieties at publicly traded companies and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws. We have policies, procedures and systems designed to comply with these regulations, and we review and document such policies, procedures and systems to ensure continued compliance with these regulations. Following the completion of this offering, our management will be required to assess and report on the effectiveness of our internal control over financial reporting under Section 404(a) of the Sarbanes-Oxley Act beginning with our second annual report filed with the SEC.
Evolving Legislation and Regulatory Action
New laws or regulations or changes to existing laws and regulations, including changes in interpretation or enforcement, could materially adversely affect our financial condition or results of operations.
 
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MANAGEMENT
The following table sets forth certain information regarding our executive officers as of the date of this prospectus.
Name
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Position(s) with the Company
​ ​
Age
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Bartow Morgan, Jr. ​ ​
Chief Executive Officer
​ ​ ​ ​ 53 ​ ​
J. Craig Addison ​ ​
Chief Human Resources Officer
​ ​ ​ ​ 59 ​ ​
David F. Black ​ ​
Chief Commercial Officer
​ ​ ​ ​ 51 ​ ​
Charles M. DeWitt, III ​ ​
Chief Financial Officer
​ ​ ​ ​ 59 ​ ​
Richard Fairey ​ ​
President & Chief Operating Officer
​ ​ ​ ​ 57 ​ ​
Ryan D. Nemec ​ ​
Chief Accounting Officer
​ ​ ​ ​ 39 ​ ​
Wesley Reagan ​ ​
Chief Risk Officer & Chief Credit Officer
​ ​ ​ ​ 45 ​ ​
Margaret H. Whieldon ​ ​
Chief Experience Officer
​ ​ ​ ​ 63 ​ ​
The following is a brief description of the background and experience of each of our executive officers. No executive officer has any family relationship, as defined in Item 401 of Regulation S-K, with any other executive officer or with any of our directors. There are no arrangements or understandings between any of the executive officers and any other person pursuant to which he or she was selected as an executive officer.
Bartow Morgan, Jr. has served as our Chief Executive Officer and a member of our Board since February 2021. Mr. Morgan has more than 30 years of banking experience and has led community banking organizations through periods of significant growth, capital formation, strategic acquisitions, and operational transformation. From September 2018 to February 2021, Mr. Morgan served as an executive and board member of Renasant Bank, a subsidiary of Renasant Corporation (NYSE: RNST). Prior to joining Renasant, he served as Chief Executive Officer and a director of BrandBank from 2001 until its merger with Renasant in 2018 and as Chief Executive Officer and a director of Brand Group Holdings, Inc. from 2003 to 2018. During his tenure, BrandBank grew from a local community bank into one of the largest privately held banks headquartered in Georgia, increasing assets to more than $2 billion while broadening its commercial banking capabilities and expanding its presence throughout the Atlanta metropolitan market. Following his departure from Renasant, Mr. Morgan led the recapitalization and acquisition of Georgia Banking Company, raising approximately $180 million of investor capital to establish a new commercial and private banking franchise focused on serving the Atlanta market. Under his leadership, the Company has pursued a disciplined growth strategy that combines organic expansion, strategic acquisitions, and prudent capital management to build a scalable banking platform positioned for long-term growth. Mr. Morgan has extensive experience in capital formation, investor relations, and merger integration and has successfully led multiple transformational transactions throughout his career. Mr. Morgan was recognized by the Atlanta Business Chronicle as a Most Admired CEO in 2025 and for multiple years has been named to Georgia Trend’s list of most influential leaders in Georgia. He currently serves as a founding trustee of the Board of Trustees of Georgia Gwinnett College and as a trustee of Hampden-Sydney College. Mr. Morgan holds a Bachelor of Arts degree in Economics from Hampden-Sydney College.
J. Craig Addison has served as Chief Human Resources Officer of Georgia Banking Company and the Bank since July 2021. Mr. Addison brings more than 30 years of banking and financial services experience, having held senior leadership roles with Bank of America, Wells Fargo, Wells Fargo Securities, Wells Fargo Advisors, and SunTrust. Throughout his career, he has led human capital, organizational design, talent management, and strategic planning initiatives in banking, wealth management, and investment banking organizations. Mr. Addison also served in the United States Army Reserve as a Legal Specialist, including service during Operation Desert Storm. He holds a Bachelor of Science in Marketing from the University of South Carolina.
David F. Black has served as the Bank’s Chief Commercial Officer since February 2024. Previously, Mr. Black served as the Bank’s Chief Risk Officer and Chief Credit Officer from February 2021 through February 2024. In his role as Chief Commercial Officer, he oversees loan production for our commercial real estate, home builder finance, mortgage warehouse, commercial and financial, private banking, and community banking lines of business. He has been in the banking industry for over 25 years and was previously the Chief Risk Officer at Cadence Bank, and the Chief Credit Officer at State Bank & Trust Company. Additionally, he has held positions at First Horizon Bank, Wachovia Bank, and SunTrust Bank, including several senior leadership roles across credit, finance, risk, mergers & acquisitions, and corporate strategy. Mr. Black holds a BBA and MBA from the Terry College of Business at the University of Georgia.
Charles M. DeWitt, III has served as Chief Financial Officer of Georgia Banking Company and the Bank since July 2026. He was the Chairman, President and Chief Executive Officer of Tandem Bank and Tandem Bancorp since their formation in 2019 and 2023, respectively. Previously, he was the Chief Executive Officer of Resurgens Bank and Resurgens Bancorp, which
 
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opened in 2008 and merged with Charter Financial Corp in 2017. Mr. DeWitt has experience in many aspects of commercial banking including retail, commercial lending, capital markets and investment banking, including SunTrust Robinson Humphrey. He received his Bachelor of Science from the University of Tennessee, Knoxville and is a graduate of the Graduate School of Banking at Louisiana State University.
Richard Fairey has served as President and Chief Operating Officer of Georgia Banking Company and the Bank since 2021. Mr. Fairey brings more than 35 years of banking experience and has held senior executive leadership positions with Wells Fargo, Regions Bank, Renasant Bank, and BrandBank, where he previously served as President and Chief Operating Officer. During his tenure at BrandBank, he helped lead the organization’s growth from approximately $1 billion to $2.5 billion in assets through a combination of strategic business development, expanded customer relationships, operational execution, and disciplined growth initiatives. At Georgia Banking Company, Mr. Fairey is responsible for the execution of the Company’s operating strategy and oversees information technology, deposit and loan operations, treasury services, and other critical infrastructure supporting the Company’s growth. He plays a key role in advancing the Company’s strategic initiatives, including operational integration, scalability, process improvement, and the development of capabilities necessary to support continued organic growth and acquisition activity. Mr. Fairey holds a Bachelor of Business Administration degree from Georgia State University and a Master of Business Administration degree from the Georgia Institute of Technology.
Ryan D. Nemec has served as Senior Vice President and Chief Accounting Officer of Georgia Banking Company and the Bank since September 2026. Prior to joining the Company, Mr. Nemec served as Senior Vice President and Director of Corporate Finance of Veritex Community Bank (“Veritex”) from June 2025 to September 2026 and served as Senior Vice President and Chief Accounting Officer of Veritex from September 2020 to June 2025, where Mr. Nemec was responsible for corporate accounting, financial reporting, corporate governance, investor relations and the certification of financial data contained in periodic reports filed with the SEC and regulatory agencies. Earlier at Veritex, Mr. Nemec served as Director of Financial Reporting from September 2017 to September 2020, managing the preparation and accuracy of the institution’s SEC and regulatory filings. Before joining Veritex, Mr. Nemec spent approximately six years at Ernst & Young LLP in the firm’s Financial Services Office in Dallas, Texas, where he rose to the position of Audit Manager. In that capacity, he provided audit and advisory services to banking and financial services clients across the financial services industry. Mr. Nemec is a Certified Public Accountant and holds a Bachelor of Business Administration in Accounting and Masters in Finance from Texas A&M University.
Wesley Reagan has served as the Bank’s Chief Risk Officer and Chief Credit Officer since February 2024. Prior to this role, from July 2021 to February 2024, Mr. Reagan served as Director of Credit Risk for the Bank where he instituted various credit and risk processes and procedures as the Bank established its various lines of business. Mr. Reagan has over 20 years of commercial banking and investment management experience. Prior to joining the Bank, Mr. Reagan was a Managing Director, Underwriting at White Oak Commercial Capital (“White Oak”) where he focused on structuring and underwriting lender finance transactions. Prior to White Oak, Mr. Reagan held multiple senior leadership roles at State Bank and Trust Company including Regional Credit Officer, Investment Portfolio Manager, and Director of Wholesale Lending. He began his career in commercial banking with BrandBank. Mr. Reagan is a CFA® charterholder and earned both his BBA and MBA from the Terry College of Business at the University of Georgia.
Margaret H. Whieldon has served as the Bank’s Chief Experience Officer since May 2025. In this capacity, she is responsible for overseeing the Bank’s customer and employee experience strategy, including marketing, brand management, learning and development, service excellence, and culture initiatives that support the Bank’s strategic objectives and long-term growth. From May 2021 to May 2025, Ms. Whieldon served as Senior Vice President and Director of Marketing at the Bank, where she led the development and execution of the Bank’s marketing, communications, public relations, and community engagement strategies. She played a significant role in advancing the Bank’s strategic growth initiatives, including supporting market expansion, acquisition integration efforts, brand development, investor communications, and enterprise-wide initiatives designed to strengthen organizational performance and franchise value. Prior to joining the Bank, Ms. Whieldon held senior marketing leadership positions with community banking organizations and has more than 25 years of experience in financial services marketing, communications, customer experience, and strategic growth initiatives. Ms. Whieldon earned a Bachelor of Science degree in Business Administration and Marketing from Tennessee Technological University.
 
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BOARD OF DIRECTORS
Our Board currently consists of nine members. The following table sets forth certain information regarding our current directors. Sarah R. Borders, James F. Deutsch, Craig Heiser, Bartow Morgan, Jr. and R. Lee Tucker, Jr., serve as the Bank’s board of directors with Ms. Borders as the chairperson of the Bank.
Name
​ ​
Position(s) with
the Company
​ ​
Age
​ ​
Director
Since
​ ​
Audit
Committee
​ ​
ALCO
​ ​
Compensation
Committee
​ ​
Nominating &
Corporate
Governance
Committee
​ ​
Risk
Committee
​
Sarah R. Borders ​ ​
Chairperson
​ ​ ​ ​ 64 ​ ​ ​ ​ ​ 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​
Member
​ ​
Chair
​ ​ ​ ​
Arthur F. Anton ​ ​
Director
​ ​ ​ ​ 69 ​ ​ ​ ​ ​ 2021 ​ ​ ​
Chair
​ ​
Chair
​ ​ ​ ​ ​ ​ ​ ​ ​ ​
James F. Deutsch ​ ​
Director
​ ​ ​ ​ 71 ​ ​ ​ ​ ​ 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​
Member
​ ​ ​ ​ ​ ​ ​
Henchy R. Enden ​ ​
Director
​ ​ ​ ​ 53 ​ ​ ​ ​ ​ 2026 ​ ​ ​
Member
​ ​
Member
​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Ryan Glover ​ ​
Director
​ ​ ​ ​ 56 ​ ​ ​ ​ ​ 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Member
​
Craig Heiser ​ ​
Director
​ ​ ​ ​ 54 ​ ​ ​ ​ ​ 2026 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Member
​ ​
Member
​
Bartow Morgan, Jr. ​ ​
CEO and Director
​ ​ ​ ​ 53 ​ ​ ​ ​ ​ 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Mark Scheinfeld ​ ​
Director
​ ​ ​ ​ 71 ​ ​ ​ ​ ​ 2025 ​ ​ ​
Member
​ ​
Member
​ ​ ​ ​ ​ ​ ​ ​ ​ ​
R. Lee Tucker, Jr. ​ ​
Director
​ ​ ​ ​ 54 ​ ​ ​ ​ ​ 2021 ​ ​ ​ ​ ​ ​ ​ ​ ​
Chair
​ ​
Member
​ ​
Chair
​
The following is a brief discussion of the business and banking background and experience of our directors. The director biographies also contain information regarding the person’s experience, qualifications, attributes or skills that led to the conclusion that the person should serve as a director. No director has any family relationship, as defined in Item 401 of Regulation S-K, with any other director or with any of our executive officers. There are no arrangements or understandings between any of the directors and any other person pursuant to which he or she was selected as a director except as disclosed below.
Sarah R. Borders has served as a member of our Board since February 2021 and was appointed Chairperson in July 2026. Since October 2023, Ms. Borders has served as Executive Vice President and General Counsel for Novare Group, a Sunbelt focused multi-family real estate development company. Prior to her time at Novare, until December 2022, Ms. Borders was a partner of King & Spalding LLP where she practiced in the Finance and Restructuring and Real Estate practice groups with a focus on financial institutions. Ms. Borders has extensive experience representing both creditors and debtors in some of the nation’s largest workouts, restructurings and bankruptcy cases as well as sophisticated real estate financing transactions. Ms. Borders is a fellow in the American College of Bankruptcy, has been recognized as one of Georgia’s “Legal Elite” for several years and Chambers USA selected her as a star individual, its highest rating, in her practice area. Ms. Borders served on the BrandBank board of directors prior to its merger with Renasant in 2018. Ms. Borders graduated from Louisiana State University and the University of Virginia School of Law. We believe Ms. Borders is qualified to serve as the chairperson of our Board because of her legal expertise, experience representing companies and financial institutions, and her extensive experience in commercial real estate.
Arthur F. Anton has served as a member of our Board since February 2021. Mr. Anton worked at Swagelok Company, a manufacturer of fluid system solutions, from 1998 to 2019. He served in various roles over the years including Chief Executive Officer from 2002 to 2019, with the last four serving as Chairman. Prior to joining Swagelok, Mr. Anton was a Partner at Ernst & Young, where he led the Midwest financial services practice. He currently serves on the boards of the Rock & Roll Hall of Fame, Diebold Nixdorf, Inc., SunCoke Energy, Inc. (NYSE: SXC), Union Home Mortgage and Great Lakes Cheese. Mr. Anton earned his B.S. in Economics and Accounting from City University of New York and his MBA from Case Western Reserve University. We believe Mr. Anton is qualified to serve as a member of our Board because of his extensive board experience across industries, his executive management experience, and his expertise in accounting within the financial service industry.
James F. Deutsch has served as a member of our Board since February 2021. Mr. Deutsch joined Patriot Financial Partners (“Patriot”) in 2012, a private equity firm, where he currently serves as a Senior Partner, and has over 40 years of experience in banking. Prior to joining Patriot, Mr. Deutsch served as the President and CEO of Team Capital Bank, a private institution headquartered in Bethlehem, Pennsylvania. He was also one of the founding members of Team Capital. Prior to Team Capital, Mr. Deutsch spent 25 years managing various lending groups including community bank lending, regional lending and national lending programs at Commerce Bancorp, Inc., Brown Brothers Harriman and Summit Bancorp. Mr. Deutsch has served on the board of directors of more than 10 banks over the last 15 years. He currently serves on the boards of Avidbank Holdings, Inc. and Midland States Bancorp, Inc. Mr. Deutsch has also served on the boards of many civic and professional organizations during his career including serving as the Chair of The State Theatre, Valley Youth House, The Bethlehem YMCA and the Hugh
 
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Moore Historical Parks and Museums. He formerly served on the board of the Minsi Trails Boy Scout Council. Mr. Deutsch received his B.S. degree in Finance and his MBA from Lehigh University. We believe Mr. Deutsch is qualified to serve as a member of our Board due to his experience as a Chief Executive Officer of a bank, and his extensive experience as a board member in the banking and the financial services industry.
Henchy R. Enden has served as a member of our Board since June 2026. Ms. Enden was appointed to our Board pursuant to that certain Investor Rights Agreement, dated as of June 17, 2026, by and between the Bank and CF GBC Investors LP. Since January 2024, Ms. Enden has served as a Managing Director at Fortress Investment Group (“Fortress”), an investment firm based in New York. Prior to joining Fortress, Ms. Enden was a portfolio manager and equity analyst for MFP Investors LLC, an investment management company based in New York, beginning in 2004. Ms. Enden has served as a director of FirstSun Capital Bancorp (Nasdaq: FSUN) since April 2026. She previously served as a director of First Foundation Inc. from 2024 until it merged with and into FirstSun. She also previously served as a director of Avidbank Holdings, Inc. (Nasdaq: AVBH) from August 2022 to January 2024, Dynasty Financial Partners from November 2021 to January 2024, Atlantic Capital Bancshares Inc. from June 2015 until its March 2022 purchase by SouthState Bank (NYSE: SSB), and First Security Bank, from 2013 until its 2015 purchase by Atlantic Capital. In addition, Ms. Enden previously served as a director of Bridgeview Bancorp, a bank in Chicago, Illinois, from July 2015 until its May 2019 acquisition by First Midwest Bancorp. Ms. Enden also served as a director of West Coast Bancorp, a bank in Lake Oswego, Oregon, from January 2012 until its April 2013 acquisition by Columbia Banking System, Inc. (Nasdaq: COLB). Ms. Enden graduated from Touro College with a BS degree in Finance and Economics and from Columbia Business School with an MBA. We believe Ms. Enden is qualified to serve as a member of our Board because of her extensive experience serving as a director on boards within the banking industry and her experience as an investor in financial institutions.
Ryan Glover has served as a member of our Board since April 2021. Mr. Glover has more than 20 years of experience delivering products focused on the African American community. Mr. Glover is a seasoned Entertainment Industry veteran and started Bounce TV in 2011. Bounce was the first African American Nationwide Broadcast Network. Mr. Glover also founded Noontime Records, a label responsible for more than a dozen Billboard No. 1 hits and is a co-founder of Greenwood, a mobile banking platform inspired by the early 1900’s Greenwood District. Mr. Glover graduated from Howard University. We believe Mr. Glover is qualified to serve as a member of our Board because of his experience as an entrepreneur of multiple successful companies, his business acumen and mobile banking experience.
Craig Heiser has served as a member of our Board since June 2026. Mr. Heiser is President of Cardinal Gates, Inc., a manufacturer and distributor of child and pet safety products, which he acquired in 2004. Under his leadership, Cardinal has become a recognized industry brand, earning two industry awards for new product development. He was named a 2024 Georgia VFW Veteran Employer of the Year and served on the Board of the Juvenile Products Manufacturers Association. Mr. Heiser is also the owner and operator of Scitex Supply, a distributor of cleanroom supplies serving industrial customers throughout the United States. Prior to acquiring Cardinal, Mr. Heiser spent his early career in banking with SunTrust Bank and Wachovia Bank. He was involved with the organization of Tandem Bank, which was acquired by the Bank in June 2026, and served on its Board of Directors from 2019 to 2026, including service on board committees and acting as Chair of the Directors Loan Committee. He is a former member of the Entrepreneurs’ Organization Atlanta. Mr. Heiser holds a BA from the University of the South (Sewanee) and an MBA from Wake Forest University. We believe Mr. Heiser is qualified to serve as a member of our Board because of his prior bank board experience, including chairing the Directors Loan Committee at Tandem, and his business background and experience as President of Cardinal Gates, Inc.
Bartow Morgan, Jr. has served as a member of our Board since February 2021. See Mr. Morgan’s business experience in the Management section. We believe Mr. Morgan is qualified to serve as a member of our Board because of his experience as a Chief Executive Officer of multiple banks, his leadership of the Bank, and his experience in the financial services industry.
Mark Scheinfeld has served as a member of our Board since February 2025. Mr. Scheinfeld is a licensed attorney and owns his private practice, Mark A. Scheinfeld, LLC, which he started in October 1998. Mr. Scheinfeld is also a real estate investor, builder, and developer. He is the president and owner of both SCC Construction, Inc., which he founded in 1976, and SCC Atlanta Inc., which he founded in 1984. Mr. Scheinfeld is a partner and Chief Executive Officer in the DSO Right Smile Center, LLC and serves on the Georgia Board of Dentistry. Mr. Scheinfeld serves as a director of Interactive College of Technology. Mr. Scheinfeld served on the Georgia Commission on the Holocaust for 19 years. Mr. Scheinfeld served on the board of directors of Georgia Primary Bank prior to its merger with the Bank in 2025. He received a BA from Emory University, an MBA from Georgia State University and a J.D. from John Marshall Law School. We believe Mr. Scheinfeld is qualified to serve as a member of our Board because of his legal background, his business experience as an entrepreneur and his community leadership.
 
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R. Lee Tucker, Jr. has served as a member of our Board since February 2021. Mr. Tucker is one of the founding partners of Mahaffey Pickens Tucker, LLP, a business law firm with operations throughout the State of Georgia and the southeastern United States, which was founded in 2006. He maintains a broad-based legal practice and acts as “general counsel” for many of his clients. Mr. Tucker serves fiduciary roles with numerous civic organizations in the northern Atlanta metropolitan area. Mr. Tucker served on the BrandBank board prior to its merger with Renasant in 2018. He received his J.D., cum laude, from the Georgia State University College of Law where he was a member of the Georgia State University Law Review and earned a B.A. in History from the University of Georgia. We believe Mr. Tucker is qualified to serve as a member of our Board due to his corporate legal expertise, his prior experience as a bank board member, and his community leadership.
Director Selection Process
Our Board seeks director candidates who uphold the highest standards, are committed to our values and are strong independent stewards of the long-term interests of shareholders. Our Nominating and Corporate Governance Committee (the “NCGC”) considers Board composition on an ongoing basis, with a focus on establishing a board of directors with the skills and experience required to effectively oversee the Company’s present and future operations and strategy. The NCGC and our Board seek a diverse group of directors with experience in banking and other aspects of business that are relevant to our businesses and operations.
The NCGC also oversees the director nomination process. In considering whether to nominate a director for election, the NCGC considers, among other things:
•
Whether the director possesses personal and professional integrity, sound judgment, forthrightness and has sufficient time and energy to devote to the affairs of the Company;
​
•
Whether the director possesses a willingness to challenge and stimulate management and the ability to work as part of a team in an environment of trust;
​
•
The extent of the director’s business and financial acumen and experience, especially in the financial services and products areas;
​
•
Whether the director assists in achieving a mix of Board members that represents a diversity of background and experience;
​
•
Whether the director would be considered a “financial expert” or “financially literate” as defined in applicable law;
​
•
Whether the director, by virtue of particular technical expertise, experience or specialized skill relevant to the Company’s current or future business, will add specific value as a Board member, including business contacts, reputation, visibility, community involvement, regulatory experience, and independence;
​
•
Whether the director is free from conflicts of interest with the Company; and
​
•
Any factors related to the ability and willingness of a new director to serve, or an existing director to continue his/her service.
​
In addition to the foregoing director selection process, certain of our investors have contractual rights to designate individuals to serve on our Board. Pursuant to the terms of investor rights agreements entered into in connection with the Recapitalization, each of Patriot and Bartow Morgan, Jr. has the right to designate one representative to serve on each of our and the Bank’s board of directors, and one observer to attend meetings of each such board. These designation rights remain in effect for so long as Patriot or Mr. Morgan, as applicable, together with their respective affiliates, beneficially own at least 50.0% of the shares of common stock acquired by such investor in the Recapitalization or at least 4.9% of our outstanding common stock. Pursuant to the terms of an investor rights agreement entered into in connection with the June 2026 Private Placement with Fortress, Fortress has the right to designate one representative to serve on our Board for so long as Fortress and its affiliates beneficially own at least 50.0% of the shares of common stock acquired by Fortress in the June 2026 Private Placement or at least 4.9% of our outstanding common stock. We have agreed to recommend that our shareholders elect each board designee of Patriot, Mr. Morgan and Fortress to our Board. James F. Deutsch currently serves on our Board as Patriot’s designee, and Henchy R. Enden currently serves on our Board as Fortress’s designee. Mr. Morgan serves as our Chief Executive Officer and as a member of our Board. For additional information regarding the investor rights agreements, see “Description of Capital Stock — Transactions with Certain Investors — Board Representation and Information Rights.”
Director Independence
Under the rules of Nasdaq Stock Market, independent directors must comprise a majority of our Board within a specified period of time after our common stock is listed. The rules of Nasdaq Stock Market, as well as those of the SEC, also impose
 
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several other requirements with respect to the independence of our directors. Our Board has evaluated the independence of its members based upon the rules of Nasdaq Stock Market and the SEC. Applying these standards, our Board has determined that all of our directors other than our Chief Executive Officer, Mr. Morgan, are independent directors, as defined under the applicable rules.
Committees of our Board
We conduct business through meetings of our Board and its committees. Our Board has established standing committees, including ALCO, Audit Committee, Compensation Committee, NCGC and Risk Committee. Each of these committees operates under a written charter, which governs its composition, responsibilities and operations. Our Board also may establish such other committees as it deems appropriate, in accordance with applicable law and regulations and our corporate governance documents.
Asset/Liability Management Committee
The primary function of ALCO is to assess and manage the interest rate risk, and make recommendations to management and our Board regarding the appropriate balance and pricing of assets and liabilities (both coupon and maturity) to increase or decrease the level of risk (and reward) in the current tactical and strategic business framework in light of current and prospective economic conditions, competitive pressures, internal resources, and the regulatory/governmental environment. Among other things ALCO:
•
monitors and quantifies our interest rate risk, both on and off-balance sheet;
​
•
recommends changes in our tactical and strategic plans to increase interest rate risk in support of increased earnings; to decrease interest rate risk in support of protecting earnings; or to maintain current levels of risk;
​
•
reviews, considers, and recommends changes in certain products, services, organization structure, policies, and procedures consistent with its mission and other responsibilities;
​
•
anticipates changes in the Bank’s environments that will affect our and the Bank’s risk position, including by the use of modeling tools subject to model validation; and
​
•
annually reviews the ALCO charter and the committee’s performance.
​
ALCO is composed solely of members who satisfy the applicable independence requirements of the SEC and Nasdaq Stock Market.
Audit Committee
The primary function of the Audit Committee is to oversee our and the Bank’s accounting and financial reporting processes and the audit of our and the Bank’s financial statements. Among other things, the Audit Committee:
•
has sole power to appoint, evaluate, oversee, determine the compensation of, and if necessary, terminate our independent registered public accounting firm;
​
•
reviews and approves the scope of the annual audit, audit fees and financial statements;
​
•
reviews and discusses at least four times annually the adequacy and effectiveness of internal control over financial reporting and disclosure controls and procedures;
​
•
oversees the internal audit function and corporate policies with respect to financial information;
​
•
reviews and discusses with management and the independent accountants significant accounting and financial reporting issues and their impact on the financial statements;
​
•
oversees investigations into complaints concerning financial matters, if any;
​
•
reviews related party transactions as required;
​
•
monitors our code of ethics and business conduct to investigate any alleged breach or violation of the code, and to enforce provisions of the code; and
​
•
annually reviews the Audit Committee charter and the committee’s performance.
​
 
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The Audit Committee works closely with management as well as our independent registered public accounting firm and third-party internal audit firm. The Audit Committee has the authority to obtain advice and assistance from and receive appropriate funding to engage outside legal, accounting or other advisors as the Audit Committee deems necessary to carry out its duties.
The Audit Committee is composed solely of members who satisfy the applicable independence and other requirements of the SEC and Nasdaq Stock Market for Audit Committees and our Board has determined that Arthur F. Anton qualifies as an “audit committee financial expert” under applicable SEC rules.
Compensation Committee
The Compensation Committee is responsible for discharging our Board’s responsibilities relating to compensation of the executives and directors. Among other things, the Compensation Committee:
•
review and approve annually the corporate goals and objectives relevant to the compensation of the Chief Executive Officer, evaluate the Chief Executive Officer’s performance against those goals and objectives, and determine and approve the Chief Executive Officer’s compensation level based on this evaluation;
​
•
with the assistance of the Chief Executive Officer, review and approve the individual elements of total compensation for the other executive officers and other members of the executive management team;
​
•
periodically evaluate and oversee the administration of our and the Bank’s short-term and long-term incentive compensation plans, including stock incentive plans and other incentive pay plans, and as appropriate amend or recommend to the board of directors amendments to those plans;
​
•
review and oversee compensation and benefit plans;
​
•
review and approve the terms of any employment agreements, severance arrangements, change-of-control protections and any other compensatory arrangements (including, without limitation, perquisites and any other form of compensation) for the Chief Executive Officer, other senior executive officers and other members of the executive management team;
​
•
periodically review the forms and amounts of director compensation, including cash fees and equity-based compensation, and make recommendations to the board of directors concerning director compensation and determine the amount in advance of the annual meeting of the shareholders; and
​
•
annually reviews the Compensation Committee charter and the committee’s performance.
​
The Compensation Committee is composed solely of members who satisfy the applicable independence requirements of the SEC and Nasdaq Stock Market.
Nominating and Corporate Governance Committee
The NCGC is responsible for making recommendations to our Board regarding candidates for directorships and the size and composition of our Board. In addition, the NCGC is responsible for overseeing our corporate governance guidelines and reporting and making recommendations to our Board concerning governance matters. Among other things, the NCGC:
•
identifies qualified individuals to be directors consistent with the criteria approved by our Board and recommending director nominees to the full Board;
​
•
periodically reviews the size and composition of our Board and its committees, including independence and qualification criteria;
​
•
periodically reviews and assesses our and the Bank’s organizational documents and recommends any changes to our Board as necessary;
​
•
reviews and makes recommendations to our Board regarding any material communications to our shareholders relating to matters overseen by the NCGC;
​
•
develops and recommends to our Board for approval an officer succession plan, periodically reviews the plan, develops and evaluates potential candidates for executive positions, and recommends to our Board any changes to, and candidates for succession under, the plan;
​
•
annually reviews and assesses the adequacy of our corporate governance guidelines and other corporate governance policies and, if appropriate, recommends changes to our Board; and
​
 
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•
annually reviews the NCGC’s charter and the committee’s performance.
​
The NCGC is composed solely of members who satisfy the applicable independence requirements of the SEC and Nasdaq Stock Market.
Risk Committee
The Risk Committee is responsible for assisting our Board and the Bank’s board of directors in fulfilling their respective oversight responsibilities relating to risk management practices, including the risk management framework, and maintaining free and open communication between the directors, the risk management and governance functions, and management. Among other things, the Risk Committee:
•
oversees management’s credit governance committee activities, including review of applicable loan policies and procedures regarding credit approval authority, establishment of credit concentration limits, credit administration, credit and lending strategies, and the quality and performance of the Bank’s credit portfolio;
​
•
reviews and recommends to the Bank board of directors for approval key policies establishing risk management governance and procedures, risk control infrastructure for the Bank’s operation, and, where appropriate, provide feedback to management on the proposed structure and content of such policies;
​
•
oversees and reviews various aspects of operational risk, including risks related to line of business operations, information technology and systems, data management and information security, and third-party and vendor-management risk;
​
•
oversees and reviews various aspects of compliance-related risk, including risks related to the Bank’s adherence to applicable regulations;
​
•
reviews with the Chief Risk Officer and counsel any legal matters or risks;
​
•
reviews the status and adequacy of management action plans related to examination reports issued by any regulatory agency examinations, if applicable, and other significant regulatory or governmental correspondence or actions; and
​
•
annually reviews the Risk Committee charter and the committee’s performance.
​
The Risk Committee is composed solely of members who satisfy the applicable independence requirements of the SEC and Nasdaq Stock Market.
Board Oversight of Risk Management
Our Board believes that effective risk management and control processes are critical to our safety and soundness, our ability to predict and manage the challenges that we face and, ultimately, our long-term corporate success. Our Board, both directly and through its committees, is responsible for overseeing our risk management processes, with each of the committees of our Board assuming a different and important role in overseeing the management of the risks we face.
The Risk Committee reviews, and assesses the effectiveness of, our enterprise risk management program, which is designed to assist our Board, management, and our business lines in identifying and monitoring major risks to mitigate potential losses or adverse impacts to the Company’s position. Our Risk Committee also reviews the strategies, policies, procedures, reports, models and systems established by management to identify, assess, measure, and manage the major risks facing us. The audit committee is responsible for overseeing risks associated with financial matters (particularly financial reporting, accounting practices and policies, disclosure controls and procedures and internal control over financial reporting) and, through its oversight of our internal audit function, assessing the overall effectiveness of our risk management framework.
The Compensation Committee has primary responsibility for risks and exposures associated with our human resources, compensation policies, plans and practices, regarding both executive compensation and the compensation structure generally. In particular, our Compensation Committee reviews and approves all human resources and talent-related components of our risk metrics. Further, the Compensation Committee, in conjunction with our Chief Human Resources Officer and other members of our senior management as appropriate, is responsible for overseeing whether our incentive compensation arrangements are consistent with our compensation philosophy and applicable laws and regulations, including safety and soundness requirements, and do not encourage imprudent or excessive risk-taking by our employees. The nominating and corporate governance committee oversees risks associated with the independence of our Board and potential conflicts of interest.
Our senior management is responsible for implementing and reporting to our Board regarding our risk management processes, including by assessing and managing the risks we face, including strategic, operational, regulatory, investment and
 
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execution risks, on a day-to-day basis. Our senior management is also responsible for creating and recommending to our Board for approval appropriate risk appetite metrics reflecting the aggregate levels and types of risk we are willing to accept in connection with the operation of our business and pursuit of our business objectives.
The role of our Board in our risk oversight is consistent with our leadership structure, with our senior management having responsibility for identifying, assessing, measuring and managing our risk exposure, and our Board and its committees providing oversight in connection with those efforts. We believe this division of risk management responsibilities presents a consistent, systematic and effective approach for identifying, managing and mitigating risks throughout our operations.
Compensation Committee Interlocks and Insider Participation
None of the members of our Compensation Committee is or has been one of our officers or employees. None of our executive officers currently serve, or in the past year has served, as a member of the Compensation Committee (or other committee performing equivalent functions) of any entity that has one or more executive officers serving on our Board or Compensation Committee.
Indemnification and Insurance
We maintain a directors’ and officers’ liability policy that covers certain liabilities of our directors and officers arising out of claims based on acts or omissions in their capacities as directors or officers. Our Articles of Incorporation and Bylaws include provisions limiting the liability of directors and officers and indemnifying them under certain circumstances. See the section entitled “Description of Capital Stock —  Indemnification of Directors and Officers.”
Code of Conduct and Ethics
We have a written code of business conduct and ethics that applies to our directors, officers, and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of the code will be posted on our principal corporate website at www.georgiabanking.com. The information contained on, or that can be accessed through, our website is not a part of this prospectus; we have included this website address solely as an inactive textual reference. In addition, we intend to post on our website all disclosures that are required by law or the rules of Nasdaq Stock Market concerning any amendments to, or waivers from, any provision of the code.
 
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EXECUTIVE AND DIRECTOR COMPENSATION
As an emerging growth company under the JOBS Act, we have opted to comply with the executive compensation disclosure rules applicable to “smaller reporting companies” as such term is defined in the rules promulgated under the Securities Act, which permit us to limit reporting of executive compensation to our principal executive officer and our two other most highly compensated executive officers, which are referred to as our “named executive officers.”
Our named executive officers (“NEOs”), which consist of our principal executive officer and the Company’s two other most highly compensated executive officers who were serving as executive officers at the end of the fiscal year ended December 31, 2025, are:
•
Bartow Morgan, Jr., Chief Executive Officer;
​
•
Richard Fairey, President and Chief Operating Officer; and
​
•
David Black, Chief Commercial Officer.
​
Summary Compensation Table
The following table sets forth certain information with respect to the compensation paid to our named executive officers for the fiscal year ended December 31, 2025:
Name and Principal Position
​ ​
Salary
​ ​
Bonus
​ ​
Stock Awards(1)
​ ​
All Other
Compensation(3)
​ ​
Total
Compensation
​
Bartow Morgan, Jr.
(Chief Executive Officer)
​ ​ ​ $ 500,000 ​ ​ ​ ​ $ 650,000 ​ ​ ​ ​ $ 500,000 ​ ​ ​ ​ $ 16,825 ​ ​ ​ ​ $ 1,666,825 ​ ​
Richard Fairey
(President/Chief Operating Officer)
​ ​ ​ $ 375,000 ​ ​ ​ ​ $ 1,300,000(2) ​ ​ ​ ​ $ 150,000 ​ ​ ​ ​ $ 27,287 ​ ​ ​ ​ $ 1,852,287 ​ ​
David Black
(Chief Commercial Officer)
​ ​ ​ $ 375,000 ​ ​ ​ ​ $ 350,000 ​ ​ ​ ​ $ 225,000 ​ ​ ​ ​ $ 11,945 ​ ​ ​ ​ $ 961,945 ​ ​
​
(1)
The amounts reported here do not reflect the actual economic value realized by each named executive officer. In accordance with SEC rules, the Stock Awards column reflects the grant date fair value of restricted stock unit (“RSU”) awards, calculated in accordance with ASC 718. For additional information, see Note 14 in our consolidated financial statements included in this prospectus. The assumptions used in calculating the grant date fair value of the RSUs reported in this table are set forth in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates — Stock-Based Compensation.”
​
(2)
Mr. Fairey’s bonus includes $500,000 granted under our non-equity incentive plan and an $800,000 one-time bonus.
​
(3)
All Other Compensation for 2025 includes the following:
​
Name
​ ​
Health and Welfare
Reimbursement
​ ​
401(k) Matching
Contributions
​ ​
Additional
Reimbursement
​
Bartow Morgan, Jr.
​ ​ ​ $ 2,836 ​ ​ ​ ​ $ 13,989 ​ ​ ​ ​ $ — ​ ​
Richard Fairey
​ ​ ​ $ — ​ ​ ​ ​ $ 13,992 ​ ​ ​ ​ $ 13,295 ​ ​
David Black
​ ​ ​ $ — ​ ​ ​ ​ $ 11,945 ​ ​ ​ ​ $ — ​ ​
Narrative Disclosure to Summary Compensation Table
Base Salaries.   Base salary represents the fixed portion of each NEO’s compensation and is intended to provide compensation for expected day-to-day performance. Our NEOs received aggregate salaries for 2025 in the amounts reported above in the Summary Compensation Table.
Non-Equity Incentive Plan; Bonuses.   Our NEOs are eligible to receive an annual bonus. Our annual incentive plan for executive officers is designed to align compensation with the achievement of financial, strategic, and risk management objectives. For 2025, 65% of incentive opportunities were tied to financial performance and credit quality measures, while 35% were tied to the achievement of business-specific strategic objectives. Awards are based on Board-approved performance goals and are intended to reinforce sustainable growth, profitability, prudent risk management, and long-term shareholder value creation.
RSUs.   In 2025, the Company granted RSUs to the NEOs, which vest equally over four years subject to the NEO’s continued service on such date, as follows: Mr. Morgan 21,730; Mr. Fairey 6,519; and Mr. Black 9,778. The Company granted
 
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the RSUs to advance its long-term financial success by attracting, retaining, and rewarding individuals who contribute meaningfully to that success, and to better align their interests with those of shareholders. In January 2026, the Company granted RSUs to Mr. Morgan 21,739; Mr. Fairey 6,087; and Mr. Black 9,783. RSU awards were granted under, and pursuant to the terms and conditions of, the Company’s 2021 Stock Incentive Plan prior to its amendment and restatement.
401(k) Plan.   The Company maintains a defined contribution plan under which eligible employees may elect to defer a portion of their compensation and receive certain employer contributions (the “401(k) Plan”). The named executive officers are eligible to participate in the 401(k) Plan on the same terms as other eligible employees of the Bank. Eligible employees are immediately enrolled into the 401(k) Plan.
Under the 401(k) Plan, a participant may elect to defer, on a pretax basis, a portion of their eligible compensation. In addition to salary deferral contributions, the Bank makes a discretionary matching contribution. For the most recent plan year, the matching contribution was equal to 100% of employee deferrals up to 3% of eligible compensation and 50% of employee deferrals on the next 2% of eligible compensation (up to 5% of eligible compensation in the aggregate). A participant is immediately 100% vested in his or her salary deferral contributions. A participant’s vested percentage in the Bank’s matching contributions is determined under a four-year graded vesting schedule, beginning at 25% after year one and increasing 25% per year, reaching 100% after four years of service. Participants become vested in employer profit sharing contributions pursuant to the same four-year graded vesting schedule.
Health and Welfare Benefits.   Our named executive officers are eligible to participate in the same benefit plans designed for all of our eligible employees, including medical, dental, vision, disability and basic group life insurance coverage.
Perquisites.   We provide our named executive officers with a limited number of perquisites that we believe are reasonable and consistent with our overall compensation program to better enable us to attract and retain superior employees for key positions. Our Compensation Committee periodically reviews the levels of perquisites and other personal benefits provided to named executive officers.
Amended and Restated 2021 Stock Incentive Plan
On July 28, 2026, our Board approved the Amended and Restated Georgia Banking Company, Inc. 2021 Stock Incentive Plan (the “2021 Stock Incentive Plan”), which amends and restates the Georgia Banking Company, Inc. 2021 Stock Incentive Plan, effective as of April 27, 2021. The 2021 Stock Incentive Plan is intended to promote the success, and enhance the value of the Company by linking the personal interests of employees, officers, directors and consultants of the Company or any Affiliate to those of Company shareholders and by providing such persons with an incentive for outstanding performance. The 2021 Stock Incentive Plan is further intended to provide flexibility to the Company in its ability to motivate, attract and retain the services of employees, officers, directors and consultants upon whose judgment, interest, and special effort the successful conduct of the Company’s operations is largely dependent. The 2021 Stock Incentive Plan is administered by the Compensation Committee. The following is a summary of the material terms of the 2021 Stock Incentive Plan:
Permissible Awards.   The 2021 Stock Incentive Plan authorizes the granting of awards in any of the following forms:
•
options to purchase shares of our common stock, which may be designated under the tax code as nonstatutory stock options (which may be granted to all participants) or incentive stock options (which may be granted to officers and employees but not to consultants or non-employee directors);
​
•
stock appreciation rights, or SARs, which give the holder the right to receive the difference (payable in cash or stock, as specified in the award agreement) between the fair market value per share of our common stock on the date of exercise over the base price of the award;
​
•
restricted stock, which is subject to restrictions on transferability and subject to forfeiture on terms set by the Compensation Committee;
​
•
restricted stock units, or RSUs, which represent the right to receive shares of our common stock (or an equivalent value in cash or other property, as specified in the award agreement) in the future, based upon the attainment of stated vesting criteria;
​
•
deferred stock units, or DSUs, which represent the right granted to receive shares of our common stock (or an equivalent value in cash or other property, as specified in the award agreement) at a future time as determined by the Compensation Committee, or as determined by the recipient within guidelines established by the Compensation Committee in the case of voluntary deferral elections;
​
 
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•
performance awards, which are awards payable in cash or stock upon the attainment of specified performance goals (any award that may be granted under the 2021 Stock Incentive Plan may be granted in the form of a performance award);
​
•
other stock-based awards in the discretion of the Compensation Committee, including unrestricted stock grants; and
​
•
cash-based awards, including annual bonuses.
​
Dividend equivalent rights, which entitle the participant to payments in cash or property calculated by reference to the amount of dividends paid on the shares of stock underlying an award, may be granted with respect to awards other than options or SARs.
Authorized Shares.   Subject to adjustment as provided in the 2021 Stock Incentive Plan, the aggregate number of shares of our common stock reserved and available for issuance pursuant to awards granted under the 2021 Stock Incentive Plan is 1,125,000 shares, all of which may be granted as incentive stock options. In the event of a nonreciprocal transaction between us and our shareholders that causes the per share value of our common stock to change (including, without limitation, any stock dividend, stock split, spin-off, rights offering, or large nonrecurring cash dividend), the share authorization limits under the 2021 Stock Incentive Plan will be adjusted proportionately, and the Compensation Committee must make such adjustments to the 2021 Stock Incentive Plan and awards as it deems necessary, in its sole discretion, to prevent dilution or enlargement of rights immediately resulting from such transaction.
Limit on Compensation Payable to Non-Employee Directors.   With respect to any one calendar year, the aggregate compensation that may be granted to any non-employee director, including all meeting fees, cash retainers and retainers granted in the form of awards, may not exceed $500,000. For purposes of such limit, the value of awards will be determined based on the aggregate grant date fair value of all awards issued to the director in such year (computed in accordance with applicable financial accounting rules).
Limitations on Transfer; Beneficiaries.   No award will be assignable or transferable by a participant other than by will or the laws of descent and distribution or, except in the case of an incentive stock option, pursuant to a domestic relations order that would satisfy section 414(p)(1)(A) of the Code if such section applied to an award under the 2021 Stock Incentive Plan; provided, however, that the Compensation Committee may permit other transfers (other than transfers for value). A participant may, in the manner determined by the Compensation Committee, designate a beneficiary to exercise the rights of the participant and to receive any distribution with respect to any award upon the participant’s death.
Acceleration of Vesting upon Death or Disability.   Except as otherwise provided in the award certificate or any special 2021 Stock Incentive Plan document governing an award, upon the termination of a participant’s service by reason of death or disability: (i) all of such participant’s outstanding options and stock appreciation rights will become fully exercisable; (ii) the time-based vesting restrictions on outstanding awards will lapse; and (iii) the payout opportunities attainable under all of that participant’s outstanding performance-based awards will be deemed to have been fully earned as of the date of termination as follows: (i) if the date of termination occurs during the first half of the applicable performance period, all relevant performance goals will be deemed to have been achieved at the “target” level, and (ii) if the date of termination occurs during the second half of the applicable performance period, the actual level of achievement of all relevant performance goals against target will be measured as of the end of the calendar quarter immediately preceding the date of termination, and (iii) in either such case, the awards will payout on a pro-rata basis, based on the length of time within the performance period that has elapsed prior to date of termination.
Discretionary Acceleration.   Our Compensation Committee may, in its discretion, accelerate the vesting and/or payment of any awards for any reason. Our Compensation Committee may discriminate among participants or among awards in exercising such discretion.
Certain Transactions.   Upon the occurrence or in anticipation of certain corporate events or extraordinary transactions, the Compensation Committee may also make discretionary adjustments to awards, including settling awards for cash, providing that awards will become fully vested and exercisable, providing for awards to be assumed or substituted, or modifying performance targets or periods for awards.
Termination and Amendment.   The 2021 Stock Incentive Plan will terminate on April 27, 2031, the tenth anniversary of the date our shareholders approved the 2021 Stock Incentive Plan. Our Board or Compensation Committee may, at any time and from time to time, terminate or amend the 2021 Stock Incentive Plan, but if an amendment to the 2021 Stock Incentive Plan would constitute a material amendment requiring shareholder approval under applicable listing requirements, laws, policies or regulations, then such amendment will be subject to shareholder approval. No termination or amendment of the 2021 Stock
 
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Incentive Plan may adversely affect any award previously granted under the 2021 Stock Incentive Plan without the written consent of the participant. Without the prior approval of our shareholders, and except as otherwise permitted by the anti-dilution provisions of the 2021 Stock Incentive Plan, the 2021 Stock Incentive Plan may not be amended to directly or indirectly reprice, replace or repurchase “underwater” options or SARs.
Our Compensation Committee may amend or terminate outstanding awards. However, such amendments may require the consent of the participant and, unless approved by our shareholders or otherwise permitted by the anti-dilution provisions of the 2021 Stock Incentive Plan, (i) the exercise price or base price of an option or SAR may not be reduced, directly or indirectly, (ii) an option or SAR may not be cancelled in exchange for cash, other awards, or options or SARS with an exercise price or base price that is less than the exercise price or base price of the original option or SAR, or otherwise, (iii) we may not repurchase an option or SAR for value (in cash or otherwise) from a participant if the current fair market value of the shares of our common stock underlying the option or SAR is lower than the exercise price or base price per share of the option or SAR, and (iv) the original term of an option or SAR may not be extended.
Prohibition on Repricing.   As indicated above under “Termination and Amendment,” outstanding stock options and SARs cannot be repriced, directly or indirectly, without the prior consent of our shareholders. The exchange of an “underwater” option or stock appreciation right (i.e., an option or stock appreciation right having an exercise price or base price in excess of the current market value of the underlying stock) for cash or for another award would be considered an indirect repricing and would, therefore, require the prior consent of our shareholders.
Certain Federal Income Tax Effects.   The U.S. federal income tax discussion set forth below is intended for general information only and does not purport to be a complete analysis of all of the potential tax effects of the 2021 Stock Incentive Plan. It is based upon laws, regulations, rulings and decisions now in effect, all of which are subject to change. State and local income tax consequences are not discussed and may vary from locality to locality.
Nonstatutory Stock Options.   There will be no federal income tax consequences to the optionee or to us upon the grant of a nonstatutory stock option under the 2021 Stock Incentive Plan. When the optionee exercises a nonstatutory option, however, he or she will recognize ordinary income in an amount equal to the excess of the fair market value of our common stock received upon exercise of the option at the time of exercise over the exercise price, and we will be allowed a corresponding federal income tax deduction. Any gain that the optionee realizes when he or she later sells or disposes of the option shares will be short-term or long-term capital gain, depending on how long the shares were held.
Incentive Stock Options.   There typically will be no federal income tax consequences to the optionee or to us upon the grant or exercise of an incentive stock option. If the optionee holds the acquired option shares for the required holding period of at least two years after the date the option was granted and one year after exercise, the difference between the exercise price and the amount realized upon sale or disposition of the option shares will be long-term capital gain or loss, and we will not be entitled to a federal income tax deduction. If the optionee disposes of the option shares in a sale, exchange or other disqualifying disposition before the required holding period ends, he or she will recognize taxable ordinary income in an amount equal to the excess of the fair market value of the option shares at the time of exercise over the exercise price, and we will be allowed a federal income tax deduction equal to such amount. While the exercise of an incentive stock option does not result in current taxable income, the excess of the fair market value of the option shares at the time of exercise over the exercise price will be an item of adjustment for purposes of determining the optionee’s alternative minimum taxable income.
SARs.   A participant receiving a SAR under the 2021 Stock Incentive Plan will not recognize income, and we will not be allowed a tax deduction, at the time the award is granted. When the participant exercises a SAR, the amount of cash and the fair market value of any shares of common stock received will be ordinary income to the participant, and we will be allowed a corresponding federal income tax deduction at that time.
Restricted Stock.   Unless a participant makes an election to accelerate recognition of the income to the date of grant as described below, a participant will not recognize income, and we will not be allowed a tax deduction, at the time a restricted stock award is granted, provided that the award is nontransferable and is subject to a substantial risk of forfeiture. When the restrictions lapse, the participant will recognize ordinary income equal to the fair market value of our common stock as of that date (less any amount he or she paid for the stock), and we will be allowed a corresponding federal income tax deduction at that time. If the participant files an election under Section 83(b) of the tax code within 30 days after the date of grant of the restricted stock, he or she will recognize ordinary income as of the date of grant equal to the fair market value of the stock as of that date (less any amount paid for the stock), and we will be allowed a corresponding federal income tax deduction at that time. Any future appreciation in the stock will be taxable to the participant at capital gains rates. However, if the stock is later forfeited, the participant will not be able to recover the tax previously paid pursuant to the Section 83(b) election.
 
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Restricted or Deferred Stock Units.   A participant will not recognize income, and we will not be allowed a tax deduction, at the time a stock unit award is granted. When the participant receives or has the right to receive shares of common stock (or the equivalent value in cash or other property) in settlement of a stock unit award, a participant will recognize ordinary income equal to the fair market value of our common stock or other property as of that date (less any amount he or she paid for the stock or property), and we will be allowed a corresponding federal income tax deduction.
Georgia Banking Company, Inc. 2017 Long-Term Incentive Plan
On March 1, 2025, in connection with the merger with Georgia Primary, the Company adopted the Georgia Banking Company, Inc. 2017 Long-Term Incentive Plan (the “2017 Long-Term Incentive Plan”), which was formerly known as the Primary Bancshares, Corporation 2017 Long-Term Incentive Plan. The 2017 Long-Term Incentive Plan has not been approved by the Company’s shareholders.
The 2017 Long-Term Incentive Plan reserves 139,326 shares of our common stock for issuance. In connection with the merger, outstanding options to purchase shares of Georgia Primary common stock that were granted under the 2017 Long-Term Incentive Plan were converted into options to purchase shares of our common stock using an exchange ratio of 0.5870 and became fully vested and exercisable at the effective time of the merger.
The 2017 Long-Term Incentive Plan permits the grant of new equity incentives to eligible service providers, including our officers, employees, directors and consultants. No Incentive Stock Options may be granted under the 2017 Long-Term Incentive Plan unless and until our shareholders approve the 2017 Long-Term Incentive Plan. The 2017 Long-Term Incentive Plan is administered by the Compensation Committee.
Deferred Compensation Plan
We began offering a non-qualified deferred compensation plan during 2021 for certain officers and members of our Board (the “Deferred Compensation Plan”). The Deferred Compensation Plan provides for the pre-tax deferral of compensation, fees, and other specified benefits and permits each employee participant to elect to defer a portion of their base salary, bonus, or commission and permits each director participant to elect to defer all or a portion of their director’s fees.
Further, the Deferred Compensation Plan allows for a discretionary Company match to any deferred bonus allocated to a fund that tracks the performance of our common stock. Deferred bonuses vest ratably over five years while our match cliff vests on the fifth anniversary of the grant date. Our NEOs are not eligible to receive a match from us on their deferrals.
All transactions tied to stock between us and the Deferred Compensation Plan were initially at a stock price obtained from an independent valuation, which may include valuations prepared in connection with merger or acquisition transactions. Our Board could have also elected to make a discretionary contribution to any or all participants. At December 31, 2025 and 2024, assets related to the Deferred Compensation Plan totaled $4.4 million and $3.2 million, respectively, and are included in accrued interest and other assets on the consolidated balance sheets. At December 31, 2025 and 2024, liabilities related to the Deferred Compensation Plan totaled $11.4 million and $8.2 million, respectively, and are included in accrued interest and other liabilities on the consolidated balance sheets. During 2025 and 2024, revenues of $1.2 million and $1.1 million, respectively, were recognized and included in other noninterest income in the consolidated statements of income along with expenses $3.3 million and $2.8 million, respectively, that were included in salaries and employee benefits in the consolidated statements of income.
The Deferred Compensation Plan was amended and restated by the Compensation Committee on September 30, 2026.
Employment Agreements
The Company and the Bank are parties to an amended and restated employment agreement with Bartow Morgan, Jr., Chief Executive Officer of the Company and the Bank. The amended and restated employment agreement has an initial three-year term and renews automatically for successive one-year periods thereafter, unless written notice of non-renewal is provided by either party no less than 90 days prior to the end of the then-current term. The agreement provides Mr. Morgan a base salary, currently $500,000, which may be increased at the discretion of our Board during the term of the amended and restated employment agreement but may not be decreased. In addition to base salary, Mr. Morgan is eligible to participate in the annual cash incentive plan, with a minimum target Annual Bonus opportunity of no less than 50% of his Annual Base Salary, and the equity award plan (both of which are described above). Mr. Morgan is also eligible to participate in all health and welfare benefit plans, practices, policies and programs available to similarly situated senior executives of the Company, including treatment provided under the executive health program. Mr. Morgan is further eligible to maintain life insurance arrangements providing death benefits and/or premium payment assistance benefits to the same extent applicable to similarly situated senior executives of
 
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the Company. All reasonable travel and other business expenses incurred by Mr. Morgan in the performance of his duties are reimbursed by the Bank in accordance with its reimbursement policy, as amended from time to time. In addition, the Bank will reimburse Mr. Morgan for educational expenses related to his professional development and for membership in professional and civic organizations, subject in each instance to advance approval by the Bank’s board of directors for amounts in excess of $1,000.
We are not a party to any other executive employment agreements but are a party to certain change in control agreements with our other named executive officers. See the section “— Potential Payments Upon Termination of Employment or Change in Control” below.
Outstanding Equity Awards at 2025 Fiscal Year End
The following table shows stock awards outstanding for each of our named executive officers as of December 31, 2025:
​ ​ ​
Option Awards
​ ​
Stock Awards
​
Name
​ ​
Grant
Date
​ ​
Number of
Securities
Underlying
Unexercised
Options(#)
Exercisable(1)
​ ​
Number of
Securities
Underlying
Unexercised
Options(#)
Unexercisable
​ ​
Option
Exercise
Price ($)
​ ​
Option
Expiration
Date
​ ​
Number of
shares or units
of stock that
have not
vested(#)(2)
​ ​
Market value of
shares or units
of stock that
have not
vested ($)(3)
​
Bartow Morgan Jr.
​ ​ ​ ​ 3/1/2022 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 5,781 ​ ​ ​ ​ ​ 173,430 ​ ​
​ ​ ​ ​ ​ 3/1/2024 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 16,305 ​ ​ ​ ​ ​ 489,150 ​ ​
​ ​ ​ ​ ​ 3/1/2025 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 21,730 ​ ​ ​ ​ ​ 651,900 ​ ​
Richard Fairey
​ ​ ​ ​ 3/1/2025 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 6,519 ​ ​ ​ ​ ​ 195,570 ​ ​
David Black
​ ​ ​ ​ 12/8/2021 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,588 ​ ​ ​ ​ ​ 47,640 ​ ​
​ ​ ​ ​ ​ 3/31/2022 ​ ​ ​ ​ ​ 7,528 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 21.62 ​ ​ ​ ​ ​ 3/31/2032 ​ ​ ​ ​ ​ 2,601 ​ ​ ​ ​ ​ 78,030 ​ ​
​ ​ ​ ​ ​ 5/15/2023 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,891 ​ ​ ​ ​ ​ 146,730 ​ ​
​ ​ ​ ​ ​ 3/1/2024 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 7,338 ​ ​ ​ ​ ​ 220,140 ​ ​
​ ​ ​ ​ ​ 3/1/2025 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 9,778 ​ ​ ​ ​ ​ 293,340 ​ ​
​
(1)
The options fully vest on the third anniversary of the grant date.
​
(2)
The restricted shares vest in four equal annual installments starting on the grant date.
​
(3)
Market value is calculated on the basis of $30.00 per share, which was based on the most recent comprehensive valuation of the Company in 2026.
​
Potential Payments Upon Termination of Employment or Change in Control
Mr. Morgan is entitled to certain payments and benefits upon the termination of his employment or a Change in Control (as defined in the amended and restated employment agreement) of the Company pursuant to his amended and restated employment agreement. If Mr. Morgan’s employment is terminated by the Company without Cause (as defined in the amended and restated employment agreement) or by Mr. Morgan for Good Reason (as defined in the amended and restated employment agreement), he is entitled to receive: (i) a cash severance payment equal to the greater of his Annual Base Salary for the remainder of the then-current term or one times his Annual Base Salary, payable in monthly installments; (ii) a lump sum equal to his average annual bonus for the three preceding calendar years; (iii) a prorated Annual Bonus for the year of termination based on actual performance; and (iv) accelerated vesting of outstanding unvested equity awards that would have vested through the greater of the remainder of the term or 12 months following termination, with performance-based awards converted to service-based awards at target. If, during the period beginning six months prior to and ending 12 months after a Change in Control, Mr. Morgan is terminated without Cause or resigns for Good Reason, he is entitled to receive, in addition to the foregoing severance, a lump sum equal to three times his Annual Base Salary and three times his average annual bonus (in each case less amounts already payable as severance), and full accelerated vesting of all outstanding unvested equity awards. In addition, upon the occurrence of a Change in Control, regardless of whether Mr. Morgan’s employment is terminated, the Company is obligated to provide Mr. Morgan with additional benefits, equity compensation, and/or accelerated vesting in an aggregate amount equal to $2.6 million, payable in a lump sum within 60 days following the Change in Control. If any payments to Mr. Morgan would constitute a “parachute payment” within the meaning of Section 280G of the Code and would be subject to the excise tax imposed by Section 4999 of the Code, his payments will be reduced to the extent such reduction produces a better after-tax result for Mr. Morgan. All severance payments are conditioned upon Mr. Morgan’s execution of a release and non-disparagement agreement.
 
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Pursuant to the terms of their respective amended and restated change in control agreements, Mr. Morgan, Mr. Fairey, and Mr. Black are each entitled to severance and other benefits upon termination of employment in certain circumstances, as described below. The terms “cause,” “good reason,” “incapacity,” and “change in control” referred to below are defined in each NEO’s amended and restated change in control agreement.
If, upon or within 12 months immediately after a change in control (or within six months prior to a change in control), a NEO’s employment is terminated (i) by us without cause (other than on account of death or incapacity), or (ii) by the NEO for good reason, the NEO will be entitled to receive the following severance payments and benefits, payable in a lump sum within 60 days following the later of the date of termination or change in control:
Mr. Morgan
•
An amount equal to three times the NEO’s annual base salary at the highest rate in effect during the 12-month period immediately preceding termination;
​
•
An amount equal to three times the NEO’s average annual bonus for the three calendar-year period immediately preceding termination, annualized for any partial year; and
​
•
Full accelerated vesting of all outstanding unvested equity-based awards that would have vested based solely on continued employment (with performance-based awards converted to service-based awards at target).
​
Mr. Fairey and Mr. Black
•
An amount equal to two times the NEO’s annual base salary at the highest rate in effect during the 12-month period immediately preceding termination;
​
•
An amount equal to two times the NEO’s average annual bonus for the three calendar-year period immediately preceding termination, annualized for any partial year; and
​
•
Full accelerated vesting of all outstanding unvested equity-based awards that would have vested based solely on continued employment (with performance-based awards converted to service-based awards at target).
​
Our obligation to provide the severance payments and benefits above is contingent upon the NEO’s execution and non-revocation of a general release of claims in favor of the Company and continued compliance with any restrictive covenants.
Each amended and restated change in control agreement provides that in the event any payment to an NEO would constitute a “parachute payment” within the meaning of Section 280G of the Code and would be subject to the excise tax imposed by Section 4999 of the Code, payments will be reduced to the extent such reduction produces a better after-tax result for the NEO.
Clawback Policy
We have adopted a compensation policy that is compliant with Nasdaq listing rules as required by the Dodd-Frank Act.
Equity Award Grant Practices
We anticipate granting restricted stock and other equity-based awards and we will establish a policy regarding how our Board determines when to grant such awards and how our Board or Compensation Committee will take material non-public information into account when determining the timing and terms of such awards.
Director Compensation
Each of our non-employee directors is entitled to receive an annual cash retainer of $45,000 for service on the Board, payable in accordance with our standard payment practices. The Chairperson of the Board, in recognition of the additional responsibilities associated with serving in that role, receives compensation at an additional annual amount of $30,000 above the standard director retainer, resulting in total annual cash compensation of $75,000 for their service as Chairperson of the Board. The annual retainer compensates directors for their service on the Board and does not include additional amounts for service on committees, except as may be separately determined by the Board from time to time.
The following table sets forth information regarding compensation paid, earned or awarded to each non-employee director during the year ended December 31, 2025 for service as a member of our Board and committees thereof, as well as for service
 
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on the Bank’s board of directors. As our Chief Executive Officer, Mr. Morgan does not receive any additional compensation for service on our Board or the Bank’s board of directors. Henchy R. Enden and Craig Heiser did not receive any compensation in the year ended December 31, 2025 as each joined our Board in 2026.
Name
​ ​
Fees earned or
paid in cash
​ ​
Total
​
Arthur F. Anton
​ ​ ​ $ 45,000 ​ ​ ​ ​ $ 45,000 ​ ​
H. Ross Arnold, III(1)
​ ​ ​ $ 45,000 ​ ​ ​ ​ $ 45,000 ​ ​
Sarah R. Borders
​ ​ ​ $ 45,000 ​ ​ ​ ​ $ 45,000 ​ ​
Michael W. Clarke(1)
​ ​ ​ $ 45,000 ​ ​ ​ ​ $ 45,000 ​ ​
James F. Deutsch(2)
​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​
David Fisher(1)
​ ​ ​ $ 45,000 ​ ​ ​ ​ $ 45,000 ​ ​
J. Littleton Glover, Jr.(1)
​ ​ ​ $ 45,000 ​ ​ ​ ​ $ 45,000 ​ ​
Ryan Glover
​ ​ ​ $ 45,000 ​ ​ ​ ​ $ 45,000 ​ ​
James R. Lientz, Jr.(1)
​ ​ ​ $ 75,000 ​ ​ ​ ​ $ 75,000 ​ ​
R. Elliott Miller(1)
​ ​ ​ $ 45,000 ​ ​ ​ ​ $ 45,000 ​ ​
Sunny K. Park(1)
​ ​ ​ $ 45,000 ​ ​ ​ ​ $ 45,000 ​ ​
H. Boyd Pettit, III(1)(3)
​ ​ ​ $ 37,350 ​ ​ ​ ​ $ 37,350 ​ ​
Mark Scheinfeld(3)
​ ​ ​ $ 37,350 ​ ​ ​ ​ $ 37,350 ​ ​
R. Lee Tucker, Jr.
​ ​ ​ $ 45,000 ​ ​ ​ ​ $ 45,000 ​ ​
​
(1)
This director retired from, and ceased to serve as a member of, the Board as of July 28, 2026. As such they are included in this Director Compensation table but may not be mentioned elsewhere in this prospectus.
​
(2)
Mr. Deutsch serves as Patriot’s board representative pursuant to Patriot’s investor rights agreement with the Company. The annual cash retainer for Mr. Deutsch’s service on the Board for fiscal year ended December 31, 2025 was paid to Patriot.
​
(3)
Mr. Pettit and Mr. Scheinfeld joined the Board on March 1, 2025 in connection with the closing of the Georgia Primary merger. Because these directors served for only a portion of the fiscal year ended December 31, 2025, their annual cash retainer was prorated to reflect their period of service on the Board.
​
For any director who serves for less than a full fiscal year, the annual cash retainer is prorated. The prorated fee is calculated by multiplying the applicable annual retainer rate by a fraction, of the number of days a director serves on the Board over the number of days in a fiscal year. Proration is determined solely by reference to the director’s period of service and is not adjusted by reference to the number of Board or committee meetings held or attended during the relevant period.
We also offer reimbursements to our directors for their reasonable out-of-pocket expenses, including travel and lodging, incurred in attending meetings of our Board and its committees. Amounts reimbursed for such expenses are not considered compensation for purposes of the director fees described above.
 
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CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In addition to the compensation arrangements with directors and executive officers described in “Executive and Director Compensation” above, the following is a description of transactions since January 1, 2023, to which we have been a party in which the amount involved exceeded or will exceed $120,000, and in which any of our directors, executive officers or beneficial holders of more than five percent of our capital stock, or their immediate family members or entities affiliated with them (each a “related party”), had or will have a direct or indirect material interest.
Private Placements
The following related parties purchased shares of our common stock in a private placement that took place as of April 28, 2023 at a price of $23.00 per share (the “April 2023 Private Placement”). The following table summarizes these purchases by these related parties:
Shareholder
​ ​
Total
Purchase Price
​
Commerce Street Financial Partners II, L.P.(1)
​ ​ ​ $ 12,499,994 ​ ​
Patriot Financial Partners III, LP(2)
​ ​ ​ $ 2,392,000 ​ ​
Bartow Morgan, Jr.(3)
​ ​ ​ $ 2,192,728 ​ ​
R. Lee Tucker, Jr.(4)
​ ​ ​ $ 500,020 ​ ​
AllianceBernstein LP(5)
​ ​ ​ $ 230,000 ​ ​
Arthur F. Anton(6)
​ ​ ​ $ 200,008 ​ ​
J. Littleton Glover, Jr.(7)
​ ​ ​ $ 200,008 ​ ​
Sunny K. Park(8)
​ ​ ​ $ 170,200 ​ ​
Sarah R. Borders(9)
​ ​ ​ $ 161,000 ​ ​
David Fisher(10)
​ ​ ​ $ 120,014 ​ ​
David F. Black(11)
​ ​ ​ $ 80,017 ​ ​
Richard Fairey
​ ​ ​ $ 75,003 ​ ​
Michael W. Clarke(12)
​ ​ ​ $ 57,500 ​ ​
James R. Lientz, Jr.(13)
​ ​ ​ $ 46,000 ​ ​
H. Ross Arnold III(14)
​ ​ ​ $ 34,500 ​ ​
R. Elliott Miller(15)
​ ​ ​ $ 23,000 ​ ​
J. Craig Addison(16)
​ ​ ​ $ 20,010 ​ ​
​
(1)
Commerce Street Financial Partners II, L.P. (“Commerce Street”) is a beneficial holder of more than five percent of the Company.
​
(2)
Patriot Financial Partners III, LP is a beneficial holder of more than five percent of the Company.
​
(3)
Mr. Morgan serves on the board of directors of the Company and the Bank and serves as the Chief Executive Officer of the Company and the Bank.
​
(4)
Mr. Tucker purchased the shares through TMP GBC Investment, LLC. Mr. Tucker serves on the board of directors of the Company and the Bank.
​
(5)
AllianceBernstein LP, through its subsidiary AB Financial Services Opportunities Master Fund LP (“AB Financial”), is a beneficial holder of more than five percent of the Company. AllianceBernstein LP purchased the shares through Scalloplight + Co, the bank nominee for AB Financial.
​
(6)
Mr. Anton serves on the board of directors of the Company.
​
(7)
Includes shares purchased by J. Littleton Glover, Jr.’s son, Littleton Glover III. J. Littleton Glover, Jr. served on the board of directors of the Company and the Bank until July 28, 2026.
​
(8)
Mr. Park served on the board of directors of the Company until July 28, 2026.
​
(9)
Ms. Borders purchased the shares through JSRB Funding, LLC. Ms. Borders serves as Chair for the board of directors of the Company and the Bank.
​
(10)
Mr. Fisher purchased the shares through Knoll Capital I, LLC. Mr. Fisher served on the board of directors of the Company until July 28, 2026.
​
(11)
Mr. Black purchased the shares through Community National Bank FBO David F. Black IRA. Mr. Black serves as the Chief Commercial Officer of the Bank.
​
(12)
Mr. Clarke served on the board of directors of the Company until July 28, 2026.
​
(13)
Mr. Lientz served as Chair of the board of directors of the Company and the Bank until July 28, 2026.
​
(14)
Mr. Arnold served on the board of directors of the Company until July 28, 2026.
​
(15)
Mr. Miller served on the board of directors of the Company and the Bank until July 28, 2026.
​
(16)
Mr. Addison serves as the Chief Human Resources Officer of the Company and the Bank.
​
 
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The following related parties purchased shares of our common stock in the June 2026 Private Placement. The following table summarizes these purchases by the related party:
Shareholder
​ ​
Total
Purchase Price
​
AllianceBernstein LP(1)
​ ​ ​ $ 18,000,000 ​ ​
​
(1)
AllianceBernstein LP, through its subsidiary AB Financial Services Opportunities Master Fund LP, is a beneficial holder of more than five percent of the Company.
​
The following related parties purchased shares of our common stock in the August 2026 Private Placement. The following table summarizes these purchases by these related parties:
Shareholder
​ ​
Total
Purchase Price
​
Ryan Glover(1)
​ ​ ​
$
400,020
​ ​
Sunny K. Park(2)
​ ​ ​ $ 250,020 ​ ​
H. Ross Arnold III(3)
​ ​ ​
$
200,010
​ ​
James R. Lientz, Jr.(4)
​ ​ ​
$
100,020
​ ​
​
(1)
Mr. Glover purchased these shares through GBCFP1, LLC. Mr. Glover serves on the board of directors of the Company.
​
(2)
Mr. Park served on the board of directors of the Company until July 28, 2026.
​
(3)
Mr. Arnold served on the board of directors of the Company until July 28, 2026.
​
(4)
Mr. Lientz served as Chair of the board of directors of the Company and the Bank until July 28, 2026.
​
Leasing
In December 2021, the Bank entered into two lease agreements for a branch and sales office involving a property located at 2827 Peachtree Road NE, Atlanta, Georgia (the “Garden Hills Property”), in which Bartow Morgan, Jr., our Chief Executive Officer and a director of the Company and the Bank, who, together with certain of Mr. Morgan’s immediate family members, holds an interest, and J. Littleton Glover, Jr., a director of the Company and the Bank at the time of the transaction, who holds a separate interest. Mr. Morgan and certain of Mr. Morgan’s immediate family members hold 9.3% interest in the Garden Hills Property through a corresponding ownership interest in Brand Properties, LLC. Mr. Glover, a director of the Company and the Bank at the time of the transaction, holds a 13.96% interest in the Garden Hills Property by virtue of his role as President and Chief Executive Officer of Batson-Cook Development Company.
The first lease agreement (the “Garden Hills Office Lease”) covers approximately 27,850 rentable square feet for use as general office space, with an initial term of 20 years and commenced on or about August 4, 2023. The aggregate base rent payments under the Garden Hills Office Lease are approximately $25.7 million over the initial term. The second lease (the “Garden Hills Retail Lease”) covers approximately 4,500 rentable square feet on the ground floor level of the building for use as a branch banking facility, with an initial term of 20 years, also commencing on or about August 4, 2023. The aggregate base rent payments under the Garden Hills Retail Lease are approximately $7.5 million over the initial term. The combined aggregate base rent payments under both leases total approximately $34.2 million over the initial 20-year term. The aggregate amount of all periodic payments or installments remaining as of December 31, 2025 is approximately $31.1 million. Further, the approximate dollar value of the interest of Mr. Morgan and Mr. Glover in the transaction, measured by the pro rata share of rental payments over the lease term, is approximately $2.9 million and $4.4 million, respectively. Neither lease contains any renewal options or early termination provisions available to the Bank.
This transaction was reviewed and approved by our Board in accordance with our applicable policies and procedures relating to related-party transactions. Further, two independent consultants were engaged by management to carry out the market comparison analysis to affirm the leasing arrangements, including the rental rates, were fair and reasonable in comparison to similar arrangements that could have been made with unaffiliated third parties. Directors with a personal interest in the transaction were recused from the Board’s deliberations and vote.
Legal Services
R. Lee Tucker, Jr., a director of the Company and the Bank, is a founding partner of Mahaffey Pickens Tucker, LLP (“MPT”), a law firm that provides commercial legal services to the Company and the Bank in connection with certain loan
 
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transactions. Mr. Tucker holds a 19.1% ownership interest in MPT by virtue of his position as a named partner of the firm. During the fiscal years ended December 31, 2025, 2024 and 2023, MPT provided legal services to the Company for loan closings in which borrowers paid total fees of approximately $194,000, $244,000 and $160,000, respectively. Of those amounts, the Company paid MPT approximately $2,300, $0 and $15,800, respectively, for such legal services. During the six months ended June 30, 2026, MPT provided legal services to the Company for loan closings in which borrowers paid total fees of approximately $91,200, of which the Company paid MPT approximately $1,800. This arrangement was reviewed and approved by our Board in accordance with our applicable policies and procedures relating to related party transactions, and Mr. Tucker was recused from the Board’s deliberations and vote.
Banking Relationships and Related Party Transactions
The Sarbanes-Oxley Act generally prohibits publicly traded companies from making loans to their executive officers and directors, but it contains a specific exemption from the prohibition for loans made by federally insured financial institutions, such as the Bank, to their executive officers and directors in compliance with federal banking regulations. Applicable law and our written credit policies require that loans to insiders be on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated parties, and must not involve more than the normal risk of repayment or present other unfavorable features. Loans to non-insider employees and other non-insiders are subject to the same requirements and underwriting standards and meet our normal lending guidelines. Loans to individual employees, directors and executive officers must also comply with the Bank’s statutory lending limits and regulatory requirements regarding lending limits and collateral. All extensions of credit to the related parties must be reviewed and approved by the Bank’s board of directors, and directors with a personal interest in any loan application are excluded from the consideration of such loan application. At September 30, 2026, all of the loans to the Bank’s directors and executive officers were made in compliance with our Regulation O policies and procedures, in the ordinary course of business, were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable loans with persons not related to the Bank, and did not involve more than the normal risk of collectability or present other features unfavorable to the Bank. These loans were performing according to their original terms at September 30, 2026, and were made in compliance with federal banking regulations.
At September 30, 2026, the aggregate amount of extensions of credit to our directors, executive officers, principal shareholders and their associates was $2.5 million, or approximately 0.91% of our total equity. At September 30, 2026, total unfunded commitments to these related parties were $451 thousand.
Other Transactions
Our Bylaws include provisions limiting the liability of directors and officers and indemnifying them under certain circumstances, to the fullest extent permitted by law. See section entitled “Description of Capital Stock — Indemnification of Directors and Officers.” Our ability to provide indemnification to our directors and officers is limited by federal banking laws and regulations, including, but not limited to, section 18(k) of the Federal Deposit Insurance Act of 1950, as amended, and implementing regulations of the FDIC.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors and officers or for persons controlling us under any of the foregoing provisions, in the opinion of the SEC, that indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
We are party to registration rights agreements with investor rights agreements, and provide information rights to Bartow Morgan, Jr., our Chief Executive Officer and director of the Bank and the Company, Patriot and Fortress, which each holds more than 5% of our capital stock. See “Description of Capital Stock — Transactions with Certain Investors” for a description of the registration rights, the investor rights, the board rights, and information rights held by these related parties. We have also granted a board observer right to Commerce Street, which holds more than 5% of our capital stock.
Policies and Procedures Regarding Related Party Transactions
Transactions by the Company with related parties are subject to a formal written policy, as well as certain regulatory requirements and restrictions, including Sections 23A and 23B of the Federal Reserve Act and the Federal Reserve’s Regulation W (which govern certain transactions by the Bank with its affiliates) and the Federal Reserve’s Regulation O (which governs certain loans by the Bank to its executive officers, directors and principal shareholders). We have adopted policies to comply with these regulatory requirements and restrictions.
In addition, we have adopted a written policy governing the approval of related party transactions that complies with all applicable requirements of the SEC and Nasdaq Stock Market’s exchange rules. Related party transactions are transactions in
 
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which we are a participant, the amount involved exceeds $120,000 and a related party has or will have a direct or indirect material interest. Related parties of the Company include directors (including nominees for election as directors), executive officers, five percent shareholders and the immediate family members of these persons. In determining whether to approve a related party transaction, our Board will consider, among other factors, as it deems appropriate, the related party’s interest in the related party transaction, the approximate dollar value of the amount involved in the related party transaction, the approximate dollar value of the amount of the related party’s interests in the related party transaction without regard to the amount of any profit or loss, whether the related party transaction was undertaken in the ordinary course of business, whether the related party transaction with the related party is proposed to be, or was, entered into on terms no less favorable to the Company than terms that could have been reached with an unrelated third party, the purpose of, and the potential benefits to the Company of, the related party transaction, the fairness of the proposed transaction, the direct or indirect nature of the related party’s interest in the transaction, the appearance of an improper conflict of interests for any director or executive officer taking into account the size of the transaction and the financial position of the related party, whether the transaction would impair an outside director’s independence, the acceptability of the transaction to our regulators and the potential violations of other corporate policies, and any other information regarding the related party transaction or the related party in the context of the proposed related party transaction that would be material to investors in the light of the circumstances of the particular related party transaction.
 
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PRINCIPAL AND REGISTERED SHAREHOLDERS
The following table sets forth information about the beneficial ownership of our common stock as of September 30, 2026 and as adjusted to reflect the completion of the offering, for:
•
Each person known to us to be the beneficial owner of more than 5% of our common stock;
​
•
Each of our directors;
​
•
Each of our named executive officers;
​
•
All directors and executive officers as a group; and
​
•
Each other Registered Shareholder not already included.
​
The Registered Shareholders include affiliates of the Company and certain other shareholders with “restricted securities” (as defined in Rule 144 under the Securities Act) because of their status as affiliates pursuant to Rule 144 or because they acquired their common stock in a private placement within the prior 12 months. The Registered Shareholders may, or may not, elect to sell their common stock in transactions on Nasdaq at prevailing market prices. As such, the Company will have no input if and when any Registered Shareholder may, or may not, elect to sell their common stock or the prices at which any such sales may occur. See “Plan of Distribution”.
Information concerning the Registered Shareholders may change from time to time and any information changed will be set forth in supplements to this prospectus, if and when necessary. Because the Registered Shareholders may sell all, some, or none of the common stock covered by this prospectus, we cannot determine the number of shares of common stock that will be sold by the Registered Shareholders, or the amount or percentage of shares of common stock that will be held by the Registered Shareholders upon consummation of any particular sale. In addition, the Registered Shareholders listed in the table below may have sold, transferred, or otherwise disposed of, or may sell, transfer, or otherwise dispose of, at any time and from time to time, our common stock in transactions exempt from the registration requirements of the Securities Act, after the date on which they provided the information set forth in the table below.
Certain of the Registered Shareholders are parties to registration rights agreements entered into in connection with the Recapitalization and our June 2026 Private Placement. The filing of the registration statement of which this prospectus forms a part satisfies our obligations under those agreements to file a registration statement covering the resale of shares held by such qualified holders prior to the filing deadline of February 17, 2027. Following the effectiveness of the registration statement, which this prospectus forms a part, the registration rights pursuant to the registration rights agreement will be extinguished. See “Description of Capital Stock” for more information on the registration rights agreements.
Other than as described above and in the “Description of Capital Stock,” we are not party to any other agreement, plan, or arrangement with any Registered Shareholder or broker-dealer with respect to the timing, coordination, or execution of sales of common stock by the Registered Shareholders in connection with this listing. We have engaged Performance Trust Capital Partners, LLC (“Performance Trust”) as our financial advisor with respect to certain other matters relating to our listing. See “Plan of Distribution.”
We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally provide that a person is the beneficial owner of securities if such person has or shares the power to vote or direct the voting of securities, or to dispose or direct the disposition of securities, or has the right to acquire such powers within 60 days of September 30, 2026. For purposes of calculating each person’s percentage ownership, common stock issuable pursuant to equity awards that are exercisable within 60 days of September 30, 2026 are included as outstanding and beneficially owned for that person or group, but are not deemed outstanding for the purposes of computing the percentage ownership of any other person. Except as disclosed in the footnotes to this table and subject to applicable community property laws, we believe that each beneficial owner identified in the table possesses sole voting and investment power over all our common stock shown as beneficially owned by the beneficial owner.
The percentage of voting power is based on 10,340,809 shares of common stock outstanding as of September 30, 2026.
The Registered Shareholders have not, nor have they within the past three years had, any position, office, or other material relationship with us, other than as disclosed in this prospectus. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Certain Relationships and Related Party Transactions” for further information regarding the Registered Shareholders.
 
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Shares of non-voting common stock offered by the Registered Shareholders will automatically convert into voting common stock, which we refer to in this prospectus as common stock, upon transfer. See “Description of Capital Stock” for additional information regarding the automatic conversion.
Unless otherwise noted, the address for each shareholder listed on the table below is: c/o Georgia Banking Company, Inc. 1776 Peachtree Street NW, Suite 300, Atlanta, GA 30309.
​ ​ ​
Shares Beneficially Owned
as of September 30, 2026
​ ​
Shares to be
Registered in the
Offering
​
Name and Address of Beneficial Owner
​ ​
Number of
Shares
​ ​
Percentage of
Voting Power
​
Named Executive Officers and Directors: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Sarah R. Borders(1)
​ ​ ​ ​ 61,276 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 53,260 ​ ​
Arthur F. Anton(2)
​ ​ ​ ​ 31,826 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 31,826 ​ ​
James F. Deutsch(3)
​ ​ ​ ​ 1,642,278 ​ ​ ​ ​ ​ 14.43%(4) ​ ​ ​ ​ ​ 1,642,278 ​ ​
Henchy R. Enden
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Ryan Glover(5)
​ ​ ​ ​ 15,647 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 15,647 ​ ​
Craig Heiser(6)
​ ​ ​ ​ 25,920 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 25,920 ​ ​
Bartow Morgan, Jr.(7)
​ ​ ​ ​ 780,802 ​ ​ ​ ​ ​ 7.41% ​ ​ ​ ​ ​ 737,667 ​ ​
Mark Scheinfeld(8)
​ ​ ​ ​ 116,779 ​ ​ ​ ​ ​ 1.13% ​ ​ ​ ​ ​ 115,654 ​ ​
R. Lee Tucker, Jr.(9)
​ ​ ​ ​ 78,495 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 68,000 ​ ​
Richard Fairey(10)
​ ​ ​ ​ 54,871 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 54,871 ​ ​
David Black(11)
​ ​ ​ ​ 55,769 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 52,741 ​ ​
All directors and executive officers as a group (15 persons total)(12)
​ ​ ​ ​ 2,966,080 ​ ​ ​ ​ ​ 26.48% ​ ​ ​ ​ ​ 2,894,317 ​ ​
5% Shareholders and Registered Shareholders: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Patriot Financial Partners III, LP(13)​
​ ​ ​ ​ 1,642,278 ​ ​ ​ ​ ​ 14.43% ​ ​ ​ ​ ​ 1,642,278 ​ ​
Fortress Investment Group LLC(14)​
​ ​ ​
​
833,334
​ ​ ​ ​
​
4.85%(15)
​ ​ ​ ​
​
833,334
​ ​
AllianceBernstein LP(16)​
​ ​ ​ ​ 656,260 ​ ​ ​ ​ ​ 6.35% ​ ​ ​ ​ ​ 656,260 ​ ​
Commerce Street Financial Partners II, L.P.(17)​
​ ​ ​ ​ 543,478 ​ ​ ​ ​ ​ 5.26% ​ ​ ​ ​ ​ 543,478 ​ ​
Angel Oak Capital Advisors, LLC(18)​
​ ​ ​ ​ 50,000 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 50,000 ​ ​
Banc Funds Company LLC(19)​
​ ​ ​ ​ 200,000 ​ ​ ​ ​ ​ 1.93% ​ ​ ​ ​ ​ 200,000 ​ ​
Black Maple Capital Management LP(20)​
​ ​ ​ ​ 10,000 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 10,000 ​ ​
Choral Financial Fund, LP(21)
​ ​ ​ ​ 25,000 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 25,000 ​ ​
Cutler Capital Management, LLC(22)​
​ ​ ​ ​ 25,000 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 25,000 ​ ​
Down Range Capital Management, LLC(23)​
​ ​ ​ ​ 5,000 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 5,000 ​ ​
EJF Capital LP(24)​
​ ​ ​ ​ 120,000 ​ ​ ​ ​ ​ 1.16% ​ ​ ​ ​ ​ 120,000 ​ ​
Ledyard Capital, LLC(25)​
​ ​ ​ ​ 10,000 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 10,000 ​ ​
Maltese Capital Management, LLC(26)​
​ ​ ​ ​ 461,294 ​ ​ ​ ​ ​ 4.46% ​ ​ ​ ​ ​ 461,294 ​ ​
The Manufacturer’s Life Insurance Company(27)​
​ ​ ​ ​ 175,000 ​ ​ ​ ​ ​ 1.69% ​ ​ ​ ​ ​ 175,000 ​ ​
Siena Capital Partners GP, LLC(28)​
​ ​ ​ ​ 75,000 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 75,000 ​ ​
All Other Registered Shareholders: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
J. Bradford Smith(29)
​ ​ ​ ​ 708,414 ​ ​ ​ ​ ​ 6.75% ​ ​ ​ ​ ​ 708,414 ​ ​
James R. Lientz, Jr.
​ ​ ​ ​ 16,334 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 16,334 ​ ​
Michael W. Clarke(30)​
​ ​ ​ ​ 2,500 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 2,500 ​ ​
David Fisher(31)
​ ​ ​ ​ 14,470 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 14,470 ​ ​
H. Ross Arnold III
​ ​ ​ ​ 115,886 ​ ​ ​ ​ ​ 1.12% ​ ​ ​ ​ ​ 115,886 ​ ​
J. Littleton Glover, Jr.
​ ​ ​ ​ 8,974 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 8,974 ​ ​
Sunny K. Park
​ ​ ​ ​ 24,986 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 24,986 ​ ​
H. Boyd Pettit III(32)​
​ ​ ​ ​ 65,267 ​ ​ ​ ​ ​ * ​ ​ ​ ​ ​ 65,267 ​ ​
​
*
Indicates beneficial ownership is less than 1%.
​
(1)
Shares beneficially owned include 53,260 shares of common stock held by JSRB Funding, LLC. The address of JSRB Funding, LLC is 315 Valley Road, NW, Atlanta, Georgia 30305. Includes 8,016 shares of common stock underlying fully vested deferred stock units credited to Ms. Borders’ account in the
​
 
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Company Stock Unit Fund under the Deferred Compensation Plan. These units will be settled solely in shares of our common stock, on a one-for-one basis, as soon as administratively practicable (and in any event within 90 days) after Ms. Borders separates from service on our Board. Ms. Borders has no voting or investment power over the underlying shares until they are delivered.
(2)
Shares beneficially owned include 23,130 shares of common stock held by Arthur F. Anton JWROS: Anoz M. Anton.
​
(3)
Shares beneficially owned include 1,491,800 shares of common stock held by Patriot Financial Partners III, LP, previously defined as Patriot, along with warrants to purchase 150,478 shares of non-voting common stock. Patriot’s voting and dispositive power is held by James F. Deutsch, who serves as a Partner of Patriot. Mr. Deutsch disclaims beneficial ownership of such shares of common stock, except to the extent of his pecuniary interest in the funds. The address of Patriot is 100 Matsonford Rd, Four Radnor Corporate Center, Suite 210, Radnor, Pennsylvania 19087.
​
(4)
In accordance with the rules of the SEC in determining beneficial ownership, the percentage ownership reflected does not include the warrants to purchase 150,478 shares of non-voting common stock held by Patriot.
​
(5)
Shares beneficially owned are held by Special Project X, LLC and GBCFP1, LLC. The address of Special Project X, LLC is 4060 Glen Devon Dr., Atlanta, Georgia 30327. The address of GBCFP1, LLC is 2870 Peachtree Rd. #413, Atlanta, Georgia 30305.
​
(6)
Shares beneficially owned include warrants to purchase 9,360 shares of common stock and 9,600 shares of common stock held by Community National Bank Cust Craig S. Heiser IRA.
​
(7)
Shares beneficially owned include warrants to purchase 150,478 shares of common stock and 34,070 shares held by Community National Bank FBO Bartow Morgan. 543,314 shares are pledged to secure a personal line of credit. Includes 43,135 shares of common stock underlying vested deferred stock units credited to Mr. Morgan’s account in the Company Stock Unit Fund under the Deferred Compensation Plan. Under the Deferred Compensation Plan, these units will be settled solely in shares of our common stock, as soon as administratively practicable (and in any event within 90 days) following Mr. Morgan’s separation from service. These shares are included in the table because they could be acquired within 60 days of September 30, 2026 if a separation from service occurred. Mr. Morgan does not have voting or investment power over the underlying shares until they are delivered.
​
(8)
Shares beneficially owned include options to purchase 5,283 shares of common stock. Includes 1,125 shares of common stock underlying fully vested deferred stock units credited to Mr. Scheinfeld’s account in the Company Stock Unit Fund under the Deferred Compensation Plan. These units will be settled solely in shares of our common stock, on a one-for-one basis, as soon as administratively practicable (and in any event within 90 days) after Mr. Scheinfeld separates from service on our Board. Mr. Scheinfeld has no voting or investment power over the underlying shares until they are delivered.
​
(9)
Shares beneficially owned include 68,000 shares of common stock held by TMP GBC Investment, LLC. The address of TMP GBC Investment, LLC is 1550 North Brown, Suite 125, Lawrenceville, Georgia 30043. Includes 10,495 shares of common stock underlying fully vested deferred stock units credited to Mr. Tucker’s account in the Company Stock Unit Fund under the Deferred Compensation Plan. These units will be settled solely in shares of our common stock, on a one-for-one basis, as soon as administratively practicable (and in any event within 90 days) after Mr. Tucker separates from service on our Board. Mr. Tucker has no voting or investment power over the underlying shares until they are delivered.
​
(10)
Shares are pledged to secure a personal line of credit.
​
(11)
Shares beneficially owned include options to purchase 7,528 shares of common stock and 15,044 shares of common stock held by Community National Bank FBO David F. Black IRA. Includes 3,028 shares of common stock underlying vested deferred stock units credited to Mr. Black’s account in the Company Stock Unit Fund under the Deferred Compensation Plan. Under the Deferred Compensation Plan, these units will be settled solely in shares of our common stock, as soon as administratively practicable (and in any event within 90 days) following Mr. Black’s separation from service. These shares are included in the table because they could be acquired within 60 days of September 30, 2026 if a separation from service occurred. Mr. Black does not have voting or investment power over the underlying shares until they are delivered.
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(12)
Includes 5,964 shares of common stock underlying vested deferred stock units credited to certain executive officers’ accounts in the Company Stock Unit Fund under the Deferred Compensation Plan. Under the Deferred Compensation Plan, these units will be settled solely in shares of our common stock, as soon as administratively practicable (and in any event within 90 days) following the executive officer’s separation from service, as applicable. These shares are included in the table because they could be acquired within 60 days of September 30, 2026 if a separation from service occurred. The executive officers do not have voting or investment power over the underlying shares until they are delivered.
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(13)
Shares beneficially owned include warrants to purchase 150,478 shares of non-voting common stock. Patriot’s voting and dispositive power is held by James F. Deutsch, who serves as a Partner of Patriot. Mr. Deutsch serves as a member of the board of directors of the Company and the Bank. Mr. Deutsch disclaims beneficial ownership of such shares of common stock, except to the extent of his pecuniary interest in the funds. The address of Patriot is 100 Matsonford Rd, Four Radnor Corporate Center, Suite 210, Radnor, Pennsylvania 19087.
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(14)
Shares beneficially owned include 501,993 shares of common stock and 331,341 shares of non-voting common stock held by CF GBC Investors LP, a Delaware limited partnership (“CF GBC”). CF GBC’s voting and dispositive power is held by CF GBC GP LLC, a Delaware limited liability company (“CF GBC GP”), CF GBC’s general partner. CF GBC GP’s voting and dispositive power is held by FIG LLC, a Delaware limited liability company (“FIG”), CF GBC GP’s sole member. Fortress Operating Entity I LP, a Delaware limited partnership (“FOE I”), is the owner of all of the issued and outstanding interests of FIG. FIG Blue LLC, a Delaware limited liability company (“FIG Blue”), is the general partner of FOE I. FIG Blue is wholly owned by Fortress Investment Group LLC, a Delaware limited liability company (“Fortress Investment Group”). FINCO I Intermediate Holdco LLC, a Delaware limited liability company (“FINCO I IH”), is the sole member of Fortress Investment Group. FINCO I LLC, a Delaware limited liability company (“FINCO I LLC”), is the sole member of FINCO I IH. FIG Parent, LLC, a Delaware limited liability company (“FIG Parent”), is the sole member of FINCO I LLC. Foundation Holdco LP, a Delaware limited partnership (“Foundation Holdco”), is the sole member of FIG Parent. FIG Buyer GP, LLC, a Delaware limited liability company (“FIG Buyer”), is the general partner of Foundation Holdco. As the Co-Chief Investment Officers, each of Drew McKnight and Joshua Pack participates in the voting and investment decisions with respect to the shares of common stock and non-voting common stock held by CF GBC, but each of them disclaims beneficial ownership thereof. The address of each of the entities and persons named in this footnote is 1345 Avenue of the Americas, 46th Floor, New York, New York 10105.
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(15)
In determining beneficial ownership in accordance with the rules of the SEC, the percentage ownership reflected does not include the 331,341 shares of non-voting common stock held by Fortress.
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(16)
Shares beneficially owned include 646,260 shares of common stock held by AB Financial and 10,000 shares of common stock held by Scalloplight + Co,
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the bank nominee for AB Financial. AB Financial’s voting and dispositive power is held by AllianceBernstein LP (“AllianceBernstein”), ABFinancial’s investment adviser. The voting and dipositive power of AllianceBernstein is held by Michael Howard, who serves as Senior Vice President and Portfolio Manager of AllianceBernstein. Mr. Howard disclaims beneficial ownership of such shares of common stock, except to the extent of his pecuniary interest in the fund. The address of AllianceBernstein LP is 66 Hudson Blvd E, New York, New York 10001.
(17)
The voting and dipositive power of Commerce Street Financial Partners II, L.P., previously defined as Commerce Street, is held by Carla J. Brooks, who serves as Senior Managing Director of Commerce Street. Ms. Brooks disclaims beneficial ownership of such shares of common stock, except to the extent of her pecuniary interest in the fund. The address of Commerce Street Financial Partners II, L.P. is 1445 Ross Avenue, Suite 2700, Dallas, Texas 75202.
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(18)
Shares beneficially owned include 50,000 shares of common stock held by Angel Oak Financial Strategies Income Term Trust (“Angel Oak Financial”). Angel Oak Financial’s voting and dispositive power is held by Angel Oak Capital Advisors, LLC (“Angel Oak Capital”), Angel Oak Financial’s investment advisor. Angel Oak Capital’s voting and dispositive power is held by Sreeniwas Prabhu, who serves as the Managing Partner and Group Chief Investment Officer of Angel Oak Capital. Mr. Prabhu disclaims beneficial ownership of such shares of common stock, except to the extent of his pecuniary interest in the funds. The address of Angel Oak Capital is 980 Hammond Dr., Suite 200, Atlanta, Georgia 30328.
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(19)
Shares beneficially owned include 200,000 shares of common stock held by Banc Fund X L.P. (“Banc Fund X”). Banc Fund X’s voting and dispositive power is held by MidBan X L.P. (“MidBan”), Banc Fund X’s General Partner. MidBan’s voting and dispositive power is held by Banc Funds Company LLC (“Banc Funds Company”), MidBan’s General Partner. Banc Funds Company’s voting and dispositive power is held by Charles J. Moore, who serves as a member of Banc Funds Company. Mr. Moore disclaims beneficial ownership of such shares of common stock, except to the extent of his pecuniary interest in the funds. The address of Banc Funds Company is 150 S. Wacker Drive, Suite 2725, Chicago, Illinois 60606.
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(20)
Shares beneficially owned include 10,000 shares of common stock held by Black Maple Capital Partners LP (“Black Maple Partners”). Black Maple Partners’ voting and dispositive power is held by Black Maple Capital Management LP (“Black Maple LP”), Black Maple Partners’ Investment Manager. Black Maple LP’s voting and dispositive power is held by Robert Barnard, who serves as the Chief Executive Officer and Chief Investment Officer of Black Maple LP. Mr. Barnard disclaims beneficial ownership of such shares of common stock, except to the extent of his pecuniary interest in the funds. The address of Black Maple Capital Management LP is 833 E Michigan St, Suite 750, Milwaukee, Wisconsin 53202.
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(21)
Choral Financial Fund, LP’s (“Choral Financial”) voting and dispositive power is held by Choral Capital, LLC (“Choral, LLC”), Choral Financial’s General Partner. Choral, LLC’s voting and dispositive power is held by Bradley Jay Ness, who serves as the sole Managing Member and Principal Officer of Choral, LLC. Mr. Ness disclaims beneficial ownership of such shares of common stock, except to the extent of his pecuniary interest in the funds. The address of Choral Financial and Choral, LLC is 1201 Wilson Boulevard, 9th Floor, Arlington, Virginia 22209.
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(22)
Shares beneficially owned include 25,000 shares of common stock held by Cutler Financial Fund, LP (“Cutler Financial”). Cutler Financial’s voting and dispositive power is held by Cutler Capital Management, LLC (“Cutler Capital”), Cutler’s General Partner. Cutler Capital’s voting and dipositive power is held by Geoffrey K. Dancey, who serves as the President and Chief Operating Officer of Cutler Capital. Mr. Dancey disclaims beneficial ownership of such shares of common stock, except to the extent of his pecuniary interest in the funds. The address of Cutler Capital Management, LLC is 306 Main Street, Worcester, Massachusetts 01608.
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(23)
Shares beneficially owned include 5,000 shares of common stock held by Down Range Capital Opportunity Fund, LP (“Down Range Opportunity”). Down Range Opportunity’s voting and dispositive power is held by Down Range Capital Management, LLC (“Down Range Management”), Down Range Opportunity’s General Partner. Down Range Management’s voting and dispositive power is held by Bradley Rinschler, who serves as the Managing Partner of Down Range Opportunity. Mr. Rinschler disclaims beneficial ownership of such shares of common stock, except to the extent of his pecuniary interest in the funds. The address of Down Range Management is 92 Brinleigh Dr., East Stroudsburg, Pennsylvania 18301.
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(24)
Shares beneficially owned include 120,000 shares of common stock held by EJF Financial Services Fund LP (“FSF”). FSF’s voting and dispositive voting power is held by EJF Financial Services GP, LLC (“FSG”), FSF’s General Partner. FSG’s voting and dispositive power is held by EJF Capital LP (“EJF”), FSG’s Sole Member. EJF’s voting and dispositive power is held by Emanuel J. Friedman and Neal J. Wilson, who each serve as Co-Chief Executive Officers of EJF. Mr. Friedman and Mr. Wilson disclaim beneficial ownership of such shares of common stock, except to the extent of their individual pecuniary interest in the funds. The address of EJF is 2107 Wilson Boulevard, Suite 410, Arlington, Virginia 22201.
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(25)
Shares beneficially owned include 10,000 shares of common stock held by Ledyard Future of Financials Fund LP (“Ledyard Future”). Ledyard Future’s voting and dispositive power is held by Ledyard Capital, LLC (“Ledyard Capital”), Ledyard Future’s Investment Advisor. Ledyard Capital’s voting and dipositive power is held by Russell Parker Echlov, who serves as the Ledyard Capital’s General Partner. Mr. Echlov disclaims beneficial ownership of such shares of common stock, except to the extent of his pecuniary interest in the funds. The address of Ledyard Capital is 200 S. Wacker Dr., Suite 2650, Chicago, Illinois 60606.
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(26)
Shares beneficially owned include 18,348 of common stock held by Malta Hedge Fund, L.P. (“Malta Hedge Fund”), 111,695 of common stock held by Malta Hedge Fund II, L.P. (“Malta Hedge Fund II”), 108,903 shares of common stock held by Malta Opportunity Fund LP (“Malta Opportunity Fund”), 20,348 shares of common stock held by Malta Offshore, Ltd. (“Malta Offshore”) and 202,000 shares of common stock held by MCM SPV VIII, LLC (“MCM”, together with Malta Hedge Fund, Malta Hedge Fund II, Malta Opportunity Fund, and Malta Offshore, the “Malta Entities”). The Malta Entities’ voting and dispositive power is held by Maltese Capital Management, LLC (“Maltese Capital”). Maltese Capital’s voting and dipositive power is held by Terry Maltese, who serves as the Managing Member of Maltese Capital. Mr. Maltese disclaims beneficial ownership of such shares of common stock, except to the extent of his pecuniary interest in the Malta Entities. The address of Maltese Capital is 150 East 52nd Street, Suite 23001, New York, New York 10022.
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(27)
Shares beneficially owned include 175,000 shares of common stock held by John Hancock Financial Opportunity Fund (“JH”). JH’s voting and dispositive power is held by Manulife Investment Management LLC (“MIMUS”), JH’s subadvisor, subject to oversight by John Hancock Investment Management LLC, JH’s advisor. MIMUS is an indirect wholly-owned subsidiary of Manulife Financial Corporation (“MFC”), which is a Canadian-based publicly-held company that is listed on the Toronto Stock Exchange, New York Stock Exchange, Hong Kong Stock Exchange, and the Philippine Stock Exchange. The Manufacturer’s Life Insurance Company (which is also a subsidiary of MFC) files a Form 13F for all impacted MFC subsidiaries. The address of MIMUS is 197 Clarendon St., Boston, Massachusetts 02116.
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(28)
Shares beneficially owned include 75,000 shares of common stock held by Siena Capital Partners I, LP (“Siena I”). Siena I’s voting and dispositive power is held by Siena Capital Partners GP, LLC (“Siena Capital”), Siena I’s General Partner. Siena Capital’s voting and dispositive power is held by Daniel Kanter,
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David Abraham, Gregory Dingens, Christian Appleby, who serve as the President, Executive Vice President, Executive Vice President, and a Member of Siena Capital, respectively. Mr. Kanter, Mr. Abraham, Mr. Dingens, and Mr. Appleby each disclaim beneficial ownership of such shares of common stock, except to the extent of their respective pecuniary interest in the funds. The address of Siena Capital Partners GP LLC is 909 Davis Street, Suite 500, Evanston, Illinois 60201.
(29)
Shares beneficially owned include warrants to purchase 90,287 shares of common stock, warrants to purchase 60,191 shares of common stock and 223,174 shares of common stock held by TPA Wingshooter Investors, LLC. The address of TPA Wingshooter Investors, LLC is 1776 Peachtree Street NW, Suite 100, Atlanta, Georgia 30309.
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(30)
Shares beneficially owned are held by Michael W. Clarke Trust dated 4/26/2005.
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(31)
Shares beneficially owned are held by Knoll Capital I LLC. The address of Knoll Capital I LLC is 1005 Mount Vernon Hwy, Atlanta, Georgia 30327.
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(32)
Shares beneficially owned include 5,870 shares of common stock held by RJ Trust Co New Hampshire Cust H. Boyd Pettit III Sep IRA.
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DESCRIPTION OF CAPITAL STOCK
The following is a summary of the material terms of our capital stock. The following description of our capital stock does not purport to be complete so you should refer to our Articles of Incorporation and Bylaws, which we have included as exhibits to the registration statement of which this prospectus is a part. We urge you to read these documents for a more complete understanding of the information contained in this section.
General
Our authorized capital stock consists of 60,000,000 shares, of which 40,000,000 shares are voting common stock, $0.01 par value per share (which we refer to in this prospectus as common stock), 10,000,000 shares are non-voting common stock, $0.01 par value and 10,000,000 shares are preferred stock, $0.01 par value (“preferred stock”). As of September 30, 2026, 10,340,809 shares of our common stock were outstanding, 331,341 shares of our non-voting common stock were outstanding, and no shares of preferred stock were designated or outstanding.
At September 30, 2026, there were 146,463 outstanding stock options at a weighted average price of $18.55 per share (all of which options are exercisable), 529,722 shares of our common stock, par value $0.01 issuable upon the exercise of outstanding stock warrants at a weighted average price of $21.50 per share (all of which warrants are exercisable), 124,232 shares of our common stock issuable upon the future vesting of 124,232 restricted stock units outstanding and 176,777 shares of our common stock issuable under our Deferred Compensation Plan.
All of our outstanding shares of our common stock and non-voting common stock are fully paid and nonassessable.
Capital Stock
Common Stock
Voting Rights.   Holders of our common stock are entitled to one vote per share on all matters requiring shareholder action, including the election of directors. Our Bylaws provide that a majority of the shares entitled to vote at a shareholders’ meeting, represented in person or by proxy, constitute a quorum. If a quorum exists, action on a matter by a voting group is approved if the votes cast within the voting group favoring the action exceeds the votes cast opposing the action, unless otherwise specified by law or our Articles of Incorporation and except for the election of directors, which will be determined by a plurality vote. There are no cumulative voting rights.
Liquidation Rights.   In the event of liquidation, dissolution or winding up of the Company, either voluntarily or involuntarily, the holders of our common stock are entitled to share ratably in all assets remaining after payment of liabilities, subject to prior distribution rights of preferred stock or any other classes of shares having prior rights as to dividends, if any, then outstanding.
Dividends.   Holders of our common stock may receive dividends when, as and if declared by our Board out of funds legally available for the payment of dividends, subject to any restrictions imposed by regulatory authorities and the payment of any preferential amounts to which any class of preferred stock or other classes of shares may be entitled. Our future dividend policy will be subject to the discretion of our Board and will depend upon a number of factors, including future earnings, financial condition, liquidity, and general business conditions. Our ability to pay dividends is subject to statutory and regulatory limitations applicable to us and our Bank. Please see “Dividend Policy” and “Supervision and Regulation — Regulation of the Company — Payment of Dividends” for a description of certain limitations and restrictions on the payment of dividends applicable to us.
Non-Voting Common Stock
No Voting Rights.   Holders of our non-voting common stock do not have any voting rights, except as may otherwise from time to time be required by law.
Ranking.   Shares of our non-voting common stock rank, with respect to the payment of dividends and distributions upon liquidation, dissolution, or winding-up:
•
pari passu with the common stock; and
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subordinate and junior in right of payment and to all of our other securities which, by their respective terms, are senior to the non-voting common stock or common stock.
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Dividends.   Our non-voting common stock ranks pari passu with our common stock with respect to payment of dividends and distribution. Holders of our non-voting common stock are entitled to receive dividends and distributions in the same per share amount as paid on the common stock. No dividends or distributions will be paid to common stock or any other class or series of capital stock ranking pari passu with the common stock (with respect to dividends or distributions) unless an identical dividend or distribution is paid, at the same time, to the non-voting common stock in an amount per share of non-voting common stock equal to the product of, (1) the per share dividend or distribution declared and paid in respect of each share of common stock and (2) the number of shares of common stock into which such share of non-voting common stock is then convertible.
No Redemption Rights.   The shares of our non-voting common stock are not redeemable at our option or the holders of non-voting common stock at any time.
Conversion Rights.   Subject to the restrictions and requirements provided in our Articles of Incorporation, a holder of non-voting common stock is permitted to convert shares of non-voting common stock into shares of common stock at any time or from time to time, provided that upon such conversion the holder, together with all affiliates of the holder, will not own or control in the aggregate more than 9.9% of our common stock (or of any class of securities issued by us). Each share of non-voting common stock is convertible into one share of common stock upon certain events. First, non-voting common stock held by the initial holder, or by any transferee or assignee, may convert upon any issuance of common stock by the Company, including, without limitation, any issuance of common stock in respect of equity-based compensation granted to directors or employees, or upon any other event that has a dilutive effect on such holder’s ownership of common stock, each a “triggering event.” However, no such conversion may result in the holder, together with its affiliates, owning or controlling a greater percentage of the Company’s common stock, or of any class of voting securities issued by us, than the holder and its affiliates owned or controlled immediately prior to the applicable triggering event. Second, non-voting common stock may convert in connection with a “permissible transfer,” as defined in our Articles of Incorporation, including, among other events, a transfer to us, a widespread public distribution of our common stock or a transfer made as part of a transaction approved by the Federal Reserve.
In any such conversion, each share of non-voting common stock will convert into one share of common stock, subject to adjustment as provided in our Articles of Incorporation. Additionally, each share of non-voting common stock will automatically convert into one share of common stock, without any further action on the part of any holder, subject to adjustment as provided in our Articles, on the date a holder of non-voting common stock transfers any shares of non-voting common stock to a non-affiliate of the holder. Shares of non-voting common stock offered by the Registered Shareholders, if any, will automatically convert into common stock upon transfer.
Preemptive Rights.   The holders of shares of the non-voting common stock have no preemptive rights under our Articles of Incorporation with respect to any shares of our capital stock or any of its other securities convertible into or carrying rights or options to purchase or otherwise acquire any such capital stock or any interest therein, regardless of how any such securities may be designated, issued, or granted.
Protective Provisions.   As long as there are any shares of non-voting common stock issued and outstanding, we will not, (i) alter or change the rights, preferences, privileges or restrictions for the benefit of the holders of non-voting common stock, or (ii) increase or decrease the authorized number of shares of non-voting common stock.
If we repurchase shares of common stock, we must offer to repurchase shares of non-voting common stock pro rata based upon the then-applicable conversion ratio of non-voting common stock to common stock.
In the event of a capital reorganization of the common stock (other than a subdivision, combination, reclassification or exchange of shares otherwise provided for in our Articles of Incorporation) or a merger or consolidation of the Company with or into another corporation, or the sale of all or substantially all of our properties and assets to any other person or corporation, we must make provision for the holders of non-voting common stock to receive, upon conversion of the non-voting common stock, the number of shares of stock or other securities or property, or of the successor company resulting from such transaction, that such holders would be entitled to receive upon conversion of their non-voting common stock to common stock in connection with such transaction. Notwithstanding any other provision in our Articles of Incorporation, if a conversion of non-voting common stock is to be made in connection with such transaction in which the shares of common stock are exchanged for or changed into other stock or securities, cash and/or any other property or in any dissolution or liquidation, the conversion of any shares of non-voting common stock may, at the election of the holder thereof, be conditioned upon the consummation of such transaction, in which case such conversion shall not be deemed to be effective until such transaction has been consummated.
 
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Preferred Stock
Our Articles of Incorporation authorize the issuance of up to 10 million shares of preferred stock. The shares of preferred stock may be divided into and issued in one or more series, with such relative rights, preferences, and limitations as determined by our Board in its discretion. Our Board is authorized to establish one or more series of preferred stock and to cause shares of preferred stock to be issued from time to time. At present, we have no shares of preferred stock outstanding.
For each series of preferred stock it establishes, our Board has the authority to prescribe the number of shares in that series, the number of votes (if any) to which the shares in that series are entitled, the consideration for the shares in that series, and the designations, powers, preferences and other rights, qualifications, limitations or restrictions of the shares in that series. Depending upon the rights prescribed for a series of preferred stock, the issuance of preferred stock could have an adverse effect on the voting power of the holders of our common stock and could adversely affect holders of our common stock by delaying or preventing a change in control, making removal of our present management more difficult, or imposing restrictions upon the payment of dividends and other distributions to the holders of our common stock.
Warrants
Common Stock Warrants
As of September 30, 2026, we had outstanding warrants to purchase 300,956 shares of our common stock, with an exercise price of $21.62 per share (the “Recapitalization Warrants”). The Recapitalization Warrants are exercisable, in whole or in part, at any time before their expiration on February 23, 2031. The Recapitalization Warrants may expire prior to such date if the Company’s primary federal or state regulator requires the holder to exercise or forfeit the Recapitalization Warrants due to the Company capital falling below minimum regulatory requirements. The Recapitalization Warrants include a cashless exercise feature allowing the holder to elect to receive upon exercise of the holder’s warrant (either in whole or in part) the net number of shares determined according to a formula set forth in such warrants. The exercise price and the number of shares of common stock issuable upon exercise of the Recapitalization Warrants are subject to appropriate adjustment in the event of stock dividends, stock splits, combinations, or similar events affecting the common stock.
Non-Voting Common Stock Warrant
As of September 30, 2026, we had an outstanding warrant to purchase 150,478 shares of our non-voting common stock, with an exercise price of $21.62 per share (the “Patriot Warrant”). The Patriot Warrant is exercisable, in whole or in part, at any time before its expiration on February 23, 2031. The Patriot Warrant may expire prior to such date if the Company’s primary federal or state regulator requires the holder to exercise or forfeit the Patriot Warrant due to the Company capital falling below minimum regulatory requirements. The Patriot Warrant includes a cashless exercise feature allowing the holder to elect to receive upon exercise of the holder’s warrant (either in whole or in part) the net number of shares determined according to a formula set forth in such warrants. The Patriot Warrant is exercisable only for non-voting securities of the Company while held by Patriot or any of its affiliates, and may only be exercised for voting securities of the Company following a transfer (i) in a widespread public distribution, (ii) to the Company, (iii) in which no transferee (or group of associated transferees) would receive 2% or more of the outstanding securities of any class of voting securities of the Company, or (iv) to a transferee that would control more than 50% of every class of voting securities of the Company without any transfer from the holder. The exercise price and the number of shares of non-voting common stock issuable upon exercise of the Patriot Warrant are subject to appropriate adjustment in the event of stock dividends, stock splits, combinations, or similar events affecting the non-voting common stock.
Rollover Warrants
As of September 30, 2026, we had outstanding warrants to purchase 78,288 shares of our common stock, with an exercise price of $20.83 per share (the “Rollover Warrants”). The Rollover Warrants were issued on June 1, 2026 in connection with the acquisition of Tandem in exchange for the cancellation of the holder’s outstanding warrant to purchase shares of Tandem common stock. The Rollover Warrants are immediately exercisable, in whole or in part, at any time before their expiration on the tenth anniversary of their original issue date of November 1, 2019. The Rollover Warrant may expire prior to such date if the Company’s primary federal or state regulator requires the holder to exercise or forfeit the Rollover Warrant due to the Company’s capital falling below minimum regulatory requirements. The exercise price and the number of shares of common stock issuable upon exercise of the Rollover Warrants are subject to appropriate adjustment in the event of stock dividends, stock splits, combinations, or similar events affecting the common stock.
 
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Restrictions on Ownership of Our Shares
The ability of a third party to acquire our shares is also limited under applicable U.S. banking laws, and regulatory approval for the acquisition of our stock may be required under certain circumstances. The BHC Act requires any bank holding company to obtain the approval of the Federal Reserve prior to acquiring more than 5% of our outstanding voting securities. Any corporation or other company that becomes a holder of 25% or more of our outstanding voting securities, or otherwise is deemed to control us under the BHC Act, would be subject to regulation as a bank holding company under the BHC Act. In addition, any person other than a bank holding company may be required to obtain prior approval of the Federal Reserve to acquire 10% or more of our outstanding common stock under the Change in Bank Control Act. See the section entitled “Supervision and Regulation — Regulation of the Company” for an additional description of these federal law restrictions on ownership of our stock.
Advance Notice Provisions for Shareholder Nominations and Shareholder Proposals
Our Bylaws provide that shareholders must provide advance notice of any proposal or nomination for election as a director which a shareholder desires to bring before a meeting of shareholders. Such requirements are in addition to any requirements under SEC Rule 14a-8 for shareholder proposals sought to be included in our proxy materials.
Transactions with Certain Investors
Registration Rights
In connection with the Recapitalization and the June 2026 Private Placement, we entered into registration rights agreements with certain holders of our common stock (as amended, the “Registration Rights Agreements”). After February 17, 2027 (the “filing deadline”), certain shareholders who are parties to the Registration Rights Agreements that meet certain ownership requirements (the “Qualified Holders”) have the right to request that we file a registration statement with the SEC so that the Qualified Holders may resell their shares of common stock (the “registration rights”). We must use our commercially reasonable efforts to cause each registration statement to be declared effective by the SEC as soon as practicable prior to the filing deadline. The filing of the registration statement of which this prospectus is a part of satisfies the registration rights pursuant to the Registration Rights Agreements. These rights pursuant to the Registration Rights Agreements are extinguished for any shares registered in an effective registration statement, subject to certain customary conditions.
Piggyback Rights
If we file a registration statement for a primary or secondary offer of our securities (other than a registration statement related to equity compensation plans or mergers and acquisitions), the Registration Rights Agreements require us to give notice at least 10 business days prior to the anticipated registration statement filing date to holders of common stock who are parties to the Registration Rights Agreements, who may elect to have any of their securities that remain “registrable securities” included in a piggyback registration statement for resale. We must effect registration of all securities that any such holder requests to be included in the piggyback registration within 5 business days following the notice given by us. However, if the offering is underwritten, the number of shares to be sold by any such holders may be reduced upon recommendation of the managing underwriters. These rights pursuant to the Registration Rights Agreements will be extinguished for any shares registered in an effective registration statement, subject to certain customary conditions.
Underwritten Shelf Offering
Holders of common stock who are parties to the Registration Rights Agreements are also entitled to certain Form S-3 registration rights. At any time when we have an effective registration statement on Form S-3, any such holder can request that we register the offer and sale of their shares of our common stock on a registration statement on Form S-3, so long as the anticipated gross proceeds of such offering will exceed $2 million. These Form S-3 registration rights are subject to specified conditions and limitations, including the right of the underwriters to limit the number of shares included in any such registration under certain circumstances. These rights pursuant to the Registration Rights Agreements will be extinguished for any shares registered in an effective registration statement, subject to certain customary conditions.
Registration Expenses
In any of the foregoing registration statements, we will pay the fees and expenses of such registration statements, including all of our registration and filing fees, printing expenses, messenger, telephone and delivery expenses; fees and disbursements of
 
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our counsel; Securities Act liability insurance, if we so desire such insurance; fees and expenses of all other Persons retained by us in connection with the consummation of the transactions contemplated by the Registration Rights Agreement; and those expenses of the selling Qualified Holders actually and reasonably incurred, including without limitation, the reasonable fees of Qualified Holders Counsel up to $50 thousand. In addition, we shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by the Registration Rights Agreements (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the common stock on any securities exchange as required hereunder.
Board Representation and Information Rights
In connection with the Recapitalization, we entered into certain investor rights agreements with Patriot and Bartow Morgan, Jr. (the “2021 Investor Rights Agreements”). In connection with the June 2026 Private Placement, we entered into an investor rights agreement with Fortress (the “2026 Investor Rights Agreement” and, together with the 2021 Investor Rights Agreements, the “Investor Rights Agreements”).
Pursuant to the 2021 Investor Rights Agreements, each of Patriot and Bartow Morgan, Jr. (collectively, the “2021 Investors”) has the right to designate one representative to serve on each of our Board and the Bank’s board of directors, and one observer to attend meetings of each such board, for so long as such 2021 Investors and their affiliates beneficially own at least 50.0% of the shares of common stock acquired by such investor in the Recapitalization or at least 4.9% of our outstanding common stock. We have agreed to recommend that our shareholders elect each board designee of the 2021 Investors to such board of directors. In addition, certain shareholders who acquired shares in the Recapitalization or pursuant to the Investor Rights Agreements have the right to inspect our books and records and to receive certain information, including financial statements. These rights pursuant to the Investor Rights Agreements remain in effect for shares registered in an effective registration statement, subject to certain customary conditions.
Pursuant to the 2026 Investor Rights Agreement, Fortress has the right to designate one representative to serve on our Board for so long as Fortress and its affiliates beneficially own at least 50.0% of the shares of common stock acquired by Fortress in the June 2026 Private Placement or at least 4.9% of our outstanding common stock. We have agreed to recommend that our shareholders elect such board designee of Fortress to our Board.
Anti-Takeover Provisions
Provisions of our Articles of Incorporation and Bylaws, and the Georgia Business Corporation Code (“GBCC”) and federal banking regulations applicable to us, may be deemed to have anti-takeover effects and may delay, defer or prevent a change of control of the Company and/or limit the price that certain investors may be willing to pay in the future for shares of our common stock. See the section entitled “Supervision and Regulation — Regulation of the Company” for a description of the federal banking regulations applicable to us that may be deemed to have anti-takeover effects.
Authorized but Unissued Shares
The corporate laws and regulations applicable to us will enable our Board to issue, from time to time and at its discretion, but subject to the rules of any applicable securities exchange, any authorized but unissued shares of our common stock, non-voting common stock or preferred stock. Any such issuance of shares could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The ability of our Board to issue authorized but unissued shares of our common stock, non-voting common stock or preferred stock at its sole discretion may enable our Board to sell shares to individuals or groups who our Board perceives as friendly with management, which may make more difficult unsolicited attempts to obtain control of our organization. In addition, the ability of our Board to issue authorized but unissued shares of our capital stock at its sole discretion could deprive the shareholders of opportunities to sell their shares of common stock, non-voting common stock or preferred stock for prices higher than prevailing market prices.
Preferred Stock
Our Articles of Incorporation contains provisions that will permit our Board to issue, without any further vote or action by the shareholders, shares of preferred stock in one or more series and, with respect to each such series, to fix the number of shares constituting the series and the designation of the series, the voting rights (if any) of the shares of the series, and the powers, preferences and relative, participation, optional and other special rights, if any, and any qualifications, limitations or restrictions, of the shares of such series.
 
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Board Size and Vacancies
Pursuant to our Bylaws, our Board is authorized to have not less than five nor more than 25 directors, unless changed by resolution of our Board. Our Board will be able to increase the size of our Board between annual meetings and fill the vacancies created by the increase by a majority of the remaining directors.
No Cumulative Voting
Our Bylaws do not permit cumulative voting in the election of directors. The holders of a plurality of the shares of our common stock may elect the directors standing for election.
Special Meetings of Shareholders
Our Bylaws permit our Board, our Chief Executive Officer or the holders of shares of at least 15.0% of the votes entitled to be cast in an election of directors to be considered at such special meeting to call a special meeting of shareholders.
Advance Notice Procedures for Director Nominations and Shareholder Proposals
Our Bylaws includes an advance notice procedure with regard to business to be brought before an annual or special meeting of shareholders and with regard to the nomination of candidates for election as directors, other than by or at the direction of our Board. Although this procedure does not give our Board any power to approve or disapprove shareholder nominations for the election of directors or proposals for action, it may have the effect of precluding a contest for the election of directors or the consideration of shareholder proposals if the established procedure is not followed, and of discouraging or deterring a third party from conducting a solicitation of proxies to elect its own slate of directors or to approve its proposal without regard to whether consideration of the nominees or proposals might be harmful or beneficial to our shareholders and us.
Amending our Bylaws
Our Board may amend our Bylaws, other than the bylaws regarding director compensation and the Board’s authority to fill vacancies. Any bylaws adopted by our Board may be altered, amended or repealed and new bylaws adopted, by the majority vote of all the shareholders entitled to vote thereon.
Approval of Merger
Under the GBCC, most business combinations, including mergers, consolidations and sales of substantially all of the assets of a Georgia corporation, must be approved by the vote of the holders of at least a majority of the outstanding shares of common stock and any other affected class of stock of such corporation. The articles of incorporation or bylaws of a Georgia corporation may, but are not required to, set a higher standard for approval of such transactions. Our Articles of Incorporation and Bylaws do not set higher limits.
Banking Laws
The BHC Act, and Change in Bank Control Act, and Financial Institutions Code of Georgia impose notice, application and approvals and ongoing regulatory requirements on any shareholder or other party that seeks to acquire direct or indirect control of bank holding companies or banks, as applicable. These laws could delay or prevent an acquisition.
Under the BHC Act, prior approval of the Federal Reserve would be required for any acquisition of control of the Company or the Bank by any other company. Control for purposes of the BHC Act would be based on, among other factors, a 25% voting securities test, on the ability of the company otherwise to control the election of a majority of our Board, and the power of the company to exercise a controlling influence over the management or policies of the Company or the Bank. Under control presumptions established by the Federal Reserve, a company may be presumed to exercise a controlling influence over a bank or bank holding company, even if a company owns less than 10% of any class of voting securities if other indicia of control are present. If a company acquires control of the Company of the Bank, the acquiring company (unless already so registered) would be required to register as a bank holding company under the BHC Act.
The FDIC has also adopted a regulation pursuant to the Change in Bank Control Act which generally requires persons who at any time intend to acquire control of an FDIC-insured, state-chartered non-member bank, either directly or indirectly through an acquisition of control of its holding company, to provide 60 days prior written notice and certain financial and other information to the FDIC. Control for the purpose of this Act exists in situations in which the acquiring party has voting
 
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control of at least 25% of any class of voting securities or the power to direct the management or policies of the bank or the holding company. However, under FDIC regulations, control is presumed to exist where the acquiring party has voting control of at least 10% of any class of voting securities if (a) the bank or holding company has a class of voting securities which is registered under section 12 of the Exchange Act, or (b) the acquiring party would be the largest holder of a class of voting securities of the bank or the holding company. The statute and underlying regulations authorize the FDIC to disapprove a proposed acquisition on certain specified grounds. See the section entitled “Supervision and Regulation” for additional discussions of the BHC Act and Change in Bank Control Act.
Other Matters
Under our Articles of Incorporation and Bylaws, the holders of our common stock have no preemptive or other subscription rights (except as otherwise disclosed herein) and there are no redemption, sinking fund or conversion privileges applicable to our common stock.
Indemnification of Directors and Officers
Our Articles of Incorporation and Bylaws contain a provision providing that, to the fullest extent permitted by the GBCC, no person serving or who has served as a director of the Company shall be personally liable to the Company or any of its shareholders for monetary damages for breach of any duty as a director. Further, our Bylaws provide indemnification rights to our directors and officers who become party to any suit or proceeding as a result of such person’s role with the Company; provided that, such person’s liability or expense is not the result of such person’s activities that were at the time taken known or believed by such person to be clearly in conflict with the best interests of the Company or not otherwise had reasonable cause to believe such conduct was unlawful. Our Bylaws also allow us to indemnify other employees and agents on the same terms. Subject to certain limitations, our Bylaws also require us to advance expenses incurred by our directors, officers, employees and agents for the defense of any action for which indemnification is required.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, and controlling persons under the provisions discussed above or otherwise, we have been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Listing
We have applied to list our common stock on Nasdaq under the symbol “GBC.” We believe that upon the completion of this offering, we will meet the standards for listing our common stock on Nasdaq. This offering is contingent on the approval of our listing application.
Transfer Agent
The transfer agent and registrar for our common stock is Broadridge Corporate Solutions, LLC.
 
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SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, our common stock has not been traded on an established public trading market, and quotations for our common stock were not reported on any market. As a result, there has been no regular market for our common stock. As of September 30, 2026, there were 601 holders of record of our common stock.
We have applied to list our common stock for trading on Nasdaq under the symbol “GBC.” This offering is contingent on the approval of our listing application. However, we cannot assure you that a liquid trading market for our common stock will develop or be sustained after this offering. You may not be able to sell your shares quickly or at the market price if trading in our common stock is not active. See the section entitled “Plan of Distribution” for more information regarding the process of directly listing our common stock on Nasdaq.
Upon the sale of all of the registered shares, including shares subject to options and warrants and shares of non-voting stock convertible into common stock upon transfer, we will have 11,194,524 shares of common stock outstanding. This prospectus covers the resale of up to 7,040,514 shares of our common stock by the Registered Shareholders which includes shares of our common stock subject to warrants and options and shares of our non-voting common stock which automatically convert into common stock upon transfer. The shares held by the Registered Shareholders that are registered for resale under this prospectus will be freely transferable without restriction or further registration under the Securities Act, except for any shares held by our “affiliates,” as that term is defined in Rule 144 under the Securities Act. The remaining shares of our issued and outstanding common stock that are not registered for resale under this prospectus are “restricted shares” as defined in Rule 144. Restricted shares may be sold in the public market only if registered under the Securities Act or if they qualify for an exemption from registration under Rules 144 or 701 of the Securities Act. As this is a direct listing without underwriters, there is no contractual lock-up period imposed by underwriters. However, our directors, named executive officers, and certain other shareholders may be subject to restrictions as to the number of shares of common stock each may dispose of in any given period under Rule 144 and applicable banking regulations. See “Risk Factors — Risks Related to Our Common Stock” and “Plan of Distribution.”
Rule 144
In general, once we have been subject to the public company reporting requirements of Section 13 or Section 15(d) of the Exchange Act for at least 90 days, a person who has beneficially owned restricted shares of our common stock for at least six months would be entitled to sell such securities, provided that such person is not deemed to have been one of our affiliates at the time of, or at any time during the 90 days preceding, the sale. Persons who have beneficially owned restricted shares of our common stock for at least six months but who are our affiliates at the time of, or any time during the 90 days preceding, the sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of the following:
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1% of the number of shares of our common stock then outstanding, which will equal approximately 111,945 shares immediately after this offering; or
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the average weekly trading volume of our common stock on Nasdaq during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale;
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provided that we have been subject to the Exchange Act periodic reporting requirements for at least 90 days before the sale. Such sales both by affiliates and by non-affiliates must also comply with the manner of sale and notice provisions of Rule 144 to the extent applicable.
Upon effectiveness of this offering, we will have 4,154,010 shares of common stock that are freely tradeable under Rule 144 or other applicable exemptions. Together with the 7,040,514 shares of common stock registered pursuant to the registration statement of which this prospectus is a part, we will have 11,194,524 freely tradable shares.
Rule 701
Rule 701 under the Securities Act generally applies to stock options and restricted common stock granted by an issuer to its employees, directors, officers, consultants or advisors in connection with a compensatory stock or option plan or other written agreement before the issuer becomes subject to the reporting requirements of the Exchange Act, along with the shares acquired upon exercise of such options. Securities issued in reliance on Rule 701 are restricted securities and, subject to the contractual restrictions described above, beginning 90 days after the date of this prospectus, may be sold by persons other than our “affiliates,” as defined in Rule 144, without compliance with its current public information and minimum holding period requirement of Rule 144 and by “affiliates” under Rule 144 without compliance with its minimum holding period requirement.
 
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Registration Statement on Form S-8
In connection with or as soon as practicable following the completion of this listing, we intend to file one or more registration statements with the SEC on Form S-8 to register approximately 1,184,070 shares of our common stock issuable under our equity incentive plans, including 573,899 remaining shares reserved for future issuance under our 2021 Stock Incentive Plan, 59,070 shares issuable upon exercise of stock options under our 2017 Long-Term Incentive Plan and 176,777 shares issuable under the Deferred Compensation Plan, as described further under “Executive and Director Compensation.” That registration statement will become effective upon filing and shares of common stock covered by such registration statement will be eligible for sale in the public market immediately after the effective date of such registration statement (unless held by affiliates).
 
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SALE PRICE HISTORY OF OUR CAPITAL STOCK
We have applied to list our common stock on Nasdaq. Prior to the initial listing, no public market existed for our common stock. Our common stock has a limited history of trading in private transactions. In April 2023, we issued 1,184,021 shares of our common stock at a sale price of $23.00 per share in a private placement. In June 2026, we issued 963,473 shares of common stock as well as 331,341 shares of non-voting common stock and certain selling shareholders sold 1,294,814 shares of common stock, all at a sale price of $30.00 per share in private placements. In August 2026, we issued 40,683 shares of common stock at a sale price of $30.00 per share in a private placement.
While Performance Trust, as our designated financial advisor for the direct listing, is expected to consider this price in connection with setting the opening public price of our common stock, this information may have little or no relation to broader market demand for our common stock and thus the opening public price and subsequent public price of our common stock on Nasdaq. As a result, you should not place undue reliance on this historical private sale price as it may differ materially from the opening public price and subsequent public price of our common stock on Nasdaq. See “Risk Factors — Risks Related to Our Common Stock — The trading price of our common stock, upon listing on Nasdaq, may have little or no relationship to the historical sales prices of our capital stock in private transactions, and such private transactions have been limited.”
 
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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
FOR NON-U.S. HOLDERS
The following discussion is a summary of the material U.S. federal income tax consequences of the purchase, ownership and disposition of our common stock by Non-U.S. Holders (as defined below) that acquire our common stock in this offering and hold our common stock as a capital asset. This discussion does not purport to be a complete analysis of all potential tax effects of the purchase, ownership and disposition of our common stock by Non-U.S. Holders. The effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local or non-U.S. tax laws are not discussed. This discussion is based on the Code, Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the IRS, in each case in effect as of the date of this prospectus. These authorities may change or be subject to differing interpretations at any time. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect a Non-U.S. Holder of our common stock. We have not sought and will not seek any rulings from the United States Internal Revenue Service (the “IRS”) regarding the statements made and the conclusions reached in the discussion below. There can be no assurance the IRS or a court will agree with our position discussed below regarding the U.S. federal income tax consequences of the purchase, ownership and disposition of our common stock. We cannot assure you that a change in law will not significantly alter the tax considerations described in this discussion.
This discussion does not address all U.S. federal income tax consequences relevant to a Non-U.S. Holder’s particular circumstances, including the alternative minimum tax and the impact of the Medicare contribution tax on net investment income. In addition, it does not address consequences relevant to Non-U.S. Holders subject to special rules, including, without limitation:
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U.S. expatriates and former citizens or long-term residents of the United States or United States expatriated entities;
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persons who have elected to mark securities to market or who hold our common stock as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment;
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banks, insurance companies, and other financial institutions;
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brokers, dealers or traders in securities;
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corporations that accumulate earnings to avoid U.S. federal income tax, controlled foreign corporations, and passive foreign investment companies;
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foreign entities that are treated as stapled to a domestic entity pursuant to Code Section 269B;
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persons who have acquired our common stock in connection with the exercise of employee stock options or otherwise as compensation for services;
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tax-exempt organizations, pension plans, tax-qualified retirement plans, or governmental organizations;
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persons required for U.S. federal income tax purposes to conform the timing of income accruals to their financial statements under Section 451(b) of the Code;
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a “qualified foreign pension fund” as defined in Code Section 897(l)(2), or an entity all of the interests of which are held by qualified foreign pension fund; and
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persons deemed to sell our common stock under the constructive sale provisions of the Code.
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If an entity treated as a partnership for U.S. federal income tax purposes holds our common stock, the tax treatment of a partner in the partnership generally will depend on the status of the partner and the activities of the partnership. Accordingly, partnerships holding our common stock and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them.
 
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THIS DISCUSSION IS FOR INFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. INVESTORS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK ARISING UNDER THE U.S. FEDERAL ESTATE OR GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL OR NON-U.S. TAXING JURISDICTION OR UNDER ANY APPLICABLE INCOME TAX TREATY.
Definition of a Non-U.S. Holder
For purposes of this discussion, a “Non-U.S. Holder” is any beneficial owner of our common stock that is for U.S. federal income tax purposes:
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a non-resident alien individual;
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a foreign corporation (or any other foreign entity treated as a corporation for U.S. federal income tax purposes);
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an estate, the income of which is not subject to U.S. federal income taxation regardless of its source; or
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trust that does not have in effect a valid election under the U.S. Treasury Regulations, to be treated as a United States person and (i) no court within the United States is able to exercise primary supervision over the trust’s administration, or (ii) no United States person has the authority to control all substantial decisions of that trust.
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Distributions
As described in the section titled “Dividend Policy,” we do not anticipate declaring or paying dividends to holders of our common stock in the foreseeable future. However, if we do make distributions of cash or property on our common stock (other than certain pro rata distributions of our stock), such distributions will generally constitute dividends for U.S. federal income tax purposes to the extent of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. If a distribution exceeds our current and accumulated earnings and profits, the excess will first be applied against and reduce a Non-U.S. Holder’s adjusted tax basis in its common stock, but not below zero. Any remaining excess will be treated thereafter as capital gain from the sale or exchange of the Non-U.S. Holder’s shares of common stock, which is subject to the tax treatment described below in the section entitled “— Sale or Other Taxable Disposition.”
Subject to the discussion below in the sections entitled “— Information Reporting and Backup Withholding” and “—​FATCA Withholding” and the discussion below on effectively connected income, dividends paid to a Non-U.S. Holder will generally be subject to U.S. federal withholding tax at a rate of 30% of the gross amount of the dividends or such lower rate specified by an applicable income tax treaty. To receive a reduced withholding rate under a treaty, a Non-U.S. Holder must furnish a valid IRS Form W-8BEN or W-8BEN-E (or other applicable documentation) certifying qualification for the lower treaty rate. These certifications must be provided to the applicable withholding agent prior to the payment of dividends and must be updated periodically. A Non-U.S. Holder that holds our common stock through a financial institution or other agent will be required to provide appropriate documentation to the financial institution or other agent, which then will be required to provide certification to us or our paying agent either directly or through other intermediaries. A Non-U.S. Holder that does not timely furnish the required documentation, but that qualifies for a reduced income tax treaty rate, may generally obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. Non-U.S. Holders should consult their tax advisors regarding their entitlement to benefits under an applicable income tax treaty and the manner of claiming the benefits of such treaty.
If dividends paid to a Non-U.S. Holder are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, as provided by an applicable income tax treaty, attributable to a permanent establishment or fixed base maintained by the Non-U.S. Holder in the United States), the Non-U.S. Holder will be exempt from the U.S. federal withholding tax described above. To claim the exemption, the Non-U.S. Holder must furnish to the applicable withholding agent a valid IRS Form W-8ECI, certifying that the dividends are effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States.
Any such effectively connected dividends will be subject to U.S. federal income tax on a net income basis at the regular rates that also apply to United States persons (as defined by the Code). A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected dividends, as adjusted for certain items. Non-U.S. Holders should consult their tax advisors regarding any applicable tax treaties that may provide for different rules.
 
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Sale or Other Taxable Disposition
Subject to the discussion below under “— Information Reporting and Backup Withholding” and “— FATCA Withholding,” a Non-U.S. Holder generally will not be subject to U.S. federal income tax or withholding tax on any gain realized upon the sale or other taxable disposition of our common stock unless:
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the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business within the United States (and, as provided by an applicable income tax treaty, attributable to a permanent establishment or fixed base maintained by the Non-U.S. Holder in the United States);
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the Non-U.S. Holder is a nonresident alien individual present in the United States for 183 days or more during the taxable year of the disposition and certain other requirements are met; or
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we are or have been a U.S. real property holding corporation (“USRPHC”) for U.S. federal income tax purposes at any time within the shorter of the five-year period preceding such disposition or such Non-U.S. Holder’s holding period for our common stock (the “relevant period”) and the Non-U.S. Holder (i) disposes of our common stock during a calendar year when our common stock is no longer regularly traded on an established securities market or (ii) owned (directly, indirectly and constructively) more than 5% of our common stock at any time during the relevant period.
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Gain described in the first bullet point above generally will be subject to U.S. federal income tax on a net income basis at the regular rates in the same manner as if such holder were a resident of the United States. A Non-U.S. Holder that is a corporation also may be subject to a branch profits tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty) on such effectively connected gain, as adjusted for certain items.
Gain described in the second bullet point above will be subject to U.S. federal income tax at a rate of 30% (or such lower rate specified by an applicable income tax treaty), which may be offset by U.S.-source capital losses of the Non-U.S. Holder for the year, even though the individual is not considered a resident of the United States, provided the Non-U.S. Holder has timely filed U.S. federal income tax returns with respect to such losses.
With respect to the third bullet point above, we believe we currently are not, and do not anticipate becoming, a USRPHC. Because the determination of whether we are a USRPHC depends, however, on the fair market value of our United States real property interests as defined in the Code relative to the fair market value of our non-U.S. real property interests and our other business assets, there can be no assurance we currently are not a USRPHC or will not become one in the future. Each Non-U.S. Holder should consult its tax advisor regarding the possible consequences to them if we are, or were to become, a USRPHC.
Information Reporting and Backup Withholding
Payments of dividends on our common stock and the payment of the proceeds from the sale of our common stock effected at a U.S. office of a broker generally will not be subject to backup withholding and the payment of proceeds from the sale of our common stock effected at a U.S. office of a broker will generally not be subject to information reporting, provided the applicable withholding agent does not have actual knowledge or reason to know a Non-U.S. Holder is a United States person and the Non-U.S. Holder either certifies its non-U.S. status, such as by furnishing a valid IRS Form W-8BEN or W-8BEN-E or other documentation upon which it may rely to treat the payments as made to a non-U.S. person in accordance with Treasury Regulations or otherwise establishes an exemption.
However, we are required to file information returns with the IRS in connection with any distribution on our common stock paid to a Non-U.S. Holder, regardless of whether any tax was actually withheld. Copies of information returns that are filed with the IRS may also be made available under the provisions of an applicable treaty or agreement with the tax authorities of the country in which the Non-U.S. Holder resides or was established or formed.
Payment of the proceeds from the sale of our common stock effected at a foreign office of a broker generally will not be subject to information reporting or backup withholding. However, a sale of our common stock by a Non-U.S. Holder that is effected at a foreign office of a broker will be subject to information reporting and backup withholding if (i) the proceeds are transferred to an account maintained by the Non-U.S. Holder in the United States, (ii) the payment of proceeds or the confirmation of the sale is mailed to the Non-U.S. Holder at a U.S. address or (iii) the sale has some other specified connection with the United States as provided in the Treasury Regulations, unless, in each case, the broker does not have actual knowledge or reason to know that the holder is a United States person and the documentation requirements described above are met or the Non-U.S. Holder otherwise establishes an exemption.
In addition, a sale of our common stock will be subject to information reporting if it is effected at a foreign office of a broker that is (i) a United States person, (ii) a “controlled foreign corporation” for U.S. federal income tax purposes, (iii) a
 
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foreign person 50% or more of whose gross income is effectively connected with the conduct of a U.S. trade or business for a specified three-year period or (iv) a foreign partnership, if at any time during its tax year (a) one or more of its partners are “U.S. persons,” as defined in the Treasury Regulations, who in the aggregate hold more than 50% of the income or capital interest in the partnership or (b) such foreign partnership is engaged in the conduct of a trade or business in the United States, in each case unless the broker does not have actual knowledge or reason to know that the holder is a United States person and the documentation requirements described above are met or an exemption is otherwise established. Backup withholding will apply if the sale is subject to information reporting and the broker has actual knowledge that the holder is a United States person.
Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against a Non-U.S. Holder’s U.S. federal income tax liability, provided the required information is timely furnished to the IRS. Moreover, certain penalties may be imposed by the IRS on a Non-U.S. Holder who is required to furnish information but does not do so in the proper manner. Non-U.S. Holders should consult their tax advisors regarding the application of backup withholding in their particular circumstances and the availability of and procedure for obtaining an exemption from backup withholding under current Treasury Regulations.
FATCA Withholding
Sections 1471 through 1474 of the Code and the Treasury Regulations issued thereunder (commonly referred to as the Foreign Account Tax Compliance Act, or “FATCA”) impose a 30% withholding tax on dividends paid on our shares to, and (subject to the proposed Treasury Regulations discussed below) the gross proceeds derived from the sale or other disposition of our shares by, a foreign entity if the foreign entity is:
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a “foreign financial institution” ​(as defined under FATCA) that does not furnish proper documentation, typically on IRS Form W-8BEN-E, evidencing either (i) an exemption from FATCA withholding or (ii) its compliance (or deemed compliance) with specified due diligence, reporting, withholding and certification obligations under FATCA or (iii) residence in a jurisdiction that has entered into an intergovernmental agreement with the United States relating to FATCA and compliance with the diligence and reporting requirements of the intergovernmental agreement and local implementing rules; or
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a “non-financial foreign entity” ​(as defined under FATCA) that does not provide sufficient documentation, typically on IRS Form W-8BEN-E, evidencing either (i) an exemption from FATCA or (ii) adequate information regarding substantial United States beneficial owners of such entity (if any).
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Withholding under FATCA generally applies to payments of dividends on our shares and to payments of gross proceeds from a sale or other disposition of our shares. Withholding agents may, however, rely on proposed U.S. Treasury Regulations that would no longer require FATCA withholding on payments of gross proceeds. A withholding agent such as a broker, and not us, will determine whether or not to implement gross proceeds FATCA withholding.
If a dividend payment is subject to withholding both under FATCA and the withholding tax rules discussed above in the section entitled “— Distributions,” the withholding under FATCA may be credited against, and therefore reduce, such other withholding tax. Non-U.S. Holders of our common stock should consult their own tax advisors regarding these requirements and whether they may be relevant to their ownership and disposition of the shares.
 
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PLAN OF DISTRIBUTION
This prospectus relates solely to the resale from time to time by the Registered Shareholders of up to 7,040,514 shares of our common stock, par value $0.01 per share. The shares covered by this prospectus consist of outstanding shares held by the Registered Shareholders and shares underlying warrants and options held by the Registered Shareholders, as set forth under “Principal and Registered Shareholders.”
The Registered Shareholders, and their pledgees, donees, transferees, assignees, or other successors in interest may sell their shares of common stock covered hereby pursuant to brokerage transactions on the Nasdaq Capital Market, which we refer to in this prospectus as Nasdaq, or other public exchanges or registered alternative trading venues, at prevailing market prices at any time after the shares of common stock are listed for trading. We are not party to any arrangement with any Registered Shareholder or any broker-dealer with respect to sales of shares of common stock by the Registered Shareholders, except we have engaged a financial advisor with respect to certain other matters relating to the registration of shares of our common stock and listing of our common stock, as further described below. As such, we do not anticipate receiving notice as to if and when any Registered Shareholder may, or may not, elect to sell their shares of common stock or the prices at which any such sales may occur, and there can be no assurance that any Registered Shareholders will sell any or all of the shares of common stock covered by this prospectus.
We will not receive any proceeds from the sale of shares of common stock by the Registered Shareholders. We will recognize costs related to this direct listing and our transition to a publicly traded company consisting of professional fees and other expenses. We will expense these amounts in the period incurred and not deduct these costs from net proceeds to the issuer as they would be in an initial public offering.
We engaged Performance Trust as our financial advisor to advise and assist us with respect to certain matters relating to our listing. Our engagement agreement provides for, among other things, that Performance Trust will assist us in our preparation of the registration statement of which this prospectus forms a part, our preparation of investor communications and presentations in connection with investor education, and being available to consult with The Nasdaq Stock Market LLC (the “Nasdaq Stock Market”), including on the day that our shares of common stock are initially listed on the Nasdaq. We have agreed to reimburse Performance Trust for all out-of-pocket expenses incurred by Performance Trust, which we anticipate will be approximately $150,000 (including fees and disbursements of counsel, and of other consultants and advisors retained by Performance Trust) in connection with the matters listed above. No fee will be due or payable by us to Performance Trust in connection with this offering. We have also agreed to indemnify Performance Trust and certain of their affiliates and controlling persons against certain liabilities including liabilities under the Securities Act and the Exchange Act, and to contribute to payments that Performance Trust may be required to make in respect of those liabilities. We selected Performance Trust based on its significant experience advising companies in connection with capital markets transactions, its familiarity with our Company as a result of its prior role as placement agent in the April 2023 Private Placement and the June 2026 Private Placement and its relationships within the institutional investor community.
On the day that our shares of common stock are initially listed on Nasdaq, Nasdaq Stock Market will begin accepting, but not executing, pre-opening buy and sell orders and will begin to continuously generate the indicative “Current Reference Price” on the basis of such accepted orders. The Current Reference Price is calculated each second and, during a 10-minute “Display Only” period, is disseminated, along with other indicative imbalance information, to market participants by Nasdaq Stock Market on its NOII and BookViewer tools. Following the “Display Only” period, a “Pre-Launch” period begins, during which Performance Trust, in its capacity as our financial advisor, will perform the functions under Nasdaq Rule 4120(c)(8) and must notify Nasdaq Stock Market that our shares are “ready to trade.” Once Performance Trust has notified Nasdaq Stock Market that our shares of common stock are ready to trade, Nasdaq Stock Market will confirm the Current Reference Price for our shares of common stock, in accordance with Nasdaq Stock Market’s exchange rules. As part of conducting such price validation test, Nasdaq Stock Market may consult with Performance Trust, if the price bands need to be modified, to select the new price bands for purposes of applying such test iteratively until the validation tests yield a price within such bands. If Performance Trust then approves proceeding at the Current Reference Price, the applicable orders that have been entered will then be executed at such price and regular trading of our shares of common stock on Nasdaq will commence, subject to Nasdaq Stock Market conducting validation checks in accordance with Nasdaq Stock Market’s exchange rules.
Under Nasdaq Stock Market’s exchange rules, the Current Reference Price means: (i) the single price at which the maximum number of orders to buy or sell can be matched; (ii) if there is more than one price at which the maximum number of orders to buy or sell can be matched, then it is the price that minimizes the imbalance between orders to buy or sell (i.e. minimizes the number of shares that would remain unmatched at such price); (iii) if more than one price exists under (ii), then it is the entered price (i.e. the specified price entered in an order by a customer to buy or sell) at which our shares of common stock will
 
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remain unmatched (i.e. will not be bought or sold); and (iv) if more than one price exists under (iii), a price determined by Nasdaq Stock Market in consultation with Performance Trust in its capacity as our financial advisor. In the event that more than one price exists under (iii), Performance Trust will exercise any consultation rights only to the extent that it can do so consistent with the anti-manipulation provisions of the federal securities laws, including Regulation M, or applicable relief granted thereunder. In determining the Current Reference Price, Nasdaq Stock Market’s cross algorithms will match orders that have been entered into and accepted by Nasdaq Stock Market’s system. This occurs with respect to a potential Current Reference Price when orders to buy shares of common stock at an entered bid price that is greater than or equal to such potential Current Reference Price are matched with orders to sell a like number of shares of common stock at an entered asking price that is less than or equal to such potential Current Reference Price.
Performance Trust, as the designated financial advisor under Nasdaq Rule 4120(c)(8), will determine when our shares of common stock are ready to trade and approve proceeding at the Current Reference Price primarily based on considerations of volume, timing and price. In particular, Performance Trust will determine, based primarily on pre-opening buy and sell orders, when a reasonable amount of volume will cross on the opening trade such that sufficient price discovery has been made to open trading at the Current Reference Price. If Performance Trust does not approve proceeding at the Current Reference Price (for example, due to the absence of adequate pre-opening buy and sell interest), Performance Trust will request that Nasdaq Stock Market delay the opening until such a time that sufficient price discovery has been made to ensure that a reasonable amount of volume crosses on the opening trade. Further, in the highly unlikely event that Nasdaq Stock Market consults with Performance Trust as described in clause (iv) of the definition of Current Reference Price, Performance Trust would request that Nasdaq Stock Market delay the opening to ensure a single opening price within clauses (i), (ii) or (iii) of the definition of the Current Reference Price. Neither the Company nor Registered Shareholders will be involved in Nasdaq Stock Market’s price-setting mechanism, and will not coordinate or be in communication with Performance Trust including with respect to any decision by Performance Trust to delay or proceed with trading.
Similar to a Nasdaq-listed underwritten initial public offering, in connection with the listing of our shares of common stock, buyers and sellers who have subscribed will have access to Nasdaq Stock Market’s Order Imbalance Indicator (the “Net Order Imbalance Indicator”), a widely available, subscription-based data feed, prior to submitting buy or sell orders. Nasdaq Stock Market’s electronic trading platform simulates auctions every second to calculate a Current Reference Price, the number of shares of common stock that can be paired off the Current Reference Price, the number of shares of common stock that would remain unexecuted at the Current Reference Price and whether a buy-side or sell-side imbalance exists, or whether there is no imbalance, to disseminate that information continuously to buyers and sellers via the Net Order Imbalance Indicator data feed.
However, because this is not an underwritten initial public offering, there will be no traditional “book building” process (i.e., an organized process pursuant to which buy and sell interest is coordinated in advance to some prescribed level — the “book”). Moreover, prior to the opening trade, there will not be a price at which underwriters initially sold shares of our common stock to the public as there would be in an underwritten initial public offering. This lack of an initial public offering price could impact the range of buy and sell orders collected by Nasdaq from various broker-dealers. Consequently, the public price of shares of our common stock may be more volatile than in an underwritten initial public offering and could, upon listing on Nasdaq, decline significantly and rapidly. See “Risk Factors — Risks Related to Our Common Stock.”
In addition, in order to list on Nasdaq, we are also required to have at least three registered and active market makers. Further, our financial advisors may assist interested Registered Shareholders with the establishment of brokerage accounts.
In addition to sales made pursuant to this prospectus, the shares of common stock covered by this prospectus may be sold by the Registered Shareholders in individually negotiated transactions exempt from the registration requirements of the Securities Act. Under the securities laws of some states, shares of common stock may be sold in such states only through registered or licensed brokers or dealers.
A Registered Shareholder may from time to time transfer, distribute (including distributions in kind by registered shareholders that are investment funds), pledge, assign, or grant a security interest in some or all the shares of common stock owned by it and, if it defaults in the performance of its secured obligations, the transferees, distributees, pledgees, assignees, or secured parties may offer and sell the shares of common stock from time to time under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act amending the list of the Registered Shareholders to include the transferee, distributee, pledgee, assignee, or other successors in interest as Registered Shareholders under this prospectus. The Registered Shareholders also may transfer the shares in other circumstances, in which case the transferees, distributees, pledgees, or other successors in interest will be the registered beneficial owners for purposes of this prospectus.
 
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A Registered Shareholder that is an entity may elect to make an in-kind distribution of common stock to its members, partners or shareholders pursuant to the registration statement of which this prospectus forms a part by delivering a prospectus. To the extent such a distribution involves a transfer of shares of non-voting common stock, such shares will automatically convert into shares of voting common stock, which we refer to in this prospectus as common stock, in accordance with their terms upon such transfer, provided the transferee is not restricted from holding common stock under applicable bank regulatory requirements. Certain shares of our common stock registered for resale pursuant to the registration statement of which this prospectus forms a part are issuable upon the exercise of warrants held by certain Registered Shareholders. The registration statement covers only the shares of common stock issuable upon exercise of such warrants and does not cover the warrants themselves or the resale or transfer of any other warrants that a Registered Shareholder may own.
If any of the Registered Shareholders utilize a broker-dealer in the sale of the shares of common stock being offered pursuant to this prospectus, such broker-dealer may receive commissions in the form of discounts, concessions, or commissions from such Registered Shareholders or commissions from purchasers of the shares of common stock for whom they may act as agent or to whom they may sell as principal.
 
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LEGAL MATTERS
The validity of the shares of common stock being offered by this prospectus will be passed upon for us by Troutman Pepper Locke LLP, Atlanta, Georgia. Partners of Troutman Pepper Locke LLP hold an aggregate of 29,765 shares of our common stock.
EXPERTS
The consolidated financial statements of Georgia Banking Company, Inc. as of and for each of the two years ended December 31, 2025 and 2024 included in this prospectus have been so included in reliance on the report of Wipfli LLP, independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to our common stock offered by this prospectus. This prospectus, which constitutes part of the registration statement, does not contain all of the information set forth in the registration statement or the exhibits or schedules filed therewith. Some items are omitted in accordance with the rules and regulations of the SEC. For further information about us and our common stock that we propose to sell in this offering, we refer you to the registration statement and the exhibits and schedules filed as a part of the registration statement. Statements or summaries in this prospectus as to the contents of any contract or other document referred to in this prospectus are not necessarily complete and, where that contract or document is filed as an exhibit to the registration statement, each statement or summary is qualified in all respects by reference to the exhibit to which the reference relates. Our filings with the SEC, including the registration statement, are also available to you for free on the SEC’s internet website at www.sec.gov.
Following the effectiveness of this registration statement, we will become subject to the informational and reporting requirements of the Exchange Act and, in accordance with those requirements, will file reports and proxy and information statements and other information with the SEC. You will be able to inspect and copy these reports and proxy and information statements and other information at the addresses set forth above. We intend to furnish to our shareholders our annual reports containing our audited consolidated financial statements certified by an independent public accounting firm.
We also maintain an internet site at www.georgiabanking.com. Information on, or accessible through, our website is not part of this prospectus and the inclusion of our website address in this prospectus is an inactive textual reference only.
 
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
​ ​ ​
Page
​
For the six months ended June 30, 2026 and 2025 (unaudited) ​ ​
​ ​ ​ ​ F-2 ​ ​
​ ​ ​ ​ F-3 ​ ​
​ ​ ​ ​ F-4 ​ ​
​ ​ ​ ​ F-5 ​ ​
​ ​ ​ ​ F-6 ​ ​
​ ​ ​ ​ F-7 ​ ​
For the years ended December 31, 2025 and 2024 (audited) ​ ​
​ ​ ​ ​ F-37 ​ ​
​ ​ ​ ​ F-38 ​ ​
​ ​ ​ ​ F-39 ​ ​
​ ​ ​ ​ F-40 ​ ​
​ ​ ​ ​ F-41 ​ ​
​ ​ ​ ​ F-42 ​ ​
​ ​ ​ ​ F-43 ​ ​
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
June 30, 2026 (unaudited) and December 31, 2025 (audited)
(dollars in thousands, except per share and share data)
​ ​ ​
June 30,
2026
​ ​
December 31,
2025
​
Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and due from banks
​ ​ ​ $ 11,649 ​ ​ ​ ​ $ 7,026 ​ ​
Interest-bearing deposits with banks
​ ​ ​ ​ 393,825 ​ ​ ​ ​ ​ 235,704 ​ ​
Federal funds sold
​ ​ ​ ​ 27,853 ​ ​ ​ ​ ​ 37,643 ​ ​
Cash and cash equivalents
​ ​ ​ ​ 433,327 ​ ​ ​ ​ ​ 280,373 ​ ​
Debt securities available for sale (amortized cost of $78,592 and $54,581)
​ ​ ​ ​ 75,087 ​ ​ ​ ​ ​ 51,796 ​ ​
Debt securities held to maturity (fair value $48,663 and $40,128)
​ ​ ​ ​ 49,360 ​ ​ ​ ​ ​ 40,102 ​ ​
Other investments
​ ​ ​ ​ 2,896 ​ ​ ​ ​ ​ 2,585 ​ ​
Loans held for sale
​ ​ ​ ​ 500,560 ​ ​ ​ ​ ​ 505,360 ​ ​
Loans, net of unearned income
​ ​ ​ ​ 2,089,860 ​ ​ ​ ​ ​ 1,724,934 ​ ​
Allowance for credit losses
​ ​ ​ ​ (28,955) ​ ​ ​ ​ ​ (25,574) ​ ​
Loans, net
​ ​ ​ ​ 2,060,905 ​ ​ ​ ​ ​ 1,699,360 ​ ​
Premises and equipment, net
​ ​ ​ ​ 17,953 ​ ​ ​ ​ ​ 18,550 ​ ​
Operating lease right of use assets
​ ​ ​ ​ 36,808 ​ ​ ​ ​ ​ 36,578 ​ ​
Goodwill
​ ​ ​ ​ 9,732 ​ ​ ​ ​ ​ 4,809 ​ ​
Core deposit intangible
​ ​ ​ ​ 10,477 ​ ​ ​ ​ ​ 5,656 ​ ​
Cash value of bank owned life insurance
​ ​ ​ ​ 35,760 ​ ​ ​ ​ ​ 30,996 ​ ​
Accrued interest and other assets
​ ​ ​ ​ 29,479 ​ ​ ​ ​ ​ 26,167 ​ ​
Total assets
​ ​ ​ $ 3,262,344 ​ ​ ​ ​ $ 2,702,332 ​ ​
Liabilities and Shareholders’ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Deposits: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Noninterest-bearing
​ ​ ​ $ 667,359 ​ ​ ​ ​ $ 617,388 ​ ​
Interest-bearing
​ ​ ​ ​ 2,171,263 ​ ​ ​ ​ ​ 1,742,297 ​ ​
Total deposits
​ ​ ​ ​ 2,838,622 ​ ​ ​ ​ ​ 2,359,685 ​ ​
Subordinated notes, net
​ ​ ​ ​ 75,405 ​ ​ ​ ​ ​ 63,999 ​ ​
Junior subordinated debentures
​ ​ ​ ​ 7,217 ​ ​ ​ ​ ​ 7,217 ​ ​
Operating lease liabilities
​ ​ ​ ​ 38,470 ​ ​ ​ ​ ​ 38,071 ​ ​
Accrued interest and other liabilities
​ ​ ​ ​ 23,971 ​ ​ ​ ​ ​ 28,446 ​ ​
Total liabilities
​ ​ ​ ​ 2,983,685 ​ ​ ​ ​ ​ 2,497,418 ​ ​
Commitments and contingencies – Note 15 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Preferred stock, $.01 par value, 10,000,000 authorized; no shares issued or outstanding
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Common stock, $.01 par value, 40,000,000 shares authorized; 10,277,894 and 8,444,343 shares of common stock and non-voting common stock issued and outstanding
​ ​ ​ ​ 103 ​ ​ ​ ​ ​ 84 ​ ​
Non-voting common stock, $.01 par value, 10,000,000 shares authorized; 331,341 shares of non-voting common stock issued and outstanding
​ ​ ​ ​ 3 ​ ​ ​ ​ ​ — ​ ​
Additional paid-in capital
​ ​ ​ ​ 214,318 ​ ​ ​ ​ ​ 152,302 ​ ​
Retained earnings
​ ​ ​ ​ 67,990 ​ ​ ​ ​ ​ 54,694 ​ ​
Accumulated other comprehensive loss
​ ​ ​ ​ (3,755) ​ ​ ​ ​ ​ (2,166) ​ ​
Total shareholders’ equity
​ ​ ​ ​ 278,659 ​ ​ ​ ​ ​ 204,914 ​ ​
Total liabilities and shareholders’ equity
​ ​ ​ $ 3,262,344 ​ ​ ​ ​ $ 2,702,332 ​ ​
See accompanying notes to consolidated financial statements.
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Consolidated Statements of Income
Six Months Ended June 30, 2026 and 2025 (unaudited)
(dollars in thousands, except per share and share data)
​ ​ ​
2026
​ ​
2025
​
Interest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Loans held for sale
​ ​ ​ $ 15,003 ​ ​ ​ ​ $ 14,389 ​ ​
Loans, including fees
​ ​ ​ ​ 63,712 ​ ​ ​ ​ ​ 56,094 ​ ​
Investment securities, taxable
​ ​ ​ ​ 2,019 ​ ​ ​ ​ ​ 1,844 ​ ​
Investment securities, tax free
​ ​ ​ ​ 228 ​ ​ ​ ​ ​ 174 ​ ​
Federal funds sold, deposits in banks and other investments
​ ​ ​ ​ 3,729 ​ ​ ​ ​ ​ 4,821 ​ ​
Total interest income
​ ​ ​ ​ 84,691 ​ ​ ​ ​ ​ 77,322 ​ ​
Interest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Deposits
​ ​ ​ ​ 25,797 ​ ​ ​ ​ ​ 26,383 ​ ​
Federal Home Loan Bank advances
​ ​ ​ ​ 1,223 ​ ​ ​ ​ ​ 2,387 ​ ​
Other borrowed funds
​ ​ ​ ​ 1,748 ​ ​ ​ ​ ​ 1,693 ​ ​
Total interest expense
​ ​ ​ ​ 28,768 ​ ​ ​ ​ ​ 30,463 ​ ​
Net interest income
​ ​ ​ ​ 55,923 ​ ​ ​ ​ ​ 46,859 ​ ​
Provision for credit losses – loans
​ ​ ​ ​ 1,104 ​ ​ ​ ​ ​ 3,171 ​ ​
Provision for credit losses – unfunded commitments
​ ​ ​ ​ 1,104 ​ ​ ​ ​ ​ — ​ ​
Net interest income after provision for credit losses
​ ​ ​ ​ 53,715 ​ ​ ​ ​ ​ 43,688 ​ ​
Noninterest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Service charges and fees
​ ​ ​ ​ 1,419 ​ ​ ​ ​ ​ 1,005 ​ ​
Mortgage banking activity
​ ​ ​ ​ 2,360 ​ ​ ​ ​ ​ 1,025 ​ ​
Bank owned life insurance income
​ ​ ​ ​ 462 ​ ​ ​ ​ ​ 433 ​ ​
Gain on sale of loans
​ ​ ​ ​ 908 ​ ​ ​ ​ ​ 1,388 ​ ​
Other
​ ​ ​ ​ 1,288 ​ ​ ​ ​ ​ 2,357 ​ ​
Total noninterest income
​ ​ ​ ​ 6,437 ​ ​ ​ ​ ​ 6,208 ​ ​
Noninterest expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Salaries and employee benefits
​ ​ ​ ​ 24,901 ​ ​ ​ ​ ​ 22,058 ​ ​
Occupancy
​ ​ ​ ​ 4,000 ​ ​ ​ ​ ​ 4,186 ​ ​
FDIC assessment and other regulatory charges
​ ​ ​ ​ 1,050 ​ ​ ​ ​ ​ 1,099 ​ ​
Professional fees
​ ​ ​ ​ 1,803 ​ ​ ​ ​ ​ 1,516 ​ ​
Communications, data processing and equipment
​ ​ ​ ​ 3,139 ​ ​ ​ ​ ​ 2,979 ​ ​
Merger and conversion expense
​ ​ ​ ​ 3,523 ​ ​ ​ ​ ​ 6,553 ​ ​
Other
​ ​ ​ ​ 3,764 ​ ​ ​ ​ ​ 2,409 ​ ​
Total other noninterest expense
​ ​ ​ ​ 42,180 ​ ​ ​ ​ ​ 40,800 ​ ​
Income before income tax expense
​ ​ ​ ​ 17,972 ​ ​ ​ ​ ​ 9,096 ​ ​
Income tax expense
​ ​ ​ ​ 4,676 ​ ​ ​ ​ ​ 2,365 ​ ​
Net income
​ ​ ​ $ 13,296 ​ ​ ​ ​ $ 6,731 ​ ​
Basic earnings per common share (common stock and non-voting common stock)
​ ​ ​ $ 1.51 ​ ​ ​ ​ $ 0.84 ​ ​
Diluted earnings per common share (common stock and non-voting common stock)
​ ​ ​ $ 1.45 ​ ​ ​ ​ $ 0.82 ​ ​
Weighted average common shares outstanding (common stock and non-voting common stock): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Basic
​ ​ ​ ​ 8,819,729 ​ ​ ​ ​ ​ 8,036,547 ​ ​
Diluted
​ ​ ​ ​ 9,155,163 ​ ​ ​ ​ ​ 8,243,927 ​ ​
See accompanying notes to consolidated financial statements.
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
Six Months Ended June 30, 2026 and 2025 (unaudited)
(dollars in thousands)
​ ​ ​
2026
​ ​
2025
​
Net income
​ ​ ​ $ 13,296 ​ ​ ​ ​ $ 6,731 ​ ​
Other comprehensive (loss) income, net of tax: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net unrealized holding (losses) gains on available for sale securities, net of tax (benefit) expense of $(187) and $84
​ ​ ​ ​ (533) ​ ​ ​ ​ ​ 240 ​ ​
Net unrealized holding (losses) gains on cash flow hedges, net of tax (benefit) expense of $(371) and $61
​ ​ ​ ​ (1,056) ​ ​ ​ ​ ​ 173 ​ ​
Other comprehensive (loss) income, net of tax
​ ​ ​ ​ (1,589) ​ ​ ​ ​ ​ 413 ​ ​
Comprehensive income
​ ​ ​ $ 11,707 ​ ​ ​ ​ $ 7,144 ​ ​
See accompanying notes to consolidated financial statements.
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Shareholders’ Equity
Six Months Ended June 30, 2026 and 2025 (unaudited)
(dollars in thousands, except per share and share data)
​ ​ ​
Common
Shares
​ ​
Common
Stock
​ ​
Additional
Paid-in
Capital
​ ​
Retained
Earnings
​ ​
Accumulated
Other
Comprehensive
Income (Loss)
​ ​
Total
​
Balance, December 31, 2024
​ ​ ​ ​ 7,358,356 ​ ​ ​ ​ $ 74 ​ ​ ​ ​ $ 126,096 ​ ​ ​ ​ $ 32,614 ​ ​ ​ ​ $ (3,256) ​ ​ ​ ​ $ 155,528 ​ ​
Stock-based compensation
expense
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 122 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 122 ​ ​
Restricted stock units
​ ​ ​ ​ 49,173 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 21 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 21 ​ ​
Stock issuances
​ ​ ​ ​ 63,045 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,449 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,449 ​ ​
Issuance of common stock – PBC acquisition
​ ​ ​ ​ 873,794 ​ ​ ​ ​ ​ 9 ​ ​ ​ ​ ​ 22,900 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 22,909 ​ ​
Issuance of common stock upon exercise of stock options
​ ​ ​ ​ 98,852 ​ ​ ​ ​ ​ 1 ​ ​ ​ ​ ​ 1,008 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,009 ​ ​
Net income
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 6,731 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 6,731 ​ ​
Change in accumulated other comprehensive loss, net of tax
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 413 ​ ​ ​ ​ ​ 413 ​ ​
Balance, June 30, 2025
​ ​ ​ ​ 8,443,220 ​ ​ ​ ​ $ 84 ​ ​ ​ ​ $ 151,596 ​ ​ ​ ​ $ 39,345 ​ ​ ​ ​ $ (2,843) ​ ​ ​ ​ $ 188,182 ​ ​
​ ​ ​
Common
Shares
and
Non-Voting
Common
Shares
​ ​
Common
Stock
and
Non-Voting
Common
Stock
​ ​
Additional
Paid-in
Capital
​ ​
Retained
Earnings
​ ​
Accumulated
Other
Comprehensive
Income (Loss)
​ ​
Total
​
Balance, December 31, 2025
​ ​ ​ ​ 8,444,343 ​ ​ ​ ​ $ 84 ​ ​ ​ ​ $ 152,302 ​ ​ ​ ​ $ 54,694 ​ ​ ​ ​ $ (2,166) ​ ​ ​ ​ $ 204,914 ​ ​
Stock-based compensation
expense
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Restricted stock units
​ ​ ​ ​ 34,699 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 323 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 323 ​ ​
Stock issuances
​ ​ ​ ​ 1,310,539 ​ ​ ​ ​ ​ 14 ​ ​ ​ ​ ​ 36,598 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 36,612 ​ ​
Issuance of common stock – Tandem acquisition
​ ​ ​ ​ 802,407 ​ ​ ​ ​ ​ 8 ​ ​ ​ ​ ​ 24,955 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 24,963 ​ ​
Issuance of common stock upon exercise of stock options
​ ​ ​ ​ 17,247 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 140 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 140 ​ ​
Net income
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 13,296 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 13,296 ​ ​
Change in accumulated other comprehensive loss, net of tax
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (1,589) ​ ​ ​ ​ ​ (1,589) ​ ​
Balance, June 30, 2026
​ ​ ​ ​ 10,609,235 ​ ​ ​ ​ $ 106 ​ ​ ​ ​ $ 214,318 ​ ​ ​ ​ $ 67,990 ​ ​ ​ ​ $ (3,755) ​ ​ ​ ​ $ 278,659 ​ ​
See accompanying notes to consolidated financial statements.
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Six Months Ended June 30, 2026 and 2025 (unaudited)
(dollars in thousands)
​ ​ ​
2026
​ ​
2025
​
Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net income
​ ​ ​ $ 13,296 ​ ​ ​ ​ ​  6,731 ​ ​
Adjustments to reconcile net income to net cash from operating activities:
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Depreciation, amortization and accretion
​ ​ ​ ​ (1,803) ​ ​ ​ ​ ​ (568) ​ ​
Provision for credit losses
​ ​ ​ ​ 2,208 ​ ​ ​ ​ ​ 3,171 ​ ​
Net (gain) on sale of loans held for sale
​ ​ ​ ​ (908) ​ ​ ​ ​ ​ (1,388) ​ ​
Stock-based compensation
​ ​ ​ ​ 323 ​ ​ ​ ​ ​ 143 ​ ​
Amortization of operating lease right of use assets
​ ​ ​ ​ 1,578 ​ ​ ​ ​ ​ 1,548 ​ ​
Bank owned life insurance income
​ ​ ​ ​ (463) ​ ​ ​ ​ ​ (433) ​ ​
Loans held for sale purchase/originated
​ ​ ​ ​ (4,490,225) ​ ​ ​ ​ ​ (3,859,279) ​ ​
Loans held for sale sold
​ ​ ​ ​ 4,495,933 ​ ​ ​ ​ ​ 3,840,655 ​ ​
Change in:
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Accrued interest receivable and other assets
​ ​ ​ ​ (2,996) ​ ​ ​ ​ ​ (3,797) ​ ​
Accrued interest payable and other liabilities
​ ​ ​ ​ (5,610) ​ ​ ​ ​ ​ 4,068 ​ ​
Net cash from (used in) operating activities
​ ​ ​ ​ 11,333 ​ ​ ​ ​ ​ (9,149) ​ ​
Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Debt securities available for sale:
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Proceeds from sales, maturities and paydowns
​ ​ ​ ​ 60,145 ​ ​ ​ ​ ​ 51,758 ​ ​
Purchases
​ ​ ​ ​ (43,795) ​ ​ ​ ​ ​       - ​ ​
Debt securities held to maturity:
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Proceeds from sales, maturities and paydowns
​ ​ ​ ​ 823 ​ ​ ​ ​ ​ 943 ​ ​
Purchases
​ ​ ​ ​ (9,954) ​ ​ ​ ​ ​ (4,524) ​ ​
Purchases of other investments
​ ​ ​ ​ (15,434) ​ ​ ​ ​ ​ (16,623) ​ ​
Proceeds from sale of other investments
​ ​ ​ ​ 16,428 ​ ​ ​ ​ ​ 14,110 ​ ​
Proceeds from surrender of life insurance policy
​ ​ ​ ​ 516 ​ ​ ​ ​ ​ 1,106 ​ ​
Net change in loans
​ ​ ​ ​ (124,109) ​ ​ ​ ​ ​ (158,758) ​ ​
Purchases of premises and equipment
​ ​ ​ ​ (122) ​ ​ ​ ​ ​ (547) ​ ​
Proceeds from disposals of premises and equipment
​ ​ ​ ​ 365 ​ ​ ​ ​ ​ 56 ​ ​
Net cash acquired in business combination, net of cash paid
​ ​ ​ ​ 18,095 ​ ​ ​ ​ ​ 16,276 ​ ​
Net cash used in investing activities
​ ​ ​ ​ (97,042) ​ ​ ​ ​ ​ (96,203) ​ ​
Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net change in deposits
​ ​ ​ ​ 224,911 ​ ​ ​ ​ ​ (58,346) ​ ​
Proceeds from FHLB advances
​ ​ ​ ​ 367,500 ​ ​ ​ ​ ​ 325,000 ​ ​
Repayments of FHLB advances
​ ​ ​ ​ (390,500) ​ ​ ​ ​ ​ (283,000) ​ ​
Issuance of common stock
​ ​ ​ ​ 36,752 ​ ​ ​ ​ ​ 2,458 ​ ​
Net cash from financing activities
​ ​ ​ ​ 238,663 ​ ​ ​ ​ ​ (13,888) ​ ​
Net change in cash and cash equivalents
​ ​ ​ $ 152,954 ​ ​ ​ ​ ​ (119,240) ​ ​
Cash and cash equivalents at beginning of period
​ ​ ​ ​ 280,373 ​ ​ ​ ​ ​ 267,814 ​ ​
Cash and cash equivalents at end of period
​ ​ ​ $ 433,327 ​ ​ ​ ​ ​ 148,574 ​ ​
Supplemental cash flow information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest paid
​ ​ ​ $ 28,343 ​ ​ ​ ​ ​ 31,261 ​ ​
Income taxes
​ ​ ​ ​ 7,805 ​ ​ ​ ​ ​ 5,777 ​ ​
Supplemental noncash disclosures: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Business Combination: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Fair value of tangible assets acquired, net of cash acquired
​ ​ ​ $ 287,514 ​ ​ ​ ​ ​ 314,466 ​ ​
Goodwill and other intangible assets
​ ​ ​ ​ 10,095 ​ ​ ​ ​ ​ 10,979 ​ ​
Fair value of liabilities assumed
​ ​ ​ ​ 290,741 ​ ​ ​ ​ ​ 318,812 ​ ​
Common stock and equity-based awards issued
​ ​ ​ ​ 24,963 ​ ​ ​ ​ ​ 22,909 ​ ​
See accompanying notes to consolidated financial statements.
F-6

TABLE OF CONTENTS​
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(unaudited)
(1)
Summary of Significant Accounting Policies
​
Organization
Georgia Banking Company, Inc. and subsidiaries (the “Company” or “GBC”) is a bank holding company headquartered in Atlanta, Georgia, and whose primary business is presently conducted by Georgia Banking Company, its wholly owned banking subsidiary (the “Bank”). Through the Bank, the Company operates a full-service banking business and offers a broad range of retail and commercial banking services to its customers concentrated in metropolitan Atlanta, Georgia. The Bank also engages in mortgage banking activities through a mortgage warehouse facility. The Company and the Bank are subject to the regulations of certain federal and state agencies and are periodically examined by those regulatory agencies.
Basis of Presentation and Accounting Estimates
In preparing the condensed consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”), management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheets and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. Material estimates that are particularly susceptible to significant change in the near-term include fair value measurements, determination of the allowance for credit losses and acquisition accounting.
The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.
The condensed consolidated financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments necessary for the fair statement of the Company’s financial position at June 30, 2026 and the results of its operations and its cash flows for the six months ended June 30, 2026 and 2025. The financial data and other information disclosed in these notes related to the six months ended June 30, 2026 and 2025 are also unaudited. The results for the six months ended June 30, 2026 are not necessarily indicative of results to be expected for the year ending December 31, 2026 or for any other subsequent interim period.
The accompanying condensed consolidated balance sheet at December 31, 2025 was derived from the audited annual financial statements; however, certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with GAAP have been omitted from the unaudited interim condensed consolidated financial statements. Accordingly, these condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes thereto for the years ended December 31, 2025 and 2024 included elsewhere in the registration statement.
The significant accounting policies and estimates used in the preparation of the accompanying condensed consolidated financial statements are described in the Company’s audited consolidated financial statements for the year ended December 31, 2025. Except for the adoption of the new accounting standard discussed below, there have been no material changes to the Company’s accounting policies during the six months ended June 30, 2026. Additionally, there were no other updates to the Company’s evaluation of recently issued accounting standards since the issuance of the Company’s audited consolidated financial statements for the year ended December 31, 2025.
Accounting Standard Adopted in 2026
In November 2025, the FASB issued ASU 2025-08, Financial Instruments — Credit Losses (Subtopic 326-20): Purchased Loans (“ASU 2025-08”). The update expands the gross-up approach to most purchased loans, eliminating the recognition of a day-one credit loss expense for acquisitions. ASU 2025-08 introduces a new category of acquired loans and requires an allowance for expected credit losses to be recorded at acquisition as an adjustment to the amortized cost basis rather than through provision expense. Effective January 1, 2026, the Company adopted ASU 2025-08 on a prospective basis. For loans purchased in connection with the Company’s acquisition of Tandem Bancorp Inc. effective June 1, 2026 (see Note 2), the Company recorded an initial allowance for credit losses as an adjustment to the amortized cost basis, consistent with the new standard.
 
F-7

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(2)
Business Combinations
​
Primary Bancshares Corporation
Effective March 1, 2025, GBC completed its merger with Primary Bancshares Corporation (“PBC”), a bank holding company headquartered in Atlanta, GA, pursuant to the terms of the Agreement and Plan of Merger (the “Agreement”) dated October 9, 2024, at which time PBC merged with and into GBC, and Georgia Primary Bank, the wholly owned bank subsidiary of PBC, was merged with and into the Bank.
Under the terms of the Agreement, GBC agreed to acquire 100% of the common stock of PBC in a combined stock-and-cash transaction, whereby each PBC shareholder was given the right to elect to receive either $13.50 in cash or 0.5870 shares of the Company’s common stock in exchange for each share of PBC common stock. The transaction was valued at $27.1 million, such that 18.0% of PBC common stock was converted to cash and the remaining 82.0% of PBC common stock was converted to GBC common stock.
Also pursuant to the Agreement, as of the effective date of the merger, each option to purchase shares of PBC common stock (each a “PBC stock option”) that was outstanding immediately prior to the effective date of the merger, to the extent not vested, became fully vested and exercisable and was canceled in consideration for the right to receive, at the election of the holder (i) an option (“Rollover Option”) to purchase a number of shares of GBC common stock equal to the sum of the number of shares of PBC common stock subject to such options to acquire PBC common stock (“Seller Option”) times 0.5870, at an exercise price per share equal to the exercise price per share of the PBC common stock of such seller option divided by 0.5870; (ii) or a number of shares of GBC common stock equal to the sum of the number of shares of PBC common stock subject to such option times 0.5870 less the number of shares of GBC common stock equal to the aggregate exercise price for such options, assuming a value of $23.00 per share of GBC common stock.
A summary of the assets acquired and liabilities assumed in the PBC transaction, as of the acquisition date, including the purchase price allocation was as follows (in thousands):
​ ​ ​
Fair Value
​
Assets Acquired: ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ $ 20,436 ​ ​
Debt securities available for sale
​ ​ ​ ​ 43,378 ​ ​
Other investments
​ ​ ​ ​ 662 ​ ​
Loans
​ ​ ​ ​ 254,821 ​ ​
Allowance for credit losses
​ ​ ​ ​ (1,364) ​ ​
Net loans
​ ​ ​ ​ 253,457 ​ ​
Premises and equipment
​ ​ ​ ​ 9,283 ​ ​
Core deposit intangible
​ ​ ​ ​ 6,170 ​ ​
Cash value of bank owned life insurance
​ ​ ​ ​ 4,436 ​ ​
Other assets
​ ​ ​ ​ 3,250 ​ ​
Total assets acquired
​ ​ ​ $ 341,072 ​ ​
Liabilities Assumed: ​ ​ ​ ​ ​ ​ ​
Deposits
​ ​ ​ $ 301,402 ​ ​
Federal Home Loan Bank advances
​ ​ ​ ​ 8,000 ​ ​
Subordinated notes
​ ​ ​ ​ 8,952 ​ ​
Other liabilities
​ ​ ​ ​ 458 ​ ​
Total liabilities assumed
​ ​ ​ ​ 318,812 ​ ​
Net assets acquired
​ ​ ​ $ 22,260 ​ ​
 
F-8

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(2)
Business Combinations (continued)
​
​ ​ ​
Fair Value
​
Purchase Price: ​ ​ ​ ​ ​ ​ ​
GBC common stock issued (in shares)
​ ​ ​ ​ 873,794 ​ ​
Value of GBC common stock and equity-based awards consideration
​ ​ ​ $ 22,909 ​ ​
Cash consideration paid
​ ​ ​ ​ 4,160 ​ ​
Total purchase price
​ ​ ​ $ 27,069 ​ ​
Goodwill
​ ​ ​ $ 4,809 ​ ​
​
The Company purchased loans through the acquisition of PBC for which there was, at the date of acquisition, more than insignificant deterioration of credit quality since origination (purchased credit deteriorated loans or “PCD” loans). The carrying amount of these loans at acquisition was as follows (in thousands):
​ ​ ​
March 1, 2025
​
Purchase price of PCD loans at acquisition
​ ​ ​ $ 5,264 ​ ​
Allowance for credit losses on PCD loans at acquisition
​ ​ ​ ​ 1,364 ​ ​
Par value of PCD acquired loans at acquisition
​ ​ ​ $ 6,628 ​ ​
In connection with the acquisition, GBC recorded goodwill of $4.8 million, none of which is expected to be deductible for tax purposes. The goodwill is primarily attributable to expected synergies, operational efficiencies, and other factors to arise from the transaction. Information regarding carrying amounts and amortization of core deposit and other intangible assets is provided in Note 8 Goodwill and Other Intangible Assets.
The following is a description of the methods used to determine the fair values of significant assets acquired and liabilities assumed:
Cash and cash equivalents:   The carrying amount of these assets was a reasonable estimate of fair value based on the short-term nature of these assets.
Debt investment securities:   Fair values for debt investment securities were based on quoted market prices, where available. If quoted market prices were not available, fair value estimates were based on observable inputs including quoted market prices for similar instruments, quoted market prices that were not in an active market or other inputs that were observable in the market. In the absence of observable inputs, fair value was estimated based on pricing models and/or discounted cash flow methodologies.
Loans:   Fair values for loans were based on a discounted cash flow methodology that considered factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term, amortization status and current discount rates. Loans were grouped together according to similar characteristics when applying various valuation techniques. The discount rates used for loans were based on current market rates for new originations of comparable loans and included adjustments for liquidity. The discount rate does not include a factor for credit losses as that has been included as a reduction to the estimated cash flows. Purchased loans that reflect a more-than-insignificant deterioration of credit from origination are considered PCD. For PCD loans, the initial estimate of expected credit losses is recognized in the ACL on the date of acquisition using the same methodology as other loans and held-for-investment.
Core deposit intangible (“CDI”):   GBC recorded a CDI of $6.2 million as of the acquisition date, which represents the low cost of funding acquired core deposits provided relative to the Company’s marginal cost of funds. The fair value was estimated based on a discounted cash flow methodology that considered expected customer attrition rates, net maintenance cost of the deposit base, alternative cost of funds, and the interest costs associated with customer deposits. The CDI is being amortized over 10 years based upon the period over which estimated economic benefits are estimated to be received.
Deposits:   The fair values used for the demand and savings deposits by definition equal the amount payable on demand at the acquisition date. The fair values for time deposits were estimated using a discounted cash flow calculation that applies interest rates currently being offered to the contractual interest rates on such time deposits.
 
F-9

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(2)
Business Combinations (continued)
​
The following table presents certain unaudited pro forma information for the results of operations for the six months ended June 30, 2025, as if the PBC merger had occurred on January 1, 2025. This result combines the historical results of GBC’s consolidated statement of income and, while certain adjustments were made for the estimated impact of certain fair valuation adjustments and other acquisition related activity, it is not indicative of what would have occurred had the acquisition taken place on the indicated date nor is it intended to represent or be indicative of future results of operations. In particular, no adjustments have been made to eliminate the amount of PBC’s provision for credit losses for 2025 that may not have been necessary had the acquired loans been recorded at fair value as of the beginning of 2025. Additionally, GBC expects to achieve operating cost savings and other business synergies as a result of the acquisition which are not reflected in the pro forma amounts.
(in thousands)
​ ​
Six Months Ended
June 30, 2025
​
Total revenue, net of interest expense
​ ​ ​ $ 54,647 ​ ​
Net income
​ ​ ​ ​ 12,789 ​ ​
Tandem Bancorp Inc.
Effective June 1, 2026, GBC completed its merger with Tandem Bancorp, Inc. (“Tandem”), a bank holding company headquartered in Tucker, Georgia, pursuant to the terms of the Agreement and Plan of Merger (the “Tandem Agreement”) dated February 26, 2026, at which time Tandem merged with and into GBC, and Tandem Bank, the wholly owned bank subsidiary of Tandem, was merged with and into the Bank.
Under the terms of the Tandem Agreement, GBC agreed to acquire 100% of the common stock of Tandem in a combined stock-and-cash transaction, whereby each Tandem shareholder was given the right to elect to receive either $14.40 in cash or 0.480 shares of the Company’s common stock in exchange for each share of Tandem common stock. The transaction was valued at $35.5 million, such that 30.4% of Tandem common stock was converted to cash and the remaining 69.6% of Tandem common stock was converted to GBC common stock.
Pursuant to the Tandem Agreement, as of the effective date of the merger, each option to purchase shares of Tandem common stock (each a “Tandem stock option”) that was outstanding immediately prior to the effective date of the merger, to the extent not vested, became fully vested and exercisable and was canceled in consideration for the right to receive, at the election of the holder (i) an option (“Rollover Option”) to purchase a number of shares of GBC common stock equal to the sum of the number of shares of Tandem common stock subject to such options to acquire Tandem common stock (“Seller Option”) times 0.480, at an exercise price per share equal to the exercise price per share of the Tandem common stock of such seller option divided by 0.480; (ii) or a number of shares of GBC common stock equal to the sum of the number of shares of Tandem common stock subject to such option times 0.480 less the number of shares of GBC common stock equal to the aggregate exercise price for such options, assuming a value of $30.00 per share of GBC common stock.
Also pursuant to the Tandem Agreement, as of the effective date of the merger, each warrant to acquire shares of Tandem common stock (each a “Tandem warrant”) that was outstanding immediately prior to the effective date of the merger be cancelled in consideration for the right to receive, at the election of the holder (i) an amount of cash (“Warrant Cancellation Payment”) without interest equal the number of shares of Tandem common stock subject to such warrant immediately prior to the effective time times any per share consideration over the exercise price of such warrant, (ii) a warrant (“Rollover Warrant”) to acquire a number of shares of GBC common stock equal to the sum of the number of shares of Tandem common stock subject to such warrant to acquire Tandem common stock (“Seller Warrant”) times 0.480, at an exercise price per share equal to the exercise price per share of the Tandem common stock of such seller warrant divided by 0.480; (iii) or a number of shares of GBC common stock equal to the sum of the number of shares of Tandem common stock subject to such warrant times 0.480 less the number of shares of GBC common stock equal to the aggregate exercise price for such warrant, assuming a value of $30.00 per share of GBC common stock.
 
F-10

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(2)
Business Combinations (continued)
​
A summary of the fair value of assets acquired and liabilities assumed in the Tandem transaction, as of the acquisition date, including the purchase price allocation was as follows (in thousands):
​ ​ ​
Fair Value
​
Assets Acquired: ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ $ 28,660 ​ ​
Debt securities available for sale
​ ​ ​ ​ 40,962 ​ ​
Other investments
​ ​ ​ ​ 1,305 ​ ​
Loans
​ ​ ​ ​ 240,056 ​ ​
Allowance for credit losses
​ ​ ​ ​ (3,254) ​ ​
Net loans
​ ​ ​ ​ 236,802 ​ ​
Premises and equipment
​ ​ ​ ​ 636 ​ ​
Core deposit intangible
​ ​ ​ ​ 5,172 ​ ​
Cash value of bank owned life insurance
​ ​ ​ ​ 4,817 ​ ​
Other assets
​ ​ ​ ​ 2,992 ​ ​
Total assets acquired
​ ​ ​ $ 321,346 ​ ​
Liabilities Assumed: ​ ​ ​ ​ ​ ​ ​
Deposits
​ ​ ​ $ 253,968 ​ ​
Federal Home Loan Bank advances
​ ​ ​ ​ 23,000 ​ ​
Subordinated notes
​ ​ ​ ​ 11,933 ​ ​
Other liabilities
​ ​ ​ ​ 1,840 ​ ​
Total liabilities assumed
​ ​ ​ ​ 290,741 ​ ​
Net assets acquired
​ ​ ​ $ 30,605 ​ ​
Purchase Price: ​ ​ ​ ​ ​ ​ ​
GBC common stock issued (in shares)
​ ​ ​ ​ 802,407 ​ ​
Value of GBC common stock and equity-based awards consideration
​ ​ ​ $ 24,963 ​ ​
Cash consideration paid
​ ​ ​ ​ 10,565 ​ ​
Total purchase price
​ ​ ​ $ 35,528 ​ ​
Goodwill
​ ​ ​ $ 4,923 ​ ​
The fair value of assets acquired and liabilities assumed reflected in the table above are preliminary and are the current assessment of such assets and liabilities. These amounts are subject to change following the complete and finalized accounting of the Tandem transaction.
The Company purchased loans through the acquisition of Tandem for which there was, at the date of acquisition, more than insignificant deterioration of credit quality since origination (PCD loans). The carrying amount of these loans at acquisition was as follows (in thousands):
​ ​ ​
June 1, 2026
​
Purchase price of PCD loans at acquisition
​ ​ ​ $ 830 ​ ​
Allowance for credit losses on PCD loans at acquisition
​ ​ ​ ​ 1,857 ​ ​
Par value of PCD acquired loans at acquisition
​ ​ ​ $ 2,687 ​ ​
In connection with the acquisition, GBC recorded preliminary goodwill of $4.9 million, none of which is expected to be deductible for tax purposes. The preliminary goodwill is primarily attributable to expected synergies, operational efficiencies,
 
F-11

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(2)
Business Combinations (continued)
​
and other factors to arise from the transaction. Information regarding carrying amounts and amortization of core deposit and other intangible assets is provided in Note 8 Goodwill and Other Intangible Assets.
The following is a description of the methods used to determine the fair values of significant assets acquired and liabilities assumed:
Cash and cash equivalents:   The carrying amount of these assets was a reasonable estimate of fair value based on the short-term nature of these assets.
Debt investment securities:   Fair values for debt investment securities were based on quoted market prices, where available. If quoted market prices were not available, fair value estimates were based on observable inputs including quoted market prices for similar instruments, quoted market prices that were not in an active market or other inputs that were observable in the market. In the absence of observable inputs, fair value was estimated based on pricing models and/or discounted cash flow methodologies.
Loans:   Fair values for loans were based on a discounted cash flow methodology that considered factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term, amortization status and current discount rates. Loans were grouped together according to similar characteristics when applying various valuation techniques. The discount rates used for loans were based on current market rates for new originations of comparable loans and included adjustments for liquidity. The discount rate does not include a factor for credit losses as that has been included as a reduction to the estimated cash flows. Purchased loans that reflect a more-than-insignificant deterioration of credit from origination are considered PCD. For PCD loans, the initial estimate of expected credit losses is recognized in the ACL on the date of acquisition using the same methodology as other loans and held-for-investment.
Core deposit intangible (“CDI”):   GBC recorded a CDI of $5.2 million as of the acquisition date, which represents the low cost of funding acquired core deposits provided relative to the Company’s marginal cost of funds. The fair value was estimated based on a discounted cash flow methodology that considered expected customer attrition rates, net maintenance cost of the deposit base, alternative cost of funds, and the interest costs associated with customer deposits. The CDI is being amortized over 10 years based upon the period over which estimated economic benefits are estimated to be received.
Deposits:   The fair values used for the demand and savings deposits by definition equal the amount payable on demand at the acquisition date. The fair values for time deposits were estimated using a discounted cash flow calculation that applies interest rates currently being offered to the contractual interest rates on such time deposits.
The following table presents certain unaudited pro forma information for the results of operations for the six months ended June 30, 2026 and 2025, as if the Tandem merger had occurred on January 1, 2025. These results combine the historical results of GBC’s consolidated statement of income and, while certain adjustments were made for the estimated impact of certain fair valuation adjustments and other acquisition related activity, they are not indicative of what would have occurred had the acquisition taken place on the indicated date nor are they intended to represent or be indicative of future results of operations. In particular, no adjustments have been made to eliminate the amount of Tandem’s provision for credit losses for 2025 that may not have been necessary had the acquired loans been recorded at fair value as of the beginning of 2025. Additionally, GBC expects to achieve operating cost savings and other business synergies as a result of the acquisition which are not reflected in the pro forma amounts.
​ ​ ​
Six Months Ended
​
(in thousands)
​ ​
June 30, 2026
​ ​
June 30, 2025
​
Total revenue, net of interest expense
​ ​ ​ $ 67,574 ​ ​ ​ ​ $ 60,060 ​ ​
Net income
​ ​ ​ ​ 16,423 ​ ​ ​ ​ ​ 13,830 ​ ​
 
F-12

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(3)
Debt Securities
​
The amortized cost, gross unrealized gains and losses, and fair value of debt securities available for sale at June 30, 2026 and December 31, 2025 are summarized as follows (in thousands):
​ ​ ​
Amortized
Cost
​ ​
Gross
Unrealized
Gains
​ ​
Gross
Unrealized
Losses
​ ​
Fair Value
​
June 30, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
U.S. Treasury securities
​ ​ ​ $ 4,953 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ (1) ​ ​ ​ ​ $ 4,952 ​ ​
U.S. government sponsored agencies
​ ​ ​ ​ 2,984 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (6) ​ ​ ​ ​ ​ 2,978 ​ ​
Residential mortgage-backed securities
​ ​ ​ ​ 63,523 ​ ​ ​ ​ ​ 7 ​ ​ ​ ​ ​ (3,333) ​ ​ ​ ​ ​ 60,197 ​ ​
Collateralized mortgage obligations
​ ​ ​ ​ 5,869 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (174) ​ ​ ​ ​ ​ 5,695 ​ ​
Corporate debt securities
​ ​ ​ ​ 1,263 ​ ​ ​ ​ ​ 21 ​ ​ ​ ​ ​ (19) ​ ​ ​ ​ ​ 1,265 ​ ​
​ ​ ​ ​ $ 78,592 ​ ​ ​ ​ $ 28 ​ ​ ​ ​ $ (3,533) ​ ​ ​ ​ $ 75,087 ​ ​
December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
U.S. Treasury securities
​ ​ ​ $ 21,863 ​ ​ ​ ​ $ 49 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 21,912 ​ ​
U.S. government sponsored agencies
​ ​ ​ ​ 2,978 ​ ​ ​ ​ ​ 16 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,994 ​ ​
Residential mortgage-backed securities
​ ​ ​ ​ 27,673 ​ ​ ​ ​ ​ 135 ​ ​ ​ ​ ​ (2,874) ​ ​ ​ ​ ​ 24,934 ​ ​
Collateralized mortgage obligations
​ ​ ​ ​ 1,067 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (71) ​ ​ ​ ​ ​ 996 ​ ​
Corporate debt securities
​ ​ ​ ​ 1,000 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (40) ​ ​ ​ ​ ​ 960 ​ ​
​ ​ ​ ​ $ 54,581 ​ ​ ​ ​ $ 200 ​ ​ ​ ​ $ (2,985) ​ ​ ​ ​ $ 51,796 ​ ​
The amortized cost, gross unrealized gains and losses, and fair value of debt securities held to maturity at June 30, 2026 and December 31, 2025 are summarized as follows (in thousands):
​ ​ ​
Amortized
Cost
​ ​
Gross
Unrealized
Gains
​ ​
Gross
Unrealized
Losses
​ ​
Fair Value
​
June 30, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Residential mortgage-backed securities
​ ​ ​ $ 14,846 ​ ​ ​ ​ $ 11 ​ ​ ​ ​ $ (222) ​ ​ ​ ​ $ 14,635 ​ ​
Collateralized mortgage obligations
​ ​ ​ ​ 23,537 ​ ​ ​ ​ ​ 22 ​ ​ ​ ​ ​ (237) ​ ​ ​ ​ ​ 23,322 ​ ​
State and political subdivisions
​ ​ ​ ​ 10,977 ​ ​ ​ ​ ​ 24 ​ ​ ​ ​ ​ (295) ​ ​ ​ ​ ​ 10,706 ​ ​
​ ​ ​ ​ $ 49,360 ​ ​ ​ ​ $ 57 ​ ​ ​ ​ $ (754) ​ ​ ​ ​ $ 48,663 ​ ​
December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Residential mortgage-backed securities
​ ​ ​ $ 670 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ (18) ​ ​ ​ ​ $ 652 ​ ​
Collateralized mortgage obligations
​ ​ ​ ​ 28,488 ​ ​ ​ ​ ​ 318 ​ ​ ​ ​ ​ (59) ​ ​ ​ ​ ​ 28,747 ​ ​
State and political subdivisions
​ ​ ​ ​ 10,944 ​ ​ ​ ​ ​ 81 ​ ​ ​ ​ ​ (296) ​ ​ ​ ​ ​ 10,729 ​ ​
​ ​ ​ ​ $ 40,102 ​ ​ ​ ​ $ 399 ​ ​ ​ ​ $ (373) ​ ​ ​ ​ $ 40,128 ​ ​
 
F-13

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(3)
Debt Securities (continued)
​
The following table presents the gross unrealized losses and estimated fair value by security category and length of time that individual debt securities available for sale have been in a continuous unrealized loss position at June 30, 2026 and December 31, 2025 (in thousands):
​ ​ ​
Less than 12 Months
​ ​
More than 12 Months
​ ​
Total
​
​ ​ ​
Fair Value
​ ​
Gross
Unrealized
Losses
​ ​
Fair Value
​ ​
Gross
Unrealized
Losses
​ ​
Fair Value
​ ​
Gross
Unrealized
Losses
​
June 30, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
U.S. Treasury securities
​ ​ ​ $ 4,952 ​ ​ ​ ​ $ (1) ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 4,952 ​ ​ ​ ​ $ (1) ​ ​
U.S. government sponsored agencies
​ ​ ​ ​ 2,978 ​ ​ ​ ​ ​ (6) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,978 ​ ​ ​ ​ ​ (6) ​ ​
Residential mortgage-backed securities
​ ​ ​ ​ 23,569 ​ ​ ​ ​ ​ (334) ​ ​ ​ ​ ​ 14,791 ​ ​ ​ ​ ​ (2,999) ​ ​ ​ ​ ​ 38,360 ​ ​ ​ ​ ​ (3,333) ​ ​
Collateralized mortgage obligations
​ ​ ​ ​ 4,789 ​ ​ ​ ​ ​ (109) ​ ​ ​ ​ ​ 906 ​ ​ ​ ​ ​ (65) ​ ​ ​ ​ ​ 5,695 ​ ​ ​ ​ ​ (174) ​ ​
Corporate debt securities
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 981 ​ ​ ​ ​ ​ (19) ​ ​ ​ ​ ​ 981 ​ ​ ​ ​ ​ (19) ​ ​
​ ​ ​ ​ $ 36,288 ​ ​ ​ ​ $ (450) ​ ​ ​ ​ $ 16,678 ​ ​ ​ ​ $ (3,083) ​ ​ ​ ​ $ 52,966 ​ ​ ​ ​ $ (3,533) ​ ​
December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
U.S. Treasury securities
​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​
U.S. government sponsored agencies
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Residential mortgage-backed securities
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 15,533 ​ ​ ​ ​ ​ (2,874) ​ ​ ​ ​ ​ 15,533 ​ ​ ​ ​ ​ (2,874) ​ ​
Collateralized mortgage obligations
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 996 ​ ​ ​ ​ ​ (71) ​ ​ ​ ​ ​ 996 ​ ​ ​ ​ ​ (71) ​ ​
Corporate debt securities
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 960 ​ ​ ​ ​ ​ (40) ​ ​ ​ ​ ​ 960 ​ ​ ​ ​ ​ (40) ​ ​
​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 17,489 ​ ​ ​ ​ $ (2,985) ​ ​ ​ ​ $ 17,489 ​ ​ ​ ​ $ (2,985) ​ ​
The following table presents the number and aggregate depreciation from the Company’s amortized cost basis of debt securities available for sale in a continuous loss position by security type at June 30, 2026:
​ ​ ​
Number of
Securities
​ ​
Aggregate
Depreciation
​
U.S. Treasury securities
​ ​ ​ ​ 1 ​ ​ ​
0.0%
​
U.S. government sponsored agencies
​ ​ ​ ​ 1 ​ ​ ​
0.2%
​
Residential mortgage-backed securities
​ ​ ​ ​ 20 ​ ​ ​
8.0%
​
Collateralized mortgage obligations
​ ​ ​ ​ 2 ​ ​ ​
3.0%
​
Corporate debt securities
​ ​ ​ ​ 1 ​ ​ ​
1.9%
​
​ ​ ​ ​ ​ 25 ​ ​ ​
6.3%
​
Management evaluates debt securities available for sale in unrealized loss positions on a quarterly basis to determine whether the decline in fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors. The Company does not consider its debt securities available for sale with unrealized losses to be attributable to credit-related factors, as the unrealized losses in each category have occurred as a result of changes in noncredit-related factors such as changes in interest rates, market spreads and market conditions subsequent to purchase, not credit deterioration. Furthermore, the Company does not have the intent to sell any of these debt securities available for sale and believes that it is more likely than not that we will not have to sell any such securities before a recovery of cost. As of June 30, 2026 and December 31, 2025, no allowance for credit losses on debt securities available for sale was recognized.
Management evaluates debt securities held to maturity on a quarterly basis to determine whether an allowance for credit losses is necessary. In making this determination, management considers the facts and circumstances of the underlying securities. The mortgage-backed securities are all issued by U.S. government agencies and corporations, which are currently explicitly or
 
F-14

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(3)
Debt Securities (continued)
​
implicitly guaranteed by the U.S. government and have a long history of no credit losses. For the state and political subdivisions, management considers issuer bond ratings, historical loss rates by bond ratings, whether issuers continued to make timely principal and interest payments per the contractual terms of the securities, internal forecasts, and whether or not such securities provide insurance, other credit enhancements, or are pre-refunded by the issuers. Therefore, management determined no allowance for credit losses was necessary for the debt securities held to maturity at June 30, 2026 or December 31, 2025.
The amortized cost and fair value of debt securities available for sale June 30, 2026, by contractual maturity, are presented in the following table (in thousands):
​ ​ ​
Amortized
Cost
​ ​
Fair
Value
​
Less than 1 year
​ ​ ​ $ 4,953 ​ ​ ​ ​ $ 4,952 ​ ​
1 to 5 years
​ ​ ​ ​ 4,247 ​ ​ ​ ​ ​ 4,243 ​ ​
5 to 10 years
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Mortgage-backed securities
​ ​ ​ ​ 69,392 ​ ​ ​ ​ ​ 65,892 ​ ​
​ ​ ​ ​ $ 78,592 ​ ​ ​ ​ $ 75,087 ​ ​
The amortized cost of debt securities held to maturity at June 30, 2026, by contractual maturity, are presented in the following table (in thousands):
​ ​ ​
Amortized
Cost
​ ​
Fair
Value
​
Less than 1 year
​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​
1 to 5 years
​ ​ ​ ​ 484 ​ ​ ​ ​ ​ 483 ​ ​
5 to 10 years
​ ​ ​ ​ 3,220 ​ ​ ​ ​ ​ 3,200 ​ ​
Over 10 Years
​ ​ ​ ​ 7,273 ​ ​ ​ ​ ​ 7,023 ​ ​
Mortgage-backed securities
​ ​ ​ ​ 38,383 ​ ​ ​ ​ ​ 37,957 ​ ​
​ ​ ​ ​ $ 49,360 ​ ​ ​ ​ $ 48,663 ​ ​
Maturities may differ from contractual maturities in mortgage-backed debt securities because the mortgages underlying the securities may be called or prepaid without penalty. Therefore, these securities are not included in the maturity categories in the above maturity summaries.
Debt securities with a carrying value of $21.9 million and $30.0 million at June 30, 2026 and December 31, 2025, respectively, serve as collateral to secure public deposits and for other purposes required or permitted by law.
As part of the PBC acquisition, effective March 1, 2025, securities were acquired and immediately sold with a fair value of $36.1 million. The fair value of the securities sold equaled the total proceeds of this transaction resulting in no net gain or loss.
Accrued interest receivable on securities was $496,000 and $493,000 at June 30, 2026 and December 31, 2025, respectively. Accrued interest is presented in accrued interest and other assets within the condensed consolidated balance sheets.
At June 30, 2026 and December 31, 2025, there were no holdings of debt securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholders’ equity.
 
F-15

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(4)
Loans
​
Loans receivable at June 30, 2026 and December 31, 2025, are summarized as follows (in thousands):
​ ​ ​
2026
​ ​
2025
​
Real estate loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Construction and land development
​ ​ ​ $ 269,655 ​ ​ ​ ​ $ 236,851 ​ ​
Single-family residential
​ ​ ​ ​ 348,327 ​ ​ ​ ​ ​ 276,719 ​ ​
Commercial real estate
​ ​ ​ ​ 892,007 ​ ​ ​ ​ ​ 679,103 ​ ​
Multifamily
​ ​ ​ ​ 70,412 ​ ​ ​ ​ ​ 66,341 ​ ​
Total real estate loans
​ ​ ​ ​ 1,580,401 ​ ​ ​ ​ ​ 1,259,014 ​ ​
Commercial and financial
​ ​ ​ ​ 460,268 ​ ​ ​ ​ ​ 428,006 ​ ​
Consumer
​ ​ ​ ​ 54,844 ​ ​ ​ ​ ​ 43,223 ​ ​
Total gross loans
​ ​ ​ ​ 2,095,513 ​ ​ ​ ​ ​ 1,730,243 ​ ​
Less: unearned loan fees
​ ​ ​ ​ 5,653 ​ ​ ​ ​ ​ 5,309 ​ ​
Less: allowance for credit losses
​ ​ ​ ​ 28,955 ​ ​ ​ ​ ​ 25,574 ​ ​
Total loans, net
​ ​ ​ $ 2,060,905 ​ ​ ​ ​ $ 1,699,360 ​ ​
Accrued interest receivable on loans was $8.9 million and $8.2 million at June 30, 2026 and December 31, 2025, respectively. Accrued interest is presented in accrued interest and other assets within the condensed consolidated balance sheets.
The following table presents an aging analysis of past due loans, including nonaccrual loans, by loan type, at June 30, 2026 and December 31, 2025 (in thousands):
​ ​ ​
30 – 59
Days
Past Due
​ ​
60 – 89 Days
Past Due
​ ​
90 or
More
Days Past
Due
​ ​
Total
Past
Due
​ ​
Total
Current
​ ​
Total
Loans
​
June 30, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Construction and land development
​ ​ ​ $ 667 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 667 ​ ​ ​ ​ $ 268,988 ​ ​ ​ ​ $ 269,655 ​ ​
Single-family residential
​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,872 ​ ​ ​ ​ ​ 1,115 ​ ​ ​ ​ ​ 3,987 ​ ​ ​ ​ ​ 344,340 ​ ​ ​ ​ ​ 348,327 ​ ​
Commercial real estate
​ ​ ​ ​ 3,200 ​ ​ ​ ​ ​ 127 ​ ​ ​ ​ ​ 38 ​ ​ ​ ​ ​ 3,365 ​ ​ ​ ​ ​ 888,642 ​ ​ ​ ​ ​ 892,007 ​ ​
Multifamily
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 70,412 ​ ​ ​ ​ ​ 70,412 ​ ​
Commercial and
financial
​ ​ ​ ​ 822 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 5,145 ​ ​ ​ ​ ​ 5,967 ​ ​ ​ ​ ​ 454,301 ​ ​ ​ ​ ​ 460,268 ​ ​
Consumer
​ ​ ​ ​ 540 ​ ​ ​ ​ ​ 417 ​ ​ ​ ​ ​ 39 ​ ​ ​ ​ ​ 996 ​ ​ ​ ​ ​ 53,848 ​ ​ ​ ​ ​ 54,844 ​ ​
Total
​ ​ ​ $ 5,229 ​ ​ ​ ​ $ 3,416 ​ ​ ​ ​ $ 6,337 ​ ​ ​ ​ $ 14,982 ​ ​ ​ ​ $ 2,080,531 ​ ​ ​ ​ $ 2,095,513 ​ ​
December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Construction and land development
​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 328 ​ ​ ​ ​ $ 328 ​ ​ ​ ​ $ 236,523 ​ ​ ​ ​ $ 236,851 ​ ​
Single-family residential
​ ​ ​ ​ 1,330 ​ ​ ​ ​ ​ 124 ​ ​ ​ ​ ​ 300 ​ ​ ​ ​ ​ 1,754 ​ ​ ​ ​ ​ 274,965 ​ ​ ​ ​ ​ 276,719 ​ ​
Commercial real estate
​ ​ ​ ​ 147 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 429 ​ ​ ​ ​ ​ 576 ​ ​ ​ ​ ​ 678,527 ​ ​ ​ ​ ​ 679,103 ​ ​
Multifamily
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 66,341 ​ ​ ​ ​ ​ 66,341 ​ ​
Commercial and
financial
​ ​ ​ ​ 720 ​ ​ ​ ​ ​ 3,815 ​ ​ ​ ​ ​ 3,447 ​ ​ ​ ​ ​ 7,982 ​ ​ ​ ​ ​ 420,024 ​ ​ ​ ​ ​ 428,006 ​ ​
Consumer
​ ​ ​ ​ — ​ ​ ​ ​ ​ 9 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 9 ​ ​ ​ ​ ​ 43,214 ​ ​ ​ ​ ​ 43,223 ​ ​
Total
​ ​ ​ $ 2,197 ​ ​ ​ ​ $ 3,948 ​ ​ ​ ​ $ 4,504 ​ ​ ​ ​ $ 10,649 ​ ​ ​ ​ $ 1,719,594 ​ ​ ​ ​ $ 1,730,243 ​ ​
 
F-16

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(4)
Loans (continued)
​
Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, and other-than-insignificant payment delay or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses.
In some cases, the Company may grant more than one type of modification on a single loan to a borrower experiencing financial difficulty; for example, a term extension may be granted initially and, if the borrower continues to experience financial difficulty, a subsequent modification such as principal forgiveness may be granted. The Company had loan balances of $0.8 million that were experiencing both financial difficulty and also modified during the six months ended June 30, 2026. There were no loans that were both experiencing financial difficulty and modified during the six months ended June 30, 2025.
The following tables present the amortized cost basis of loans on nonaccrual status and loans past due 90 days or more and still accruing at June 30, 2026 and December 31, 2025 (in thousands):
June 30, 2026:
​ ​
Nonaccrual
​ ​
Nonaccrual
Loans with no
Allowance For
Credit Losses
​ ​
Loans Past Due
90 Days or
More and
Accruing
​
Construction and land development
​ ​ ​ $ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Single-family residential
​ ​ ​ ​ 3,338 ​ ​ ​ ​ ​ 1,470 ​ ​ ​ ​ ​ — ​ ​
Commercial real estate
​ ​ ​ ​ 539 ​ ​ ​ ​ ​ 502 ​ ​ ​ ​ ​ — ​ ​
Commercial and financial
​ ​ ​ ​ 13,391 ​ ​ ​ ​ ​ 1,065 ​ ​ ​ ​ ​ — ​ ​
Consumer ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 39 ​ ​
Total loans
​ ​ ​ $ 17,268 ​ ​ ​ ​ ​ 3,037 ​ ​ ​ ​ ​ 39 ​ ​
December 31, 2025:
​ ​
Nonaccrual
​ ​
Nonaccrual
Loans with no
Allowance For
Credit Losses
​ ​
Loans Past Due
90 Days or
More and
Accruing
​
Construction and land development
​ ​ ​ $ 328 ​ ​ ​ ​ ​ 328 ​ ​ ​ ​ ​ — ​ ​
Single-family residential
​ ​ ​ ​ 2,359 ​ ​ ​ ​ ​ 516 ​ ​ ​ ​ ​ — ​ ​
Commercial real estate
​ ​ ​ ​ 577 ​ ​ ​ ​ ​ 565 ​ ​ ​ ​ ​ — ​ ​
Commercial and financial
​ ​ ​ ​ 11,410 ​ ​ ​ ​ ​ 467 ​ ​ ​ ​ ​ — ​ ​
Consumer
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total loans
​ ​ ​ $ 14,674 ​ ​ ​ ​ ​ 1,876 ​ ​ ​ ​ ​ — ​ ​
Interest income recognized on nonaccrual loans during the six months ended June 30, 2026 and 2025 was not material.
Loans that no longer share similar risk characteristics with the collectively evaluated pools are estimated on an individual basis. A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. The following tables present collateral-dependent loans held for investment by loan type at June 30, 2026 and December 31, 2025 (in thousands):
June 30, 2026:
​ ​
Balance
​ ​
Allowance
for Credit
Losses
​
Construction and land development
​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​
Single-family residential
​ ​ ​ ​ 1,891 ​ ​ ​ ​ ​ 218 ​ ​
Commercial real estate
​ ​ ​ ​ 1,562 ​ ​ ​ ​ ​ — ​ ​
Commercial and financial
​ ​ ​ ​ 17,429 ​ ​ ​ ​ ​ 2,292 ​ ​
Total
​ ​ ​ $ 20,882 ​ ​ ​ ​ $ 2,510 ​ ​
 
F-17

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(4)
Loans (continued)
​
December 31, 2025:
​ ​
Balance
​ ​
Allowance
for Credit
Losses
​
Construction and land development
​ ​ ​ $ 328 ​ ​ ​ ​ $ — ​ ​
Single-family residential
​ ​ ​ ​ 1,827 ​ ​ ​ ​ ​ — ​ ​
Commercial real estate
​ ​ ​ ​ 660 ​ ​ ​ ​ ​ — ​ ​
Commercial and financial
​ ​ ​ ​ 15,112 ​ ​ ​ ​ ​ 1,715 ​ ​
Total
​ ​ ​ $ 17,927 ​ ​ ​ ​ $ 1,715 ​ ​
Loan Grades:
The Company utilizes an internal risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of 1 to 9. These risk grades are evaluated on an ongoing basis. A description of the general characteristics of the nine risk grades is as follows:
•
Pass.   Loans rated Pass include those that are adequately collateralized performing loans which management believe do not have conditions that have occurred or may occur that would result in the loan being downgraded into an inferior category. The Pass category also includes loans rated as Watch, which include those that management believes have conditions that have occurred, or may occur, which could result in the loan being downgraded to an inferior category.
​
•
Special Mention.   A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan, or in the Company’s credit position at some future date. Loans graded special mention may require resolution of specific lending events before the associated risk can be adequately evaluated.
​
•
Substandard.   A substandard loan is inadequately protected by the net worth and cash flow capacity of the borrower or of the collateral pledged. Loans so classified must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.
​
•
Doubtful.   Loans classified as doubtful are inadequately protected by the net worth of the borrower or the collateral pledged and repayment in full is improbable based on existing facts, values, and conditions. The possibility of loss is high, but because of certain important and reasonably specific pending factors which may work to the advantage and strengthening of the facility, its classification as an estimated loss is deferred until its more exact status may be determined. These loans are considered classified, as value is impaired. A full or partial reserve is warranted. Because of the high probability of loss, nonaccrual accounting treatment is required.
​
•
Loss.   Loans classified as loss are considered uncollectible and continuance as an acceptable asset is not warranted. This classification does not mean that the credit has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this asset even though partial recovery may be affected in the future. These loans are considered classified. Because of the high probability of loss, nonaccrual accounting treatment is required. Losses are to be recorded in the period an obligation becomes uncollectable.
​
The following tables present the loan portfolio’s amortized cost by class of financing receivable, risk grade and year of origination (in thousands). Generally, current period renewals of credit are underwritten again at the point of renewal and considered current period originations for purposes of the table below. The Company had an immaterial amount of revolving loans which converted to term loans and the amortized cost basis of those loans is included in the applicable origination year. There were no loans risk graded doubtful or loss at June 30, 2026 and December 31, 2025.
 
F-18

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(4)
Loans (continued)
​
Term Loans by Origination Year
As of June 30, 2026
​ ​
2026
​ ​
2025
​ ​
2024
​ ​
2023
​ ​
2022
​ ​
Prior
​ ​
Revolving
Loans
Amortized
Cost Basis
​ ​
Total
​
Construction and land development ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 79,085 ​ ​ ​ ​ ​ 103,223 ​ ​ ​ ​ ​ 45,810 ​ ​ ​ ​ ​ 1,741 ​ ​ ​ ​ ​ 1,761 ​ ​ ​ ​ ​ 1,577 ​ ​ ​ ​ ​ 36,458 ​ ​ ​ ​ ​ 269,655 ​ ​
Special Mention
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Substandard
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Construction and land development
​ ​ ​ ​ 79,085 ​ ​ ​ ​ ​ 103,223 ​ ​ ​ ​ ​ 45,810 ​ ​ ​ ​ ​ 1,741 ​ ​ ​ ​ ​ 1,761 ​ ​ ​ ​ ​ 1,577 ​ ​ ​ ​ ​ 36,458 ​ ​ ​ ​ ​ 269,655 ​ ​
2026 gross charge-offs
​ ​ ​
​
—
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Single-family residential ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 51,267 ​ ​ ​ ​ ​ 56,870 ​ ​ ​ ​ ​ 81,732 ​ ​ ​ ​ ​ 28,578 ​ ​ ​ ​ ​ 34,848 ​ ​ ​ ​ ​ 73,567 ​ ​ ​ ​ ​ 17,577 ​ ​ ​ ​ ​ 344,439 ​ ​
Special Mention
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 44 ​ ​ ​ ​ ​ 220 ​ ​ ​ ​ ​ 59 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 323 ​ ​
Substandard
​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,898 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 342 ​ ​ ​ ​ ​ 325 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 3,565 ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Single-family residential
​ ​ ​ ​ 51,267 ​ ​ ​ ​ ​ 59,768 ​ ​ ​ ​ ​ 81,732 ​ ​ ​ ​ ​ 28,622 ​ ​ ​ ​ ​ 35,410 ​ ​ ​ ​ ​ 73,951 ​ ​ ​ ​ ​ 17,577 ​ ​ ​ ​ ​ 348,327 ​ ​
Gross Charge-Offs
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Commercial real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 238,604 ​ ​ ​ ​ ​ 204,167 ​ ​ ​ ​ ​ 131,323 ​ ​ ​ ​ ​ 69,817 ​ ​ ​ ​ ​ 95,688 ​ ​ ​ ​ ​ 120,171 ​ ​ ​ ​ ​ 11,962 ​ ​ ​ ​ ​ 871,732 ​ ​
Special Mention
​ ​ ​ ​ — ​ ​ ​ ​ ​ 11,583 ​ ​ ​ ​ ​ 8,058 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 19,641 ​ ​
Substandard
​ ​ ​ ​ — ​ ​ ​ ​ ​ 375 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 259 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 634 ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Commercial real estate
​ ​ ​ ​ 238,604 ​ ​ ​ ​ ​ 216,125 ​ ​ ​ ​ ​ 139,381 ​ ​ ​ ​ ​ 69,817 ​ ​ ​ ​ ​ 95,688 ​ ​ ​ ​ ​ 120,430 ​ ​ ​ ​ ​ 11,962 ​ ​ ​ ​ ​ 892,007 ​ ​
Gross charge-offs
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Multifamily ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 7,939 ​ ​ ​ ​ ​ 6,277 ​ ​ ​ ​ ​ 36,768 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,898 ​ ​ ​ ​ ​ 14,530 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 70,412 ​ ​
Special Mention
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Substandard
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Multifamily
​ ​ ​ ​ 7,939 ​ ​ ​ ​ ​ 6,277 ​ ​ ​ ​ ​ 36,768 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,898 ​ ​ ​ ​ ​ 14,530 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 70,412 ​ ​
Gross charge-offs
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Commercial and financial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 44,848 ​ ​ ​ ​ ​ 112,023 ​ ​ ​ ​ ​ 28,980 ​ ​ ​ ​ ​ 23,787 ​ ​ ​ ​ ​ 22,216 ​ ​ ​ ​ ​ 11,213 ​ ​ ​ ​ ​ 189,544 ​ ​ ​ ​ ​ 432,611 ​ ​
Special Mention
​ ​ ​ ​ 620 ​ ​ ​ ​ ​ 3,760 ​ ​ ​ ​ ​ 78 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 228 ​ ​ ​ ​ ​ 2,050 ​ ​ ​ ​ ​ 6,736 ​ ​
Substandard
​ ​ ​ ​ 2,501 ​ ​ ​ ​ ​ 5,453 ​ ​ ​ ​ ​ 1,669 ​ ​ ​ ​ ​ 268 ​ ​ ​ ​ ​ 925 ​ ​ ​ ​ ​ 9,601 ​ ​ ​ ​ ​ 504 ​ ​ ​ ​ ​ 20,921 ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Commercial and financial
​ ​ ​ ​ 47,969 ​ ​ ​ ​ ​ 121,236 ​ ​ ​ ​ ​ 30,727 ​ ​ ​ ​ ​ 24,055 ​ ​ ​ ​ ​ 23,141 ​ ​ ​ ​ ​ 21,042 ​ ​ ​ ​ ​ 192,098 ​ ​ ​ ​ ​ 460,268 ​ ​
 
F-19

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(4)
Loans (continued)
​
Term Loans by Origination Year
As of June 30, 2026
​ ​
2026
​ ​
2025
​ ​
2024
​ ​
2023
​ ​
2022
​ ​
Prior
​ ​
Revolving
Loans
Amortized
Cost Basis
​ ​
Total
​
Gross charge-offs
​ ​ ​
​
—
​ ​ ​ ​ ​ 912 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 96 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,008 ​ ​
Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 19,827 ​ ​ ​ ​ ​ 14,235 ​ ​ ​ ​ ​ 1,377 ​ ​ ​ ​ ​ 107 ​ ​ ​ ​ ​ 37 ​ ​ ​ ​ ​ 18,986 ​ ​ ​ ​ ​ 275 ​ ​ ​ ​ ​ 54,844 ​ ​
Special Mention
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Substandard
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Consumer
​ ​ ​ ​  19,827 ​ ​ ​ ​ ​  14,235 ​ ​ ​ ​ ​   1,377 ​ ​ ​ ​ ​    107 ​ ​ ​ ​ ​ 37 ​ ​ ​ ​ ​  18,986 ​ ​ ​ ​ ​ 275 ​ ​ ​ ​ ​  54,844 ​ ​
Gross charge-offs
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Term Loans by Origination Year
As of December 31, 2025
​ ​
2025
​ ​
2024
​ ​
2023
​ ​
2022
​ ​
2021
​ ​
Prior
​ ​
Revolving
Loans
Amortized
Cost Basis
​ ​
Total
​
Construction and land development ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 160,577 ​ ​ ​ ​ ​ 64,593 ​ ​ ​ ​ ​ 4,669 ​ ​ ​ ​ ​ 269 ​ ​ ​ ​ ​ 91 ​ ​ ​ ​ ​ 87 ​ ​ ​ ​ ​ 6,237 ​ ​ ​ ​ ​ 236,523 ​ ​
Special Mention
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Substandard
​ ​ ​ ​ — ​ ​ ​ ​ ​ 328 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 328 ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Construction and land development
​ ​ ​ ​ 160,577 ​ ​ ​ ​ ​ 64,921 ​ ​ ​ ​ ​ 4,669 ​ ​ ​ ​ ​ 269 ​ ​ ​ ​ ​ 91 ​ ​ ​ ​ ​ 87 ​ ​ ​ ​ ​ 6,237 ​ ​ ​ ​ ​ 236,851 ​ ​
Gross charge-offs
​ ​ ​
​
—
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 59 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 59 ​ ​
Single-family residential ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 52,712 ​ ​ ​ ​ ​ 83,281 ​ ​ ​ ​ ​ 29,243 ​ ​ ​ ​ ​ 33,681 ​ ​ ​ ​ ​ 67,126 ​ ​ ​ ​ ​ 4,715 ​ ​ ​ ​ ​ 2,083 ​ ​ ​ ​ ​ 272,841 ​ ​
Special Mention
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 29 ​ ​ ​ ​ ​ 88 ​ ​ ​ ​ ​ 58 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 175 ​ ​
Substandard
​ ​ ​ ​ 2,958 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 399 ​ ​ ​ ​ ​ 30 ​ ​ ​ ​ ​ 316 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 3,703 ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Single-family residential
​ ​ ​ ​ 55,670 ​ ​ ​ ​ ​ 83,281 ​ ​ ​ ​ ​ 29,272 ​ ​ ​ ​ ​ 34,168 ​ ​ ​ ​ ​ 67,214 ​ ​ ​ ​ ​ 5,031 ​ ​ ​ ​ ​ 2,083 ​ ​ ​ ​ ​ 276,719 ​ ​
Gross charge-offs
​ ​ ​
​
—
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 75 ​ ​ ​ ​ ​ 109 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 184 ​ ​
Commercial Real Estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 220,125 ​ ​ ​ ​ ​ 132,715 ​ ​ ​ ​ ​ 78,279 ​ ​ ​ ​ ​ 73,280 ​ ​ ​ ​ ​ 137,526 ​ ​ ​ ​ ​ 24,579 ​ ​ ​ ​ ​ 3,872 ​ ​ ​ ​ ​ 670,376 ​ ​
Special Mention
​ ​ ​ ​ — ​ ​ ​ ​ ​ 8,055 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 8,055 ​ ​
Substandard
​ ​ ​ ​ 417 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 255 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 672 ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Commercial Real Estate
​ ​ ​ ​ 220,542 ​ ​ ​ ​ ​ 140,770 ​ ​ ​ ​ ​ 78,279 ​ ​ ​ ​ ​ 73,280 ​ ​ ​ ​ ​ 137,526 ​ ​ ​ ​ ​ 24,834 ​ ​ ​ ​ ​ 3,872 ​ ​ ​ ​ ​ 679,103 ​ ​
Gross charge-offs
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
 
F-20

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(4)
Loans (continued)
​
Term Loans by Origination Year
As of December 31, 2025
​ ​
2025
​ ​
2024
​ ​
2023
​ ​
2022
​ ​
2021
​ ​
Prior
​ ​
Revolving
Loans
Amortized
Cost Basis
​ ​
Total
​
Multifamily ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 9,545 ​ ​ ​ ​ ​ 29,332 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 14,279 ​ ​ ​ ​ ​ 13,185 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 66,341 ​ ​
Special Mention
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Substandard
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Multifamily
​ ​ ​ ​ 9,545 ​ ​ ​ ​ ​ 29,332 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 14,279 ​ ​ ​ ​ ​ 13,185 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 66,341 ​ ​
Gross charge-offs
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Commercial and financial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 123,805 ​ ​ ​ ​ ​ 34,517 ​ ​ ​ ​ ​ 23,596 ​ ​ ​ ​ ​ 23,667 ​ ​ ​ ​ ​ 10,760 ​ ​ ​ ​ ​ 1,775 ​ ​ ​ ​ ​ 185,744 ​ ​ ​ ​ ​ 403,864 ​ ​
Special Mention
​ ​ ​ ​ 4,276 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 181 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 335 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,792 ​ ​
Substandard
​ ​ ​ ​ 1,894 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 321 ​ ​ ​ ​ ​ 4,766 ​ ​ ​ ​ ​ 7,041 ​ ​ ​ ​ ​ 1,329 ​ ​ ​ ​ ​ 3,999 ​ ​ ​ ​ ​ 19,350 ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Commercial and financial
​ ​ ​ ​ 129,975 ​ ​ ​ ​ ​ 34,517 ​ ​ ​ ​ ​ 24,098 ​ ​ ​ ​ ​ 28,433 ​ ​ ​ ​ ​ 17,801 ​ ​ ​ ​ ​ 3,439 ​ ​ ​ ​ ​ 189,743 ​ ​ ​ ​ ​ 428,006 ​ ​
Gross charge-offs
​ ​ ​
​
—
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 762 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 762 ​ ​
Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 21,755 ​ ​ ​ ​ ​ 1,956 ​ ​ ​ ​ ​ 131 ​ ​ ​ ​ ​ 50 ​ ​ ​ ​ ​ 19,324 ​ ​ ​ ​ ​ 7 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 43,223 ​ ​
Special Mention
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Substandard
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Consumer
​ ​ ​ ​ 21,755 ​ ​ ​ ​ ​ 1,956 ​ ​ ​ ​ ​ 131 ​ ​ ​ ​ ​ 50 ​ ​ ​ ​ ​ 19,324 ​ ​ ​ ​ ​ 7 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 43,223 ​ ​
Gross charge-offs
​ ​ ​ ​ — ​ ​ ​ ​ ​ 12 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 12 ​ ​
 
F-21

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(5)
Allowance for Credit Losses
​
Changes in the allowance for credit losses (“ACL”) for the six months ended June 30, 2026 and 2025 were as follows (in thousands):
June 30, 2026:
​ ​
Construction
and Land
Development
​ ​
Single-
Family
Residential
​ ​
Commercial
Real Estate
​ ​
Multifamily
​ ​
Commercial
and
Financial
​ ​
Consumer
​ ​
Total
​
Allowance for credit losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Beginning balance
​ ​ ​ $ 4,496 ​ ​ ​ ​ $ 7,048 ​ ​ ​ ​ $ 4,453 ​ ​ ​ ​ $ 514 ​ ​ ​ ​ $ 8,607 ​ ​ ​ ​ $ 456 ​ ​ ​ ​ $ 25,574 ​ ​
Provision for credit
losses
​ ​ ​ ​ (558) ​ ​ ​ ​ ​ 642 ​ ​ ​ ​ ​ 144 ​ ​ ​ ​ ​ (123) ​ ​ ​ ​ ​ 1,250 ​ ​ ​ ​ ​ (251) ​ ​ ​ ​ ​ 1,104 ​ ​
Initial ACL on seasoned loans
​ ​ ​ ​ 183 ​ ​ ​ ​ ​ 116 ​ ​ ​ ​ ​ 591 ​ ​ ​ ​ ​ 5 ​ ​ ​ ​ ​ 498 ​ ​ ​ ​ ​ 4 ​ ​ ​ ​ ​ 1,397 ​ ​
Initial ACL on PCD
loans
​ ​ ​ ​ 73 ​ ​ ​ ​ ​ 507 ​ ​ ​ ​ ​ 60 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,217 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,857 ​ ​
Charge-offs
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (1,008) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (1,008) ​ ​
Recoveries
​ ​ ​ ​ 7 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 24 ​ ​ ​ ​ ​ 31 ​ ​
Ending balance
​ ​ ​ $ 4,200 ​ ​ ​ ​ $ 8,313 ​ ​ ​ ​ $ 5,248 ​ ​ ​ ​ $ 396 ​ ​ ​ ​ $ 10,565 ​ ​ ​ ​ $ 233 ​ ​ ​ ​ $ 28,955 ​ ​
June 30, 2025:
​ ​
Construction
and Land
Development
​ ​
Single-
Family
Residential
​ ​
Commercial
Real Estate
​ ​
Multifamily
​ ​
Commercial
and
Financial
​ ​
Consumer
​ ​
Total
​
Allowance for credit losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Beginning balance
​ ​ ​ $ 2,817 ​ ​ ​ ​ $ 6,854 ​ ​ ​ ​ $ 4,014 ​ ​ ​ ​ $ 698 ​ ​ ​ ​ $ 5,456 ​ ​ ​ ​ $ 761 ​ ​ ​ ​ $ 20,600 ​ ​
Provision for credit
losses
​ ​ ​ ​ 1,140 ​ ​ ​ ​ ​ 99 ​ ​ ​ ​ ​ 575 ​ ​ ​ ​ ​ (279) ​ ​ ​ ​ ​ 1,512 ​ ​ ​ ​ ​ 124 ​ ​ ​ ​ ​ 3,171 ​ ​
Initial ACL on PCD
loans
​ ​ ​ ​ — ​ ​ ​ ​ ​ 135 ​ ​ ​ ​ ​ 7 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,221 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,363 ​ ​
Charge-offs
​ ​ ​ ​ (59) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (59) ​ ​
Recoveries
​ ​ ​ ​ — ​ ​ ​ ​ ​ 2 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 14 ​ ​ ​ ​ ​ 1 ​ ​ ​ ​ ​ 17 ​ ​
Ending balance
​ ​ ​ $ 3,898 ​ ​ ​ ​ $ 7,090 ​ ​ ​ ​ $ 4,596 ​ ​ ​ ​ $ 419 ​ ​ ​ ​ $ 8,203 ​ ​ ​ ​ $ 886 ​ ​ ​ ​ $ 25,092 ​ ​
The Company maintains an ACL for credit losses on unfunded commercial lending commitments and letters of credit to consider the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the ACL for loans, modified to consider the probability of a drawdown on the commitment. The ACL on unfunded loan commitments is classified as a liability on the condensed consolidated balance sheets within other liabilities, while the corresponding provision for these credit losses is recorded as a component of provision for credit losses. The reserve for unfunded loan commitments was $2,090,000 and $986,000 as of June 30, 2026 and December 31, 2025, respectively.
 
F-22

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(6)
Premises and Equipment
​
Premises and equipment are summarized as follows as of June 30, 2026 and December 31, 2025 (in thousands):
​ ​ ​
2026
​ ​
2025
​
Land
​ ​ ​ $ 4,320 ​ ​ ​ ​ $ 4,320 ​ ​
Buildings
​ ​ ​ ​ 6,204 ​ ​ ​ ​ ​ 6,204 ​ ​
Furniture, fixtures and equipment
​ ​ ​ ​ 8,657 ​ ​ ​ ​ ​ 8,390 ​ ​
Leasehold improvements
​ ​ ​ ​ 9,012 ​ ​ ​ ​ ​ 8,886 ​ ​
​ ​ ​ ​ ​ 28,193 ​ ​ ​ ​ ​ 27,800 ​ ​
Less: Accumulated depreciation
​ ​ ​ ​ (10,240) ​ ​ ​ ​ ​ (9,250) ​ ​
​ ​ ​ ​ $ 17,953 ​ ​ ​ ​ $ 18,550 ​ ​
Depreciation expense was $1.0 million and $1.1 million for the six months ended June 30, 2026 and 2025, respectively.
(7)
Leases
​
The Company leases space under non-cancelable operating leases for several of its banking offices.
Supplemental balance sheet information related to operating leases at June 30, 2026 and December 31, 2025 are as follows (in thousands):
​ ​ ​
2026
​ ​
2025
​
Operating lease right of use assets
​ ​ ​ $ 36,808 ​ ​ ​ ​ $ 36,578 ​ ​
Operating lease liabilities
​ ​ ​ $ 38,470 ​ ​ ​ ​ $ 38,071 ​ ​
Weighted average remaining lease term (years)
​ ​ ​ ​ 12.72 ​ ​ ​ ​ ​ 12.77 ​ ​
Weighted average discount rate
​ ​ ​ ​ 4.13% ​ ​ ​ ​ ​ 4.03% ​ ​
Operating lease expense was $2.2 million and $2.4 million for the six months ended June 30, 2026 and 2025, respectively. Sublease income offsetting operating lease expense was $269,000 and $69,000 for the six months ended June 30, 2026 and 2025, respectively. Variable rent expense and short-term lease expense were not material for the six months ended June 30, 2026 and 2025.
(8)
Goodwill and Other Intangible Assets
​
The carrying amount of goodwill and other intangible assets at June 30, 2026 and December 31, 2025 is summarized below (in thousands):
​ ​ ​
2026
​ ​
2025
​
Core deposit intangible
​ ​ ​ $ 11,342 ​ ​ ​ ​ $ 6,170 ​ ​
Less: accumulated amortization
​ ​ ​ ​ (865) ​ ​ ​ ​ ​ (514) ​ ​
Net core deposit intangible
​ ​ ​ ​ 10,477 ​ ​ ​ ​ ​ 5,656 ​ ​
Goodwill
​ ​ ​ ​ 9,732 ​ ​ ​ ​ ​ 4,809 ​ ​
Total goodwill and other intangible assets, net
​ ​ ​ $ 20,209 ​ ​ ​ ​ $ 10,465 ​ ​
 
F-23

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(9)
Deposits
​
Deposits at June 30, 2026 and December 31, 2025 were as follows (in thousands):
​ ​ ​
2026
​ ​
2025
​
Noninterest-bearing demand deposits
​ ​ ​ $ 667,359 ​ ​ ​ ​ $ 617,388 ​ ​
Interest-bearing demand deposits
​ ​ ​ ​ 402,874 ​ ​ ​ ​ ​ 344,982 ​ ​
Money market and savings deposits
​ ​ ​ ​ 1,078,437 ​ ​ ​ ​ ​ 727,623 ​ ​
Time deposits
​ ​ ​ ​ 689,952 ​ ​ ​ ​ ​ 669,692 ​ ​
​ ​ ​ ​ $ 2,838,622 ​ ​ ​ ​ $ 2,359,685 ​ ​
Time deposits that meet or exceed FDIC insurance limit of $250,000 at June 30, 2026 and December 31, 2025 were $294.2 million and $225.8 million, respectively. The Company had brokered deposits of $131.3 million and $202.7 million at June 30, 2026 and December 31, 2025, respectively. The brokered deposits had a weighted average interest rate of 4.02% and 4.05% at June 30, 2026 and December 31, 2025, respectively.
(10)
Federal Home Loan Bank (“FHLB”) Advances
​
At June 30, 2026 and December 31, 2025, the Company had no outstanding borrowings with the FHLB.
The advances from the FHLB are collateralized by a blanket lien on all eligible first mortgage loans and other specific loans in addition to FHLB stock.
Loans totaling approximately $1.8 billion and $1.5 billion were pledged as collateral to the FHLB at June 30, 2026 and December 31, 2025, respectively, with lendable collateral of $324.6 million and $210.5 million for the same periods.
At both June 30, 2026 and December 31, 2025, there were no securities pledged as additional lendable collateral with the FHLB.
(11)
Subordinated Notes
​
On May 7, 2021, the Company completed the offering and sale of $55.0 million in aggregate principal amount of its 4.125% fixed-to-floating rate subordinated notes due 2031. The subordinated notes are scheduled to mature on June 15, 2031, and through June 15, 2026, bear a fixed rate of interest of 4.125% per annum, payable semi-annually in arrears on June 15 and December 15 of each year. Beginning June 15, 2026, the interest rate on the subordinated notes will reset quarterly to a floating rate per annum equal to the then-current three-month SOFR plus 3.40%, payable quarterly in arrears on March 15, June 15, September 15, and December 15 of each year up to the maturity date or redemption. Beginning June 15, 2026, the Company may, at its option and with proper notice provided, redeem the subordinated notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest. The debt issuance costs of $1.2 million were netted with proceeds and are being amortized over the term until the redemption date of the notes. Approximately $82,000 and $123,000 of debt issuance costs were amortized during the six months ended June 30, 2026 and 2025, respectively, with approximately $0 and $82,000 of unamortized debt issuance costs remaining at June 30, 2026 and December 31, 2025, respectively.
In March 2025, as the result of the PBC acquisition, GBC assumed $10.0 million in fixed-to-floating rate subordinated notes due 2031. A discount of $1.0 million was recorded as part of the acquisition for a fair value of $9.0 million on the subordinated notes. At June 30, 2026 and December 31, 2025, the remaining discount on the subordinated notes was $778,000 and $919,000, respectively. The subordinated notes are scheduled to mature on October 6, 2031, and through October 6, 2026, bear a fixed rate of interest of 3.75% per annum, payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year. Beginning October 6, 2026, the interest rate on the subordinated notes will reset quarterly to a floating rate per annum equal to the then-current three-month SOFR plus 2.88%, payable quarterly in arrears on March 31, June 30, September 30, and December 31 of each year up to the maturity date or redemption. Beginning October 6, 2026, the Company may, at its option and with proper notice provided, redeem the subordinated notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest.
 
F-24

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(11)
Subordinated Notes (continued)
​
In June 2026, as the result of the Tandem acquisition, GBC assumed $12.0 million of subordinated notes maturing on July 30, 2035. A discount of $67 thousand was recorded as part of the acquisition for a fair value of $11.9 million on the subordinated notes. At June 30, 2026, the remaining discount on the subordinated notes was $66,000. Interest payments are due January 30 and July 30 of each year at a fixed interest rate of 8.0% through July 30, 2030, at which time the interest rate becomes variable and payable quarterly based on the three-month SOFR rate plus 443 basis points until July 30, 2035, when all principal and interest outstanding are due. The Company may not prepay these subordinated notes during the fixed interest rate period. Prepayments may be made at any time after the fixed interest rate period ends without penalty.
(12)
Junior Subordinated Debentures
​
On April 15, 2005, the Company issued, through a wholly owned Delaware statutory trust, Georgia Banking Statutory Trust I (the “Trust”), $7.0 million of preferred beneficial interests in the Company’s unsecured junior subordinated debentures (trust preferred securities) that qualify as Tier I capital under Federal Reserve Board guidelines within certain limitations. The Company owns all the common securities of the Trust. The proceeds from the issuance of the common securities and the trust preferred securities were used by the Trust to purchase $7.2 million of junior subordinated debentures of the Company, which carry a floating rate of interest equal to the 3-month SOFR plus 2.00%. This rate was 5.93% and 5.98% at June 30, 2026 and December 31, 2025. The proceeds received by the Company from the sale of the junior subordinated debentures were used to strengthen the capital position of the Company and to accommodate current and future growth. The debentures and related accrued interest represent the sole assets of the Trust.
The Company’s trust preferred securities accrue and pay quarterly distributions at an interest rate equal to the three-month SOFR plus 26 basis points tenor spread plus a 2.00% credit spread per annum of the stated liquidation value of $1,000 per capital security. The Company entered contractual arrangements which, taken collectively, fully and unconditionally guarantee payment of accrued and unpaid distributions required to be paid on the trust preferred securities, the redemption price with respect to any trust preferred securities called for redemption by the Trust, and payments due upon a voluntary or involuntary dissolution, winding up, or liquidation of the Trust.
The trust preferred securities are mandatorily redeemable upon maturity of the debentures on April 15, 2035, or upon earlier redemption of the debentures as provided in the indenture. The Company has the right to redeem the debentures purchased by the Trust in whole or in part. As specified in the indenture, if the debentures are redeemed prior to maturity, the redemption price will be the unpaid principal amount and any accrued but unpaid interest. The Trust document provides the Company, upon notification to the trustee, may elect to defer quarterly interest payments for a period as established in the Trust.
(13)
Related Party Transactions
​
In the ordinary course of business, the Company has granted loans to certain executive officers, directors and their affiliates. These loans are made on substantially the same terms as those prevailing at the time for comparable transactions and do not involve more than normal credit risk. Changes in related party loans at June 30, 2026 and December 31, 2025 are summarized as follows (in thousands):
​ ​ ​
2026
​ ​
2025
​
Balance at beginning of year
​ ​ ​ $ 1,839 ​ ​ ​ ​ $ 868 ​ ​
New loans and advances
​ ​ ​ ​ 7 ​ ​ ​ ​ ​ 508 ​ ​
Repayments
​ ​ ​ ​ (320) ​ ​ ​ ​ ​ (349) ​ ​
Effect of changes in composition of related parties
​ ​ ​ ​ — ​ ​ ​ ​ ​ 812 ​ ​
Balance at end of period
​ ​ ​ $ 1,526 ​ ​ ​ ​ $ 1,839 ​ ​
Deposits with related parties were $25.4 million and $21.1 million at June 30, 2026 and December 31, 2025, respectively.
In 2023, the Bank entered into a lease agreement for a branch and sales offices involving a property in which two related parties held ownership interests. The lease requires total payments of approximately $34.1 million over a 20-year lease term,
 
F-25

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(13)
Related Party Transactions (continued)
​
with remaining undiscounted lease payments of $30.4 million and $31.0 million at June 30, 2026 and December 31, 2025, respectively.
(14)
Employee Benefit and Stock Plans
​
Profit Sharing Plan
The Company has a contributory 401(k) profit sharing plan covering substantially all employees. The contributions to the plan are at the discretion of the Company’s Board of Directors. Contributions are equal to 100% of employee deferrals up to 3% and 50% of employee deferrals up to 5%. The Company recognized 401(k) expenses of approximately $548,000 and $456,000 for the six months ended June 30, 2026 and 2025, respectively.
Supplemental Executive Retirement Plan (“SERP”)
The SERP was created to provide additional benefits to retired executive officers whereby these benefits are currently being paid over a twelve-year period, applicable to each officer’s retirement date. A SERP liability is recorded which recognizes the remaining obligation of the Company to the former executives. For the six months ended June 30, 2026 and 2025, these postretirement benefit plan expenses were $20,000 and $23,000, respectively. The accrued SERP liability totaled $1.0 million and $1.1 million at June 30, 2026 and December 31, 2025, respectively and reported in accrued interest and other liabilities on the condensed consolidated balance sheets.
The Company has purchased and is the beneficiary of life insurance policies on certain key officers. The Company intends to use these policies to partially fund the supplemental executive retirement plan described herein. Income related to life insurance policies totaled approximately $460,000 and $433,000 for the six months ended June 30, 2026 and 2025, respectively. The carrying value of the policies recorded was approximately $35.8 million and $31.0 million at June 30, 2026 and December 31, 2025, respectively.
Stock Incentive Plan
During 2021, the Company implemented the “2021 Stock Incentive Plan” ​(the “Plan”) which allows for the grant of share-based awards to officers, directors and employees as approved. An aggregate of 625,000 shares has been reserved for issuance under the Plan. At June 30, 2026 and December 31, 2025, outstanding restricted shares granted under the Plan as compensation to certain employees were 128,349 and 121,170, respectively. The restriction period for the shares is one to four years from the date of grant which is based on service. Shares issued under the Plan are recorded at the fair value on the date of grant. The compensation expense is recognized on a straight-line basis over the related vesting period. Compensation expense was approximately $0.6 million and $0.8 million for the six months ended June 30, 2026 and June 30, 2025, respectively. During the six months ended June 30, 2026, 11,407 shares worth approximately $342,000 were surrendered for grantees to satisfy tax obligations related to the vesting of these grants during the period. During the six months ended June 30, 2025, 24,550 shares worth approximately $565,000 were surrendered for grantees to satisfy tax obligations related to the vesting of these grants during the period. Unrecognized compensation expense on grants totaled approximately $2.5 million and $1.9 million as of June 30, 2026 and December 31, 2025, respectively.
The following table summarizes the activity of the Company’s restricted stock awards.
​ ​ ​
Shares
​ ​
Weighted Average
Grant Date Fair
Value
​
Outstanding, December 31, 2025
​ ​ ​ ​ 121,170 ​ ​ ​ ​ $ 22.40 ​ ​
Granted
​ ​ ​ ​ 53,285 ​ ​ ​ ​ $ 30.00 ​ ​
Vested
​ ​ ​ ​ (34,699) ​ ​ ​ ​ $ 24.12 ​ ​
Forfeited
​ ​ ​ ​ (11,407) ​ ​ ​ ​ $ 24.16 ​ ​
Outstanding, June 30, 2026
​ ​ ​ ​ 128,349 ​ ​ ​ ​ $ 25.81 ​ ​
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(14)
Employee Benefit and Stock Plans (continued)
​
The Company’s stock option activity is summarized below.
​ ​ ​
Shares
​ ​
Weighted Average
Exercise Price
​ ​
Weighted
Average
Remaining Life
(Years)
​
Outstanding, December 31, 2025
​ ​ ​ ​ 98,844 ​ ​ ​ ​ $ 12.70 ​ ​ ​ ​ ​ 3.97 ​ ​
Granted
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Exercise of stock options
​ ​ ​ ​ (17,247) ​ ​ ​ ​ ​ 8.09 ​ ​ ​ ​ ​ ​ ​ ​
Rollover options
​ ​ ​ ​ 87,246 ​ ​ ​ ​ ​ 20.95 ​ ​ ​ ​ ​ ​ ​ ​
Forfeited
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Outstanding, June 30, 2026
​ ​ ​ ​ 168,843 ​ ​ ​ ​ $ 18.55 ​ ​ ​ ​ ​ 4.04 ​ ​
The fair value of each option granted was estimated on the date of grant using the Black-Scholes model. Compensation expense related to the options for the six months ended June 30, 2026 and 2025 was not material.
Options granted under the plan vest over a three-year period and have a five-year maximum term. Subject to any committee discretion to accelerate vesting of the options granted, the options shall vest and become exercisable as of each vesting date provided the grantee has not incurred a termination of service prior to such vesting date. There is no proportionate or partial vesting in the periods prior to each vesting date and all vesting shall occur only on the appropriate vesting date, subject to the grantee’s continued employment or service with the Company. Upon expiration of the option, the option shall be cancelled and no longer exercisable.
Deferred Compensation Plan
The Company began offering a non-qualified deferred compensation plan during 2021 for certain officers and members of the Company’s Board of Directors. The deferred compensation plan provides for the pre-tax deferral of compensation, fees, and other specified benefits and permits each employee participant to elect to defer a portion of their base salary, bonus, or commission and permits each director participant to elect to defer all or a portion of their director’s fees.
Further, the deferred compensation plan allows for a discretionary Company match to any deferred bonus allocated to a fund that tracks the performance of the Company’s stock (the “Company Stock Fund”). Deferred bonuses vest ratably over five years while the Company’s match cliff vests on the fifth anniversary of the grant date. All transactions tied to stock between the Company and the deferred compensation plan are at a stock price obtained from an independent valuation. The Board of Directors may also elect to make a discretionary contribution to any or all participants. At June 30, 2026 and December 31, 2025, assets related to the deferred compensation plan totaled $5.0 million and $4.4 million, respectively, and are included in accrued interest and other assets on the condensed consolidated balance sheets. At June 30, 2026 and December 31, 2025, liabilities related to the deferred compensation plan totaled $13.2 million and $11.4 million, respectively, and are included in accrued interest and other liabilities on the condensed consolidated balance sheets. During the six months ended June 30, 2026 and 2025, revenues of $0.4 million and $0.5 million, respectively, were recognized and included in other noninterest income in the condensed consolidated statements of income along with expenses of $1.9 million and $1.9 million, respectively, that were included in salaries and employee benefits in the condensed consolidated statements of income.
(15)
Commitments and Contingencies
​
The Company is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of their customers. These financial instruments include commitments to extend credit and letters of credit. These instruments involve, to varying degrees, elements of credit risk more than the amount recognized in the balance sheet. The notional contract amounts of these instruments reflect the extent of involvement the Company has in particular classes of financial instruments.
The exposure to credit loss in the event of nonperformance by the counter party for commitments to extend credit and letters of credit written is represented by the contractual or notional amount of these instruments. The Company uses the same
 
F-27

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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(15)
Commitments and Contingencies (continued)
​
credit policies in making commitments and conditional obligations as it uses for underwriting on-balance sheet instruments. In most cases, collateral or other security is required to support financial instruments with a credit risk.
The following table summarizes the contract amount of off-balance sheet instruments at June 30, 2026 and December 31, 2025 (in thousands):
​ ​ ​
2026
​ ​
2025
​
Financial instruments whose contract amounts represent credit risk: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Commitments to extend credit
​ ​ ​ $ 481,518 ​ ​ ​ ​ $ 388,867 ​ ​
Financial and performance letters of credit
​ ​ ​ ​ 5,558 ​ ​ ​ ​ ​ 5,533 ​ ​
​ ​ ​ ​ $ 487,076 ​ ​ ​ ​ $ 394,400 ​ ​
Commitments to extend credit are arrangements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments may expire without being drawn on, the total commitment amounts do not necessarily represent future cash requirements. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment. The amount of collateral obtained, if deemed necessary, upon extension of credit is based on management’s credit evaluation. Collateral held varies, but may include unimproved and improved real estate, certificates of deposit, personal property or other acceptable collateral.
Commercial letters of credit are issued to facilitate commerce and typically result in the commitment being drawn on when the underlying transaction is consummated between the customer and the third party. Those guarantees are primarily issued to local businesses. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company holds real estate, certificates of deposit, and other acceptable collateral as security supporting those commitments for which collateral is deemed necessary. The extent of collateral held for those commitments varies.
As of June 30, 2026, the Bank maintained credit arrangements with various financial institutions to purchase federal funds up to $60 million. The Bank has completed eligibility requirements to participate in the Federal Reserve discount window borrowings program. At June 30, 2026 and December 31, 2025, the Company had $561.3 million and $555.1 million, respectively, in loans pledged at the Federal Reserve discount window and $471.1 million and $478.0 million, respectively, available for borrowing.
The Company is involved in various legal proceedings from time-to-time in the normal course of business. It is the opinion of management that any judgment or settlement resulting from pending or threatened litigation would not have a material adverse effect on the Company’s consolidated financial position or results of operations.
(16)
Earnings Per Share
​
Presented below are the calculations for basic and diluted earnings per common share for the six months ended June 30, 2026 and 2025 (in thousands, except per share and share data):
​ ​ ​
2026
​ ​
2025
​
Net income available to common shareholders
​ ​ ​ $ 13,296 ​ ​ ​ ​ $ 6,731 ​ ​
Weighted average number of common shares outstanding
​ ​ ​ ​ 8,819,729 ​ ​ ​ ​ ​ 8,036,547 ​ ​
Effect of dilutive common stock awards
​ ​ ​ ​ 335,434 ​ ​ ​ ​ ​ 207,380 ​ ​
Diluted weighted average common shares outstanding
​ ​ ​ ​ 9,155,163 ​ ​ ​ ​ ​ 8,243,927 ​ ​
Basic earnings per common share
​ ​ ​ $ 1.51 ​ ​ ​ ​ $ 0.84 ​ ​
Diluted earnings per common share
​ ​ ​ $ 1.45 ​ ​ ​ ​ $ 0.82 ​ ​
 
F-28

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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(16)
Earnings Per Share (continued)
​
For the six months ended June 30, 2026 and 2025, the Company had no potentially anti-dilutive instruments outstanding that were not included in the above calculation.
(17)
Warrants
​
In connection with the recapitalization that occurred in 2021, four significant shareholders received warrants to acquire 507,729 shares of common stock and non-voting common stock at an exercise price of $21.62 per share. The warrants are exercisable for a term of ten years from the date of issuance. In connection with the Tandem acquisition, warrants to acquire 78,288 shares of common stock were assumed or replaced, with a weighted-average exercise price of $20.83 per share and a weighted-average remaining contractual term of 3.5 years. During the six months ended June 30, 2026, warrants to purchase 56,295 shares of non-voting common stock were exercised in connection with the June 2026 private placement. At June 30, 2026, warrants to acquire 529,722 shares of common stock and non-voting common stock were outstanding, with a weighted-average exercise price of $21.50 per share.
(18)
Derivatives and Hedging Activities
​
The Company utilizes interest rate swap and option agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties but is rather determined by reference to the notional amount and the other terms of the individual interest rate swap agreements.
The Company had no collateral posted as of June 30, 2026 while having $2.0 million posted in the normal course of business related to these contracts as of December 31, 2025.
Cash Flow Hedges
In a cash flow hedge, the entire change in the fair value of the interest rate swap or the gain/loss on an interest rate option included in the assessment of hedge effectiveness is initially recorded in other comprehensive income (“OCI”) and subsequently reclassified from OCI to current period earnings in the same period that the hedged item affects earnings. Interest rate hedges with notional amounts totaling $250.0 million and $150.0 million as of June 30, 2026 and December 31, 2025, respectively, were designated as cash flow hedges of certain loans receivable and interest rate contracts and were determined to be effective during all periods presented. The Company expects the hedges to remain effective during the remaining terms of the hedges. The effect of cash flow hedge accounting on other comprehensive income for the six months ended June 30, 2026 and 2025 were unrealized losses of $1.1 million and unrealized gains of $0.2 million, respectively.
Interest expense recorded on the cash flow hedges totaled $69,000 and $341,000 for the six months ended June 30, 2026 and 2025, respectively, and is reported as a component of interest income on loans.
At June 30, 2026, the net unrealized holding loss recorded in accumulated other comprehensive income that are expected to be reclassified into earnings within the next 12 months totaled $227,000.
Fair Value Hedges
Interest rate swaps with notional amounts of $76.3 million and $79.2 million at June 30, 2026 and December 31, 2025, respectively, were designated as fair value hedges of certain time deposits and are considered effective during all periods presented. The Company expects the hedges to remain effective during the remaining terms of the swaps.
Interest expense recorded on these swap transactions totaled $84,000 and $135,000 for the six months ended June 30, 2026 and 2025, respectively, and is reported as a component of interest expense on deposits.
 
F-29

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(18)
Derivatives and Hedging Activities (continued)
​
The Company presents derivative position gross on the condensed consolidated balance sheet. The following table reflects the derivatives recorded on the condensed consolidated balance sheet as of June 30, 2026 and December 31, 2025 (in thousands):
​ ​ ​
2026
​ ​
2025
​
​ ​ ​
Notional
Amount
​ ​
Fair Value
​ ​
Notional
Amount
​ ​
Fair Value
​
Included in other assets: ​ ​ ​ ​ ​
Derivatives designated as hedging instruments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest rate hedges related to customer loans
​ ​ ​ $ 150,000 ​ ​ ​ ​ $ 439 ​ ​ ​ ​ $ 150,000 ​ ​ ​ ​ $ 1,001 ​ ​
Interest rate hedges related to customer deposits
​ ​ ​ ​ 17,000 ​ ​ ​ ​ ​ 146 ​ ​ ​ ​ ​ 79,150 ​ ​ ​ ​ ​ 761 ​ ​
Total included in other assets
​ ​ ​ $ 167,000 ​ ​ ​ ​ $ 585 ​ ​ ​ ​ $ 229,150 ​ ​ ​ ​ $ 1,762 ​ ​
​ ​ ​
2026
​ ​
2025
​
​ ​ ​
Notional
Amount
​ ​
Fair Value
​ ​
Notional
Amount
​ ​
Fair Value
​
Included in other liabilities: ​ ​ ​ ​ ​
Derivatives designated as hedging instruments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest rate hedges related to customer loans
​ ​ ​ $ 100,000 ​ ​ ​ ​ $ (610) ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​
Interest rate hedges related to customer deposits
​ ​ ​ ​ 59,322 ​ ​ ​ ​ ​ (108) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total included in other liabilities
​ ​ ​ $ 159,322 ​ ​ ​ ​ $ (718) ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​
(19) Regulatory Matters
The Company, by virtue of being a bank holding company with more than $3.0 billion in total consolidated assets, and the Bank are subject to various regulatory capital requirements administered by the federal banking regulators. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary action by regulators that, if undertaken, could have a direct material effect on the Company’s and Bank’s financial statements. Under capital adequacy rules and the regulatory framework for prompt corrective action, as revised by the Basel III Capital Rules effective January 1, 2015, the Company and Bank must meet specific capital thresholds that involve quantitative measures of capital, assets, and certain off-balance sheet items as calculated under regulatory rules. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Quantitative measures (as defined) established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios of total capital, Tier 1 capital, and common equity Tier 1 capital (“CET 1”) to risk-weighted assets, and of Tier 1 capital to average assets, the Tier 1 leverage ratio.
At June 30, 2026 and December 31, 2025, the Company and the Bank were categorized as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Company and the Bank must maintain minimum guideline ratios as set forth in the table below. There are no conditions or events since June 30, 2026, that management believes have changed the Company’s or the Bank’s category.
The Company’s actual capital amounts and ratios are presented below (dollars in thousands):
​ ​ ​
Actual
​ ​
For Capital
Adequacy
Purposes
​ ​
To Be Well
Capitalized Under
Prompt Corrective
Action Provisions
​
​
Amount
​ ​
Ratio
​ ​
Amount
​ ​
Ratio
​ ​
Amount
​ ​
Ratio
​
June 30, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total Capital to Risk-Weighted Assets
​ ​ ​ $ 364,873 ​ ​ ​ ​ ​ 14.32% ​ ​ ​ ​ $ 203,803 ​ ​ ​ ​ ​ 8.00% ​ ​ ​ ​ $ 254,754 ​ ​ ​ ​ ​ 10.00% ​ ​
Tier 1 Capital to Risk-Weighted Assets
​ ​ ​ $ 269,422 ​ ​ ​ ​ ​ 10.58% ​ ​ ​ ​ $ 152,852 ​ ​ ​ ​ ​ 6.00% ​ ​ ​ ​ $ 203,803 ​ ​ ​ ​ ​ 8.00% ​ ​
Common Equity Tier 1 Capital to Risk-Weighted Assets
​ ​ ​ $ 262,205 ​ ​ ​ ​ ​ 10.29% ​ ​ ​ ​ $ 114,639 ​ ​ ​ ​ ​ 4.50% ​ ​ ​ ​ $ 165,590 ​ ​ ​ ​ ​ 6.50% ​ ​
Tier 1 Capital to Average Assets
​ ​ ​ $ 269,422 ​ ​ ​ ​ ​ 9.43% ​ ​ ​ ​ $ 114,257 ​ ​ ​ ​ ​ 4.00% ​ ​ ​ ​ $ 142,822 ​ ​ ​ ​ ​ 5.00% ​ ​
 
F-30

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(19) Regulatory Matters (continued)
​ ​ ​
Actual
​ ​
For Capital
Adequacy
Purposes
​ ​
To Be Well
Capitalized Under
Prompt Corrective
Action Provisions
​
​
Amount
​ ​
Ratio
​ ​
Amount
​ ​
Ratio
​ ​
Amount
​ ​
Ratio
​
December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total Capital to Risk-Weighted Assets
​ ​ ​ $ 295,392 ​ ​ ​ ​ ​ 13.61% ​ ​ ​ ​ $ 173,647 ​ ​ ​ ​ ​ 8.00% ​ ​ ​ ​ $ 217,059 ​ ​ ​ ​ ​ 10.00% ​ ​
Tier 1 Capital to Risk-Weighted Assets
​ ​ ​ $ 203,832 ​ ​ ​ ​ ​ 9.39% ​ ​ ​ ​ $ 130,235 ​ ​ ​ ​ ​ 6.00% ​ ​ ​ ​ $ 173,647 ​ ​ ​ ​ ​ 8.00% ​ ​
Common Equity Tier 1 Capital to Risk-Weighted Assets
​ ​ ​ $ 196,615 ​ ​ ​ ​ ​ 9.06% ​ ​ ​ ​ $ 97,676 ​ ​ ​ ​ ​ 4.50% ​ ​ ​ ​ $ 141,088 ​ ​ ​ ​ ​ 6.50% ​ ​
Tier 1 Capital to Average Assets
​ ​ ​ $ 203,832 ​ ​ ​ ​ ​ 7.64% ​ ​ ​ ​ $ 106,726 ​ ​ ​ ​ ​ 4.00% ​ ​ ​ ​ $ 133,408 ​ ​ ​ ​ ​ 5.00% ​ ​
The Bank’s actual capital amounts and ratios are presented below (dollars in thousands):
​ ​ ​
Actual
​ ​
For Capital
Adequacy
Purposes
​ ​
To Be Well
Capitalized Under
Prompt Corrective
Action Provisions
​
​
Amount
​ ​
Ratio
​ ​
Amount
​ ​
Ratio
​ ​
Amount
​ ​
Ratio
​
June 30, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total Capital to Risk-Weighted Assets
​ ​ ​ $ 331,775 ​ ​ ​ ​ ​ 13.05% ​ ​ ​ ​ $ 203,391 ​ ​ ​ ​ ​ 8.00% ​ ​ ​ ​ $ 254,238 ​ ​ ​ ​ ​ 10.00% ​ ​
Tier 1 Capital to Risk-Weighted Assets
​ ​ ​ $ 300,730 ​ ​ ​ ​ ​ 11.83% ​ ​ ​ ​ $ 152,543 ​ ​ ​ ​ ​ 6.00% ​ ​ ​ ​ $ 203,391 ​ ​ ​ ​ ​ 8.00% ​ ​
Common Equity Tier 1 Capital to Risk-Weighted Assets
​ ​ ​ $ 300,730 ​ ​ ​ ​ ​ 11.83% ​ ​ ​ ​ $ 114,407 ​ ​ ​ ​ ​ 4.50% ​ ​ ​ ​ $ 165,255 ​ ​ ​ ​ ​ 6.50% ​ ​
Tier 1 Capital to Average Assets
​ ​ ​ $ 300,730 ​ ​ ​ ​ ​ 10.78% ​ ​ ​ ​ $ 111,587 ​ ​ ​ ​ ​ 4.00% ​ ​ ​ ​ $ 139,484 ​ ​ ​ ​ ​ 5.00% ​ ​
​ ​ ​
Actual
​ ​
For Capital
Adequacy
Purposes
​ ​
To Be Well
Capitalized Under
Prompt Corrective
Action Provisions
​
​
Amount
​ ​
Ratio
​ ​
Amount
​ ​
Ratio
​ ​
Amount
​ ​
Ratio
​
December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total Capital to Risk-Weighted Assets
​ ​ ​ $ 276,260 ​ ​ ​ ​ ​ 12.74% ​ ​ ​ ​ $ 173,413 ​ ​ ​ ​ ​ 8.00% ​ ​ ​ ​ $ 216,767 ​ ​ ​ ​ ​ 10.00% ​ ​
Tier 1 Capital to Risk-Weighted Assets
​ ​ ​ $ 249,700 ​ ​ ​ ​ ​ 11.52% ​ ​ ​ ​ $ 130,060 ​ ​ ​ ​ ​ 6.00% ​ ​ ​ ​ $ 173,413 ​ ​ ​ ​ ​ 8.00% ​ ​
Common Equity Tier 1 Capital to Risk-Weighted Assets
​ ​ ​ $ 249,700 ​ ​ ​ ​ ​ 11.52% ​ ​ ​ ​ $ 97,545 ​ ​ ​ ​ ​ 4.50% ​ ​ ​ ​ $ 140,898 ​ ​ ​ ​ ​ 6.50% ​ ​
Tier 1 Capital to Average Assets
​ ​ ​ $ 249,700 ​ ​ ​ ​ ​ 9.37% ​ ​ ​ ​ $ 106,983 ​ ​ ​ ​ ​ 4.00% ​ ​ ​ ​ $ 133,729 ​ ​ ​ ​ ​ 5.00% ​ ​
​
(20)
Fair Value Measurement and Disclosures
​
Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC Topic 820, Fair Value Measurements and Disclosures establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are utilized in the determination of fair value for instruments classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs for instruments classified within Level 3 of the hierarchy).
Fair Value Hierarchy
Level 1 — Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access at the measurement date.
Level 2 — Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
 
F-31

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(20)
Fair Value Measurement and Disclosures (continued)
​
Level 3 — Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.
The following methods and assumptions were used by the Company in estimating the fair value of its significant financial instruments and other accounts recorded or disclosed based on their fair value:
Securities
Securities available for sale are recorded at fair value on a recurring basis. Securities held to maturity are recorded at amortized cost. For securities available for sale, the fair value is determined by various valuation methodologies. Where quoted market prices are available in active markets, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. Level 2 securities include certain U.S. agency bonds, collateralized mortgage and debt obligations, and certain municipal securities. The Level 2 fair value pricing is provided by an independent third party and is based upon similar securities in an active market.
Loans
The carrying amount of variable-rate loans that reprice frequently and have no significant change in credit risk approximates fair value. The fair value of fixed-rate loans is estimated based on discounted contractual cash flows, using interest rates currently being offered for loans with similar terms to borrowers with similar credit quality. The fair value of collateral dependent loans is estimated based on discounted contractual cash flows or underlying collateral values, where applicable. A loan is determined to be collateral dependent if the Company believes it is probable that all principal and interest amounts due according to the terms of the note will not be collected as scheduled. The fair value of collateral dependent loans is determined in accordance with GAAP and generally results in a specific reserve established through a charge to the provision for credit losses.
Losses on collateral dependent loans are charged to the allowance when management believes the collectability of a loan is confirmed. Management classifies all collateral dependent loans carried at fair value as Level 3, since their valuations are based on either discounted cash flows or on underlying collateral values, as determined by appraisals, which are based in part on observable inputs, but which are not themselves observable inputs.
Other Real Estate Owned (“OREO”)
The fair value of OREO is determined by using certified appraisals that assign value to the property at its highest and best uses by applying traditional valuation methods common to the industry. The Company does not hold any OREO for profit purposes, and all OREO is actively marketed for sale. In most cases, management has determined that additional valuation adjustments may be appropriate to reflect other market factors that may not be captured in the appraisal. Accordingly, appraisals as adjusted are not based on observable inputs, and management has determined that OREO should be classified as Level 3.
Derivatives
The fair value of derivatives is based on valuation models using observable market data as of the measurement date (Level 2). Our derivatives are traded in an over-the counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indicts to generate continuous yield or pricing curves, prepayment rates and volatility factors to value the position. Most market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services.
Brokered Time Deposits
Fair value for certain fixed-rate time deposits is estimated using a discounted cash flow calculation that applies interest rates currently being offered to a schedule of aggregated expected maturities of time deposits.
 
F-32

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(20)
Fair Value Measurement and Disclosures (continued)
​
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fall are summarized below (in thousands).
June 30, 2026:
​ ​
Level 1
​ ​
Level 2
​ ​
Level 3
​ ​
Total
​
Securities available for sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
U.S. Treasury securities
​ ​ ​ $ 4,952 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 4,952 ​ ​
U.S. Government sponsored agencies
​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,978 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,978 ​ ​
Residential mortgage-backed securities
​ ​ ​ ​ — ​ ​ ​ ​ ​ 60,197 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 60,197 ​ ​
Collateralized mortgage obligations
​ ​ ​ ​ — ​ ​ ​ ​ ​ 5,695 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 5,695 ​ ​
Corporate debt securities
​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,265 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,265 ​ ​
Derivative asset
​ ​ ​ ​ — ​ ​ ​ ​ ​ 585 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 585 ​ ​
Brokered time deposits
​ ​ ​ ​ — ​ ​ ​ ​ ​ 85,699 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 85,699 ​ ​
Derivative liability
​ ​ ​ ​ — ​ ​ ​ ​ ​ 718 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 718 ​ ​
December 31, 2025:
​ ​
Level 1
​ ​
Level 2
​ ​
Level 3
​ ​
Total
​
Securities available for sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
U.S. Treasury securities
​ ​ ​ $ 21,912 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 21,912 ​ ​
U.S. Government sponsored agencies
​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,994 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,994 ​ ​
Residential mortgage-backed securities
​ ​ ​ ​ — ​ ​ ​ ​ ​ 24,934 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 24,934 ​ ​
Collateralized mortgage obligations
​ ​ ​ ​ — ​ ​ ​ ​ ​ 996 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 996 ​ ​
Corporate debt securities
​ ​ ​ ​ — ​ ​ ​ ​ ​ 960 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 960 ​ ​
Derivative asset
​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,762 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,762 ​ ​
Brokered time deposits
​ ​ ​ ​ — ​ ​ ​ ​ ​ 90,743 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 90,743 ​ ​
There were no transfers between Level 2 and Level 3 assets or liabilities during the six months ended June 30, 2026 and 2025.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
The table below presents the Company’s assets and liabilities measured at fair value on a nonrecurring, aggregated by the level in the fair value hierarchy within which those measurements fall are summarized below (in thousands):
​ ​ ​
Level 1
​ ​
Level 2
​ ​
Level 3
​ ​
Total
​
June 30, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Collateral dependent loans
​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 18,372 ​ ​ ​ ​ $ 18,372 ​ ​
Total
​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 18,372 ​ ​ ​ ​ $ 18,372 ​ ​
December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Collateral dependent loans
​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 16,212 ​ ​ ​ ​ $ 16,212 ​ ​
Total
​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 16,212 ​ ​ ​ ​ $ 16,212 ​ ​
For individually evaluated collateral dependent loans, the estimated fair value is based upon the present value of expected future cash flows discounted at the loan’s effective rate, the estimated fair value of the underlying collateral with consideration for estimated selling costs if satisfaction of the loan depends on the sale of the collateral, or the estimated liquidity of the note.
For the six months ended June 30, 2026 and 2025, there were no changes in the methods and significant assumptions used to estimate fair value.
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(20)
Fair Value Measurement and Disclosures (continued)
​
The following table shows significant unobservable inputs used in the fair value measurement of Level 3 nonrecurring assets as of June 30, 2026 and December 31, 2025 (in thousands):
June 30, 2026
​ ​
​ ​ ​
Fair Value
​ ​
Valuation Technique
​ ​
Unobservable Inputs
​ ​
Range of
Discounts
​ ​
Weighted
Average
Discount
​ ​
Collateral dependent loans
​ ​ ​ $ 18,372 ​ ​ ​
Third-party
appraisals
​ ​
Collateral discounts and discount rates
​ ​
0% – 25%
​ ​
15%
​ ​ ​ ​
December 31, 2025
​
​ ​ ​
Fair Value
​ ​
Valuation Technique
​ ​
Unobservable Inputs
​ ​
Range of
Discounts
​ ​
Weighted
Average
Discount
​
Collateral dependent loans
​ ​ ​ $    16,212 ​ ​ ​
Third-party appraisals
​ ​
Collateral discounts and discount rates
​ ​
0% – 15%
​ ​
5%
​
Financial Instruments
The carrying amounts and estimated fair values of the Company’s financial instruments at June 30, 2026 and December 31, 2025 that are not shown elsewhere in these condensed consolidated financial statements are presented below (in thousands):
​ ​ ​
Carrying
Amount
​ ​
Estimated
Fair Value
​ ​
Level 1
​ ​
Level 2
​ ​
Level 3
​
June 30, 2026: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Financial Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ $    433,327 ​ ​ ​ ​ $ 433,327 ​ ​ ​ ​ $  433,327 ​ ​ ​ ​ $       — ​ ​ ​ ​ $ — ​ ​
Debt securities held to maturity
​ ​ ​ ​ 49,360 ​ ​ ​ ​ ​ 48,663 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 48,663 ​ ​ ​ ​ ​ — ​ ​
Other investments
​ ​ ​ ​ 2,896 ​ ​ ​ ​ ​ 2,896 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,896 ​ ​ ​ ​ ​ — ​ ​
Loans held for sale
​ ​ ​ ​ 500,560 ​ ​ ​ ​ ​ 500,560 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 500,560 ​ ​ ​ ​ ​ — ​ ​
Loans
​ ​ ​ ​ 2,089,860 ​ ​ ​ ​ ​ 2,074,942 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,074,942 ​ ​
Accrued interest receivable
​ ​ ​ ​ 11,199 ​ ​ ​ ​ ​ 11,199 ​ ​ ​ ​ ​ 11,199 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Financial Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Deposits
​ ​ ​ $ 2,752,923 ​ ​ ​ ​ $ 2,757,838 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 2,757,838 ​ ​
Borrowings
​ ​ ​ ​ 82,622 ​ ​ ​ ​ ​ 82,622 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 82,622 ​ ​
Accrued interest payable
​ ​ ​ ​ 3,296 ​ ​ ​ ​ ​ 3,296 ​ ​ ​ ​ ​ 3,296 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Financial Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ $ 280,373 ​ ​ ​ ​ ​ 280,373 ​ ​ ​ ​ ​ 280,373 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Debt securities held to maturity
​ ​ ​ ​ 40,102 ​ ​ ​ ​ ​ 40,128 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 40,128 ​ ​ ​ ​ ​ — ​ ​
Other investments
​ ​ ​ ​ 2,585 ​ ​ ​ ​ ​ 2,585 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,585 ​ ​ ​ ​ ​ — ​ ​
Loans held for sale
​ ​ ​ ​ 505,360 ​ ​ ​ ​ ​ 505,360 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 505,360 ​ ​ ​ ​ ​ — ​ ​
Loans
​ ​ ​ ​ 1,724,934 ​ ​ ​ ​ ​ 1,705,306 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,705,306 ​ ​
Accrued interest receivable
​ ​ ​ ​ 10,829 ​ ​ ​ ​ ​ 10,829 ​ ​ ​ ​ ​ 10,829 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Financial Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Deposits
​ ​ ​ $ 2,268,942 ​ ​ ​ ​ $ 2,270,868 ​ ​ ​ ​ $ — ​ ​ ​ ​ $ — ​ ​ ​ ​ $ 2,270,868 ​ ​
Borrowings
​ ​ ​ ​ 71,216 ​ ​ ​ ​ ​ 65,456 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 65,456 ​ ​
Accrued interest payable
​ ​ ​ ​ 2,741 ​ ​ ​ ​ ​ 2,741 ​ ​ ​ ​ ​ 2,741 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(20)
Fair Value Measurement and Disclosures (continued)
​
The carrying value of certain assets and liabilities such as cash and cash equivalents, accrued interest receivable, nonmaturing deposits, short-term borrowings, and accrued interest payable approximate their estimated fair value due to their immediate and shorter-term maturities. For those financial instruments not previously disclosed, the following is a description of the valuation methodologies used.
Other investments:   The carrying amount of FHLB stock is a reasonably accepted fair value estimate given the restricted nature. Fair value is the redeemable (carrying) value based on the redemption provisions of the instruments which is considered a Level 2 measurement. The Bank owned FHLB stock amounting to approximately $2.1 million and $1.8 million at June 30, 2026 and December 31, 2025, respectively
Deposits:   The fair value of deposits with no stated maturity (such as demand deposits, interest-bearing demand, money market accounts and savings accounts) is equal to the amount payable on demand at the reporting date. Fair values for fixed-rate time deposits are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the marketplace on time deposits of similar remaining maturities. Use of internal discounted cash flows provides a Level 3 fair value measurement.
Borrowings:   The fair values of the junior subordinated debentures and subordinated notes utilize a discounted cash flow analysis based on an estimate of current interest rates being offered by instruments with similar terms and credit quality. Since the market for these instruments is limited, the internal valuation represents a Level 3 measurement.
Limitations:   Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Fair value estimates may not be realizable in an immediate settlement of the instrument. In some instances, there are no quoted, market prices for the Company’s various financial instruments, in which case fair value may be based on estimates using present value or other valuation techniques, or based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of the financial instruments, or other factors. Those techniques are significantly affected by the assumptions used, including the discount rate and estimate of future cash flows. Subsequent changes in assumptions could significantly affect the estimates.
(21) Segment Information
The Company adopted ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures on January 1, 2025. The Company has determined that its current community bank operating model is structured whereby all banking locations serve a similar base of primarily commercial customers utilizing a company-wide offering of similar products and services managed through similar processes and technology platforms that are collectively reviewed by the Company’s Chief Executive Officer, who has been designated as the chief operating decision maker (“CODM”). The CODM regularly assesses performance of the aggregated single banking segment in determining how to allocate resources.
The banking segment derives revenue from customers by providing a broad array of loan and deposit products to businesses and consumers. Loan offerings include commercial and commercial real estate loans, as well as residential real estate and consumer loans. Deposit products include checking, savings, money market, and time deposits, as well as treasury management services, mobile banking, ATMs, and other deposit-related products and services.
The CODM assesses performance of the banking segment and decides how to allocate resources based on net income as reported in the Company’s condensed consolidated statements of income. All categories of interest expense, provision for credit losses, and noninterest expenses, as disclosed in the Company’s condensed consolidated statements of income, are considered significant to the banking segment. In addition, depreciation expense is disclosed within Note 6.
For the six months ended June 30, 2026 and 2025, there were no adjustments or reconciling items between the banking segment net income and the consolidated net income as presented in the condensed consolidated statements of income.
 
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TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(unaudited)
(21) Segment Information (continued)
The measure of segment assets is based on total assets as reported on the condensed consolidated balance sheets. As of June 30, 2026 and December 31, 2025, there were no adjustments or reconciling items between the banking segment total assets and the total assets as presented on the condensed consolidated balance sheets.
(22)
Subsequent Events
​
On August 12, 2026, the Company completed a $1.22 million private placement of 40,683 shares of its common stock at a price of $30.00 per share (the “August 2026 Private Placement”). The Company intends to use the net proceeds from the shares sold in the August 2026 Private Placement to support organic growth, strengthen capital position, and enhance strategic flexibility to pursue future growth opportunities.
On August 21, 2026, the Company completed the offering and sale of $55.0 million in aggregate principal amount of 6.75% fixed-to-floating rate subordinated notes due September 1, 2036 (the “Notes”). The Notes were structured to comply with the requirements for Tier 2 capital treatment under bank regulatory capital guidelines; with a fixed rate period for five years and a floating rate for the remaining five years. The Company intends to use the net proceeds from the sale of the Notes to redeem existing subordinated debt.
 
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TABLE OF CONTENTS​
 
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Georgia Banking Company, Inc. and Subsidiaries
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Georgia Banking Company, Inc. and Subsidiaries (the “Company”) as of December 31, 2025 and 2024, and the related statements of income, comprehensive income, changes in shareholders’ equity, and cash flows for the years then ended, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the auditing standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
We have served as the Company’s auditor since 2021.
/s/ Wipfli LLP
Atlanta, Georgia
July 28, 2026
 
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TABLE OF CONTENTS​
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 2025 and 2024
(dollars in thousands, except per share and share data)
​ ​ ​
2025
​ ​
2024
​
Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and due from banks
​ ​ ​ $ 7,026 ​ ​ ​ ​ ​ 8,005 ​ ​
Interest-bearing deposits with banks
​ ​ ​ ​ 235,704 ​ ​ ​ ​ ​ 166,777 ​ ​
Federal funds sold
​ ​ ​ ​ 37,643 ​ ​ ​ ​ ​ 93,032 ​ ​
Cash and cash equivalents
​ ​ ​ ​ 280,373 ​ ​ ​ ​ ​ 267,814 ​ ​
Debt securities available for sale (amortized cost of $54,581 and $73,741)
​ ​ ​ ​ 51,796 ​ ​ ​ ​ ​ 69,708 ​ ​
Debt securities held to maturity (fair value $40,128 and $26,172)
​ ​ ​ ​ 40,102 ​ ​ ​ ​ ​ 26,740 ​ ​
Other investments
​ ​ ​ ​ 2,585 ​ ​ ​ ​ ​ 8,859 ​ ​
Loans held for sale
​ ​ ​ ​ 505,360 ​ ​ ​ ​ ​ 498,227 ​ ​
Loans, net of unearned income
​ ​ ​ ​ 1,724,934 ​ ​ ​ ​ ​ 1,312,293 ​ ​
Allowance for credit losses
​ ​ ​ ​ (25,574) ​ ​ ​ ​ ​ (20,600) ​ ​
Loans, net
​ ​ ​ ​ 1,699,360 ​ ​ ​ ​ ​ 1,291,693 ​ ​
Premises and equipment, net
​ ​ ​ ​ 18,550 ​ ​ ​ ​ ​ 10,729 ​ ​
Operating lease right of use assets
​ ​ ​ ​ 36,578 ​ ​ ​ ​ ​ 39,678 ​ ​
Goodwill
​ ​ ​ ​ 4,809 ​ ​ ​ ​ ​ — ​ ​
Core deposit intangible
​ ​ ​ ​ 5,656 ​ ​ ​ ​ ​ — ​ ​
Cash value of bank owned life insurance
​ ​ ​ ​ 30,996 ​ ​ ​ ​ ​ 26,765 ​ ​
Accrued interest and other assets
​ ​ ​ ​ 26,167 ​ ​ ​ ​ ​ 23,410 ​ ​
Total assets
​ ​ ​ $ 2,702,332 ​ ​ ​ ​ ​ 2,263,623 ​ ​
Liabilities and Shareholders’ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Deposits: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Noninterest-bearing
​ ​ ​ $ 617,388 ​ ​ ​ ​ ​ 393,720 ​ ​
Interest-bearing
​ ​ ​ ​ 1,742,297 ​ ​ ​ ​ ​ 1,434,905 ​ ​
Total deposits
​ ​ ​ ​ 2,359,685 ​ ​ ​ ​ ​ 1,828,625 ​ ​
Federal Home Loan Bank advances
​ ​ ​ ​ — ​ ​ ​ ​ ​ 150,000 ​ ​
Subordinated notes, net
​ ​ ​ ​ 63,999 ​ ​ ​ ​ ​ 54,671 ​ ​
Junior subordinated debentures
​ ​ ​ ​ 7,217 ​ ​ ​ ​ ​ 7,217 ​ ​
Operating lease liabilities
​ ​ ​ ​ 38,071 ​ ​ ​ ​ ​ 40,768 ​ ​
Accrued interest and other liabilities
​ ​ ​ ​ 28,446 ​ ​ ​ ​ ​ 26,814 ​ ​
Total liabilities
​ ​ ​ ​ 2,497,418 ​ ​ ​ ​ ​ 2,108,095 ​ ​
Commitments and contingencies – Note 15 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Preferred stock, $.01 par value, 10,000,000 authorized; no shares issued or outstanding
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Common stock, $.01 par value, 40,000,000 shares authorized; 8,444,343 and 7,358,356 shares issued and outstanding
​ ​ ​ ​ 84 ​ ​ ​ ​ ​ 74 ​ ​
Non-voting common stock, $.01 par value, 10,000,000 shares authorized; no shares of non-voting
common stock issued and outstanding
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Additional paid-in capital
​ ​ ​ ​ 152,302 ​ ​ ​ ​ ​ 126,096 ​ ​
Retained earnings
​ ​ ​ ​ 54,694 ​ ​ ​ ​ ​ 32,614 ​ ​
Accumulated other comprehensive loss
​ ​ ​ ​ (2,166) ​ ​ ​ ​ ​ (3,256) ​ ​
Total shareholders’ equity
​ ​ ​ ​ 204,914 ​ ​ ​ ​ ​ 155,528 ​ ​
Total liabilities and shareholders’ equity
​ ​ ​ $ 2,702,332 ​ ​ ​ ​ ​ 2,263,623 ​ ​
See accompanying notes to consolidated financial statements.
F-38

TABLE OF CONTENTS​
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Consolidated Statements of Income
Years Ended December 31, 2025 and 2024
(dollars in thousands)
​ ​ ​
2025
​ ​
2024
​
Interest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Loans held for sale
​ ​ ​ $ 31,880 ​ ​ ​ ​ ​ 26,024 ​ ​
Loans, including fees
​ ​ ​ ​ 119,743 ​ ​ ​ ​ ​ 92,049 ​ ​
Investment securities, taxable
​ ​ ​ ​ 3,749 ​ ​ ​ ​ ​ 3,375 ​ ​
Investment securities, tax free
​ ​ ​ ​ 401 ​ ​ ​ ​ ​ 130 ​ ​
Federal funds sold, deposits in banks and other investments
​ ​ ​ ​ 9,099 ​ ​ ​ ​ ​ 8,834 ​ ​
Total interest income
​ ​ ​ ​ 164,872 ​ ​ ​ ​ ​ 130,412 ​ ​
Interest expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Deposits
​ ​ ​ ​ 53,971 ​ ​ ​ ​ ​ 50,981 ​ ​
Federal Home Loan Bank advances
​ ​ ​ ​ 5,078 ​ ​ ​ ​ ​ 4,645 ​ ​
Other borrowed funds
​ ​ ​ ​ 3,445 ​ ​ ​ ​ ​ 3,102 ​ ​
Total interest expense
​ ​ ​ ​ 62,494 ​ ​ ​ ​ ​ 58,728 ​ ​
Net interest income
​ ​ ​ ​ 102,378 ​ ​ ​ ​ ​ 71,684 ​ ​
Provision for credit losses – loans
​ ​ ​ ​ 4,521 ​ ​ ​ ​ ​ 8,120 ​ ​
Provision for credit losses – unfunded commitments
​ ​ ​ ​ — ​ ​ ​ ​ ​ 201 ​ ​
Net interest income after provision for credit losses
​ ​ ​ ​ 97,857 ​ ​ ​ ​ ​ 63,363 ​ ​
Noninterest income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Service charges and fees
​ ​ ​ ​ 2,141 ​ ​ ​ ​ ​ 1,142 ​ ​
Mortgage banking activity
​ ​ ​ ​ 2,750 ​ ​ ​ ​ ​ 1,775 ​ ​
Bank owned life insurance income
​ ​ ​ ​ 901 ​ ​ ​ ​ ​ 782 ​ ​
Gain on sale of loans
​ ​ ​ ​ 1,564 ​ ​ ​ ​ ​ 2,369 ​ ​
Other
​ ​ ​ ​ 2,983 ​ ​ ​ ​ ​ 1,238 ​ ​
Total noninterest income
​ ​ ​ ​ 10,339 ​ ​ ​ ​ ​ 7,306 ​ ​
Noninterest expenses: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Salaries and employee benefits
​ ​ ​ ​ 45,922 ​ ​ ​ ​ ​ 37,779 ​ ​
Occupancy
​ ​ ​ ​ 8,496 ​ ​ ​ ​ ​ 8,572 ​ ​
FDIC assessment and other regulatory charges
​ ​ ​ ​ 2,255 ​ ​ ​ ​ ​ 1,881 ​ ​
Professional fees
​ ​ ​ ​ 3,207 ​ ​ ​ ​ ​ 2,882 ​ ​
Communications, data processing and equipment
​ ​ ​ ​ 6,121 ​ ​ ​ ​ ​ 4,402 ​ ​
Merger and conversion expense
​ ​ ​ ​ 6,732 ​ ​ ​ ​ ​ — ​ ​
Other
​ ​ ​ ​ 5,624 ​ ​ ​ ​ ​ 3,868 ​ ​
Total other noninterest expense
​ ​ ​ ​ 78,357 ​ ​ ​ ​ ​ 59,384 ​ ​
Income before income tax expense
​ ​ ​ ​ 29,839 ​ ​ ​ ​ ​ 11,285 ​ ​
Income tax expense
​ ​ ​ ​ 7,759 ​ ​ ​ ​ ​ 2,829 ​ ​
Net income
​ ​ ​ $ 22,080 ​ ​ ​ ​ ​ 8,456 ​ ​
Basic earnings per common share
​ ​ ​ $ 2.68 ​ ​ ​ ​ $ 1.15 ​ ​
Diluted earnings per common share
​ ​ ​ $ 2.62 ​ ​ ​ ​ $ 1.12 ​ ​
Weighted average common shares outstanding: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Basic
​ ​ ​ ​ 8,238,252 ​ ​ ​ ​ ​ 7,334,994 ​ ​
Diluted
​ ​ ​ ​ 8,442,809 ​ ​ ​ ​ ​ 7,532,802 ​ ​
See accompanying notes to consolidated financial statements.
F-39

TABLE OF CONTENTS​
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
Years Ended December 31, 2025 and 2024
(dollars in thousands)
​ ​ ​
2025
​ ​
2024
​
Net income
​ ​ ​ $ 22,080 ​ ​ ​ ​ ​ 8,456 ​ ​
Other comprehensive income, net of tax: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net unrealized holding gains on available for sale securities, net of tax expense of $325 and $27
​ ​ ​ ​ 923 ​ ​ ​ ​ ​ 78 ​ ​
Net unrealized holding gains on cash flow hedges, net of tax expense of $58 and $28
​ ​ ​ ​ 167 ​ ​ ​ ​ ​ 79 ​ ​
Other comprehensive income, net of tax
​ ​ ​ ​ 1,090 ​ ​ ​ ​ ​ 157 ​ ​
Comprehensive income
​ ​ ​ $ 23,170 ​ ​ ​ ​ ​ 8,613 ​ ​
See accompanying notes to consolidated financial statements.
F-40

TABLE OF CONTENTS​
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Shareholders’ Equity
Years Ended December 31, 2025 and 2024
(dollars in thousands, except per share and share data)
​ ​ ​
Common
Shares
​ ​
Common
Stock
​ ​
Additional
Paid-in
Capital
​ ​
Retained
Earnings
​ ​
Accumulated
Other
Comprehensive
Income (Loss)
​ ​
Total
​
Balance, December 31, 2023
​ ​ ​ ​ 7,307,687 ​ ​ ​ ​ $ 73 ​ ​ ​ ​ ​ 124,871 ​ ​ ​ ​ ​ 24,158 ​ ​ ​ ​ ​ (3,413) ​ ​ ​ ​ ​ 145,689 ​ ​
Stock-based compensation
expense
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,014 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,014 ​ ​
Restricted stock units
​ ​ ​ ​ 50,669 ​ ​ ​ ​ ​ 1 ​ ​ ​ ​ ​ 211 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 212 ​ ​
Net income
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 8,456 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 8,456 ​ ​
Change in accumulated other comprehensive loss, net of tax
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 157 ​ ​ ​ ​ ​ 157 ​ ​
Balance, December 31, 2024
​ ​ ​ ​ 7,358,356 ​ ​ ​ ​ ​ 74 ​ ​ ​ ​ ​ 126,096 ​ ​ ​ ​ ​ 32,614 ​ ​ ​ ​ ​ (3,256) ​ ​ ​ ​ ​ 155,528 ​ ​
Stock-based compensation
expense
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 688 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 688 ​ ​
Restricted stock units
​ ​ ​ ​ 50,296 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 161 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 161 ​ ​
Stock issuances
​ ​ ​ ​ 63,045 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,449 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,449 ​ ​
Issuance of common stock – PBC acquisition
​ ​ ​ ​ 873,794 ​ ​ ​ ​ ​ 9 ​ ​ ​ ​ ​ 22,900 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 22,909 ​ ​
Issuance of common stock upon exercise of stock options
​ ​ ​ ​ 98,852 ​ ​ ​ ​ ​ 1 ​ ​ ​ ​ ​ 1,008 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,009 ​ ​
Net income
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 22,080 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 22,080 ​ ​
Change in accumulated other comprehensive loss, net of tax
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,090 ​ ​ ​ ​ ​ 1,090 ​ ​
Balance, December 31, 2025
​ ​ ​ ​ 8,444,343 ​ ​ ​ ​ $ 84 ​ ​ ​ ​ ​ 152,302 ​ ​ ​ ​ ​ 54,694 ​ ​ ​ ​ ​ (2,166) ​ ​ ​ ​ ​ 204,914 ​ ​
See accompanying notes to consolidated financial statements.
F-41

TABLE OF CONTENTS​
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years Ended December 31, 2025 and 2024
(dollars in thousands)
​ ​ ​
2025
​ ​
2024
​
Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net income
​ ​ ​ $ 22,080 ​ ​ ​ ​ ​ 8,456 ​ ​
Adjustments to reconcile net income to net cash from operating activities:
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Depreciation, amortization and accretion
​ ​ ​ ​ (266) ​ ​ ​ ​ ​ (633) ​ ​
Provision for credit losses
​ ​ ​ ​ 4,521 ​ ​ ​ ​ ​ 8,321 ​ ​
Deferred income tax benefit
​ ​ ​ ​ (3,241) ​ ​ ​ ​ ​ (1,562) ​ ​
Net (gain) on sale of loans held for sale
​ ​ ​ ​ (1,564) ​ ​ ​ ​ ​ (2,369) ​ ​
Stock-based compensation
​ ​ ​ ​ 849 ​ ​ ​ ​ ​ 1,225 ​ ​
Amortization of operating lease right of use assets
​ ​ ​ ​ 3,100 ​ ​ ​ ​ ​ 3,039 ​ ​
Bank owned life insurance income
​ ​ ​ ​ (901) ​ ​ ​ ​ ​ (782) ​ ​
Loans held for sale purchase/originated
​ ​ ​ ​ (8,484,593) ​ ​ ​ ​ ​ (5,694,263) ​ ​
Loans held for sale sold
​ ​ ​ ​ 8,479,024 ​ ​ ​ ​ ​ 5,411,437 ​ ​
Change in:
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Accrued interest receivable and other assets
​ ​ ​ ​ 333 ​ ​ ​ ​ ​ 1,129 ​ ​
Accrued interest payable and other liabilities
​ ​ ​ ​ 4,405 ​ ​ ​ ​ ​ 8,015 ​ ​
Net cash from (used in) operating activities
​ ​ ​ ​ 23,747 ​ ​ ​ ​ ​ (257,987) ​ ​
Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Debt securities available for sale:
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Proceeds from sales, maturities and paydowns
​ ​ ​ ​ 65,724 ​ ​ ​ ​ ​ 13,236 ​ ​
Purchases
​ ​ ​ ​ (9,941) ​ ​ ​ ​ ​ (24,455) ​ ​
Debt securities held to maturity:
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Proceeds from sales, maturities and paydowns
​ ​ ​ ​ 2,544 ​ ​ ​ ​ ​ 488 ​ ​
Purchases
​ ​ ​ ​ (8,304) ​ ​ ​ ​ ​ (8,102) ​ ​
Purchases of other investments
​ ​ ​ ​ (34,571) ​ ​ ​ ​ ​ (26,571) ​ ​
Proceeds from sale of other investments
​ ​ ​ ​ 41,507 ​ ​ ​ ​ ​ 21,800 ​ ​
Proceeds from surrender of life insurance policy
​ ​ ​ ​ 1,106 ​ ​ ​ ​ ​ — ​ ​
Net change in loans
​ ​ ​ ​ (158,731) ​ ​ ​ ​ ​ (214,793) ​ ​
Purchases of premises and equipment
​ ​ ​ ​ (970) ​ ​ ​ ​ ​ (220) ​ ​
Proceeds from disposals of premises and equipment
​ ​ ​ ​ 56 ​ ​ ​ ​ ​ — ​ ​
Net cash acquired in business combination, net of cash paid
​ ​ ​ ​ 16,276 ​ ​ ​ ​ ​ — ​ ​
Net cash used in investing activities
​ ​ ​ ​ (85,304) ​ ​ ​ ​ ​ (238,617) ​ ​
Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net change in deposits
​ ​ ​ ​ 229,658 ​ ​ ​ ​ ​ 392,425 ​ ​
Proceeds from FHLB advances
​ ​ ​ ​ 850,000 ​ ​ ​ ​ ​ 550,000 ​ ​
Repayments of FHLB advances
​ ​ ​ ​ (1,008,000) ​ ​ ​ ​ ​ (450,000) ​ ​
Issuance of common stock
​ ​ ​ ​ 2,458 ​ ​ ​ ​ ​ 1 ​ ​
Net cash from financing activities
​ ​ ​ ​ 74,116 ​ ​ ​ ​ ​ 492,426 ​ ​
Net change in cash and cash equivalents
​ ​ ​ $ 12,559 ​ ​ ​ ​ ​ (4,178) ​ ​
Cash and cash equivalents at beginning of year
​ ​ ​ ​ 267,814 ​ ​ ​ ​ ​ 271,992 ​ ​
Cash and cash equivalents at end of year
​ ​ ​ $ 280,373 ​ ​ ​ ​ ​ 267,814 ​ ​
Supplemental cash flow information: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest paid
​ ​ ​ $ 63,541 ​ ​ ​ ​ ​ 57,687 ​ ​
Income taxes
​ ​ ​ ​ 9,679 ​ ​ ​ ​ ​ 452 ​ ​
Supplemental noncash disclosures: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Business Combination: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Fair value of tangible assets acquired, net of cash acquired
​ ​ ​ $ 314,466 ​ ​ ​ ​ ​ — ​ ​
Goodwill and other intangible assets
​ ​ ​ ​ 10,979 ​ ​ ​ ​ ​ — ​ ​
Fair value of liabilities assumed
​ ​ ​ ​ 318,812 ​ ​ ​ ​ ​ — ​ ​
Common stock and equity-based awards issued
​ ​ ​ ​ 22,909 ​ ​ ​ ​ ​ — ​ ​
See accompanying notes to consolidated financial statements.
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(1)
Summary of Significant Accounting Policies
​
Organization
Georgia Banking Company, Inc. and subsidiaries (the “Company or GBC”) is a bank holding company headquartered in Atlanta, Georgia, and whose primary business is presently conducted by Georgia Banking Company, its wholly owned banking subsidiary (the “Bank”). Through the Bank, the Company operates a full-service banking business and offers a broad range of retail and commercial banking services to its customers concentrated in metropolitan Atlanta, Georgia. The Bank also engages in mortgage banking activities through a mortgage warehouse facility. The Company and the Bank are subject to the regulations of certain federal and state agencies and are periodically examined by those regulatory agencies.
Basis of Presentation and Accounting Estimates
In preparing the consolidated financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”), management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the balance sheets and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from these estimates. Material estimates that are particularly susceptible to significant change in the near-term include fair value measurements, determination of the allowance for credit losses and acquisition accounting.
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Certain prior period amounts have been reclassified to conform to the current period presentation without any impact on the reported amounts of net income or shareholders’ equity.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, cash items in process of collection, amounts due from banks, interest-bearing deposits with other financial institutions, and federal funds sold with maturities fewer than 90 days. The deposits held at other financial institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000 per institution. At times, these deposits may exceed the federally insured limit. As such, the Company periodically evaluates the credit worthiness of these institutions to ensure there are no significant risks of loss associated with any deposits held by these institutions. At December 31, 2025, the Company had not identified any significant risks of loss associated with deposits held at other financial institutions.
Debt Securities
Debt securities are classified based on the Company’s intention on the date of purchase. All debt securities classified as held to maturity are carried at amortized cost, excluding accrued interest, when management has the positive intent and ability to hold them to maturity. Debt securities classified as available for sale are carried at fair value, with any unrealized holding gains and losses reported in other comprehensive income (loss), net of the deferred income tax effects.
Interest income includes the amortization and accretion of purchase premiums and discounts. Premiums and discounts on debt securities are amortized using the interest method. Such amortization or accretion is included in interest income on investment securities. Realized gains and losses on the sale of debt investment securities are determined using the specific identification method and are included in noninterest income as investment securities gains (losses), net.
The following discussion provides a description of the methodology applied to calculate the Allowance for Credit Losses (“ACL”) using the Current Expected Credit Loss (“CECL”) model for the debt securities portfolios.
ACL — Debt Securities Held to Maturity: Management measures expected credit losses on debt securities held to maturity on a collective basis by major security type. Accrued interest receivable on debt securities held to maturity is excluded from the estimate of credit losses. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Management classifies the held to maturity portfolio into the following major security types: residential mortgage-backed, collateralized mortgage obligations, and state and political subdivisions. Nearly all the residential mortgage-backed securities and collateralized mortgage obligations securities held by the Company are issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses.
 
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Notes to Consolidated Financial Statements (continued)
(1)
Summary of Significant Accounting Policies (continued)
​
ACL — Debt Securities Available For Sale: For debt securities available for sale in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities available for sale that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.
Changes in the allowance for credit losses are recorded as credit loss expense (or reversal). Losses are charged against the allowance when management believes the uncollectibility of a debt security available for sale is confirmed or when either of the criteria regarding intent or requirement to sell is met.
Accrued interest receivable on debt securities available for sale is excluded from the estimate of credit losses.
Other Investments
Other investments include Federal Home Loan Bank (“FHLB”) stock. These investments do not have readily determinable fair values due to restrictions placed on transferability and therefore are carried at cost. These investments are periodically evaluated for impairment based on ultimate recovery of par value or cost basis. Both cash and stock dividends are reported as income. The Bank owned FHLB stock amounting to approximately $1.8 million and $8.3 million at December 31, 2025 and 2024, respectively.
Loans Held for Sale
Mortgage warehouse facilities are provided to unaffiliated mortgage origination companies and are collateralized by one-to-four family residential loans. The originator closes new mortgage loans with the intent to sell these loans to third party investors for a profit. The Company provides funding to the mortgage companies for the period between the origination and their sale of the loan. Company policy requires that it separately validate each residential mortgage loan was underwritten consistent with the underwriting requirements of the final investor or market standards prior to advancing funds. The Company is repaid with the proceeds received from sale of the mortgage loan to the final investor.
The Company utilizes a Master Repurchase Agreement (“MRA”) to define the terms of the agreement between the mortgage lender and the Company. With the MRA, the Company can facilitate short-term funding to mortgage companies to originate mortgages and then repay the warehouse advances when the loans are sold.
Mortgage loans originated or purchased under a MRA and intended for sale in the secondary market are carried at cost, as determined by outstanding commitments from investors and the short holding period of these mortgage loans. Gains and losses from the sale of loans are determined using the specific identification method and are included in mortgage banking activity in the consolidated statements of income.
In addition to mortgage warehouse facilities, the Company holds revolving, open-ended loans secured by 1 – 4 family residential loans, commonly referred to as HELOCs and closed-end loans secured by junior liens on 1 – 4 family residential loans with the intent to sell in the secondary market. These loans are referred to as correspondent loans held for sale and are carried at the lower of amortized cost or fair value. Adjustments to reflect changes in the fair value of correspondent loans held for sale are classified as mortgage banking activity while realized gains and losses upon the ultimate sale of the loans held for sale are classified as gain on sale of loans in the consolidated statements of income. At December 31, 2025 and 2024, there were no adjustments recorded on loans held for sale as fair value was greater than the amortized cost. The Company has not elected the fair value option as of December 31, 2025 or 2024.
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(1)
Summary of Significant Accounting Policies (continued)
​
Loans
Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs, and any applicable allowance for credit losses. Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method over the contractual lives of the loans without anticipating prepayments.
Interest income on loans is discontinued at the time the loan is 90 days delinquent unless the loan is well-secured and in process of collection. Past due status is based on the contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful. All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual.
Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.
Most of the Company’s business activity is with customers located within the markets where it has banking operations. Therefore, the Company’s exposure to credit risk is significantly affected by changes in the economy within its markets. As of December 31 2025, approximately 73% of the Company’s loan portfolio is secured by real estate and is therefore susceptible to changes in real estate valuations.
Loans — Acquired: Loans purchased in acquisition transactions are acquired loans, and are recorded at their estimated fair value on the acquisition date.
Acquired loans that have evidence of more-than-insignificant deterioration in credit quality since origination are considered purchased credit deteriorated (“PCD”) loans. At acquisition, an estimate of expected credit losses is made for PCD loans. This initial allowance for credit losses is allocated to individual PCD loans and added to the purchase price or acquisition date fair value to establish the initial amortized cost basis of the PCD loans. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to noncredit factors, resulting in a discount or premium that is amortized to interest income. For acquired loans not deemed PCD loans at acquisition, the difference between the initial fair value mark and the unpaid principal balance is recognized in interest income over the estimated life of the loans. In addition, an initial allowance for expected credit losses is estimated and recorded as provision expense at the acquisition date. The subsequent measurement of expected credit losses for all acquired loans is the same as the subsequent measurement of expected credit losses for originated loans.
Allowance for Credit Losses
The following discussion provides a description of the methodology applied to calculate the Allowance for Credit Losses (“ACL”) under CECL.
The ACL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the ACL when management believes the uncollectibility of a loan balance is confirmed. Accrued interest receivable on loans is excluded from the estimate of credit losses. For the majority of loans, the ACL is calculated using a cash flow-based methodology applied at the individual loan level. Expected credit losses are estimated over the contractual term of each loan, adjusted for expected prepayments and curtailments. The methodology incorporates reasonable and supportable forecasts over a one-year period, followed by a one-year straight-line reversion to long-term loss expectations. Expected losses are calculated based on forecasted loss rates and recovery assumptions and are aggregated to determine the ACL for collectively evaluated loans.
Management considers the effects of past events, current conditions, and reasonable and supportable forecasts on the collectability of financial assets as of the reporting date. Management will also use relevant forward-looking information and expectations drawn from reasonable and supportable forecasts when estimating the ACL. The information is obtained from internal and external sources relating to past events, current conditions, and reasonable and supportable forecasts. The loss rate
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(1)
Summary of Significant Accounting Policies (continued)
​
methodology is designed to estimate expected credit losses over the life of the loan for the entire portfolio utilizing reasonable and supportable economic forecasts. By segmenting the loan portfolio by call code, historical loss rates can be utilized from diversified peer group of banks under similar economic conditions to those in the economic forecast. The model takes into consideration observed historical loss rates from peer banks and combines this with third-party benchmark studies associated with prepayment speeds, curtailment rates and recovery rates to estimate historical losses on the portfolio. Qualitative factors, which require management judgment related to various sources of external and internal data, are incorporated into the overall allowance. Adjustments to modeled loss estimates may be made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in economic conditions, property values, or other relevant factors.
The ACL is measured on a collective basis when similar risk characteristics exist. The Bank has identified the following portfolio segments and calculates the ACL for each using a discounted cash flow methodology at the loan level based on a forecasted loss rate determined based on underlying assumptions that most closely align with the underlying loans current and expected conditions:
Construction and land development — Construction and land development loans include commercial construction, land acquisition and land development loans and single-family interim construction loans to small- and medium-sized businesses and individuals. These loans can carry the risk of cost overruns, changes in market demand for property, zoning and/or environmental issues and declines in real estate values.
Single-family residential — Residential loans include permanent mortgage financing and home equity lines of credit secured by first and second deeds on residential properties. These loans are susceptible to weakening general economic conditions, increases in unemployment rates and declining real estate values.
Commercial real estate — Commercial real estate loans include loans secured by owner-occupied commercial buildings for office, storage, retail, farmland, and warehouse space. They also include non-owner-occupied commercial buildings such as leased retail and office space. Commercial real estate loans may be larger in size and may involve a greater degree of risk than one-to-four family residential mortgage loans. Payments on such loans are often dependent on successful operation or management of the properties.
Multifamily — The Company’s multi-family residential loans are primarily secured by multi-family properties, such as apartments and condominium buildings. These loans also may be affected by increases in unemployment rates and deteriorating market values of real estate.
Commercial and financial — Loans include borrowings for working capital, expansion, equipment finance and other business purposes along with certain U.S. Small Business Administration (“SBA”) loans. Risks to this loan category include the inability to monitor the condition of the collateral, which often consists of inventory, accounts receivable and other non-real estate assets. Equipment and inventory obsolescence can also pose a risk. Declines in general economic conditions and other events can cause cash flows to fall to levels insufficient to service debt.
Consumer — These loans include home improvement loans, direct automobile loans, boat, and recreational vehicle financing and other personal loans. Risks common to consumer direct loans include unemployment and changes in local economic conditions as well as the inability to monitor collateral consisting of personal property.
When management determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be provided substantially through the operation or sale of the collateral, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.
ACL — Off-Balance Sheet Credit Exposures: Management estimates expected credit losses on commitments to extend credit over the contractual period during which the Bank is exposed to credit risk on the underlying commitments. The ACL on off-balance sheet credit exposures is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The ACL is calculated using a global funding rate calculated using a funding analysis incorporating various assumptions applicable to the commitments expected to fund.
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(1)
Summary of Significant Accounting Policies (continued)
​
Premises and Equipment
Premises and equipment are recorded at cost less accumulated depreciation. Depreciation is computed principally on the straight-line method and charged to occupancy expense over the estimated useful lives of the assets. Costs of major additions, replacements or improvements are capitalized while expenditures for maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise disposed any gain or loss is reflected in earnings for the period. The estimated useful lives for buildings and improvements are fifteen to forty years; for furniture and equipment, the estimated useful life is three to ten years and for leasehold improvements, the estimated useful life is five to ten years.
Cash Value of Bank Owned Life Insurance
The Company has purchased life insurance policies on certain key executives and members of management. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value or return of premiums, depending on the contract, adjusted for other changes or other amounts due that are probable at settlement.
Goodwill and Other Intangible Assets
Goodwill arises from business combinations and is determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a business combination and determined to have an indefinite useful life are not amortized but tested for impairment at least annually or more frequently if events and circumstances exist that indicate that an impairment test should be performed. Annually, the Company performs an annual impairment test. Intangible assets with finite useful lives are amortized over their estimated useful lives to their estimated residual values. Amortized intangibles must be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the long-lived asset (group) might not be recoverable.
An impairment loss related to intangible assets with finite useful lives is recognized if the carrying amount of the intangible asset is not recoverable and its carrying amount exceeds its fair value. After the impairment loss is recognized, the adjusted carrying amount of the intangible asset shall be its new accounting basis. Goodwill is the only intangible asset with an indefinite life on the Company’s balance sheet.
Other intangible assets consist of core deposit intangible assets arising from whole bank acquisitions and are amortized on a straight-line method over their estimated useful lives.
Other Real Estate Owned
Real estate acquired through, or in lieu of, loan foreclosure is initially recorded at fair value less the estimated cost to sell at the date of foreclosure, which establishes a new cost basis. Other real estate owned includes all real property received in full or partial satisfaction of a loan. For properties acquired through foreclosure or deed in lieu, fair values are based on independent appraisals. Any write-down at the time of foreclosure is charged to the allowance for credit losses. Costs of improvements are capitalized, whereas costs relating to holding other real estate owned and subsequent adjustments to the value are expensed.
Leases
The Company records a right of use (“ROU”) asset and a related lease liability for eligible operating leases for which it is the lessee, which include leases for buildings and equipment. At lease commencement, the Company records the ROU asset and related lease liability based on the present value of lease payments over the lease term. Absent a readily determinable interest rate in the lease agreement, the Company’s incremental borrowing rate for secured borrowings was utilized as the discount rate used in the present value calculation. The incremental borrowing rate is based on the term of the lease. Payments related to these leases consist primarily of base rent and, in the case of building leases, additional operating costs associated with the leased property such as common area maintenance and utilities. In most cases these operating costs vary over the term of the lease, and therefore are classified as variable lease costs, which are recognized as incurred in the consolidated statement of income. In
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(1)
Summary of Significant Accounting Policies (continued)
​
addition, certain operating leases include costs such as property taxes and insurance, which are recognized as incurred in the consolidated statement of income.
Some of the Company’s operating leases contain renewal options of which the renewal option is at the Company’s sole discretion. The Company does not consider exercise of any lease renewal options reasonably certain. In addition, certain of the lease agreements contain early termination options. No renewal or early termination options have been included in calculation of the ROU assets or operating lease liabilities. At the commencement date, the Company also recognizes a ROU asset measured at (i) the initial measurement of the lease liability; (ii) any lease payments made to the lessor at or before the commencement date less any lease incentives received; and (iii) any initial direct costs incurred by the lessee. The Company elected to include leases with an initial term of 12 months or less as short-term leases and as such are not recorded on the balance sheet. For these short-term leases, lease expense is recognized on a straight-line basis over the lease term. At December 31, 2025 and 2024, the Company had no leases classified as financing leases. The Company rents or subleases certain real estate to third parties. The Company’s sublease portfolio consists of operating leases of excess space in branch or corporate facilities.
Derivatives
As part of its overall interest rate risk management, the Company uses derivative instruments, which can include interest rate swaps, caps, and floors. GAAP requires all derivative instruments to be carried at fair value on the consolidated balance sheets. The accounting standard provides specific accounting provisions for derivative instruments that qualify for hedge accounting. To be eligible, the Company must specifically identify a derivative as a hedging instrument and identify the risk being hedged. The derivative instrument must be shown to meet specific requirements under this accounting standard.
The Company designates the derivative on the date the derivative contract is entered into as a hedge of (1) the fair value of a recognized asset or liability (a “fair-value” hedge) or (2) the variability of cash flows to be received generally in a forecasted transaction related to a recognized asset or liability (a “cash-flow” hedge). Changes in the fair value of a derivative that is highly effective as a fair-value hedge, and that is designated and qualifies as a fair-value hedge, along with the loss or gain on the hedged asset or liability that is attributable to the hedged risk, are recorded in current-period earnings.
The changes in a derivative’s fair value that are included in the assessment of hedge effectiveness for a derivative that is highly effective and that is designated and qualifies as a cash-flow hedge are recorded in other comprehensive income until earnings are affected by the variability of cash flows (e.g., when periodic settlements on a variable-rate asset or liability are recorded in earnings).
The Company formally documents all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives that are designated as fair-value or cash-flow hedges to specific assets and liabilities on the consolidated balance sheets. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, as necessary, whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items. When it is determined that a derivative is not highly effective as a hedge or that it has ceased to be a highly effective hedge, the Company discontinues hedge accounting prospectively. The Company discontinues hedge accounting prospectively when: (1) it is determined that the derivative is no longer effective in offsetting changes in the fair value or cash flows of a hedged item; (2) the derivative expires or is sold, terminated, or exercised; (3) the derivative is re-designated as a hedge instrument, because it is unlikely that a forecasted transaction will occur; (4) a hedged firm commitment no longer meets the definition of a firm commitment; or (5) management determines that designation of the derivative as a hedge instrument is no longer appropriate.
When hedge accounting is discontinued because it is determined that the derivative no longer qualifies as an effective fair-value hedge, hedge accounting is discontinued prospectively and the derivative will continue to be carried on the balance sheet at its fair value with all changes in fair value being recorded in earnings but with no offsetting fair value adjustment being recorded on the hedged item. For a discontinued cash flow hedge the change in fair value is no longer recorded in other comprehensive income.
The Company uses interest rate swaps to hedge exposure to changes in the fair value of certain fixed rate debt obligations attributable to changes in the designated benchmark interest rate. These derivative instruments are designated as fair value hedges and cash flow hedges under ASC 815, Derivatives and Hedging.
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(1)
Summary of Significant Accounting Policies (continued)
​
For qualifying hedging relationships, the Company applies the shortcut method of hedge accounting. Under the shortcut method, the Company asserts that the critical terms of the interest rate swap and the hedged debt are identical, such that the hedging relationship is assumed to have no ineffectiveness. As a result, changes in the fair value of the interest rate swap are recorded as an adjustment to the carrying amount of the hedged debt, with both amounts recognized in interest expense within the consolidated statements of income.
To qualify for the shortcut method, the Company determined at hedge inception that:
•
The notional amount of the swap matches the principal amount of the hedged debt;
​
•
The swap’s fair value is zero at inception;
​
•
The fixed and floating legs of the swap mirror the terms of the hedged debt, including repricing dates, index, maturity, and payment frequency; and
​
•
No terms exist that could invalidate an assumption of perfect offset (e.g., caps, floors, prepayment features, or non-standard amortization).
​
The Company evaluates the hedging relationship on an ongoing basis to confirm that the critical terms continue to match, and the shortcut method remains applicable. If the hedging relationship were to cease to qualify for the shortcut method, the Company would prospectively apply the long-haul method, which could result in the recognition of hedge ineffectiveness in earnings.
At December 31, 2025, the Company had outstanding interest rate swaps with an aggregate notional amount of $79.2 million designated under the shortcut method. The carrying amount of the hedged debt was increased (decreased) by $761 thousand as a result of fair value hedge accounting adjustments.
Transfers of Financial Assets
Transfers of financial assets are accounted for as sales when control over the assets have been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.
Income Taxes
Deferred tax assets and liabilities are recorded for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax benefits are recognized to the extent that realization of such benefits is more likely than not. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which the assets and liabilities are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income taxes during the period that includes the enactment date.
In the event the future tax consequences of differences between the financial reporting bases and the tax bases of the Company’s assets and liabilities results in deferred tax assets, an evaluation of the probability of being able to realize the future benefits indicated by such asset is required. A valuation allowance is provided for the portion of the deferred tax asset when it is more likely than not that some or all the deferred tax asset will not be realized. In assessing the likelihood of the realization of deferred tax assets, management considers the scheduled reversals of deferred tax liabilities, projected future taxable earnings and tax planning strategies. Deferred tax valuation allowance assessments require significant amounts of judgment. GAAP requires the more likely than not criteria (a likelihood of 50% or more) to be used; however, the likelihood is not possible to be expressed in purely mathematical terms. Highly subjective information about future events heavily factors into the conclusion as to whether the more likely than not criteria can be achieved.
The Company currently evaluates uncertainty in income tax positions. GAAP requires that a loss contingency reserve be accrued if it is probable that the tax position will be challenged, it is probable that the future resolution of the challenge will confirm that a loss has been incurred, and the amount of such loss can be reasonably estimated.
 
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Notes to Consolidated Financial Statements (continued)
(1)
Summary of Significant Accounting Policies (continued)
​
Share-Based Compensation
The Company accounts for its stock compensation plans using a fair value-based method whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. The Company recognizes forfeitures as they occur.
Comprehensive Income
Comprehensive income consists of net income and other comprehensive income. Other comprehensive income includes unrealized gains and losses on available for sale investment securities and cash flow hedges, net of the deferred income tax effects.
Dividend Restrictions
Banking regulations require maintaining certain capital levels and may limit the dividends paid by the Bank to the holding company or by the holding company to the shareholders. These restrictions are based on the level of regulatory classified assets, the prior year’s net income, and the ratio of equity capital to total assets.
Fair Value of Financial Instruments
Fair values of financial instruments are estimated using relevant market information and other assumptions as more fully disclosed in Note 21. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or in market conditions could significantly affect these estimates.
Earnings per Share
Basic earnings per common share are calculated by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per common share are calculated by dividing net income available to common shareholders by the weighted average number of common shares adjusted for the dilutive effect of outstanding common stock awards, if any. See Note 16 for additional information on earnings per common share.
Revenue Recognition
With the exception of gains/losses on the sale of OREO discussed below, revenue from contracts with customers (“ASC 606 Revenue”) is recorded in the service charges and fees category and the other income category in the Company’s consolidated statement of income as part of noninterest income.
Service charges and fees:   The deposit contract obligates the Company to serve as a custodian of the customer’s deposited funds and is generally terminable at will by either party. This contract permits the customer to access the funds on deposit and request additional services related to the deposit account.
Service charges on deposit accounts consist of account analysis fees (net fees earned on analyzed business and public checking accounts), monthly service charges, nonsufficient fund (“NSF”) charges, and other deposit account related charges. The Company’s performance obligation for account analysis fees and monthly service charges are generally satisfied, and the related revenue recognized, over the period in which the service is provided (typically monthly); while NSF charges and other deposit account-related charges are largely transactional based, and the related revenue is recognized at the time the service is provided.
Interchange and ATM fees represent a contract between the Company, as a card-issuing bank, and its customers, whereby the Company receives a transaction fee from the merchant’s bank whenever a customer uses a debit card to make a purchase. The performance obligation is completed, and the fees are recognized as the service is provided (i.e., when the customer uses a debit card).
Gains on the sale of OREO:   The net gains and losses on sales of OREO are recorded in credit resolution related expenses in the Company’s consolidated statement of income. The Company records a gain or loss from the sale of OREO when control
 
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Notes to Consolidated Financial Statements (continued)
(1)
Summary of Significant Accounting Policies (continued)
​
of the property transfers to the buyer, which generally occurs at the time of an executed deed. When the Company finances the sale of OREO to the buyer, the Company assesses whether the buyer is committed to perform their obligations under the contract and whether collectability of the transaction price is probable. Once these criteria are met, the OREO asset is derecognized and the gain on sale is recorded upon the transfer of control of the property to the buyer. The Company does not provide financing for the sale of OREO unless these criteria are met, and the OREO can be derecognized.
Other noninterest income:   Other noninterest income includes several items, such as wire transfer income, check cashing fees, check printing fees, safe deposit box rental fees. These fees are generally recognized at the time the service is provided and/or the income is earned.
The Company accounts for business combinations under the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations (“ASC 805”). The Company recognizes the full fair value of the assets acquired and liabilities assumed and immediately expenses transaction costs. If the amount of consideration exceeds the fair value of assets purchased less the fair value of liabilities assumed, goodwill is recorded. Alternatively, if the amount by which the fair value of asses purchased exceeds the fair value of liabilities assumed and consideration paid, a gain (“bargain purchase gain”) is recorded. Fair values are subject to refinement for up to one year after the closing date of an acquisition as information relative to closing date fair values becomes available. Results of operations of the acquired business are included in the statements of income from the effective date of the acquisition.
Reclassifications
Certain amounts in the 2024 financial statements have been reclassified to conform to the 2025 presentation. These reclassifications were not material and did not impact previously recorded shareholders’ equity or net income.
Accounting Standards Adopted in 2025
ASU No. 2023-09 — Income Taxes (Topic 740):   Improvements to Income Tax Disclosures (“ASU 2023‑09”). ASU 2023-09 provides for enhanced income tax disclosures by, among other things, requiring specific breakout of certain categories in the reconciliation of statutory income tax rate to effective rate, establishing a quantitative threshold for further breakout of reconciling items exceeding the threshold and not already required to be separately disclosed, requiring a qualitative description of the state and local jurisdictions making up the majority (greater than 50%) of the effect of state and local income taxes category, and provide further disaggregation of income taxes paid (net of refunds received) by jurisdiction. ASU 2023-09 is effective for annual periods beginning after December 15, 2024. The Company adopted this standard effective January 1, 2025 and adoption did not have a significant impact on the Company’s financial position or results of operations. Refer to Note 17 for additional information related to income taxes.
Accounting Standards Pending Adoption
ASU No. 2024-03 — Income Statement — Reporting Comprehensive Income (Topic 220):   Expense Disaggregation Disclosures (“ASU 2024-03”). ASU No. 2024-03 requires additional disclosure of certain expense captions presented on the face of the Company’s income statement. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, and should be applied either on a prospective or retrospective basis, with early adoption permitted. The Company is currently evaluating the effect that adoption of ASU 2024-03 will have on its disclosures.
ASU No. 2025-08, Financial Instruments — Credit Losses (Subtopic 326-20):   Purchased Loans (“ASU 2025-08”). ASU 2025-08 expands the gross-up approach to most purchased loans, eliminating the recognition of a day-one credit loss expense for these acquisitions. The standard is effective for fiscal years beginning after December 15, 2026, with early adoption permitted. The Company did not elect early adoption of this standard and is currently evaluating the effect that adoption of ASU 2025-08 will have on its disclosures.
ASU 2025-09, Derivatives and Hedging (Topic 815):   Hedge Accounting Improvements. ASU 2025-09 clarifies hedge accounting guidance and addresses issues arising from the global reference rate reform initiative. There are five issues addressed: 1) expanding risks permitted to be aggregated for cash flow hedges to include those having a similar risk exposure; 2) provide
 
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Notes to Consolidated Financial Statements (continued)
(1)
Summary of Significant Accounting Policies (continued)
​
cash flow accounting guidance on choose-your-rate debt instruments; 3) expand hedge accounting for forecasted purchases and sales of nonfinancial assets; 4) update guidance on net written options as hedging instruments; 5) refine foreign-currency-denominated debt instrument as hedging instrument and hedged item (dual hedge). This guidance is effective for annual periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The amendments in this update are to be applied on a prospective basis. The Company is currently evaluating the effect that adoption of ASU 2025-09 will have on its disclosures.
(2)
Business Combination
​
Effective March 1, 2025, GBC completed its merger with Primary Bancshares Corporation (“PBC”), a bank holding company headquartered in Atlanta, GA, pursuant to the terms of the Agreement and Plan of Merger (the “Agreement”) dated October 9, 2024, at which time PBC merged with and into GBC, and Georgia Primary Bank, the wholly owned bank subsidiary of PBC, was merged with and into the Bank.
Under the terms of the Agreement, GBC agreed to acquire 100% of the common stock of PBC in a combined stock-and-cash transaction, whereby each PBC shareholder was given the right to elect to receive either $13.50 in cash or 0.5870 shares of the Company’s common stock in exchange for each share of PBC common stock. The transaction was valued at $27.1 million, such that 18.0% of PBC common stock was converted to cash and the remaining 82.0% of PBC common stock was converted to GBC common stock.
Also pursuant to the Agreement, as of the effective date of the merger, each option to purchase shares of PBC common stock (each a “PBC stock option”) that was outstanding immediately prior to the effective date of the merger, to the extent not vested, became fully vested and exercisable and was canceled in consideration for the right to receive, at the election of the holder (i) an option (“Rollover Option”) to purchase a number of shares of GBC common stock equal to the sum of the number of shares of PBC common stock subject to such options to acquire PBC common stock (“Seller Option”) times 0.5870, at an exercise price per share equal to the exercise price per share of the PBC common stock of such seller option divided by 0.5870; (ii) or a number of shares of GBC common stock equal to the sum of the number of shares of PBC common stock subject to such option times 0.5870 less the number of shares of GBC common stock equal to the aggregate exercise price for such options, assuming a value of $23.00 per share of GBC common stock.
A summary of the assets acquired and liabilities assumed in the PBC transaction, as of the acquisition date, including the purchase price allocation was as follows (in thousands):
​ ​ ​
Fair Value
​
Assets Acquired: ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ $ 20,436 ​ ​
Debt securities available for sale
​ ​ ​ ​ 43,378 ​ ​
Other investments
​ ​ ​ ​ 662 ​ ​
Loans
​ ​ ​ ​ 254,821 ​ ​
Allowance for credit losses
​ ​ ​ ​ (1,364) ​ ​
Net loans
​ ​ ​ ​ 253,457 ​ ​
Premises and equipment
​ ​ ​ ​ 9,283 ​ ​
Core deposit intangible
​ ​ ​ ​ 6,170 ​ ​
Cash value of bank owned life insurance
​ ​ ​ ​ 4,436 ​ ​
Other assets
​ ​ ​ ​ 3,250 ​ ​
Total assets acquired
​ ​ ​ $ 341,072 ​ ​
Liabilities Assumed: ​ ​ ​ ​ ​ ​ ​
Deposits
​ ​ ​ $ 301,402 ​ ​
Federal Home Loan Bank advances
​ ​ ​ ​ 8,000 ​ ​
 
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Notes to Consolidated Financial Statements (continued)
(2)
Business Combination (continued)
​
​ ​ ​
Fair Value
​
Subordinated notes
​ ​ ​ ​ 8,952 ​ ​
Other liabilities
​ ​ ​ ​ 458 ​ ​
Total liabilities assumed
​ ​ ​ ​ 318,812 ​ ​
Net assets acquired
​ ​ ​ $ 22,260 ​ ​
Purchase Price: ​ ​ ​ ​ ​ ​ ​
GBC common stock issued (in shares)
​ ​ ​ ​ 873,794 ​ ​
Value of GBC common stock and equity-based awards consideration
​ ​ ​ $ 22,909 ​ ​
Cash consideration paid
​ ​ ​ ​ 4,160 ​ ​
Total purchase price
​ ​ ​ $ 27,069 ​ ​
Goodwill
​ ​ ​ $ 4,809 ​ ​
​
The Company purchased loans through the acquisition of PBC for which there was, at the date of acquisition, more than insignificant deterioration of credit quality since origination (purchased credit deteriorated loans or “PCD” loans). The carrying amount of these loans at acquisition was as follows (in thousands):
​ ​ ​
March 1, 2025
​
Purchase price of PCD loans at acquisition
​ ​ ​ $ 5,264 ​ ​
Allowance for credit losses on PCD loans at acquisition
​ ​ ​ ​ 1,364 ​ ​
Par value of PCD acquired loans at acquisition
​ ​ ​ $ 6,628 ​ ​
In connection with the acquisition, GBC recorded preliminary goodwill of $4.8 million, none of which is expected to be deductible for tax purposes. The preliminary goodwill is primarily attributable to expected synergies, operational efficiencies, and other factors to arise from the transaction. Information regarding carrying amounts and amortization of core deposit and other intangible assets is provided in Note 8 Goodwill and Other Intangible Assets.
The following is a description of the methods used to determine the fair values of significant assets acquired and liabilities assumed:
Cash and cash equivalents:   The carrying amount of these assets was a reasonable estimate of fair value based on the short-term nature of these assets.
Debt investment securities:   Fair values for debt investment securities were based on quoted market prices, where available. If quoted market prices were not available, fair value estimates were based on observable inputs including quoted market prices for similar instruments, quoted market prices that were not in an active market or other inputs that were observable in the market. In the absence of observable inputs, fair value was estimated based on pricing models and/or discounted cash flow methodologies.
Loans:   Fair values for loans were based on a discounted cash flow methodology that considered factors including the type of loan and related collateral, classification status, fixed or variable interest rate, term, amortization status and current discount rates. Loans were grouped together according to similar characteristics when applying various valuation techniques. The discount rates used for loans were based on current market rates for new originations of comparable loans and included adjustments for liquidity. The discount rate does not include a factor for credit losses as that has been included as a reduction to the estimated cash flows. Purchased loans that reflect a more-than-insignificant deterioration of credit from origination are considered PCD. For PCD loans, the initial estimate of expected credit losses is recognized in the ACL on the date of acquisition using the same methodology as other loans and held-for-investment.
Core deposit intangible (CDI):   GBC recorded a CDI of $6.2 million as of the acquisition date, which represents the low cost of funding acquired core deposits provided relative to the Company’s marginal cost of funds. The fair value was estimated based on a discounted cash flow methodology that considered expected customer attrition rates, net maintenance cost of the
 
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Notes to Consolidated Financial Statements (continued)
(2)
Business Combination (continued)
​
deposit base, alternative cost of funds, and the interest costs associated with customer deposits. The CDI is being amortized over 10 years based upon the period over which estimated economic benefits are estimated to be received.
Deposits:   The fair values used for the demand and savings deposits by definition equal the amount payable on demand at the acquisition date. The fair values for time deposits were estimated using a discounted cash flow calculation that applies interest rates currently being offered to the contractual interest rates on such time deposits.
The following table presents certain unaudited pro forma information for the results of operations for the years ended December 31, 2025 and 2024, as if the PBC merger had occurred on January 1, 2025 and 2024, respectively. These results combine the historical results of PBC into GBC’s consolidated statement of income and, while certain adjustments were made for the estimated impact of certain fair valuation adjustments and other acquisition related activity, they are not indicative of what would have occurred had the acquisitions taken place on the indicated date nor are they intended to represent or be indicative of future results of operations. In particular, no adjustments have been made to eliminate the amount of PBC’s provision for credit losses for 2024 that may not have been necessary had the acquired loans been recorded at fair value as of the beginning of 2025 and 2024. Additionally, GBC expects to achieve operating cost savings and other business synergies as a result of the acquisition which are not reflected in the pro forma amounts.
(in thousands)
​ ​
2025
​ ​
2024
​
Total revenues, net of interest expense
​ ​ ​ $ 113,814 ​ ​ ​ ​ $ 93,191 ​ ​
Net income
​ ​ ​ $ 27,763 ​ ​ ​ ​ $ 10,273 ​ ​
​
(3)
Debt Securities
​
The amortized cost, gross unrealized gains and losses, and fair value of debt securities available for sale at December 31, 2025 and 2024 are summarized as follows (in thousands):
​ ​ ​
Amortized
Cost
​ ​
Gross
Unrealized
Gains
​ ​
Gross
Unrealized
Losses
​ ​
Fair Value
​
December 31, 2025: ​ ​ ​ ​ ​
U.S. Treasury securities
​ ​ ​ $ 21,863 ​ ​ ​ ​ ​ 49 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 21,912 ​ ​
U.S. government sponsored agencies
​ ​ ​ ​ 2,978 ​ ​ ​ ​ ​ 16 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,994 ​ ​
Residential mortgage-backed securities
​ ​ ​ ​ 27,673 ​ ​ ​ ​ ​ 135 ​ ​ ​ ​ ​ (2,874) ​ ​ ​ ​ ​ 24,934 ​ ​
Collateralized mortgage obligations
​ ​ ​ ​ 1,067 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (71) ​ ​ ​ ​ ​ 996 ​ ​
Corporate debt securities
​ ​ ​ ​ 1,000 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (40) ​ ​ ​ ​ ​ 960 ​ ​
​ ​ ​ ​ $ 54,581 ​ ​ ​ ​ ​ 200 ​ ​ ​ ​ ​ (2,985) ​ ​ ​ ​ ​ 51,796 ​ ​
December 31, 2024: ​ ​ ​ ​ ​
U.S. Treasury securities
​ ​ ​ $ 38,511 ​ ​ ​ ​ ​ 94 ​ ​ ​ ​ ​ (41) ​ ​ ​ ​ ​ 38,564 ​ ​
U.S. government sponsored agencies
​ ​ ​ ​ 12,801 ​ ​ ​ ​ ​ 40 ​ ​ ​ ​ ​ (32) ​ ​ ​ ​ ​ 12,809 ​ ​
Residential mortgage-backed securities
​ ​ ​ ​ 20,312 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (3,890) ​ ​ ​ ​ ​ 16,422 ​ ​
Collateralized mortgage obligations
​ ​ ​ ​ 1,117 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (119) ​ ​ ​ ​ ​ 998 ​ ​
Corporate debt securities
​ ​ ​ ​ 1,000 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (85) ​ ​ ​ ​ ​ 915 ​ ​
​ ​ ​ ​ $ 73,741 ​ ​ ​ ​ ​ 134 ​ ​ ​ ​ ​ (4,167) ​ ​ ​ ​ ​ 69,708 ​ ​
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(3)
Debt Securities (continued)
​
The amortized cost, gross unrealized gains and losses, and fair value of debt securities held to maturity at December 31, 2025 and 2024 are summarized as follows (in thousands):
​ ​ ​
Amortized
Cost
​ ​
Gross
Unrealized
Gains
​ ​
Gross
Unrealized
Losses
​ ​
Fair Value
​
December 31, 2025: ​ ​ ​ ​ ​
Residential mortgage-backed securities
​ ​ ​ $ 670 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (18) ​ ​ ​ ​ ​ 652 ​ ​
Collateralized mortgage obligations
​ ​ ​ ​ 28,488 ​ ​ ​ ​ ​ 318 ​ ​ ​ ​ ​ (59) ​ ​ ​ ​ ​ 28,747 ​ ​
State and political subdivisions
​ ​ ​ ​ 10,944 ​ ​ ​ ​ ​ 81 ​ ​ ​ ​ ​ (296) ​ ​ ​ ​ ​ 10,729 ​ ​
​ ​ ​ ​ $ 40,102 ​ ​ ​ ​ ​ 399 ​ ​ ​ ​ ​ (373) ​ ​ ​ ​ ​ 40,128 ​ ​
December 31, 2024: ​ ​ ​ ​ ​
Residential mortgage-backed securities
​ ​ ​ $ 4,539 ​ ​ ​ ​ ​ 15 ​ ​ ​ ​ ​ (80) ​ ​ ​ ​ ​ 4,474 ​ ​
Collateralized mortgage obligations
​ ​ ​ ​ 18,559 ​ ​ ​ ​ ​ 34 ​ ​ ​ ​ ​ (265) ​ ​ ​ ​ ​ 18,328 ​ ​
State and political subdivisions
​ ​ ​ ​ 3,642 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (272) ​ ​ ​ ​ ​ 3,370 ​ ​
​ ​ ​ ​ $ 26,740 ​ ​ ​ ​ ​ 49 ​ ​ ​ ​ ​ (617) ​ ​ ​ ​ ​ 26,172 ​ ​
The following table shows the gross unrealized losses and estimated fair value by security category and length of time that individual debt securities available for sale have been in a continuous unrealized loss position at December 31, 2025 and 2024 (in thousands):
​ ​ ​
Less than 12 Months
​ ​
More than 12 Months
​ ​
Total
​
​ ​ ​
Fair
Value
​ ​
Gross
Unrealized
Losses
​ ​
Fair
Value
​ ​
Gross
Unrealized
Losses
​ ​
Fair
Value
​ ​
Gross
Unrealized
Losses
​
December 31, 2025: ​ ​ ​ ​ ​ ​ ​
Residential mortgage-backed securities
​ ​ ​ $ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 15,533 ​ ​ ​ ​ ​ 2,874 ​ ​ ​ ​ ​ 15,533 ​ ​ ​ ​ ​ 2,874 ​ ​
Collateralized mortgage obligations
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 996 ​ ​ ​ ​ ​ 71 ​ ​ ​ ​ ​ 996 ​ ​ ​ ​ ​ 71 ​ ​
Corporate debt securities
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 960 ​ ​ ​ ​ ​ 40 ​ ​ ​ ​ ​ 960 ​ ​ ​ ​ ​ 40 ​ ​
​ ​ ​ ​ $ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 17,489 ​ ​ ​ ​ ​ 2,985 ​ ​ ​ ​ ​ 17,489 ​ ​ ​ ​ ​ 2,985 ​ ​
December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
U.S. Treasury securities
​ ​ ​ $ 14,645 ​ ​ ​ ​ ​ 30 ​ ​ ​ ​ ​ 6,969 ​ ​ ​ ​ ​ 11 ​ ​ ​ ​ ​ 21,614 ​ ​ ​ ​ ​ 41 ​ ​
U.S. government sponsored agencies
​ ​ ​ ​ 2,935 ​ ​ ​ ​ ​ 32 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,935 ​ ​ ​ ​ ​ 32 ​ ​
Residential mortgage-backed securities
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 16,422 ​ ​ ​ ​ ​ 3,890 ​ ​ ​ ​ ​ 16,422 ​ ​ ​ ​ ​ 3,890 ​ ​
Collateralized mortgage obligations
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 998 ​ ​ ​ ​ ​ 119 ​ ​ ​ ​ ​ 998 ​ ​ ​ ​ ​ 119 ​ ​
Corporate debt securities
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 915 ​ ​ ​ ​ ​ 85 ​ ​ ​ ​ ​ 915 ​ ​ ​ ​ ​ 85 ​ ​
​ ​ ​ ​ $ 17,580 ​ ​ ​ ​ ​ 62 ​ ​ ​ ​ ​ 25,304 ​ ​ ​ ​ ​ 4,105 ​ ​ ​ ​ ​ 42,884 ​ ​ ​ ​ ​ 4,167 ​ ​
The following table presents the number and aggregate depreciation from the Company’s amortized cost basis of debt securities available for sale in a continuous loss position by security type at December 31, 2025:
​ ​ ​
Number of
Securities
​ ​
Aggregate
Depreciation
​
Residential mortgage-backed securities
​ ​ ​ ​ 14 ​ ​ ​
15.6%
​
Collateralized mortgage obligations
​ ​ ​ ​ 1 ​ ​ ​
6.6%
​
Corporate debt securities
​ ​ ​ ​ 1 ​ ​ ​
4.0%
​
​ ​ ​ ​ ​ 16 ​ ​ ​
14.6%
​
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(3)
Debt Securities (continued)
​
Management evaluates debt securities available for sale in unrealized loss positions on a quarterly basis to determine whether the decline in fair value below the amortized cost basis (impairment) is due to credit-related factors or noncredit-related factors. The Company does not consider its debt securities available for sale with unrealized losses to be attributable to credit-related factors, as the unrealized losses in each category have occurred as a result of changes in noncredit-related factors such as changes in interest rates, market spreads and market conditions subsequent to purchase, not credit deterioration. Furthermore, the Company does not have the intent to sell any of these debt securities available for sale and believes that it is more likely than not that we will not have to sell any such securities before a recovery of cost. As of December 31, 2025 and 2024, no allowance for credit losses on debt securities available for sale was recognized.
Management evaluates debt securities held to maturity on a quarterly basis to determine whether an allowance for credit losses is necessary. In making this determination, management considers the facts and circumstances of the underlying securities. The mortgage-backed securities are all issued by U.S. government agencies and corporations, which are currently explicitly or implicitly guaranteed by the U.S. government and have a long history of no credit losses. For the state and political subdivisions, management considers issuer bond ratings, historical loss rates by bond ratings, whether issuers continued to make timely principal and interest payments per the contractual terms of the securities, internal forecasts, and whether or not such securities provide insurance, other credit enhancements, or are pre-refunded by the issuers. Therefore, management determined no allowance for credit losses was necessary for the debt securities held to maturity at December 31, 2025 or 2024.
The amortized cost and fair value of debt securities available for sale December 31, 2025, by contractual maturity, are presented in the following table (in thousands):
​ ​ ​
Amortized
Cost
​ ​
Fair
Value
​
Less than 1 year
​ ​ ​ $ 21,863 ​ ​ ​ ​ ​ 21,912 ​ ​
1 to 5 years
​ ​ ​ ​ 2,978 ​ ​ ​ ​ ​ 2,994 ​ ​
5 to 10 years
​ ​ ​ ​ 1,000 ​ ​ ​ ​ ​ 960 ​ ​
Mortgage-backed securities
​ ​ ​ ​ 28,740 ​ ​ ​ ​ ​ 25,930 ​ ​
​ ​ ​ ​ $ 54,581 ​ ​ ​ ​ ​ 51,796 ​ ​
The amortized cost of debt securities held to maturity at December 31, 2025, by contractual maturity, are presented in the following table (in thousands):
​ ​ ​
Amortized
Cost
​ ​
Fair
Value
​
1 to 5 years
​ ​ ​ $ 481 ​ ​ ​ ​ ​ 491 ​ ​
5 to 10 years
​ ​ ​ ​ 3,194 ​ ​ ​ ​ ​ 3,264 ​ ​
Over 10 Years
​ ​ ​ ​ 7,269 ​ ​ ​ ​ ​ 6,974 ​ ​
Mortgage-backed securities
​ ​ ​ ​ 29,158 ​ ​ ​ ​ ​ 29,399 ​ ​
​ ​ ​ ​ $ 40,102 ​ ​ ​ ​ ​ 40,128 ​ ​
Maturities may differ from contractual maturities in mortgage-backed debt securities because the mortgages underlying the securities may be called or prepaid without penalty. Therefore, these securities are not included in the maturity categories in the above maturity summaries.
Debt securities with a carrying value of $30.0 million and $95.0 million at December 31, 2025 and 2024, respectively, serve as collateral to secure public deposits and for other purposes required or permitted by law.
As part of the PBC acquisition, effective March 1, 2025, securities were acquired and immediately sold with a fair value of $36.1 million. The fair value of the securities sold equaled the total proceeds of this transaction resulting in no net gain or loss. There were no securities sold during 2024.
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(3)
Debt Securities (continued)
​
Accrued interest receivable on securities was $493,000 and $557,000 at December 31, 2025 and 2024, respectively. Accrued interest is presented in accrued interest and other assets within the Consolidated Balance Sheets.
At December 31, 2025 and 2024, there were no holdings of debt securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of shareholders’ equity.
(4)
Loans
​
Loans receivable at December 31, 2025 and 2024, are summarized as follows (in thousands):
​ ​ ​
2025
​ ​
2024
​
Real estate loans: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Construction and land development
​ ​ ​ $ 236,851 ​ ​ ​ ​ ​ 152,455 ​ ​
Single-family residential
​ ​ ​ ​ 276,719 ​ ​ ​ ​ ​ 236,759 ​ ​
Commercial real estate
​ ​ ​ ​ 679,103 ​ ​ ​ ​ ​ 483,735 ​ ​
Multifamily
​ ​ ​ ​ 66,341 ​ ​ ​ ​ ​ 56,291 ​ ​
Total real estate loans
​ ​ ​ ​ 1,259,014 ​ ​ ​ ​ ​ 929,240 ​ ​
Commercial and financial
​ ​ ​ ​ 428,006 ​ ​ ​ ​ ​ 353,203 ​ ​
Consumer
​ ​ ​ ​ 43,223 ​ ​ ​ ​ ​ 34,676 ​ ​
Total gross loans
​ ​ ​ ​ 1,730,243 ​ ​ ​ ​ ​ 1,317,119 ​ ​
Less: unearned loan fees
​ ​ ​ ​ 5,309 ​ ​ ​ ​ ​ 4,826 ​ ​
Less: allowance for credit losses
​ ​ ​ ​ 25,574 ​ ​ ​ ​ ​ 20,600 ​ ​
Total loans, net
​ ​ ​ $ 1,699,360 ​ ​ ​ ​ ​ 1,291,693 ​ ​
Accrued interest receivable on loans was $8.2 million and $7.1 million at December 31, 2025 and 2024, respectively. Accrued interest is presented in accrued interest and other assets within the Consolidated Balance Sheets.
The following table presents an aging analysis of past due loans, including nonaccrual loans, by loan type, at December 31, 2025 and 2024 (in thousands):
​ ​ ​
30 – 59
Days
Past Due
​ ​
60 – 89
Days
Past Due
​ ​
90 or
More
Days Past
Due
​ ​
Total
Past
Due
​ ​
Total
Current
​ ​
Total
Loans
​
December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Construction and land development
​ ​ ​ $ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 328 ​ ​ ​ ​ ​ 328 ​ ​ ​ ​ ​ 236,523 ​ ​ ​ ​ ​ 236,851 ​ ​
Single-family residential
​ ​ ​ ​ 1,330 ​ ​ ​ ​ ​ 124 ​ ​ ​ ​ ​ 300 ​ ​ ​ ​ ​ 1,754 ​ ​ ​ ​ ​ 274,965 ​ ​ ​ ​ ​ 276,719 ​ ​
Commercial real estate
​ ​ ​ ​ 147 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 429 ​ ​ ​ ​ ​ 576 ​ ​ ​ ​ ​ 678,527 ​ ​ ​ ​ ​ 679,103 ​ ​
Multifamily
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 66,341 ​ ​ ​ ​ ​ 66,341 ​ ​
Commercial and financial
​ ​ ​ ​ 720 ​ ​ ​ ​ ​ 3,815 ​ ​ ​ ​ ​ 3,447 ​ ​ ​ ​ ​ 7,982 ​ ​ ​ ​ ​ 420,024 ​ ​ ​ ​ ​ 428,006 ​ ​
Consumer
​ ​ ​ ​ — ​ ​ ​ ​ ​ 9 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 9 ​ ​ ​ ​ ​ 43,214 ​ ​ ​ ​ ​ 43,223 ​ ​
Total
​ ​ ​ $ 2,197 ​ ​ ​ ​ ​ 3,948 ​ ​ ​ ​ ​ 4,504 ​ ​ ​ ​ ​ 10,649 ​ ​ ​ ​ ​ 1,719,594 ​ ​ ​ ​ ​ 1,730,243 ​ ​
December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Construction and land development
​ ​ ​ $ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 387 ​ ​ ​ ​ ​ 387 ​ ​ ​ ​ ​ 152,068 ​ ​ ​ ​ ​ 152,455 ​ ​
Single-family residential
​ ​ ​ ​ 811 ​ ​ ​ ​ ​ 40 ​ ​ ​ ​ ​ 511 ​ ​ ​ ​ ​ 1,362 ​ ​ ​ ​ ​ 235,397 ​ ​ ​ ​ ​ 236,759 ​ ​
Commercial real estate
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 483,735 ​ ​ ​ ​ ​ 483,735 ​ ​
Multifamily
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 56,291 ​ ​ ​ ​ ​ 56,291 ​ ​
Commercial and financial
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 353,203 ​ ​ ​ ​ ​ 353,203 ​ ​
Consumer
​ ​ ​ ​ 691 ​ ​ ​ ​ ​ 346 ​ ​ ​ ​ ​ 212 ​ ​ ​ ​ ​ 1,249 ​ ​ ​ ​ ​ 33,427 ​ ​ ​ ​ ​ 34,676 ​ ​
Total
​ ​ ​ $ 1,502 ​ ​ ​ ​ ​ 386 ​ ​ ​ ​ ​ 1,110 ​ ​ ​ ​ ​ 2,998 ​ ​ ​ ​ ​ 1,314,121 ​ ​ ​ ​ ​ 1,317,119 ​ ​
 
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TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(4)
Loans (continued)
​
Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, and other-than-insignificant payment delay or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses.
In some cases, the Company provides multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principial forgiveness, may be granted. The Company had no loans that were experiencing both financial difficulty and also modified during the years ended December 31, 2025 and 2024.
The following tables present the amortized cost basis of loans on nonaccrual status and loans past due 90 days or more and still accruing at December 31, 2025 and 2024 (in thousands):
​ ​ ​
Nonaccrual
​ ​
Nonaccrual
Loans
with no ACL
​ ​
Loans Past Due
90 Days or
More and
Accruing
​
December 31, 2025: ​ ​ ​ ​
Construction and land development
​ ​ ​ $ 328 ​ ​ ​ ​ ​ 328 ​ ​ ​ ​ ​ — ​ ​
Single-family residential
​ ​ ​ ​ 2,359 ​ ​ ​ ​ ​ 516 ​ ​ ​ ​ ​ — ​ ​
Commercial real estate
​ ​ ​ ​ 577 ​ ​ ​ ​ ​ 565 ​ ​ ​ ​ ​ — ​ ​
Commercial and financial
​ ​ ​ ​ 11,410 ​ ​ ​ ​ ​ 467 ​ ​ ​ ​ ​ — ​ ​
Total loans
​ ​ ​ $ 14,674 ​ ​ ​ ​ ​ 1,876 ​ ​ ​ ​ ​ — ​ ​
​ ​ ​
Nonaccrual
​ ​
Nonaccrual
Loans
with no ACL
​ ​
Loans Past Due
90 Days or
More and
Accruing
​
December 31, 2024: ​ ​ ​ ​
Construction and land development
​ ​ ​ $ 387 ​ ​ ​ ​ ​ 387 ​ ​ ​ ​ ​ — ​ ​
Single-family residential
​ ​ ​ ​ 558 ​ ​ ​ ​ ​ 461 ​ ​ ​ ​ ​ 149 ​ ​
Commercial real estate
​ ​ ​ ​ 1,073 ​ ​ ​ ​ ​ 1,073 ​ ​ ​ ​ ​ — ​ ​
Commercial and financial
​ ​ ​ ​ 4,660 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Consumer
​ ​ ​ ​ 665 ​ ​ ​ ​ ​ 129 ​ ​ ​ ​ ​ — ​ ​
Total loans
​ ​ ​ $ 7,343 ​ ​ ​ ​ ​ 2,050 ​ ​ ​ ​ ​ 149 ​ ​
Interest income recognized on nonaccrual loans during the years ended December 31, 2025 and 2024 was not material.
Loans that no longer share similar risk characteristics with the collectively evaluated pools are estimated on an individual basis. A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. The following tables present collateral-dependent loans held for investment by loan type at December 31, 2025 and 2024 (in thousands):
​ ​ ​
Balance
​ ​
Allowance for
Credit Losses
​
December 31, 2025: ​ ​ ​
Construction and land development
​ ​ ​ $ 328 ​ ​ ​ ​ ​ — ​ ​
Single-family residential
​ ​ ​ ​ 1,827 ​ ​ ​ ​ ​ — ​ ​
Commercial real estate
​ ​ ​ ​ 660 ​ ​ ​ ​ ​ — ​ ​
Commercial and financial
​ ​ ​ ​ 15,112 ​ ​ ​ ​ ​ 1,715 ​ ​
Total
​ ​ ​ $ 17,927 ​ ​ ​ ​ ​ 1,715 ​ ​
 
F-58

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(4)
Loans (continued)
​
​ ​ ​
Balance
​ ​
Allowance for
Credit Losses
​
December 31, 2024: ​ ​ ​
Single-family residential
​ ​ ​ $ 97 ​ ​ ​ ​ ​ 6 ​ ​
Commercial real estate
​ ​ ​ ​ 1,100 ​ ​ ​ ​ ​ — ​ ​
Consumer
​ ​ ​ ​ 576 ​ ​ ​ ​ ​ 17 ​ ​
Total
​ ​ ​ $ 1,773 ​ ​ ​ ​ ​ 23 ​ ​
Loan Grades:
The Company utilizes an internal risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of 1 to 9. These risk grades are evaluated on an ongoing basis. A description of the general characteristics of the nine risk grades is as follows:
•
Pass.   Loans rated Pass include those that are adequately collateralized performing loans which management believe do not have conditions that have occurred or may occur that would result in the loan being downgraded into an inferior category. The Pass category also includes loans rated as Watch, which include those that management believes have conditions that have occurred, or may occur, which could result in the loan being downgraded to an inferior category.
​
•
Special Mention.   A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan, or in the Company’s credit position at some future date. Loans graded special mention may require resolution of specific lending events before the associated risk can be adequately evaluated.
​
•
Substandard.   A substandard loan is inadequately protected by the net worth and cash flow capacity of the borrower or of the collateral pledged. Loans so classified must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.
​
•
Doubtful.   Loans classified as doubtful are inadequately protected by the net worth of the borrower or the collateral pledged and repayment in full is improbable based on existing facts, values, and conditions. The possibility of loss is high, but because of certain important and reasonably specific pending factors which may work to the advantage and strengthening of the facility, its classification as an estimated loss is deferred until its more exact status may be determined. These loans are considered classified as value is impaired. A full or partial reserve is warranted. Because of the high probability of loss, nonaccrual accounting treatment is required.
​
•
Loss.   Loans classified as loss are considered uncollectible and continuance as an acceptable asset is not warranted. This classification does not mean that the credit has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this asset even though partial recovery may be affected in the future. These loans are not considered classified. Because of the high probability of loss, nonaccrual accounting treatment is required. Losses are to be recorded in the period an obligation becomes uncollectable.
​
The following table presents the loan portfolio’s amortized cost by class of financing receivable, risk grade and year of origination (in thousands). Generally, current period renewals of credit are underwritten again at the point of renewal and considered current period originations for purposes of the table below. The Company had an immaterial amount of revolving loans which converted to term loans and the amortized cost basis of those loans is included in the applicable origination year. There were no loans risk graded doubtful or loss at December 31, 2025 and 2024.
 
F-59

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(4)
Loans (continued)
​
Term Loans by Origination Year
​ ​
Revolving
Loans
Amortized
Cost Basis
​ ​
Total
​
As of December 31, 2025
​ ​
2025
​ ​
2024
​ ​
2023
​ ​
2022
​ ​
2021
​ ​
Prior
​
Construction and land development ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 160,577 ​ ​ ​ ​ ​ 64,593 ​ ​ ​ ​ ​ 4,669 ​ ​ ​ ​ ​ 269 ​ ​ ​ ​ ​ 91 ​ ​ ​ ​ ​ 87 ​ ​ ​ ​ ​ 6,237 ​ ​ ​ ​ ​ 236,523 ​ ​
Special Mention
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Substandard
​ ​ ​ ​ — ​ ​ ​ ​ ​ 328 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 328 ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Construction and land development
​ ​ ​ ​ 160,577 ​ ​ ​ ​ ​ 64,921 ​ ​ ​ ​ ​ 4,669 ​ ​ ​ ​ ​ 269 ​ ​ ​ ​ ​ 91 ​ ​ ​ ​ ​ 87 ​ ​ ​ ​ ​ 6,237 ​ ​ ​ ​ ​ 236,851 ​ ​
Gross charge-offs
​ ​ ​
​
—
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 59 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 59 ​ ​
Single-family residential ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 52,712 ​ ​ ​ ​ ​ 83,281 ​ ​ ​ ​ ​ 29,243 ​ ​ ​ ​ ​ 33,681 ​ ​ ​ ​ ​ 67,126 ​ ​ ​ ​ ​ 4,715 ​ ​ ​ ​ ​ 2,083 ​ ​ ​ ​ ​ 272,841 ​ ​
Special Mention
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 29 ​ ​ ​ ​ ​ 88 ​ ​ ​ ​ ​ 58 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 175 ​ ​
Substandard
​ ​ ​ ​ 2,958 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 399 ​ ​ ​ ​ ​ 30 ​ ​ ​ ​ ​ 316 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 3,703 ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Single-family residential
​ ​ ​ ​ 55,670 ​ ​ ​ ​ ​ 83,281 ​ ​ ​ ​ ​ 29,272 ​ ​ ​ ​ ​ 34,168 ​ ​ ​ ​ ​ 67,214 ​ ​ ​ ​ ​ 5,031 ​ ​ ​ ​ ​ 2,083 ​ ​ ​ ​ ​ 276,719 ​ ​
Gross charge-offs
​ ​ ​
​
—
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 75 ​ ​ ​ ​ ​ 109 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 184 ​ ​
Commercial real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 220,125 ​ ​ ​ ​ ​ 132,715 ​ ​ ​ ​ ​ 78,279 ​ ​ ​ ​ ​ 73,280 ​ ​ ​ ​ ​ 137,526 ​ ​ ​ ​ ​ 24,579 ​ ​ ​ ​ ​ 3,872 ​ ​ ​ ​ ​ 670,376 ​ ​
Special Mention
​ ​ ​ ​ — ​ ​ ​ ​ ​ 8,055 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 8,055 ​ ​
Substandard
​ ​ ​ ​ 417 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 255 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 672 ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Commercial real estate
​ ​ ​ ​ 220,542 ​ ​ ​ ​ ​ 140,770 ​ ​ ​ ​ ​ 78,279 ​ ​ ​ ​ ​ 73,280 ​ ​ ​ ​ ​ 137,526 ​ ​ ​ ​ ​ 24,834 ​ ​ ​ ​ ​ 3,872 ​ ​ ​ ​ ​ 679,103 ​ ​
Gross charge-offs
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Multifamily ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 9,545 ​ ​ ​ ​ ​ 29,332 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 14,279 ​ ​ ​ ​ ​ 13,185 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 66,341 ​ ​
Special Mention
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Substandard
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Multifamily
​ ​ ​ ​ 9,545 ​ ​ ​ ​ ​ 29,332 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 14,279 ​ ​ ​ ​ ​ 13,185 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 66,341 ​ ​
 
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TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(4)
Loans (continued)
​
Term Loans by Origination Year
​ ​
Revolving
Loans
Amortized
Cost Basis
​ ​
Total
​
As of December 31, 2025
​ ​
2025
​ ​
2024
​ ​
2023
​ ​
2022
​ ​
2021
​ ​
Prior
​
Gross charge-offs
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Commercial and financial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 123,805 ​ ​ ​ ​ ​ 34,517 ​ ​ ​ ​ ​ 23,596 ​ ​ ​ ​ ​ 23,667 ​ ​ ​ ​ ​ 10,760 ​ ​ ​ ​ ​ 1,775 ​ ​ ​ ​ ​ 185,744 ​ ​ ​ ​ ​ 403,864 ​ ​
Special Mention
​ ​ ​ ​ 4,276 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 181 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 335 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,792 ​ ​
Substandard
​ ​ ​ ​ 1,894 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 321 ​ ​ ​ ​ ​ 4,766 ​ ​ ​ ​ ​ 7,041 ​ ​ ​ ​ ​ 1,329 ​ ​ ​ ​ ​ 3,999 ​ ​ ​ ​ ​ 19,350 ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Commercial and financial
​ ​ ​ ​ 129,975 ​ ​ ​ ​ ​ 34,517 ​ ​ ​ ​ ​ 24,098 ​ ​ ​ ​ ​ 28,433 ​ ​ ​ ​ ​ 17,801 ​ ​ ​ ​ ​ 3,439 ​ ​ ​ ​ ​ 189,743 ​ ​ ​ ​ ​ 428,006 ​ ​
Gross charge-offs
​ ​ ​
​
—
​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 762 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 762 ​ ​
Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 21,755 ​ ​ ​ ​ ​ 1,956 ​ ​ ​ ​ ​ 131 ​ ​ ​ ​ ​ 50 ​ ​ ​ ​ ​ 19,324 ​ ​ ​ ​ ​ 7 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 43,223 ​ ​
Special Mention
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Substandard
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Consumer
​ ​ ​ ​ 21,755 ​ ​ ​ ​ ​ 1,956 ​ ​ ​ ​ ​ 131 ​ ​ ​ ​ ​ 50 ​ ​ ​ ​ ​ 19,324 ​ ​ ​ ​ ​ 7 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 43,223 ​ ​
Gross charge-offs
​ ​ ​ ​ — ​ ​ ​ ​ ​ 12 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 12 ​ ​
Term Loans by Origination Year
​ ​
Revolving
Loans
Amortized
Cost
Basis
​ ​
Total
​
As of December 31, 2024
​ ​
2024
​ ​
2023
​ ​
2022
​ ​
2021
​ ​
2020
​ ​
Prior
​
Construction and land development ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 127,596 ​ ​ ​ ​ ​ 16,883 ​ ​ ​ ​ ​ 7,589 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 152,068 ​ ​
Special Mention
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Substandard
​ ​ ​ ​ 387 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 387 ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Construction and land development
​ ​ ​ ​ 127,983 ​ ​ ​ ​ ​ 16,883 ​ ​ ​ ​ ​ 7,589 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 152,455 ​ ​
Gross charge-offs
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Single-family residential ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 92,812 ​ ​ ​ ​ ​ 22,518 ​ ​ ​ ​ ​ 37,051 ​ ​ ​ ​ ​ 62,839 ​ ​ ​ ​ ​ 551 ​ ​ ​ ​ ​ 3,051 ​ ​ ​ ​ ​ 16,878 ​ ​ ​ ​ ​ 235,700 ​ ​
Special Mention
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 90 ​ ​ ​ ​ ​ 60 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 122 ​ ​ ​ ​ ​ 272 ​ ​
Substandard
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 147 ​ ​ ​ ​ ​ 215 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 196 ​ ​ ​ ​ ​ 229 ​ ​ ​ ​ ​ 787 ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Single-family residential
​ ​ ​ ​ 92,812 ​ ​ ​ ​ ​ 22,518 ​ ​ ​ ​ ​ 37,288 ​ ​ ​ ​ ​ 63,114 ​ ​ ​ ​ ​ 551 ​ ​ ​ ​ ​ 3,247 ​ ​ ​ ​ ​ 17,229 ​ ​ ​ ​ ​ 236,759 ​ ​
 
F-61

TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(4)
Loans (continued)
​
Term Loans by Origination Year
​ ​
Revolving
Loans
Amortized
Cost
Basis
​ ​
Total
​
As of December 31, 2024
​ ​
2024
​ ​
2023
​ ​
2022
​ ​
2021
​ ​
2020
​ ​
Prior
​
Gross charge-offs
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Commercial real estate ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 119,789 ​ ​ ​ ​ ​ 86,300 ​ ​ ​ ​ ​ 121,255 ​ ​ ​ ​ ​ 135,960 ​ ​ ​ ​ ​ 2,164 ​ ​ ​ ​ ​ 4,052 ​ ​ ​ ​ ​ 2,016 ​ ​ ​ ​ ​ 471,536 ​ ​
Special Mention
​ ​ ​ ​ 11,098 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 11,098 ​ ​
Substandard
​ ​ ​ ​ 497 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 604 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,101 ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Commercial real estate
​ ​ ​ ​ 131,384 ​ ​ ​ ​ ​ 86,300 ​ ​ ​ ​ ​ 121,255 ​ ​ ​ ​ ​ 135,960 ​ ​ ​ ​ ​ 2,164 ​ ​ ​ ​ ​ 4,656 ​ ​ ​ ​ ​ 2,016 ​ ​ ​ ​ ​ 483,735 ​ ​
Gross charge-offs
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Multifamily ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 15,743 ​ ​ ​ ​ ​ 7,650 ​ ​ ​ ​ ​ 14,531 ​ ​ ​ ​ ​ 13,867 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,500 ​ ​ ​ ​ ​ 56,291 ​ ​
Special Mention
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Substandard
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Multifamily
​ ​ ​ ​ 15,743 ​ ​ ​ ​ ​ 7,650 ​ ​ ​ ​ ​ 14,531 ​ ​ ​ ​ ​ 13,867 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,500 ​ ​ ​ ​ ​ 56,291 ​ ​
Gross charge-offs
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Commercial and financial ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 69,027 ​ ​ ​ ​ ​ 44,427 ​ ​ ​ ​ ​ 28,416 ​ ​ ​ ​ ​ 14,539 ​ ​ ​ ​ ​ 31 ​ ​ ​ ​ ​ 1,316 ​ ​ ​ ​ ​ 182,777 ​ ​ ​ ​ ​ 340,533 ​ ​
Special Mention
​ ​ ​ ​ 241 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 645 ​ ​ ​ ​ ​ 7,124 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 8,010 ​ ​
Substandard
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 4,369 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 291 ​ ​ ​ ​ ​ 4,660 ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Commercial and financial
​ ​ ​ ​ 69,268 ​ ​ ​ ​ ​ 44,427 ​ ​ ​ ​ ​ 33,430 ​ ​ ​ ​ ​ 21,663 ​ ​ ​ ​ ​ 31 ​ ​ ​ ​ ​ 1,316 ​ ​ ​ ​ ​ 183,068 ​ ​ ​ ​ ​ 353,203 ​ ​
Gross charge-offs
​ ​ ​
​
—
​ ​ ​ ​ ​ 546 ​ ​ ​ ​ ​ 4,806 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 5,352 ​ ​
Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Risk Grade: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Pass
​ ​ ​ ​ 7,452 ​ ​ ​ ​ ​ 117 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 19,351 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 6,861 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 33,781 ​ ​
Special Mention
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 172 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 172 ​ ​
Substandard
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 723 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 723 ​ ​
Doubtful
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Total Consumer
​ ​ ​ ​ 7,452 ​ ​ ​ ​ ​ 117 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 19,351 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 7,756 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 34,676 ​ ​
Gross charge-offs
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 55 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 55 ​ ​
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(5)
Allowance for Credit Losses
​
Changes in the allowance for credit losses for the years ended December 31, 2025 and 2024 were as follows (in thousands):
​ ​ ​
Construction
and Land
Development
​ ​
Single-
Family
Residential
​ ​
Commercial
Real Estate
​ ​
Multifamily
​ ​
Commercial
and
Financial
​ ​
Consumer
​ ​
Total
​
December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​
Allowance for credit losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Beginning balance
​ ​ ​ $ 2,817 ​ ​ ​ ​ ​ 6,854 ​ ​ ​ ​ ​ 4,014 ​ ​ ​ ​ ​ 698 ​ ​ ​ ​ ​ 5,456 ​ ​ ​ ​ ​ 761 ​ ​ ​ ​ ​ 20,600 ​ ​
Provision for credit
losses
​ ​ ​ ​ 1,738 ​ ​ ​ ​ ​ 156 ​ ​ ​ ​ ​ 432 ​ ​ ​ ​ ​ (184) ​ ​ ​ ​ ​ 2,673 ​ ​ ​ ​ ​ (294) ​ ​ ​ ​ ​ 4,521 ​ ​
Initial ACL on PCD
loans
​ ​ ​ ​ — ​ ​ ​ ​ ​ 135 ​ ​ ​ ​ ​ 7 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,222 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,364 ​ ​
Charge-offs
​ ​ ​ ​ (59) ​ ​ ​ ​ ​ (184) ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (762) ​ ​ ​ ​ ​ (12) ​ ​ ​ ​ ​ (1,017) ​ ​
Recoveries
​ ​ ​ ​ — ​ ​ ​ ​ ​ 87 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 18 ​ ​ ​ ​ ​ 1 ​ ​ ​ ​ ​ 106 ​ ​
Ending balance
​ ​ ​ $ 4,496 ​ ​ ​ ​ ​ 7,048 ​ ​ ​ ​ ​ 4,453 ​ ​ ​ ​ ​ 514 ​ ​ ​ ​ ​ 8,607 ​ ​ ​ ​ ​ 456 ​ ​ ​ ​ ​ 25,574 ​ ​
​ ​ ​
Construction
and Land
Development
​ ​
Single-
Family
Residential
​ ​
Commercial
Real Estate
​ ​
Multifamily
​ ​
Commercial
and
Financial
​ ​
Consumer
​ ​
Total
​
December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​
Allowance for credit losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Beginning balance
​ ​ ​ $ 2,761 ​ ​ ​ ​ ​ 3,506 ​ ​ ​ ​ ​ 4,004 ​ ​ ​ ​ ​ 344 ​ ​ ​ ​ ​ 6,509 ​ ​ ​ ​ ​ 580 ​ ​ ​ ​ ​ 17,704 ​ ​
Provision for credit
losses
​ ​ ​ ​ 56 ​ ​ ​ ​ ​ 3,348 ​ ​ ​ ​ ​ 4 ​ ​ ​ ​ ​ 354 ​ ​ ​ ​ ​ 4,138 ​ ​ ​ ​ ​ 220 ​ ​ ​ ​ ​ 8,120 ​ ​
Charge-offs
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ (5,352) ​ ​ ​ ​ ​ (55) ​ ​ ​ ​ ​ (5,407) ​ ​
Recoveries
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 6 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 161 ​ ​ ​ ​ ​ 16 ​ ​ ​ ​ ​ 183 ​ ​
Ending balance
​ ​ ​ $ 2,817 ​ ​ ​ ​ ​ 6,854 ​ ​ ​ ​ ​ 4,014 ​ ​ ​ ​ ​ 698 ​ ​ ​ ​ ​ 5,456 ​ ​ ​ ​ ​ 761 ​ ​ ​ ​ ​ 20,600 ​ ​
The Company maintains an ACL for credit losses on unfunded commercial lending commitments and letters of credit to consider the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the ACL for loans, modified to consider the probability of a drawdown on the commitment. The ACL on unfunded loan commitments is classified as a liability on the consolidated balance sheets within other liabilities, while the corresponding provision for these credit losses is recorded as a component of provision for credit losses. The reserve for unfunded loan commitments was $986,000 as of both December 31, 2025 and 2024.
(6)
Premises and Equipment
​
Premises and equipment are summarized as follows as of December 31, 2025 and 2024 (in thousands):
​ ​ ​
2025
​ ​
2024
​
Land
​ ​ ​ $ 4,320 ​ ​ ​ ​ ​ 738 ​ ​
Buildings
​ ​ ​ ​ 6,204 ​ ​ ​ ​ ​ 927 ​ ​
Furniture, fixtures and equipment
​ ​ ​ ​ 8,390 ​ ​ ​ ​ ​ 7,529 ​ ​
Leasehold improvements
​ ​ ​ ​ 8,886 ​ ​ ​ ​ ​ 8,448 ​ ​
​ ​ ​ ​ ​ 27,800 ​ ​ ​ ​ ​ 17,642 ​ ​
Less: Accumulated depreciation
​ ​ ​ ​ (9,250) ​ ​ ​ ​ ​ (6,913) ​ ​
​ ​ ​ ​ $ 18,550 ​ ​ ​ ​ ​ 10,729 ​ ​
Depreciation expense was $2.3 million for both years ended December 31, 2025 and 2024.
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(7)
Leases
​
The Company leases space under non-cancelable operating leases for several of its banking offices.
Supplemental balance sheet information related to operating leases at December 31, 2025 and 2024 are as follows (in thousands):
​ ​ ​
2025
​ ​
2024
​
Operating lease right of use assets
​ ​ ​ $ 36,578 ​ ​ ​ ​ ​ 39,678 ​ ​
Operating lease liabilities
​ ​ ​ ​ 38,071 ​ ​ ​ ​ ​ 40,768 ​ ​
Weighted average remaining lease term (years)
​ ​ ​ ​ 12.77 ​ ​ ​ ​ ​ 13.46 ​ ​
Weighted average discount rate
​ ​ ​ ​ 4.03% ​ ​ ​ ​ ​ 3.96% ​ ​
Maturities of operating lease liabilities at December 31, 2025, are as follows (in thousands):
​
2026
​ ​ ​ $ 4,193 ​ ​
​
2027
​ ​ ​ ​ 4,234 ​ ​
​
2028
​ ​ ​ ​ 4,308 ​ ​
​
2029
​ ​ ​ ​ 4,402 ​ ​
​
2030
​ ​ ​ ​ 4,497 ​ ​
​
Thereafter
​ ​ ​ ​ 29,684 ​ ​
​
Total lease payments
​ ​ ​ ​ 51,318 ​ ​
​
Less: Imputed interest
​ ​ ​ ​ 13,247 ​ ​
​
Present value of lease liability
​ ​ ​ $ 38,071 ​ ​
Operating lease expense was $4.6 million and $5.1 million for the years ended December 31, 2025 and 2024, respectively. Sublease income offsetting operating lease expense was $295,000 and $89,000 for years ended December 31, 2025 and 2024, respectively. Variable rent expense and short-term lease expense were not material for the years ended December 31, 2025 and 2024.
(8)
Goodwill and Other Intangible Assets
​
The carrying amount of goodwill and other intangible assets at December 31, 2025 is summarized below (in thousands):
​ ​ ​
2025
​
Core deposit intangible
​ ​ ​ $ 6,170 ​ ​
Less: accumulated amortization
​ ​ ​ ​ (514) ​ ​
Net core deposit intangible
​ ​ ​ ​ 5,656 ​ ​
Goodwill
​ ​ ​ ​ 4,809 ​ ​
Total goodwill and other intangible assets, net
​ ​ ​ $   10,465 ​ ​
Amortization during the period
​ ​ ​ $ 514 ​ ​
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(8)
Goodwill and Other Intangible Assets (continued)
​
The following table shows the estimated future amortization expense for amortizing intangible assets. The projections are based on existing asset balances as of December 31, 2025 (in thousands):
​ ​ ​
Core Deposit
Intangible
​
2026
​ ​ ​ $ 617 ​ ​
2027
​ ​ ​ ​ 617 ​ ​
2028
​ ​ ​ ​ 617 ​ ​
2029
​ ​ ​ ​ 617 ​ ​
2030
​ ​ ​ ​ 617 ​ ​
Thereafter
​ ​ ​ ​ 2,571 ​ ​
​ ​ ​ ​ $ 5,656 ​ ​
​
(9)
Deposits
​
Deposits at December 31, 2025 and 2024 were as follows (in thousands):
​ ​ ​
2025
​ ​
2024
​
Noninterest-bearing demand deposits
​ ​ ​ $ 617,388 ​ ​ ​ ​ ​ 393,720 ​ ​
Interest-bearing demand deposits
​ ​ ​ ​ 344,982 ​ ​ ​ ​ ​ 290,933 ​ ​
Money market and savings deposits
​ ​ ​ ​ 727,623 ​ ​ ​ ​ ​ 573,125 ​ ​
Time deposits
​ ​ ​ ​ 669,692 ​ ​ ​ ​ ​ 570,847 ​ ​
​ ​ ​ ​ $    2,359,685 ​ ​ ​ ​ ​    1,828,625 ​ ​
The scheduled maturities of time deposits at December 31, 2025, for each of the next five years are as follows (in thousands):
​
2026
​ ​ ​ $ 520,395 ​ ​
​
2027
​ ​ ​ ​ 91,844 ​ ​
​
2028
​ ​ ​ ​ 48,991 ​ ​
​
2029
​ ​ ​ ​ 6,399 ​ ​
​
2030
​ ​ ​ ​ 2,063 ​ ​
​ ​ ​ ​ ​ $    669,692 ​ ​
Time deposits that meet or exceed FDIC insurance limit of $250,000 at December 31, 2025 and 2024 were $225.8 million and $157.4 million, respectively. The Company had brokered deposits of $202.7 million and $253.6 million, at December 31, 2025 and 2024, respectively. The brokered deposits had a weighted average interest rate of 4.05% and 4.48% at December 31, 2025 and 2024, respectively.
(10)
FHLB Advances
​
At December 31, 2025, the Company had no outstanding borrowings with the FHLB. At December 31, 2024, the Company had $150.0 million of adjustable-rate credit advances outstanding with an interest rate of 4.57%. The outstanding advances at December 31, 2024, matured and were repaid during 2025.
The advances from the FHLB are collateralized by a blanket lien on all eligible first mortgage loans and other specific loans in addition to FHLB stock.
Loans totaling approximately $1.5 billion and $1.3 billion were pledged as collateral to the FHLB at December 31, 2025 and 2024, respectively, with lendable collateral of $210.5 million and $181.6 million for the same periods.
At December 31, 2025, there were no securities pledged as additional lendable collateral with the FHLB compared to December 31, 2024, in which securities with a fair value of $88.8 million and lendable collateral value of $84.7 million were pledged as additional collateral.
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(11)
Subordinated Notes
​
On May 7, 2021, the Company completed the offering and sale of $55.0 million in aggregate principal amount of its 4.125% fixed-to-floating rate subordinated notes due 2031. The subordinated notes are scheduled to mature on June 15, 2031, and through June 15, 2026, bear a fixed rate of interest of 4.125% per annum, payable semi-annually in arrears on June 15 and December 15 of each year. Beginning June 15, 2026, the interest rate on the subordinated notes will reset quarterly to a floating rate per annum equal to the then-current three-month SOFR plus 3.40%, payable quarterly in arrears on March 15, June 15, September 15, and December 15 of each year up to the maturity date or redemption. Beginning June 15, 2026, the Company may, at its option and with proper notice provided, redeem the subordinated notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest. The debt issuance costs of $1.2 million were netted with proceeds and are being amortized over the term until the redemption date of the notes. During each of the years, 2025 and 2024, approximately $246,000 of debt issuance costs were amortized, with approximately $82,000 and $329,000 of unamortized debt issuance costs remaining at December 31, 2025 and 2024, respectively.
In March 2025, as the result of an acquisition, GBC assumed $10.0 million in fixed-to-floating rate subordinated notes due 2031. A discount of $1.0 million was recorded as part of the acquisition for a fair value of $9.0 million on the subordinated notes. At December 31, 2025 the remaining discount on the subordinated notes is $919,000. The subordinated notes are scheduled to mature on October 6, 2031, and through October 6, 2026, bear a fixed rate of interest of 3.75% per annum, payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each year. Beginning October 6, 2026, the interest rate on the subordinated notes will reset quarterly to a floating rate per annum equal to the then-current three-month SOFR plus 2.88%, payable quarterly in arrears on March 31, June 30, September 30, and December 31 of each year up to the maturity date or redemption. Beginning October 6, 2026, the Company may, at its option and with proper notice provided, redeem the subordinated notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus accrued and unpaid interest.
(12)
Junior Subordinated Debentures
​
On April 15, 2005, the Company issued, through a wholly owned Delaware statutory trust, Georgia Banking Statutory Trust I (the “Trust”), $7.0 million of preferred beneficial interests in the Company’s unsecured junior subordinated debentures (trust preferred securities) that qualify as Tier I capital under Federal Reserve Board guidelines within certain limitations. The Company owns all the common securities of the Trust. The proceeds from the issuance of the common securities and the trust preferred securities were used by the Trust to purchase $7.2 million of junior subordinated debentures of the Company, which carry a floating rate of interest equal to the 3-month LIBOR plus 2.00%. At December 31, 2025 and 2024, this rate was 5.98% and 6.62%, respectively. The proceeds received by the Company from the sale of the junior subordinated debentures were used to strengthen the capital position of the Company and to accommodate current and future growth. The debentures and related accrued interest represent the sole assets of the Trust.
The Company’s trust preferred securities accrue and pay quarterly distributions at an interest rate equal to the three-month SOFR plus 26 basis points tenor spread plus a 2.00% credit spread per annum of the stated liquidation value of $1,000 per capital security. The Company entered contractual arrangements which, taken collectively, fully and unconditionally guarantee payment of accrued and unpaid distributions required to be paid on the trust preferred securities, the redemption price with respect to any trust preferred securities called for redemption by the Trust, and payments due upon a voluntary or involuntary dissolution, winding up, or liquidation of the Trust.
The trust preferred securities are mandatorily redeemable upon maturity of the debentures on April 15, 2035, or upon earlier redemption of the debentures as provided in the indenture. The Company has the right to redeem the debentures purchased by the Trust in whole or in part. As specified in the indenture, if the debentures are redeemed prior to maturity, the redemption price will be the unpaid principal amount and any accrued but unpaid interest. The Trust document provides the Company, upon notification to the trustee, may elect to defer quarterly interest payments for a period as established in the Trust.
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(13)
Related Party Transactions
​
In the ordinary course of business, the Company has granted loans to certain executive officers, directors and their affiliates. These loans are made on substantially the same terms as those prevailing at the time for comparable transactions and do not involve more than normal credit risk. Changes in related party loans at December 31, 2025 and 2024 are summarized as follows (in thousands):
​ ​ ​
2025
​ ​
2024
​
Balance at beginning of year
​ ​ ​ $ 868 ​ ​ ​ ​ ​ 1,256 ​ ​
New loans and advances
​ ​ ​ ​ 508 ​ ​ ​ ​ ​ 276 ​ ​
Repayments
​ ​ ​ ​ (349) ​ ​ ​ ​ ​ (664) ​ ​
Effect of changes in composition of related parties
​ ​ ​ ​ 812 ​ ​ ​ ​ ​ — ​ ​
Balance at end of year
​ ​ ​ $ 1,839 ​ ​ ​ ​ ​ 868 ​ ​
Deposits with related parties were $21.1 million and $19.3 million at December 31, 2025 and 2024, respectively.
In 2023, the Bank entered into a lease agreement for a branch and sales offices involving a property in which two related parties held ownership interests. The lease requires total payments of approximately $34.1 million over a 20-year lease term, with remaining undiscounted lease payments of $31.0 million and $32.5 million at December 31, 2025 and 2024, respectively.
(14)
Employee Benefit and Stock Plans
​
Profit Sharing Plan
The Company has a contributory 401(k) profit sharing plan covering substantially all employees. The contributions to the plan are at the discretion of the Company’s Board of Directors. Contributions are equal to 100% of employee deferrals up to 3% and 50% of employee deferrals up to 5%. The Company recognized 401(k) expenses of approximately $976,000 and $816,000 for the years ending December 31, 2025 and 2024, respectively.
Supplemental Executive Retirement Plan (“SERP”)
The SERP was created to provide additional benefits to now retired executive officers whereby these benefits are currently being paid over a twelve-year period, applicable to each officer’s retirement date. A SERP liability is recorded which recognizes the remaining obligation of the Company to the former executives. For the years ended December 31, 2025 and 2024, these postretirement benefit plan expenses were $45,000 and $49,000, respectively. The accrued SERP liability totaled $1.1 million and $1.2 million at December 31, 2025 and 2024, respectively and reported in accrued interest and other liabilities on the consolidated balance sheets.
The Company has purchased and is the beneficiary of life insurance policies on certain key officers. The Company intends to use these policies to partially fund the supplemental executive retirement plan described herein. Income related to life insurance policies totaled approximately $901,000 and $782,000 for the years ended December 31, 2025 and 2024, respectively. The carrying value of the policies recorded was approximately $31.0 million and $26.8 million at December 31, 2025 and 2024, respectively.
Stock Incentive Plan
During 2021, the Company implemented the “2021 Stock Incentive Plan” ​(the “Plan”) which allows for the grant of share-based awards to officers, directors and employees as approved. An aggregate of 542,000 shares has been reserved for issuance under the Plan. At December 31, 2025 and 2024, the Company has 121,170 and 141,527, respectively, outstanding restricted shares granted under the Plan as compensation to certain employees and directors. The restriction period for the shares is one to four years from the date of grant which is based on service. Shares issued under the Plan are recorded at the fair value on the date of grant. The compensation expense is recognized on a straight-line basis over the related vesting period. Compensation expense was approximately $688 thousand and $1.0 million for the years ending December 31, 2025 and 2024, respectively. During 2025, 26,340 shares, worth approximately $606,000, were surrendered for grantees to satisfy tax obligations related to the vesting of these grants during the year. During 2024, 24,242 shares, worth approximately $558,000, were surrendered for grantees
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(14)
Employee Benefit and Stock Plans (continued)
​
to satisfy tax obligations related to the vesting of these grants during the year. Unrecognized compensation expense on grants totaled approximately $1.9 million and $2.1 million as of December 31, 2025 and 2024, respectively.
The following tables summarize the status of the Company’s restricted stock awards.
​ ​ ​
Shares
​ ​
Weighted Average
Grant Date Fair
Value
​
Outstanding, December 31, 2023
​ ​ ​ ​ 171,223 ​ ​ ​ ​ $ 21.06 ​ ​
Granted
​ ​ ​ ​ 45,215 ​ ​ ​ ​ $ 23.00 ​ ​
Vested
​ ​ ​ ​ (50,669) ​ ​ ​ ​ $ 21.10 ​ ​
Forfeited
​ ​ ​ ​ (24,242) ​ ​ ​ ​ $ 21.37 ​ ​
Outstanding, December 31, 2024
​ ​ ​ ​ 141,527 ​ ​ ​ ​ $ 21.61 ​ ​
Granted
​ ​ ​ ​ 56,279 ​ ​ ​ ​ $ 23.01 ​ ​
Vested
​ ​ ​ ​ (50,296) ​ ​ ​ ​ $ 21.40 ​ ​
Forfeited
​ ​ ​ ​ (26,340) ​ ​ ​ ​ $ 21.38 ​ ​
Outstanding, December 31, 2025
​ ​ ​ ​ 121,170 ​ ​ ​ ​ $ 22.40 ​ ​
The Company’s stock option activity is summarized below.
​ ​ ​
Shares
​ ​
Weighted Average
Exercise Price
​ ​
Weighted
Average
Remaining Life
(Years)
​
Outstanding, December 31, 2023
​ ​ ​ ​ 12,797 ​ ​ ​ ​ $ 21.62 ​ ​ ​ ​ ​ ​ ​ ​
Granted
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Exercise of stock options
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Forfeited
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Outstanding, December 31, 2024
​ ​ ​ ​ 12,797 ​ ​ ​ ​ $ 21.62 ​ ​ ​ ​ ​ 2.25 ​ ​
Granted
​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​
Exercise of stock options
​ ​ ​ ​ (98,852) ​ ​ ​ ​ $ 10.21 ​ ​ ​ ​ ​ ​ ​ ​
Rollover options
​ ​ ​ ​ 200,044 ​ ​ ​ ​ $ 11.51 ​ ​ ​ ​ ​ ​ ​ ​
Forfeited
​ ​ ​ ​ (12,797) ​ ​ ​ ​ $ 20.74 ​ ​ ​ ​ ​ ​ ​ ​
Outstanding, December 31, 2025
​ ​ ​ ​ 98,844 ​ ​ ​ ​ $ 12.70 ​ ​ ​ ​ ​ 3.97 ​ ​
The fair value of each option granted was estimated on the date of grant using the Black-Scholes model. Compensation expense related to the options for the years ended December 31, 2025 and 2024 was not material.
Options granted under the plan vest over a three-year period and have a five-year maximum term. Subject to any committee discretion to accelerate vesting of the options granted, the options shall vest and become exercisable as of each vesting date provided the grantee has not incurred a termination of service prior to such vesting date. There is no proportionate or partial vesting in the periods prior to each vesting date and all vesting shall occur only on the appropriate vesting date, subject to the grantee’s continued employment or service with the Company. Upon expiration of the option, the option shall be cancelled and no longer exercisable.
In connection with the acquisition of PBC completed on March 1, 2025, the Company also assumed the PBC 2017 Long-Term Incentive Plan and the 60,831 stock options granted thereunder, which were converted into options to purchase shares of our common stock using an exchange ratio of 0.5870. In connection with the acquisition, we also converted 138,633 outstanding stock options granted under individual nonqualified stock option award agreements into options to purchase shares of our common stock using the same exchange ratio. All such converted options became fully vested and exercisable at the effective time of the merger.
 
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TABLE OF CONTENTS
 
GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(14)
Employee Benefit and Stock Plans (continued)
​
Deferred Compensation Plan
The Company began offering a non-qualified deferred compensation plan during 2021 for certain officers and members of the Company’s Board of Directors. The deferred compensation plan provides for the pre-tax deferral of compensation, fees, and other specified benefits and permits each employee participant to elect to defer a portion of their base salary, bonus, or commission and permits each director participant to elect to defer all or a portion of their director’s fees.
Further, the deferred compensation plan allows for a discretionary Company match to any deferred bonus allocated to a fund that tracks the performance of the Company’s stock (the “Company Stock Fund”). Deferred bonuses vest ratably over five years while the Company’s match cliff vests on the fifth anniversary of the grant date. All transactions tied to stock between the Company and the deferred compensation plan are at a stock price obtained from an independent valuation. The Board of Directors may also elect to make a discretionary contribution to any or all participants. At December 31, 2025 and 2024, assets related to the deferred compensation plan totaled $4.4 million and $3.2 million, respectively, and are included in accrued interest and other assets on the consolidated balance sheets. At December 31, 2025 and 2024, liabilities related to the deferred compensation plan totaled $11.4 million and $8.2 million, respectively, and are included in accrued interest and other liabilities on the consolidated balance sheets. During 2025 and 2024, revenues of $1.2 million and $1.1 million, respectively, were recognized and included in other noninterest income in the consolidated statements of income along with expenses $3.3 million and $2.8 million, respectively, that were included in salaries and employee benefits in the consolidated statements of income.
(15)
Commitments and Contingencies
​
The Company is party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of their customers. These financial instruments include commitments to extend credit and letters of credit. These instruments involve, to varying degrees, elements of credit risk more than the amount recognized in the balance sheet. The notional contract amounts of these instruments reflect the extent of involvement the Company has in particular classes of financial instruments.
The exposure to credit loss in the event of nonperformance by the counter party for commitments to extend credit and letters of credit written is represented by the contractual or notional amount of these instruments. The Company uses the same credit policies in making commitments and conditional obligations as it uses for underwriting on-balance sheet instruments. In most cases, collateral or other security is required to support financial instruments with a credit risk.
The following table summarizes the contract amount of off-balance sheet instruments at December 31, 2025 and 2024 (in thousands):
​ ​ ​
2025
​ ​
2024
​
Financial instruments whose contract amounts represent credit risk: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Commitments to extend credit
​ ​ ​ $ 388,867 ​ ​ ​ ​ ​ 373,504 ​ ​
Financial and performance letters of credit
​ ​ ​ ​ 5,533 ​ ​ ​ ​ ​ 4,748 ​ ​
​ ​ ​ ​ $ 394,400 ​ ​ ​ ​ ​ 378,252 ​ ​
Commitments to extend credit are arrangements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments may expire without being drawn on, the total commitment amounts do not necessarily represent future cash requirements. The same credit policies are used to make such commitments as are used for loans, including obtaining collateral at exercise of the commitment. The amount of collateral obtained, if deemed necessary, upon extension of credit is based on management’s credit evaluation. Collateral held varies, but may include unimproved and improved real estate, certificates of deposit, personal property or other acceptable collateral.
Commercial letters of credit are issued to facilitate commerce and typically result in the commitment being drawn on when the underlying transaction is consummated between the customer and the third party. Those guarantees are primarily issued to local businesses. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(15)
Commitments and Contingencies (continued)
​
facilities to customers. The Company holds real estate, certificates of deposit, and other acceptable collateral as security supporting those commitments for which collateral is deemed necessary. The extent of collateral held for those commitments varies.
As of December 31, 2025, the Bank maintained credit arrangements with various financial institutions to purchase federal funds up to $60 million. The Bank has completed eligibility requirements to participate in the Federal Reserve discount window borrowings program. At December 31, 2025 and 2024, the Company had $555.1 million and $370.5 million, respectively, in loans pledged at the Federal Reserve discount window and $478.0 million and $312.8 million, respectively, available for borrowing.
The Company is involved in various legal proceedings from time-to-time in the normal course of business. It is the opinion of management that any judgment or settlement resulting from pending or threatened litigation would not have a material adverse effect on the consolidated financial position or operations of the Company.
(16)
Earnings Per Share
​
Presented below are the calculations for basic and diluted earnings per common share as of December 31, 2025 and 2024 (in thousands, except per share and share data):
​ ​ ​
2025
​ ​
2024
​
Net income available to common shareholders
​ ​ ​ $ 22,080 ​ ​ ​ ​ ​ 8,456 ​ ​
Weighted average number of common shares outstanding
​ ​ ​ ​ 8,238,252 ​ ​ ​ ​ ​ 7,334,994 ​ ​
Effect of dilutive common stock awards
​ ​ ​ ​ 204,557 ​ ​ ​ ​ ​ 197,808 ​ ​
Diluted weighted average common shares outstanding
​ ​ ​ ​ 8,442,809 ​ ​ ​ ​ ​ 7,532,802 ​ ​
Basic earnings per common share
​ ​ ​ $ 2.68 ​ ​ ​ ​ ​ 1.15 ​ ​
Diluted earnings per common share
​ ​ ​ $ 2.62 ​ ​ ​ ​ ​ 1.12 ​ ​
For the years ended December 31, 2025 and 2024, the Company had no potentially anti-dilutive instruments outstanding that were not included in the above calculation.
(17)
Income Taxes
​
The current and deferred amounts of income tax expense were as follows for the years ended December 31, 2025 and 2024 (in thousands):
​ ​ ​
2025
​ ​
2024
​
Current expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Federal
​ ​ ​ $ 9,358 ​ ​ ​ ​ ​ 3,776 ​ ​
State
​ ​ ​ ​ 1,642 ​ ​ ​ ​ ​ 615 ​ ​
Total current income tax expense
​ ​ ​ ​ 11,000 ​ ​ ​ ​ ​ 4,391 ​ ​
Deferred expense (benefit): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Federal
​ ​ ​ ​ (3,163) ​ ​ ​ ​ ​ (1,562) ​ ​
State
​ ​ ​ ​ (78) ​ ​ ​ ​ ​ — ​ ​
Total deferred income tax expense (benefit)
​ ​ ​ ​ (3,241) ​ ​ ​ ​ ​ (1,562) ​ ​
Total income tax expense
​ ​ ​ $ 7,759 ​ ​ ​ ​ ​ 2,829 ​ ​
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(17)
Income Taxes (continued)
​
The difference between the income tax expense recognized and the amount computed by applying the statutory federal income tax rate of 21% to the income before income tax expense for the years ended December 31, 2025 and 2024 are as follows (in thousands):
​ ​ ​
2025
​ ​
2024
​
​ ​ ​
Amount
​ ​
%
​ ​
Amount
​ ​
%
​
Tax on pretax income, at statutory rates
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
State income taxes, net of federal effect
​ ​ ​ ​ 1,194 ​ ​ ​ ​ ​ ​ 4.0 % ​ ​ ​ ​ ​ 615 ​ ​ ​ ​ ​ ​ 5.4 % ​ ​
BOLI income
​ ​ ​ ​ (391) ​ ​ ​ ​ ​ ​ (1.3) % ​ ​ ​ ​ ​ (164) ​ ​ ​ ​ ​ ​ (1.4) % ​ ​
Transaction costs
​ ​ ​ ​ 1,414 ​ ​ ​ ​ ​ ​ 4.7 % ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ — ​ ​ ​
Federal net operating loss carryforward from business combination
​ ​ ​ ​ (652) ​ ​ ​ ​ ​ ​ (2.2) % ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ ​ — ​ ​ ​
Other, net
​ ​ ​ ​ (72) ​ ​ ​ ​ ​ ​ (0.2) % ​ ​ ​ ​ ​ 8 ​ ​ ​ ​ ​ ​ 0.0 % ​ ​
Total income tax expense
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 26.0 % ​ ​ ​ ​ ​ 2,829 ​ ​ ​ ​ ​ ​ 25.1 % ​ ​
The net deferred tax asset includes the following amounts of deferred tax assets and liabilities as of December 31, 2025 and 2024 (in thousands):
​ ​ ​
2025
​ ​
2024
​
Deferred tax assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Deferred loan fees
​ ​ ​ $ 1,273 ​ ​ ​ ​ ​ 1,221 ​ ​
Unrealized loss on securities available for sale
​ ​ ​ ​ 130 ​ ​ ​ ​ ​ 1,049 ​ ​
Purchase accounting adjustments
​ ​ ​ ​ 1,486 ​ ​ ​ ​ ​ — ​ ​
Allowance for credit losses for loans
​ ​ ​ ​ 6,137 ​ ​ ​ ​ ​ 5,182 ​ ​
Allowance for credit losses for unfunded commitments
​ ​ ​ ​ 237 ​ ​ ​ ​ ​ — ​ ​
Lease liability
​ ​ ​ ​ 358 ​ ​ ​ ​ ​ 275 ​ ​
Deferred compensation
​ ​ ​ ​ 1,952 ​ ​ ​ ​ ​ 754 ​ ​
Other
​ ​ ​ ​ 721 ​ ​ ​ ​ ​ 246 ​ ​
Total deferred tax assets
​ ​ ​ ​ 12,294 ​ ​ ​ ​ ​ 8,727 ​ ​
Deferred tax liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Premises and equipment
​ ​ ​ ​ 1,844 ​ ​ ​ ​ ​ 1,449 ​ ​
Subordinated debentures
​ ​ ​ ​ 202 ​ ​ ​ ​ ​ — ​ ​
Other
​ ​ ​ ​ 2,067 ​ ​ ​ ​ ​ — ​ ​
Total deferred tax liabilities
​ ​ ​ ​ 4,113 ​ ​ ​ ​ ​ 1,449 ​ ​
Net deferred tax asset
​ ​ ​ $ 8,181 ​ ​ ​ ​ ​ 7,278 ​ ​
Federal and state income taxes paid were as follows. State income taxes paid included the states of Georgia, North Carolina, South Carolina and Forida, and were not significant in the aggregate except as noted below (in thousands).
​ ​ ​
2025
​
Federal
​ ​ ​ $ 7,423 ​ ​
State
​ ​ ​ ​ 2,256 ​ ​
Total income taxes paid
​ ​ ​ $ 9,679 ​ ​
State income taxes paid in excess of 5% of total income taxes paid: ​ ​ ​ ​ ​ ​ ​
Georgia
​ ​ ​ $ 1,895 ​ ​
The Company and its subsidiary are subject to U.S. federal income tax as well as income tax of the state of Georgia, North Carolina, South Carolina and Florida. The Company is subject to examination by taxing authorities for years ended December 31, 2022 and thereafter.
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(18)
Warrants
​
In connection with the recapitalization that occurred in 2021, four significant shareholders received 507,729 warrants to acquire common stock at a price of $21.62 per share and are exercisable for a term of ten years from the date of issuance. No warrants were exercised during 2025 or 2024.
(19)
Derivatives and Hedging Activities
​
The Company utilizes interest rate swap and option agreements as part of its asset liability management strategy to help manage its interest rate risk position. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties but is rather determined by reference to the notional amount and the other terms of the individual interest rate swap agreements.
The Company posted collateral of $2.0 million and $62,000 in the normal course of business related to these contracts as of December 31, 2025 and 2024, respectively.
Cash Flow Hedges
In a cash flow hedge, the entire change in the fair value of the interest rate swap or the gain/loss on an interest rate option included in the assessment of hedge effectiveness is initially recorded in other comprehensive income (OCI) and subsequently reclassified from OCI to current period earnings in the same period that the hedged item affects earnings. Interest rate hedges with notional amounts totaling $150.0 million and $100.0 million as of December 31, 2025 and 2024, respectively, were designated as cash flow hedges of certain loans receivable and interest rate contracts and were determined to be effective during all periods presented. The Company expects the hedges to remain effective during the remaining terms of the hedges. The effect of cash flow hedge accounting on other comprehensive income for the years ended December 31, 2025 and 2024 were unrealized losses of $143,000 and $367,000, respectively.
Interest expense recorded on the cash flow hedges totaled $706,000 and $819,000 for the years ended December 31, 2025 and 2024, respectively, and is reported as a component of interest income on loans.
At December 31, 2025, the net unrealized holding gains recorded in AOCI that are expected to be reclassified into earnings within the next 12 months totaled $184,000.
Fair Value Hedges
Interest rate swaps with notional amounts totaled $79.2 million and $122.2 million at December 31, 2025 and 2024, respectively. The swaps are designated as fair value hedges of certain time deposits and are considered effective during all periods presented. The Company expects the hedges to remain effective during the remaining terms of the swaps.
Interest expense recorded on these swap transactions totaled $217,000 and $594,000 for the years ended December 31, 2025 and 2024, respectively, and is reported as a component of interest expense on deposits.
The Company presents derivative position gross on the balance sheet. The following table reflects the derivatives recorded on the balance sheet as of December 31, 2025 and 2024 (in thousands):
​ ​ ​
2025
​ ​
2024
​
​ ​ ​
Notional
Amount
​ ​
Fair Value
​ ​
Notional
Amount
​ ​
Fair Value
​
Included in other assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Derivatives designated as hedging instruments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest rate hedges related to customer loans
​ ​ ​ $ 150,000 ​ ​ ​ ​ ​ 1,001 ​ ​ ​ ​ ​ 100,000 ​ ​ ​ ​ ​ 274 ​ ​
Interest rate hedges related to customer deposits
​ ​ ​ ​ 79,150 ​ ​ ​ ​ ​ 761 ​ ​ ​ ​ ​ 67,000 ​ ​ ​ ​ ​ 413 ​ ​
Total included in other assets
​ ​ ​ $ 229,150 ​ ​ ​ ​ ​ 1,762 ​ ​ ​ ​ ​ 167,000 ​ ​ ​ ​ ​ 687 ​ ​
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(19)
Derivatives and Hedging Activities (continued)
​
​ ​ ​
2025
​ ​
2024
​
​ ​ ​
Notional
Amount
​ ​
Fair Value
​ ​
Notional
Amount
​ ​
Fair Value
​
Included in other liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Derivatives designated as hedging instruments: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Interest rate hedges related to customer deposits
​ ​ ​ $ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 55,150 ​ ​ ​ ​ ​ 359 ​ ​
Total included in other liabilities
​ ​ ​ $ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 55,150 ​ ​ ​ ​ ​ 359 ​ ​
(20) Regulatory Matters
The Bank is subject to various regulatory capital requirements administered by federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary action by regulators that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy rules and the regulatory framework for prompt corrective action, as revised by the Basel III Capital Rules effective January 1, 2015, the Bank must meet specific capital thresholds that involve quantitative measures of capital, assets, and certain off-balance sheet items as calculated under regulatory rules. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Quantitative measures (as defined) established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios of total capital, Tier 1 capital, and common equity Tier 1 capital (“CET 1”) to risk-weighted assets, and of Tier 1 capital to average assets, the Tier 1 leverage ratio.
At December 31, 2025, and 2024, the Bank was categorized as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum guideline ratios as set forth in the table below. There are no conditions or events since December 31, 2025, that management believes have changed the institution’s category.
The Bank’s actual capital amounts and ratios are presented below (dollars in thousands):
​ ​ ​
Actual
​ ​
For Capital
Adequacy
Purposes
​ ​
To Be Well
Capitalized Under
Prompt Corrective
Action Provisions
​
​ ​ ​
Amount
​ ​
Ratio
​ ​
Amount
​ ​
Ratio
​ ​
Amount
​ ​
Ratio
​
December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total Capital to Risk-Weighted Assets
​ ​ ​ $  276,260 ​ ​ ​ ​ ​ 12.74% ​ ​ ​ ​ $  173,413 ​ ​ ​ ​ ​ 8.00% ​ ​ ​ ​ $  216,767 ​ ​ ​ ​ ​ 10.00% ​ ​
Tier 1 Capital to Risk-Weighted Assets
​ ​ ​ $ 249,700 ​ ​ ​ ​ ​ 11.52% ​ ​ ​ ​ $ 130,060 ​ ​ ​ ​ ​ 6.00% ​ ​ ​ ​ $ 173,413 ​ ​ ​ ​ ​ 8.00% ​ ​
Common Equity Tier 1 Capital to Risk-Weighted Assets
​ ​ ​ $ 249,700 ​ ​ ​ ​ ​ 11.52% ​ ​ ​ ​ $ 97,545 ​ ​ ​ ​ ​ 4.50% ​ ​ ​ ​ $ 140,898 ​ ​ ​ ​ ​ 6.50% ​ ​
Tier 1 Capital to Average Assets
​ ​ ​ $ 249,700 ​ ​ ​ ​ ​ 9.37% ​ ​ ​ ​ $ 106,983 ​ ​ ​ ​ ​ 4.00% ​ ​ ​ ​ $ 133,729 ​ ​ ​ ​ ​ 5.00% ​ ​
​ ​ ​
Actual
​ ​
For Capital
Adequacy
Purposes
​ ​
To Be Well
Capitalized Under
Prompt Corrective
Action Provisions
​
​ ​ ​
Amount
​ ​
Ratio
​ ​
Amount
​ ​
Ratio
​ ​
Amount
​ ​
Ratio
​
December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Total Capital to Risk-Weighted Assets
​ ​ ​ $  197,074 ​ ​ ​ ​ ​ 11.19% ​ ​ ​ ​ $  140,836 ​ ​ ​ ​ ​ 8.00% ​ ​ ​ ​ $  176,045 ​ ​ ​ ​ ​ 10.00% ​ ​
Tier 1 Capital to Risk-Weighted Assets
​ ​ ​ $ 175,606 ​ ​ ​ ​ ​ 9.98% ​ ​ ​ ​ $ 105,627 ​ ​ ​ ​ ​ 6.00% ​ ​ ​ ​ $ 140,836 ​ ​ ​ ​ ​ 8.00% ​ ​
Common Equity Tier 1 Capital to Risk-Weighted Assets
​ ​ ​ $ 175,606 ​ ​ ​ ​ ​ 9.98% ​ ​ ​ ​ $ 79,220 ​ ​ ​ ​ ​ 4.50% ​ ​ ​ ​ $ 114,429 ​ ​ ​ ​ ​ 6.50% ​ ​
Tier 1 Capital to Average Assets
​ ​ ​ $ 175,606 ​ ​ ​ ​ ​ 8.22% ​ ​ ​ ​ $ 85,470 ​ ​ ​ ​ ​ 4.00% ​ ​ ​ ​ $ 106,838 ​ ​ ​ ​ ​ 5.00% ​ ​
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(21)
Fair Value Measurement and Disclosures
​
Fair value measurements are determined based on the assumptions that market participants would use in pricing an asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC Topic 820, Fair Value Measurements and Disclosures establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are utilized in the determination of fair value for instruments classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs for instruments classified within Level 3 of the hierarchy).
Fair Value Hierarchy
Level 1 — Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access at the measurement date.
Level 2 — Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
Level 3 — Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.
The following methods and assumptions were used by the Company in estimating the fair value of its significant financial instruments and other accounts recorded or disclosed based on their fair value:
Securities
Securities available for sale are recorded at fair value on a recurring basis. Securities held to maturity are recorded at amortized cost. For securities available for sale, the fair value is determined by various valuation methodologies. Where quoted market prices are available in active markets, securities are classified within Level 1 of the valuation hierarchy. If quoted market prices are not available, fair values are estimated by using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. Level 2 securities include certain U.S. agency bonds, collateralized mortgage and debt obligations, and certain municipal securities. The Level 2 fair value pricing is provided by an independent third party and is based upon similar securities in an active market.
Loans
The carrying amount of variable-rate loans that reprice frequently and have no significant change in credit risk approximates fair value. The fair value of fixed-rate loans is estimated based on discounted contractual cash flows, using interest rates currently being offered for loans with similar terms to borrowers with similar credit quality. The fair value of collateral dependent loans is estimated based on discounted contractual cash flows or underlying collateral values, where applicable. A loan is determined to be collateral dependent if the Company believes it is probable that all principal and interest amounts due according to the terms of the note will not be collected as scheduled. The fair value of collateral dependent loans is determined in accordance with GAAP and generally results in a specific reserve established through a charge to the provision for credit losses.
Losses on collateral dependent loans are charged to the allowance when management believes the collectability of a loan is confirmed. Management classifies all collateral dependent loans carried at fair value as Level 3, since their valuations are based on either discounted cash flows or on underlying collateral values, as determined by appraisals, which are based in part on observable inputs, but which are not themselves observable inputs.
Other Real Estate Owned
The fair value of OREO is determined by using certified appraisals that assign value to the property at its highest and best uses by applying traditional valuation methods common to the industry. The Company does not hold any OREO for profit purposes, and all OREO is actively marketed for sale. In most cases, management has determined that additional valuation adjustments may be appropriate to reflect other market factors that may not be captured in the appraisal. Accordingly, appraisals as adjusted are not based on observable inputs, and management has determined that OREO should be classified as Level 3.
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(21)
Fair Value Measurement and Disclosures (continued)
​
Derivatives
The fair value of derivatives is based on valuation models using observable market data as of the measurement date (Level 2). Our derivatives are traded in an over-the counter market where quoted market prices are not always available. Therefore, the fair values of derivatives are determined using quantitative models that utilize multiple market inputs. The inputs will vary based on the type of derivative, but could include interest rates, prices and indicts to generate continuous yield or pricing curves, prepayment rates and volatility factors to value the position. Most market inputs are actively quoted and can be validated through external sources, including brokers, market transactions and third-party pricing services.
Brokered Time Deposits
Fair value for certain fixed-rate time deposits is estimated using a discounted cash flow calculation that applies interest rates currently being offered to a schedule of aggregated expected maturities of time deposits.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis, aggregated by the level in the fair value hierarchy within which those measurements fall are summarized below (in thousands).
​ ​ ​
Level 1
​ ​
Level 2
​ ​
Level 3
​ ​
Total
​
December 31, 2025: ​ ​ ​ ​ ​
Securities available for sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
U.S. Treasury securities
​ ​ ​ $ 21,912 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 21,912 ​ ​
U.S. Government sponsored agencies
​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,994 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,994 ​ ​
Residential mortgage-backed securities
​ ​ ​ ​ — ​ ​ ​ ​ ​ 24,934 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 24,934 ​ ​
Collateralized mortgage obligations
​ ​ ​ ​ — ​ ​ ​ ​ ​ 996 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 996 ​ ​
Corporate debt securities
​ ​ ​ ​ — ​ ​ ​ ​ ​ 960 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 960 ​ ​
Derivative asset
​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,762 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,762 ​ ​
Brokered time deposits
​ ​ ​ ​ — ​ ​ ​ ​ ​ 90,743 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 90,743 ​ ​
​ ​ ​
Level 1
​ ​
Level 2
​ ​
Level 3
​ ​
Total
​
December 31, 2024: ​ ​ ​ ​ ​
Securities available for sale: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
U.S. Treasury securities
​ ​ ​ $ 38,564 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 38,564 ​ ​
U.S. Government sponsored agencies
​ ​ ​ ​ — ​ ​ ​ ​ ​ 12,809 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 12,809 ​ ​
Residential mortgage-backed securities
​ ​ ​ ​ — ​ ​ ​ ​ ​ 16,422 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 16,422 ​ ​
Collateralized mortgage obligations
​ ​ ​ ​ — ​ ​ ​ ​ ​ 998 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 998 ​ ​
Corporate debt securities
​ ​ ​ ​ — ​ ​ ​ ​ ​ 915 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 915 ​ ​
Derivative asset
​ ​ ​ ​ — ​ ​ ​ ​ ​ 687 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 687 ​ ​
Derivative liability
​ ​ ​ ​ — ​ ​ ​ ​ ​ 359 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 359 ​ ​
Brokered time deposits
​ ​ ​ ​ — ​ ​ ​ ​ ​ 122,231 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 122,231 ​ ​
There were no transfers between Level 2 and Level 3 assets or liabilities during the years ended December 31, 2025 and 2024.
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(21)
Fair Value Measurement and Disclosures (continued)
​
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
The table below presents the Company’s assets and liabilities measured at fair value on a nonrecurring, aggregated by the level in the fair value hierarchy within which those measurements fall are summarized below (in thousands):
​ ​ ​
Level 1
​ ​
Level 2
​ ​
Level 3
​ ​
Total
​
December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Collateral dependent loans
​ ​ ​ $ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 16,212 ​ ​ ​ ​ ​ 16,212 ​ ​
Total
​ ​ ​ $ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 16,212 ​ ​ ​ ​ ​ 16,212 ​ ​
December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Collateral dependent loans
​ ​ ​ $ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,750 ​ ​ ​ ​ ​ 1,750 ​ ​
Total
​ ​ ​ $ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,750 ​ ​ ​ ​ ​ 1,750 ​ ​
For individually evaluated collateral dependent loans, the estimated fair value is based upon the present value of expected future cash flows discounted at the loan’s effective rate, the estimated fair value of the underlying collateral with consideration for estimated selling costs if satisfaction of the loan depends on the sale of the collateral, or the estimated liquidity of the note.
For the years ended December 31, 2025 and 2024, there was not a change in the methods and significant assumptions used to estimate fair value.
The following table shows significant unobservable inputs used in the fair value measurement of Level 3 nonrecurring assets as of December 31, 2025 and 2024 (in thousands):
2025
​
​ ​ ​
Fair Value
​ ​
Valuation Technique
​ ​
Unobservable Inputs
​ ​
Range of
Discounts
​ ​
Weighted
Average
Discount
​
Collateral dependent loans
​ ​ ​ $    16,212 ​ ​ ​
Third-party appraisals
​ ​
Collateral discounts and discount rates
​ ​
0% – 15%
​ ​
5%
​
2024
​
​ ​ ​
Fair Value
​ ​
Valuation Technique
​ ​
Unobservable Inputs
​ ​
Range of
Discounts
​ ​
Weighted
Average
Discount
​
Collateral dependent loans
​ ​ ​ $     1,750 ​ ​ ​
Third-party appraisals
​ ​
Collateral discounts and discount rates
​ ​
0% – 15%
​ ​
7%
​
Financial Instruments
The carrying amounts and estimated fair values of the Company’s financial instruments at December 31, 2025 and 2024 that are not shown elsewhere in these financial statements are shown below (in thousands):
​ ​ ​
Carrying
Amount
​ ​
Estimated
Fair Value
​ ​
Level 1
​ ​
Level 2
​ ​
Level 3
​
December 31, 2025: ​ ​ ​ ​ ​ ​
Financial Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ $    280,373 ​ ​ ​ ​ ​ 280,373 ​ ​ ​ ​ ​ 280,373 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Debt securities held to maturity
​ ​ ​ ​ 40,102 ​ ​ ​ ​ ​ 40,128 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 40,128 ​ ​ ​ ​ ​ — ​ ​
Other investments
​ ​ ​ ​ 2,585 ​ ​ ​ ​ ​ 2,585 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,585 ​ ​ ​ ​ ​ — ​ ​
Loans held for sale
​ ​ ​ ​ 505,360 ​ ​ ​ ​ ​ 505,360 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 505,360 ​ ​ ​ ​ ​ — ​ ​
Loans
​ ​ ​ ​ 1,724,934 ​ ​ ​ ​ ​ 1,705,306 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,705,306 ​ ​
Accrued interest receivable
​ ​ ​ ​ 10,829 ​ ​ ​ ​ ​ 10,829 ​ ​ ​ ​ ​ 10,829 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(21)
Fair Value Measurement and Disclosures (continued)
​
​ ​ ​
Carrying
Amount
​ ​
Estimated
Fair Value
​ ​
Level 1
​ ​
Level 2
​ ​
Level 3
​
Financial Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Deposits
​ ​ ​ ​ 2,268,942 ​ ​ ​ ​ ​ 2,270,868 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 2,270,868 ​ ​
Borrowings
​ ​ ​ ​ 71,216 ​ ​ ​ ​ ​ 65,456 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 65,456 ​ ​
Accrued interest payable
​ ​ ​ ​ 2,741 ​ ​ ​ ​ ​ 2,741 ​ ​ ​ ​ ​ 2,741 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Financial Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and cash equivalents
​ ​ ​ $ 267,814 ​ ​ ​ ​ ​ 267,814 ​ ​ ​ ​ ​ 267,814 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Debt securities held to maturity
​ ​ ​ ​ 26,740 ​ ​ ​ ​ ​ 26,172 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 26,172 ​ ​ ​ ​ ​ — ​ ​
Other investments
​ ​ ​ ​ 8,859 ​ ​ ​ ​ ​ 8,859 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 8,859 ​ ​ ​ ​ ​ — ​ ​
Loans held for sale
​ ​ ​ ​ 498,227 ​ ​ ​ ​ ​ 498,227 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 498,227 ​ ​ ​ ​ ​ — ​ ​
Loans
​ ​ ​ ​ 1,312,293 ​ ​ ​ ​ ​ 1,262,374 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,262,374 ​ ​
Accrued interest receivable
​ ​ ​ ​ 9,511 ​ ​ ​ ​ ​ 9,511 ​ ​ ​ ​ ​ 9,511 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
Financial Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Deposits
​ ​ ​ ​ 1,706,394 ​ ​ ​ ​ ​ 1,735,583 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 1,735,583 ​ ​
Borrowings
​ ​ ​ ​ 211,888 ​ ​ ​ ​ ​ 204,324 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ 150,090 ​ ​ ​ ​ ​ 54,234 ​ ​
Accrued interest payable
​ ​ ​ ​ 3,918 ​ ​ ​ ​ ​ 3,918 ​ ​ ​ ​ ​ 3,918 ​ ​ ​ ​ ​ — ​ ​ ​ ​ ​ — ​ ​
The carrying value of certain assets and liabilities such as cash and cash equivalents, accrued interest receivable, nonmaturing deposits, short-term borrowings, and accrued interest payable approximate their estimated fair value due to their immediate and shorter-term maturities. For those financial instruments not previously disclosed, the following is a description of the valuation methodologies used.
Other investments:   The carrying amount of FHLB stock is a reasonably accepted fair value estimate given the restricted nature. Fair value is the redeemable (carrying) value based on the redemption provisions of the instruments which is considered a Level 2 measurement.
Deposits:   The fair value of deposits with no stated maturity (such as demand deposits, interest-bearing demand, money market accounts and savings accounts) is equal to the amount payable on demand at the reporting date. Fair values for fixed-rate time deposits are estimated using a discounted cash flow calculation that applies interest rates currently being offered in the marketplace on time deposits of similar remaining maturities. Use of internal discounted cash flows provides a Level 3 fair value measurement.
Borrowings:   The fair value of the FHLB advances was obtained from the FHLB which uses a discounted cash flow analysis based on current market rates of similar maturity debt securities and represents a Level 2 measurement. The fair values of the junior subordinated debentures and subordinated notes utilize a discounted cash flow analysis based on an estimate of current interest rates being offered by instruments with similar terms and credit quality. Since the market for these instruments is limited, the internal valuation represents a Level 3 measurement.
Limitations:   Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Fair value estimates may not be realizable in an immediate settlement of the instrument. In some instances, there are no quoted market prices for the Company’s various financial instruments, in which case fair value may be based on estimates using present value or other valuation techniques, or based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of the financial instruments, or other factors. Those techniques are significantly affected by the assumptions used, including the discount rate and estimate of future cash flows. Subsequent changes in assumptions could significantly affect the estimates.
(22)
Segment Information
​
The Company adopted ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures on January 1, 2025. The Company has determined that its current community bank operating model is structured whereby all
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(22)
Segment Information (continued)
​
banking locations serve a similar base of primarily commercial customers utilizing a company-wide offering of similar products and services managed through similar processes and technology platforms that are collectively reviewed by the Company’s Chief Executive Officer, who has been designated as the chief operating decision maker (“CODM”). The CODM regularly assesses performance of the aggregated single banking segment in determining how to allocate resources.
The banking segment derives revenue from customers by providing a broad array of loan and deposit products to businesses and consumers. Loan offerings include commercial and commercial real estate loans, as well as residential real estate and consumer loans. Deposit products include checking, savings, money market, and time deposits, as well as treasury management services, mobile banking, ATMs, and other deposit-related products and services.
Accounting policies for the banking segment are the same as those described in Note 1. The CODM assesses performance of the banking segment and decides how to allocate resources based on net income as reported in the Company’s consolidated statements of income. All categories of interest expense, provision for credit losses, and noninterest expense, as disclosed in the Company’s consolidated statements of income, are considered significant to the banking segment. In addition, depreciation expense is disclosed within Note 6.
For the year ended December 31, 2025, there were no adjustments or reconciling items between the banking segment net income and consolidated net income as presented in the consolidated statements of income.
The measure of segment assets is based on total assets as reported on the consolidated balance sheets. For the year ended December 31, 2025, there were no adjustments or reconciling items between the banking segment total assets and total assets as presented on the consolidated balance sheets.
(23)
Parent Company Only Financial Information
​
Condensed Parent Company only financial statements of Georgia Banking Company, Inc. are as follows:
Balance Sheets
December 31, 2025 and 2024
(dollars in thousands)
​ ​ ​
2025
​ ​
2024
​
Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Cash and due from banks
​ ​ ​ $ 14,398 ​ ​ ​ ​ ​ 40,281 ​ ​
Investment in subsidiaries
​ ​ ​ ​ 257,999 ​ ​ ​ ​ ​ 172,971 ​ ​
Other assets
​ ​ ​ ​ 4,016 ​ ​ ​ ​ ​ 4,405 ​ ​
Total assets
​ ​ ​ $ 276,413 ​ ​ ​ ​ ​ 217,657 ​ ​
Liabilities and Shareholders’ Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Subordinated notes, net
​ ​ ​ ​ 63,999 ​ ​ ​ ​ ​ 54,671 ​ ​
Junior subordinated debentures
​ ​ ​ ​ 7,217 ​ ​ ​ ​ ​ 7,217 ​ ​
Other liabilities
​ ​ ​ ​ 283 ​ ​ ​ ​ ​ 241 ​ ​
Shareholders’ equity
​ ​ ​ ​ 204,914 ​ ​ ​ ​ ​ 155,528 ​ ​
Total liabilities and shareholders’ equity
​ ​ ​ $ 276,413 ​ ​ ​ ​ ​ 217,657 ​ ​
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(23)
Parent Company Only Financial Information (continued)
​
Statements of Income
Years Ended December 31, 2025 and 2024
(dollars in thousands)
​ ​ ​
2025
​ ​
2024
​
Interest income
​ ​ ​ $ 50 ​ ​ ​ ​ ​ 17 ​ ​
Interest expense
​ ​ ​ ​ 3,434 ​ ​ ​ ​ ​ 3,057 ​ ​
Net interest expense
​ ​ ​ ​ (3,384) ​ ​ ​ ​ ​ (3,040) ​ ​
Operating expense
​ ​ ​ ​ (899) ​ ​ ​ ​ ​ (453) ​ ​
Income tax benefit
​ ​ ​ ​ 1,083 ​ ​ ​ ​ ​ 908 ​ ​
Earnings before equity in undistributed income of subsidiaries
​ ​ ​ ​ (3,200) ​ ​ ​ ​ ​ (2,585) ​ ​
Equity in undistributed income of subsidiaries
​ ​ ​ ​ 25,280 ​ ​ ​ ​ ​ 11,041 ​ ​
Net income
​ ​ ​ $ 22,080 ​ ​ ​ ​ ​ 8,456 ​ ​
Statements of Cash Flows
For the Years Ended December 31, 2025 and 2024
(dollars in thousands)
​ ​ ​
2025
​ ​
2024
​
Cash flows from operating activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net income
​ ​ ​ $ 22,080 ​ ​ ​ ​ ​ 8,456 ​ ​
Adjustments to reconcile net income to net cash from operating activities:
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Undistributed earnings of subsidiaries
​ ​ ​ ​ (25,280) ​ ​ ​ ​ ​ (11,041) ​ ​
Amortization
​ ​ ​ ​ 376 ​ ​ ​ ​ ​ 246 ​ ​
Change in other assets and liabilities, net
​ ​ ​ ​ 304 ​ ​ ​ ​ ​ (895) ​ ​
Net cash used in operating activities
​ ​ ​ ​ (2,520) ​ ​ ​ ​ ​ (3,234) ​ ​
Cash flows from investing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Net cash paid in business combinations, net of cash acquired
​ ​ ​ ​ (3,878) ​ ​ ​ ​ ​ — ​ ​
Investments in subsidiary
​ ​ ​ ​ (21,943) ​ ​ ​ ​ ​ (5,000) ​ ​
Net cash used in investing activities
​ ​ ​ ​ (25,821) ​ ​ ​ ​ ​ (5,000) ​ ​
Cash flows from financing activities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Exercise of stock options
​ ​ ​ ​ 1,009 ​ ​ ​ ​ ​ — ​ ​
Issuance of common stock
​ ​ ​ ​ 1,449 ​ ​ ​ ​ ​ 1 ​ ​
Net cash from financing activities
​ ​ ​ ​ 2,458 ​ ​ ​ ​ ​ 1 ​ ​
Net change in cash and cash equivalents
​ ​ ​ ​ (25,883) ​ ​ ​ ​ ​ (8,233) ​ ​
Cash and cash equivalents at beginning of year
​ ​ ​ ​ 40,281 ​ ​ ​ ​ ​ 48,514 ​ ​
Cash and cash equivalents at end of year
​ ​ ​ $ 14,398 ​ ​ ​ ​ ​ 40,281 ​ ​
​
(24)
Subsequent Events
​
The Company has evaluated subsequent events for recognition and disclosure through July 28, 2026 which is the date the financial statements were available to be issued.
Acquisition of Tandem Bancorp, Inc.
Effective June 1, 2026, GBC completed its merger with Tandem Bancorp, Inc. (“Tandem”), a bank holding company headquartered in Tucker, GA, pursuant to the terms of the Agreement and Plan of Merger (the “Agreement”) dated February 26,
 
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GEORGIA BANKING COMPANY, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (continued)
(24)
Subsequent Events (continued)
​
2026, at which time Tandem merged with and into GBC, and Tandem Bank, the wholly owned bank subsidiary of Tandem, was merged with and into the Bank. The merger was accounted for under the acquisition method of accounting.
Tandem had, on a preliminary fair value basis, total assets of approximately $321.3 million, total loans of approximately $240.1 million, total liabilities of approximately $290.7 million, and total shareholders’ equity of approximately $30.6 million as of June 1, 2026. Tandem Bank, a Georgia state-chartered bank, had one branch location and three loan production offices.
Under the terms of the Agreement, GBC agreed to acquire 100% of the common stock of Tandem in a combined stock-and-cash transaction, whereby each Tandem shareholder was given the right to elect to receive either $14.40 in cash or 0.4800 shares of the Company’s common stock in exchange for each share of Tandem common stock. The transaction was valued at approximately $36 million, such that approximately 30% of Tandem common stock was converted to cash and the remaining 70% of Tandem common stock was converted to GBC common stock.
Due to the timing of the acquisition, GBC is currently in the process of completing the purchase accounting and has not made all of the remaining required disclosures, such as fair value of assets acquired and supplemental pro forma information, which will be disclosed in subsequent financial statements.
Common Stock Offering
On June 17, 2026, GBC completed a private placement of primary and secondary shares at a price of $30.00 per share that resulted in total proceeds of $78 million. Approximately $39 million of the proceeds was used to facilitate sales to new shareholders from current shareholders with the remaining $39 million retained by the Company for continued growth and future strategic expansion opportunities. This transaction resulted in the issuance of 1.3 million in new shares. The Company also incurred transaction costs related to this stock offering of approximately $2 million which have been deducted from the proceeds of the common stock offering.
 
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​
​
[MISSING IMAGE: lg_gbc-4clr.jpg]
7,040,514 Shares
Common Stock
​
PRELIMINARY PROSPECTUS
           , 2026
​
Through and including            , 2026 (the 25th day after the listing date of our common stock), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus.
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PART II — INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13 — Other Expenses of Distribution
The following table sets forth all costs and expenses in connection with the sale of shares of our common stock being registered, all of which will be paid by us. All amounts shown are estimates, except for the SEC registration fee and Nasdaq listing fee.
Expense Category
​ ​
Amounts
​
SEC registration fee
​ ​ ​ $ 18,376 ​ ​
Nasdaq listing fee
​ ​ ​ ​ 50,000 ​ ​
FINRA filing fee
​ ​ ​ ​ 30,000 ​ ​
Legal fees and expenses
​ ​ ​ ​ 1,030,000 ​ ​
Financial advisor legal fees and expenses
​ ​ ​ ​ 150,000 ​ ​
Accounting fees and expenses
​ ​ ​ ​ 459,000 ​ ​
Printing fees and expenses
​ ​ ​ ​ 145,000 ​ ​
Transfer agent and registrar fees and expenses
​ ​ ​ ​ 20,000 ​ ​
Miscellaneous expenses
​ ​ ​ ​ 150,000 ​ ​
Total
​ ​ ​ $ 2,052,376 ​ ​
ITEM 14 — Indemnification of Directors and Officers
Georgia Business Corporation Code
Subsection (a) of Section 14-2-851 of the GBCC provides that a corporation may indemnify or obligate itself to indemnify an individual made a party to a proceeding because he or she is or was a director against liability incurred in the proceeding if such individual conducted himself or herself in good faith and such individual reasonably believed, in the case of conduct in an official capacity, that such conduct was in the best interests of the corporation and, in all other cases, that such conduct was at least not opposed to the best interests of the corporation and, in the case of any criminal proceeding, such individual had no reasonable cause to believe such conduct was unlawful. Subsection (d) of Section 14-2-851 of the GBCC provides that a corporation may not indemnify a director in connection with a proceeding by or in the right of the corporation except for reasonable expenses incurred if it is determined that the director has met the relevant standard of conduct, or in connection with any proceeding with respect to conduct under Section 14-2-851 of the GBCC for which he or she was adjudged liable on the basis that personal benefit was improperly received by him or her, whether or not involving action in his or her official capacity.
Section 14-2-852 of the GBCC provides that to the extent that a director has been wholly successful, on the merits or otherwise, in the defense of any proceeding to which he or she was a party, because he or she is or was a director of the corporation, the corporation shall indemnify the director against reasonable expenses incurred by the director in connection with the proceeding.
Pursuant to Section 14-2-854 of the GBCC, a court may order a corporation to indemnify a director or advance expenses if such court determines that the director is entitled to indemnification under the GBCC or that the director is fairly and reasonably entitled to indemnification or advance of expenses in view of all the relevant circumstances, whether or not such director met the standard of conduct set forth in subsections (a) and (b) of Section 14-2-851 of the GBCC, failed to comply with Section 14-2-853 of the GBCC or was adjudged liable as described in paragraph (1) or (2) of subsection (d) of Section 14-2-851 of the GBCC.
Section 14-2-856 of the GBCC permits articles of incorporation, bylaws, a contract, or resolution approved by the shareholders, to authorize us to indemnify a director against claims to which the director was a party, including claims by us or in our right (e.g., shareholder derivative action). However, we may not indemnify the director for liability to us for any appropriation, in violation of the director’s duties, of a corporate opportunity, intentional misconduct or knowing violation of the law, unlawful distributions or receipt of an improper personal benefit.
Section 14-2-857 of the GBCC provides that a corporation may indemnify and advance expenses to an officer of the corporation who is a party to a proceeding because he or she is an officer of the corporation to the same extent as a director and, if he or she is not a director, to such further extent as may be provided in its articles of incorporation, bylaws, resolution of
 
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its board of directors or contract except for liability arising out of conduct specified in Section 14-2-857(a)(2) of the GBCC. Section 14-2-857 of the GBCC also provides that an officer of the corporation who is not a director is entitled to mandatory indemnification under Section 14-2-852 and is entitled to apply for court ordered indemnification or advances for expenses under Section 14-2-854, in each case to the same extent as a director. In addition, Section 14-2-857 provides that a corporation may also indemnify and advance expenses to an employee or agent who is not a director to the extent, consistent with public policy, that may be provided by its articles of incorporation, bylaws, action of its board of directors or contract.
Section 14-2-858 of the GBCC permits us to purchase and maintain insurance on behalf of our directors and officers against liability incurred by them in their capacities or arising out of their status as our directors and officers, regardless of whether we would have the power to indemnify or advance expenses to the director or officer for the same liability under the GBCC.
Our Articles of Incorporation and Bylaws; Insurance
In accordance with Article VI of the Bylaws, every person (and the heirs and legal representatives of such person) who is or was a director, officer, employee, or agent of the Company or any other corporation of which he or she served as such at the request of the Company and of which the Company directly or indirectly is a shareholder or creditor, or in which or in the stocks, bonds, securities or other obligations of which it is in any way interested, shall, in accordance with the Bylaws, and to the maximum extent permitted by the GBCC, be indemnified for any liability and expense that may be incurred by such person in connection with or resulting from any threatened, pending or completed action, suit or proceeding, in which he or she may become involved, as a party or prospective party or otherwise, by reason of any action taken or not taken in his or her capacity as such director or officer or as a member of any committee appointed by our Board to act for, in the interest of, or on behalf of the Company; provided such person acted in good faith and reasonably believed, in the case of conduct in the person’s official capacity, that the conduct was in the Company’s best interests, and in all other cases, that the conduct was at least not opposed to the Company’s best interests, and, in the case of a criminal proceeding, that the person had no reasonable cause to believe that the conduct was unlawful.
Pursuant to Article VI of the Bylaws, expenses incurred with respect to any proceeding will be advanced by the Company prior to the final disposition of such proceeding upon written affirmation by the recipient of (i) his or her good faith belief that he or she has met the applicable standard of conduct and (ii) a written undertaking and agreement of the recipient to repay to the Company such amount if it is ultimately determined that he or she is not entitled to indemnification under the Bylaws.
Notwithstanding the foregoing, under Article VI of the Bylaws, no individual will be indemnified in respect of any proceeding as to which such person was found liable for negligence or misconduct in the performance of his or her duty to the Company unless and except to the extent that the court in which such proceeding was brought determines upon application that, despite the adjudication of liability and in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses as such court shall deem proper.
The foregoing rights of indemnification and advancement of expenses are in addition to any rights to which any such director or officer or other person may otherwise be entitled under any bylaw, agreement, vote of shareholders or otherwise, and are in addition to the power of the Company to purchase and maintain insurance on behalf of any such director or officer or other person against any liability asserted against him or her and incurred by him or her in such capacity, or arising out of his or her status as such, regardless of whether the Company would have the power to indemnify against such liability under the Bylaws or otherwise.
In addition, our Articles of Incorporation provide that our directors shall not have any personal liability to the Company or to its shareholders for monetary damages for breach of duty of care or other duty as a director to the fullest extent permitted by the GBCC. The elimination of personal liability of directors does not apply to any appropriation of any business opportunity of the Company in violation of the director’s duties, acts or omissions which involve intentional misconduct or a knowing violation of law, unlawful distributions or receipt of an improper personal benefit.
We maintain a directors’ and officers’ liability insurance policy. The policy insures directors and officers against unindemnified losses arising from certain wrongful acts in their capacities as directors and officers and reimburses us for those losses for which we have lawfully indemnified the directors and officers. The policy contains various exclusions.
ITEM 15 — Recent Sales of Unregistered Securities
Between January 1, 2023 and the filing of this registration statement, we have engaged in the following transactions that were not registered under the Securities Act:
 
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Private Placements.   We issued 1,184,021 and 963,473 shares of our common stock in the April 2023 Private Placement and the June 2026 Private Placement, respectively. Additionally, in the June 2026 Private Placement, 331,341 shares of non-voting common stock were issued. Most recently, in the August 2026 Private Placement, we issued 40,683 shares of our common stock. We issued $55.0 million in aggregate principal amount of our 6.75% fixed-to-floating rate subordinated notes due 2036 in the 2036 Notes Offering.
The gross proceeds to us from the April 2023 Private Placement, before deducting placement agent fees and other estimated offering expenses payable by the Company, were approximately $27.2 million. Performance Trust acted as the exclusive placement agent in connection with the private placement under an engagement between the Company and Performance Trust. Total offering expenses incurred in connection with the April 2023 Private Placement were approximately $1.0 million.
The gross proceeds to us from the June 2026 Private Placement, before deducting placement agent fees and other estimated offering expenses payable by the Company, were approximately $38.8 million. Performance Trust and Stephens Inc. (“Stephens”) acted as the placement agents in connection with the private placement under an engagement, between us and Performance Trust and Stephens. Total offering expenses incurred in connection with the June 2026 Private Placement, including expenses paid by the selling shareholders, were approximately $3.9 million, of which approximately $2.0 million in expenses were paid by the Company.
The gross proceeds to us from the August 2026 Private Placement, before deducting estimated offering expenses payable by the Company, were approximately $1.2 million. No placement agent was involved in the issuance or sale of these securities, and no commissions were paid. The total offering expenses incurred in connection with the August 2026 Private Placement were approximately $7,000.
The gross proceeds to us from the 2036 Notes Offering, before deducting estimated offering expenses payable by the Company, were approximately $53.9 million. Performance Trust acted as the exclusive placement agent in connection with the private notes offering under an engagement between the Company and Performance Trust. Total offering expenses incurred in connection with 2036 Notes Offering were approximately $1.1 million.
The shares of common stock and subordinated debt issued in connection with the foregoing private placements were issued under an exemption from registration pursuant to Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder as a transaction by an issuer not involving any public offering.
Equity Awards and Grants.   During the period between January 1, 2023 and the filing of this registration statement, we have granted 24,733 stock options and 217,559 restricted stock units pursuant to our 2021 Stock Incentive Plan, as amended. In connection with the acquisition of Georgia Primary completed on March 1, 2025, the Company also assumed the 2017 Long-Term Incentive Plan and the 60,831 stock options granted thereunder, which were converted into options to purchase shares of our common stock using an exchange ratio of 0.5870. In connection with the acquisition, we also converted 138,633 outstanding stock options granted under individual nonqualified stock option award agreements into options to purchase shares of our common stock using the same exchange ratio. All such converted options became fully vested and exercisable at the effective time of the merger. No underwriter or placement agent was involved in the issuance or sale of any of these securities, and no underwriting discounts or commissions were paid. The issuance and sale of the securities described above were made in reliance upon exemptions from registration requirements under Section 4(a)(2) of the Securities Act and pursuant to Rule 701 promulgated under the Securities Act.
Merger Transactions.   In connection with the acquisition of Georgia Primary completed on March 1, 2025, we issued approximately 873,794 shares of our common stock to the then-shareholders of Georgia Primary as partial merger consideration. In connection with the acquisition of Tandem completed on June 1, 2026, we issued approximately 802,407 shares of our common stock to the then-shareholders of Tandem as partial merger consideration.
The shares of common stock issued in each transaction were issued in reliance upon the exemption from registration provided by Section 3(a)(10) of the Securities Act, as the terms and conditions of each merger, and the fairness of such terms and conditions, were approved by the Georgia Department of Banking and Finance following a hearing upon the fairness of such terms and conditions to the then-shareholders of Georgia Primary and Tandem, respectively.
 
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ITEM 16 — Exhibits and Financial Statement Schedules
(a)   Exhibits
Exhibit
Number
​ ​
Exhibit Description
​
2.1† ​ ​ ​
2.2† ​ ​ Agreement and Plan of Merger, dated as of February 26, 2026, by and between Georgia Banking Company, Inc. and Tandem Bancorp, Inc. ​
3.1 ​ ​ Articles of Incorporation of Georgia Banking Company, Inc. dated March 24, 1998, as amended by Articles of Amendment to Articles of Incorporation of Georgia Banking Company, Inc. dated February 18, 2021 and by Second Articles of Amendment to Articles of Incorporation of Georgia Banking Company, Inc. dated June 15, 2026 ​
3.2 ​ ​ ​
4.1 ​ ​ ​
4.2† ​ ​ ​
4.3 ​ ​ ​
4.4 ​ ​ ​
4.5 ​ ​ ​
4.6† ​ ​ ​
4.7 ​ ​ ​
4.8 ​ ​ Form of Warrant by and among Georgia Banking Company, Inc. and the holders named therein ​
4.9 ​ ​ ​
​ ​ ​ The other instruments defining the rights of the long-term debt securities of the Registrant and its subsidiaries are omitted pursuant to section (b)(4)(iii)(A) of Item 601 of Regulation S-K. The Registrant hereby agrees to furnish copies of these instruments to the SEC upon request. ​
5.1 ​ ​ ​
10.1† ​ ​ ​
10.2^† ​ ​ ​
10.3† ​ ​ ​
10.4 ​ ​ ​
10.5† ​ ​ ​
10.6 ​ ​ ​
10.7 ​ ​ ​
 
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Exhibit
Number
​ ​
Exhibit Description
​
10.8 ​ ​ ​
10.9 ​ ​ ​
10.10^†
​ ​ Amended and Restated Employment Agreement, dated as of September 30, 2026, by and among Georgia Banking Company, Inc., Georgia Banking Company, and Bartow Morgan, Jr. ​
10.11^ ​ ​ Form of Amended and Restated Change in Control Agreement, by and between Georgia Banking Company, Inc. and each of its other named executive officers ​
10.12^ ​ ​ ​
10.13^ ​ ​ ​
10.14^ ​ ​ ​
10.15^ ​ ​ ​
10.16^ ​ ​ ​
10.17^ ​ ​ ​
10.18^ ​ ​ ​
10.19^ ​ ​ ​
10.20^ ​ ​ Georgia Primary Bank 2017 Long-Term Incentive Plan (formerly known as the Primary Bancshares, Inc. 2017 Long-Term Incentive Plan) ​
10.21^ ​ ​ ​
10.22^ ​ ​ Second Amendment to the Georgia Primary Bank 2017 Long-Term Incentive Plan, dated March 1, 2025 ​
10.23^ ​ ​ ​
10.24 ​ ​ ​
10.25 ​ ​ ​
10.26† ​ ​ ​
10.27† ​ ​ ​
10.28 ​ ​ ​
21.1 ​ ​ ​
23.1 ​ ​ ​
23.2 ​ ​ ​
24.1 ​ ​ ​
107 ​ ​ ​
​
^
Indicates a management contract or compensatory plan.
​
†
Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request.
​
 
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ITEM 17 — Undertakings.
The undersigned registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
​
(i)   To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;
(ii)
To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement;
​
(iii)
To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;
​
(2)
That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
​
(3)
To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
​
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1)
For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.
​
(2)
For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Atlanta, State of Georgia, on October 2, 2026.
GEORGIA BANKING COMPANY, INC.
By:
/s/ Bartow Morgan, Jr.
​
​
Bartow Morgan, Jr.
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Bartow Morgan, Jr. and Richard Fairey, and each one of them, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in their name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement, and to sign any registration statement for the same offering covered by this registration statement that is to be effective on filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and all post-effective amendments thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys- in-fact and agents or any of them, or his or her substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
​
Signature
​ ​
Title
​ ​
Date
​
​
/s/ Bartow Morgan, Jr.
​
Bartow Morgan, Jr.
​ ​
Chief Executive Officer and Director
(Principal Executive Officer)
​ ​
October 2, 2026
​
​
/s/ Charles M. DeWitt, III
​
Charles M. DeWitt, III
​ ​
Chief Financial Officer
(Principal Financial Officer)
​ ​
October 2, 2026
​
​
/s/ Ryan D. Nemec
​
Ryan D. Nemec
​ ​
Chief Accounting Officer
(Principal Accounting Officer)
​ ​
October 2, 2026
​
​
/s/ Sarah R. Borders
​
Sarah R. Borders
​ ​
Chairperson
​ ​
October 2, 2026
​
​
/s/ Arthur F. Anton
​
Arthur F. Anton
​ ​
Director
​ ​
October 2, 2026
​
​
/s/ James F. Deutsch
​
James F. Deutsch
​ ​
Director
​ ​
October 2, 2026
​
 
II-7

TABLE OF CONTENTS
 
​
Signature
​ ​
Title
​ ​
Date
​
​
/s/ Henchy R. Enden
​
Henchy R. Enden
​ ​
Director
​ ​
October 2, 2026
​
​
/s/ Ryan Glover
​
Ryan Glover
​ ​
Director
​ ​
October 2, 2026
​
​
/s/ Craig Heiser
​
Craig Heiser
​ ​
Director
​ ​
October 2, 2026
​
​
/s/ Mark Scheinfeld
​
Mark Scheinfeld
​ ​
Director
​ ​
October 2, 2026
​
​
/s/ R. Lee Tucker, Jr.
​
R. Lee Tucker, Jr.
​ ​
Director
​ ​
October 2, 2026
​
 
II-8

 

Exhibit 2.1

 

CERTAIN CONFIDENTIAL INFORMATION (MARKED BY BRACKETS AS “[***]”) HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

AGREEMENT AND PLAN OF MERGER

 

between

 

GEORGIA BANKING COMPANY, INC.

 

and

 

Primary Bancshares corporation

 

 

 

Dated October 9, 2024

 

 

TABLE OF CONTENTS

 

Article I
 
THE MERGER
 
1.1 The Merger and Bank Merger 1
1.2 Closing 2
1.3 Effective Time 2
1.4 Effects of the Merger 2
1.5 Charter of Surviving Entity 2
1.6 Bylaws of Surviving Entity 2
1.7 Tax Consequences 2
     
Article II
     
EFFECT ON CAPITAL STOCK; EXCHANGE OF SHARES
 
2.1 Conversion of Capital Stock 3
2.2 Treatment of Primary Options 3
2.3 Election and Allocation Procedures 5
2.4 Dissenting Shareholders 7
2.5 Payment Procedures 7
2.6 Rights of Former Primary Shareholders 9
     
Article III
     
REPRESENTATIONS AND WARRANTIES OF PRIMARY
 
3.1 Corporate Organization 9
3.2 Capitalization 10
3.3 Authority; No Violation 11
3.4 Consents and Approvals 12
3.5 Reports 12
3.6 Financial Statements 13
3.7 Broker’s Fees 14
3.8 Absence of Certain Changes or Events 14
3.9 Legal and Regulatory Proceedings 14
3.10 Taxes and Tax Returns 15
3.11 Employees 16
3.12 Compliance with Applicable Law 20
3.13 Certain Contracts 21
3.14 Agreements with Regulatory Agencies 23
3.15 Risk Management Instruments 23
3.16 Environmental Matters 24
3.17 Investment Securities and Commodities 24
3.18 Real Property 24
3.19 Intellectual Property 25
3.20 Related Party Transactions 25
3.21 State Takeover Laws 26

 

 i 

 

3.22 Reorganization 26
3.23 Opinion 26
3.24 Primary Information 26
3.25 Loan Portfolio 26
3.26 Insurance 27
3.27 No Other Representations or Warranties 28
     
Article IV
 
REPRESENTATIONS AND WARRANTIES OF GBC
 
4.1 Corporate Organization 28
4.2 Capitalization 29
4.3 Authority; No Violation 30
4.4 Consents and Approvals 31
4.5 Reports 31
4.6 Financial Statements 31
4.7 Broker’s Fees 33
4.8 Absence of Certain Changes or Events 33
4.9 Legal and Regulatory Proceedings 33
4.10 Taxes and Tax Returns 33
4.11 Compliance with Applicable Law 34
4.12 Agreements with Regulatory Agencies 35
4.13 Related Party Transactions 36
4.14 State Takeover Laws 36
4.15 Reorganization 36
4.16 GBC Information 36
4.17 No Other Representations or Warranties 36
     
Article V
     
COVENANTS RELATING TO CONDUCT OF BUSINESS
 
5.1 Conduct of Businesses Prior to the Effective Time 37
5.2 Forbearances of Primary 37
5.3 Forbearances of GBC 41
     
Article VI
     
ADDITIONAL AGREEMENTS
 
6.1 Regulatory Matters 42
6.2 Access to Information; Confidentiality 43
6.3 Non-Control 43
6.4 Fairness Determination; Securities Act Compliance 43
6.5 Proxy Statement; Shareholders’ Approvals 44
6.6 Legal Conditions to Merger 46
6.7 Employee Matters 46
6.8 Indemnification; Directors’ and Officers’ Insurance 48
6.9 Additional Agreements 49
6.10 Advice of Changes 49

 

 ii 

 

6.11 Shareholder Litigation 50
6.12 Corporate Governance 50
6.13 Acquisition Proposals 50
6.14 Public Announcements 51
6.15 Takeover Statutes 51
6.16 Certain Tax Matters 51
     
Article VII
     
CONDITIONS PRECEDENT
 
7.1 Conditions to Each Party’s Obligation to Effect the Merger 52
7.2 Conditions to Obligations of GBC 52
7.3 Conditions to Obligations of Primary 53
     
Article VIII
     
TERMINATION AND AMENDMENT
 
8.1 Termination 54
8.2 Effect of Termination 55
     
Article IX
     
GENERAL PROVISIONS
 
9.1 Definitions 56
9.2 Amendment 58
9.3 Extension; Waiver 58
9.4 Nonsurvival of Representations, Warranties and Agreements 58
9.5 Expenses 59
9.6 Notices 59
9.7 Interpretation 60
9.8 Counterparts 60
9.9 Entire Agreement 60
9.10 Governing Law; Jurisdiction 60
9.11 Waiver of Jury Trial 61
9.12 Assignment; Third-Party Beneficiaries 61
9.13 Specific Performance 61
9.14 Severability 61
9.15 Confidential Supervisory Information 62
9.16 Delivery by Facsimile or Electronic Transmission 62

 

 iii 

 

INDEX OF DEFINED TERMS

 

Term Section
ACA 3.11(k)
Acceptable Confidentiality Agreement 6.13
Acquisition Proposal 9.1
Affiliate 9.7
Agreement Preamble
ACL 3.6(c)
ALLL 3.6(c)
Alternative Acquisition Agreement 6.5(b)
Applicable Agencies 3.4
Bank Merger Recitals
Bank Merger Agreement Recitals
Bank Merger Certificates 1.1(b)
Bank Merger Effective Time 1.1(b)
BHC Act 3.1(a)
Business Day 9.7
Call Reports 3.6(c)
Cancelled Shares 2.1(c)
Cash Election 2.3(a)
Cash Election Shares 2.3(a)
Cash Election Threshold 9.1
Certificate of Merger 1.3
Chosen Courts 9.10(b)
Closing 1.2
Closing Date 1.2
Code Recitals
Continuing Employees 6.7(a)
Conversion Fund 2.5(a)
DBF 3.4
Dissenters’ Shares 2.1(b)
Effective Time 1.3
Election Deadline 9.1
Election Form 2.3(a)
Enforceability Exceptions 3.3(a)
Environmental Laws 3.16
ERISA 3.11(a)
Evercore 4.7
Exchange Act 3.20
Exchange Agent 2.3(a)
Exchange Ratio 2.2(a)
Fairness Determination 6.4(a)
Fairness Hearing 6.4(b)
Fairness Order 6.4(b)
FDI Act 3.1(b)
FDIC 3.1(b)
Federal Reserve 3.4

 

 iv 

 

Fractional Share Cash-in-Lieu Amounts 2.3(c)
Fraud 8.2(a)
GAAP 3.1(a)
GBC Preamble
GBC Bank Recitals
GBC Bylaws 4.1(a)
GBCC 1.1(a)
GBC Charter 4.1(a)
GBC Common Stock 4.2(a)
GBC Disclosure Schedule Article IV
GBC 401(k) Plan 6.7(c)
GBC Financial Statements 4.6(a)
GBC Non-Voting Common Stock 4.2(a)
GBC Subsidiary 4.1(b)
GBC Voting Common Stock 4.2(a)
Georgia Secretary 1.3
Governmental Entity 3.4
Holder 2.3(a)
Ineligible Shares 2.3(d)
Intellectual Property 3.19
IRS 2.5(g)
Knowledge 9.7
Liens 3.2(b)
Loans 3.25(a)
Mailing Date 2.3(a)
Material Adverse Effect 9.1
Materially Burdensome Regulatory Condition 6.1(b)
Merger Recitals
Merger Consideration 2.3(a)
Non-Disclosure Agreement 6.2(b)
Non-Election Shares 2.3(a)
Option Cancellation Payment 2.2(a)(1)
Option Consideration 2.2(a)(3)
Option Election Notice 2.2(a)
Option Holder Release Agreements 2.2(a)
Option Shares 2.2(a)(3)
Primary Preamble
Primary 401(k) Plan 6.7(c)
Primary Articles 3.1(a)
Primary Bank Recitals
Primary Benefit Plans 3.11(a)
Primary Board Recommendation 6.5(b)
Primary Bylaws 3.1(a)
Primary Common Stock 3.2(a)
Primary Continuing Director 6.12(a)
Primary Contract 3.13(a)
Primary Disclosure Schedule Article III
Primary ERISA Affiliate 3.11(a)
Primary Financial Statements 3.6(a)

 

 v 

 

Primary Indemnified Parties 6.8(a)
Primary Meeting 6.5(b)
Primary Options 2.2(a)
Primary Qualified Plans 3.11(c)
Primary Regulatory Agreement 3.14
Primary Securities 3.2(a)
Primary Stock Certificate 2.3(a)
Primary Subsidiary 3.1(b)
Per Share Cash Consideration 9.1
Per Share Merger Consideration 9.1
Per Share Stock Consideration 9.1
Permitted Encumbrance 3.18
Personal Data 3.12(b)
Premium Cap 6.8(b)
Primary Owned Property 3.18
Primary Real Property 3.18
Proxy Statement 9.1
Recommendation Change 6.5(b)
Regulatory Agencies 3.5
Representatives 6.13
Requisite Regulatory Approvals 9.1
Requisite Primary Vote 3.3(a)
Rollover Option 2.2(a)(2)
Sarbanes-Oxley Act 3.12(b)
SBA Loan 3.25(g)
Securities Act 6.4(a)
Security Breach 3.12(d)
SRO 3.5
Stock Election 2.3(a)
Stock Election Shares 2.3(a)
Subsidiary 3.1(a)
Superior Proposal 9.1
Surviving Entity Recitals
Takeover Statutes 3.21
Tax 9.1
Tax Return 9.1
Termination Date 8.1(c)
Termination Fee 8.2(b)
Willful and Material Breach 8.2(a)

  

 vi 

 

AGREEMENT AND PLAN OF MERGER, dated October 9, 2024 (this “Agreement”), between Georgia Banking Company, Inc., a Georgia corporation (“GBC”), and Primary Bancshares Corporation, a Georgia corporation (“Primary”).

 

RECITALS

 

A.            The Boards of Directors of GBC and Primary have unanimously determined that it is in the best interests of their respective companies and shareholders to consummate the strategic business combination transaction provided for in this Agreement, pursuant to which Primary will, subject to the terms and conditions set forth herein, merge with and into GBC (the “Merger”), so that GBC is the surviving entity (in such capacity, the “Surviving Entity”) in the Merger.

 

B.            In furtherance thereof, the respective Boards of Directors of GBC and Primary have unanimously approved the Merger and declared advisable and adopted this Agreement, approved the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, and, with respect to the Board of Directors of Primary, has resolved to submit this Agreement to its shareholders for approval and to recommend that its shareholders approve this Agreement.

 

C.            For federal income tax purposes, it is intended that the Merger shall qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and this Agreement is intended to be and is adopted as a plan of reorganization for purposes of Sections 354 and 361 of the Code.

 

D.            Concurrently with the execution and delivery of this Agreement, Georgia Primary Bank, a Georgia bank and wholly-owned subsidiary of Primary (“Primary Bank”), and Georgia Banking Company, a Georgia bank and wholly-owned subsidiary of GBC (“GBC Bank”), entered into an agreement and plan of merger (the “Bank Merger Agreement”) in the form attached hereto as Exhibit A, pursuant to which, immediately following the Merger, and subject to it occurring, Primary Bank will merge (the “Bank Merger”) with and into GBC Bank so that GBC Bank is the surviving entity in the Bank Merger.

 

E.            Concurrently with the execution and delivery of this Agreement, as a condition and inducement for GBC to enter into this Agreement, each member of the Board of Directors of Primary and each member of the Board of Directors of Primary Bank entered into a director support agreement, in the form attached hereto as Exhibit B.

 

F.            In this Agreement, the parties desire to make certain representations, warranties and agreements in connection with the Merger and also to prescribe certain conditions to the Merger.

 

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained herein, and intending to be legally bound hereby, the parties agree as follows:

 

Article I

 

THE MERGER

 

1.1            The Merger and Bank Merger.

 

(a)            Subject to the terms and conditions of this Agreement, in accordance with the Georgia Business Corporation Code (the “GBCC”), Primary shall merge with and into GBC pursuant to this Agreement. GBC shall be the Surviving Entity, and shall continue its corporate existence under the laws of the State of Georgia. Upon consummation of the Merger, the separate corporate existence of Primary shall terminate.

 

 1 

 

(b)            At the Bank Merger Effective Time, Primary Bank will merge with and into GBC Bank. GBC Bank shall be the surviving entity in the Bank Merger and, following the Bank Merger, the separate corporate existence of Primary Bank shall cease. The Bank Merger shall be implemented pursuant to the Bank Merger Agreement. GBC and Primary shall, and shall respectively cause GBC Bank and Primary Bank to, execute certificates or articles of merger and such other agreements, documents and certificates as are necessary to make the Bank Merger effective (“Bank Merger Certificates”) at the Bank Merger Effective Time. The Bank Merger shall become effective immediately following the Effective Time or at such later time and date as specified in the Bank Merger Agreement in accordance with applicable law (the “Bank Merger Effective Time”).

 

1.2            Closing. Subject to the terms and conditions of this Agreement, the closing of the Merger (the “Closing”) will take place by electronic exchange of documents at 10:00 a.m., Eastern time, on a date which shall be no later than three (3) business days after the satisfaction or waiver (subject to applicable law) of all of the conditions set forth in Article VII hereof (other than those conditions that by their nature can only be satisfied at the Closing, but subject to the satisfaction or waiver thereof), unless another date, time or place is agreed to in writing by Primary and GBC. The date on which the Closing occurs is referred to as the “Closing Date.”

 

1.3            Effective Time. On or (if agreed by GBC and Primary) prior to the Closing Date, GBC and Primary shall cause to be filed a certificate of merger with the Secretary of State of the State of Georgia (the “Georgia Secretary”) in accordance with the GBCC (the “Certificate of Merger”). The Merger shall become effective at such time as specified in the Certificate of Merger in accordance with the relevant provisions of the GBCC, or at such other time as shall be provided by applicable law (such time hereinafter referred to as the “Effective Time”).

 

1.4            Effects of the Merger. At and after the Effective Time, the Merger shall have the effects set forth in the applicable provisions of the GBCC and this Agreement.

 

1.5            Charter of Surviving Entity. At the Effective Time, the articles of incorporation of GBC, as in effect immediately prior to the Effective Time, shall be the articles of incorporation of the Surviving Entity until thereafter amended in accordance with applicable law.

 

1.6            Bylaws of Surviving Entity. At the Effective Time, the bylaws of GBC, as in effect immediately prior to the Effective Time, shall be the bylaws of the Surviving Entity until thereafter amended in accordance with applicable law.

 

1.7            Tax Consequences. It is intended that the Merger shall qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and that this Agreement is intended to be and is adopted as a plan of reorganization for the purposes of Sections 354 and 361 of the Code.

 

 2 

 

Article II

 

EFFECT ON CAPITAL STOCK; EXCHANGE OF SHARES

 

2.1            Conversion of Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of GBC, Primary, or the Subsidiaries or shareholders of any of the foregoing, the shares of the constituent corporations to the Merger shall be converted as follows:

 

(a)            Each share of capital stock of GBC issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding from and after the Effective Time and shall not be affected by the Merger.

 

(b)            Each share of Primary Common Stock issued and outstanding immediately prior to the Effective Time, except for the Cancelled Shares (as defined below) and shares with respect to which the holder has properly exercised dissenters’ rights pursuant to Article 13 of the GBCC (the “Dissenters’ Shares”), shall be converted into the right to receive the Per Share Merger Consideration, which shall be payable to the holder thereof, in the manner provided in this Article II.

 

(c)            Any shares of Primary Common Stock that are owned immediately prior to the Effective Time by Primary, GBC or their respective Subsidiaries (in each case, other than (i) shares of Primary Common Stock held in a fiduciary capacity that are beneficially owned by third parties and (ii) shares of Primary Common Stock held, directly or indirectly, in respect of a debt contracted) shall be cancelled and shall cease to exist and no Per Share Merger Consideration shall be payable or delivered in exchange therefor (the “Cancelled Shares”).

 

2.2            Treatment of Primary Options.

 

(a)            Each unexpired, outstanding, and unexercised option to acquire shares of Primary Common Stock (collectively, the “Primary Options”), whether vested or unvested, shall, automatically and without any further action on the part of any holder thereof, be cancelled at the Effective Time and converted automatically into the right to receive, at the election of the holder, as provided by written notice of Primary to GBC not less than thirty (30) days prior to Closing (the “Option Election Notice”), and conditioned upon the holder thereof executing and delivering to Primary and GBC an option holder settlement and release agreement in the form attached hereto as Exhibit C (collectively, the “Option Holder Release Agreements”), either of the three following forms of consideration:

 

(1)            An amount in cash, without interest, equal to the product of (x) the number of shares of Primary Common Stock subject to such Primary Option immediately prior to the Effective Time times (y) the excess, if any, of the Per Share Cash Consideration over the exercise price of such Primary Option (the “Option Cancellation Payment”); provided that if the exercise price is equal to or greater than the Per Share Cash Consideration, such Primary Option shall be canceled without the payment of any cash or other consideration. GBC shall deliver, or cause to be delivered, the Option Cancellation Payment to each such holder of a Primary Option no later than the fifth (5th) Business Day following the Effective Time. Option Cancellation Payments to the holders of the Primary Options shall be subject to applicable withholding under the Code, or any provision of state, local or foreign Tax Law, with respect to the making of such payment; or

 

 3 

 

(2)            An option (each a “Rollover Option”) to purchase a number of shares of GBC Common Stock equal to the product (rounded down to the nearest whole number) of (x) the number of shares of Primary Common Stock subject to such Primary Option immediately prior to the Effective Time times (y) 0.5870 (the “Exchange Ratio”), at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of the Primary Common Stock of such Primary Option immediately prior to the Effective Time divided by (B) the Exchange Ratio; provided, however, that the exercise price and the number of shares of GBC Common Stock purchasable pursuant to the Rollover Options shall be determined in a manner consistent with the requirements of Section 409A of the Code; provided, further, that in the case of any Primary Option to which Section 422 of the Code applies, the exercise price and the number of shares of GBC Common Stock purchasable pursuant to such Rollover Option shall be subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code provided that GBC makes no assurances that such Rollover Options will satisfy the requirements of Section 422 of the Code. Except as specifically provided above and/or as necessary to effect the foregoing, following the Effective Time, each Rollover Option shall continue to have the same terms, including vesting, as were applicable to such Primary Option immediately prior to the Effective Time (substituting GBC and its subsidiaries for references to Primary and its subsidiaries as applicable), which Rollover Option will be assumed by GBC in connection with GBC’s adoption and assumption of the plans under which the Primary Options were issued following the Effective Time; or

 

(3)            A number of shares of GBC Common Stock (the “Options Shares”, together with the Rollover Options and the Option Cancellation Payment, the “Option Consideration”) equal to the product (rounded down to the nearest whole number) of (x) the number of shares of Primary Common Stock subject to such Primary Option immediately prior to the Effective Time times (y) the Exchange Ratio less the number of shares of GBC Common Stock equal to the aggregate exercise price for such Primary Options, assuming a value of $23.00 per share of GBC Common Stock. GBC shall deliver, or cause to be delivered, the Options Shares to each such holder of a Primary Option no later than the fifth (5th) Business Day following the Effective Time. The Options Shares to be issued to such holders of the Primary Options shall be subject to applicable withholding under the Code, or any provision of state, local or foreign Tax Law, with respect to the issuance of such shares, and GBC will withhold, or cause to be withheld, from such issuance that number of Options Shares (rounded up to the nearest whole number) that equals the applicable withholdings, assuming a value of $23.00 per share of GBC Common Stock.

 

(b)            All rounding described in this Section 2.2 shall be done on an aggregate basis per Primary Option and any holder of a Primary Option, the adjustment of which results in fractional shares, shall be entitled to a cash payment under this Agreement in respect of such fractional share equal to the Fractional Share Cash-in-Lieu Amounts, subject to applicable withholding under the Code, or any provision of state, local or foreign Tax Law, with respect to the making of such payment.

 

(c)            Prior to the Effective Time, conditioned upon the Closing, Primary and the Board of Directors of Primary shall adopt any resolutions and take any actions that are necessary to effect the treatment of the Primary Options pursuant to this Section 2.2, including the vesting of any Primary Option that is unvested immediately prior to the Effective Time to fully vest and receipt from the holders of the Primary Options of the executed Option Holder Release Agreements, no later than thirty (30) days prior to the Closing Date.

 

(d)            Prior to the Effective Time, conditioned upon the Closing, GBC and the Board of Directors of GBC shall adopt any resolutions and take any actions that are necessary to effect the issuance of the Rollover Options at the Effective Time and cause the issuance of the Rollover Options and any securities to be issued upon exercise of a Rollover Option to be issued in compliance with applicable federal and state securities laws.

 

 4 

 

(e)            In the event that any holder of Primary Options does not make an election or if his or her election is not timely delivered or properly completed, such holder will be treated as electing to receive Option Shares pursuant to Section 2.2(a)(3).

 

2.3           Election and Allocation Procedures.

 

(a)            Election.

 

(i)            No later than ninety (90) days following the date of this Agreement, GBC shall appoint an exchange agent (the “Exchange Agent”), which is acceptable to Primary in its reasonable discretion, for the payment and exchange of the Merger Consideration.

 

(ii)            Holders of record of Primary Common Stock may elect to receive either shares of GBC Common Stock, cash, or a combination thereof in exchange for their shares of Primary Common Stock; provided, however, that the aggregate number of shares of Primary Common Stock to be converted into the right to receive the Per Share Cash Consideration pursuant to this Section 2.3(a) shall not exceed the Cash Election Threshold.

 

(iii)            An election form (“Election Form”), together with a letter of transmittal as described in Section 2.5(b), shall be mailed no less than thirty (30) days prior to the Election Deadline (such date of mailing, the “Mailing Date”), to each holder of record of one or more shares of Primary Common Stock (each, a “Holder”) as of five (5) Business Days prior to the Mailing Date, permitting such Holder, subject to the allocation and election procedures set forth in this Section 2.3, (1) to specify the number of shares of Primary Common Stock owned by such Holder with respect to which such Holder desires to receive the Per Share Cash Consideration (a “Cash Election” and such shares subject to a Cash Election, the “Cash Election Shares”), (2) to specify the number of shares of Primary Common Stock owned by such Holder with respect to which such Holder desires to receive the Per Share Stock Consideration (a “Stock Election” and such shares subject to a Stock Election, the “Stock Election Shares”), or (3) to indicate that such record Holder has no preference as to the receipt of the Per Share Cash Consideration or the Per Share Stock Consideration for their shares of Primary Common Stock held by such Holder. Holders of record of shares of Primary Common Stock who hold such shares as nominees, trustees or in other representative capacities may submit multiple Election Forms, provided that each such Election Form covers all the shares of Primary Common Stock held by each representative for a particular beneficial owner. Any shares of Primary Common Stock with respect to which the Holder thereof shall not, as of the Election Deadline, have made an election by submission to the Exchange Agent of an effective, properly completed Election Form or for which the Holder has indicated no preference as to the receipt of the Per Share Cash Consideration or Per Share Stock Consideration shall be deemed “Non-Election Shares.” GBC shall make available one or more Election Forms as may reasonably be requested in writing from time to time by all persons who become holders (or beneficial owners) of Primary Common Stock between the record date for the initial mailing of Election Forms and the close of business on the business day prior to the Election Deadline, and GBC shall provide to the Exchange Agent all information reasonably necessary for it to perform as specified herein.

 

 5 

 

(iv)            An election shall have been properly made only if the Exchange Agent shall have actually received a properly completed Election Form by the Election Deadline accompanied by one or more certificates that immediately prior to the Effective Time represented shares of Primary Common Stock (or Primary Bank capital stock, to the extent the holder failed to exchange his, her or its certificate in connection with reorganization of Primary Bank into a holding company structure) (each, a “Primary Stock Certificate”) (or customary affidavits and indemnification regarding the loss or destruction of such Primary Stock Certificates or the guaranteed delivery of such Primary Stock Certificates) representing all the shares of Primary Common Stock covered by such Election Form. Any Election Form may be revoked or changed by the person submitting such Election Form to the Exchange Agent by written notice to the Exchange Agent only if such notice of revocation or change is actually received by the Exchange Agent at or prior to the Election Deadline. The Primary Stock Certificate(s) relating to any revoked Election Form shall be promptly returned without charge to the person submitting the Election Form to the Exchange Agent. In addition, if a Holder either (1) does not submit a properly completed Election Form in a timely fashion or (2) revokes its Election Form prior to the Election Deadline and fails to file a new properly completed Election Form before the Election Deadline, such shares shall be designated Non-Election Shares. Subject to the terms of this Agreement and of the Election Form, the Exchange Agent shall have reasonable discretion to determine whether any election, revocation, or change has been properly or timely made and to disregard immaterial defects in the Election Forms, and any good faith decisions of the Exchange Agent regarding such matters shall be binding and conclusive.

  

(b)            Allocation. No later than five (5) Business Days after the Effective Time, GBC shall cause the Exchange Agent to effect the allocation among the Holders of rights to receive the Per Share Cash Consideration and/or the Per Share Stock Consideration, which shall be effected by the Exchange Agent in accordance with the terms of this Section 2.3(b). In order to ensure that the Cash Election Threshold is not exceeded, the parties hereby agree that the Exchange Agent, in applying the allocation rules set forth herein, shall have reasonable discretion to round calculations in order to accomplish such purpose and each good faith determination made by the Exchange Agent regarding such matters shall be binding and conclusive. For all purposes under this Section 2.3(b), in making the determination with respect to the allocation of the Merger Consideration, shares of Primary Common Stock that are subject to the Fractional Share Cash-in-Lieu Amounts provision of Section 2.3(c), that are Ineligible Shares (as defined below), that are Dissenters’ Shares subject to the provisions of Section 2.4, shall be treated as Cash Election Shares.

 

(i)             Oversubscription of Cash Election Shares. If the aggregate number of Cash Election Shares (the “Cash Election Number”) is greater than the Cash Election Threshold, then, at the Effective Time: (1) each Stock Election Share and Non-Election Share shall be converted into the right to receive (subject to Sections 2.3(c)) the Per Share Stock Consideration; and (2) each Cash Election Share shall be converted into the right to receive (A) the Per Share Cash Consideration in respect of that number of Cash Election Shares equal to the product obtained by multiplying (x) the number of Cash Election Shares held by such Holder by (y) the fraction, the numerator of which is the Cash Election Threshold and the denominator of which is the Cash Election Number, and (B) the Per Share Stock Consideration in respect of the remainder of such Holder’s Cash Election Shares that were not converted into the right to receive the Per Share Cash Consideration pursuant to clause (A) above.

 

(ii)            No Oversubscription of Cash Election Shares. If the Cash Election Number is less than or equal to the Cash Election Threshold, then at the Effective Time: (1) all Stock Election Shares and Non-Election Shares shall be converted into the right to receive the Per Share Stock Consideration (subject to Sections 2.3(c)) and (2) all Cash Election Shares shall be converted into the right to receive the Per Share Cash Consideration.

 

(c)            Notwithstanding any other provisions of this Agreement, each Primary shareholder who would otherwise have been entitled under this Agreement to receive a fraction of a share of GBC Common Stock (after taking into account all Primary Stock Certificates delivered by such Primary shareholder) shall receive, in lieu thereof, cash (without interest) in an amount equal to such fractional part of a share of GBC Common Stock multiplied by $23.00 (the “Fractional Share Cash-in-Lieu Amounts”). No Primary shareholder receiving Fractional Share Cash-in-Lieu Amounts for any Primary Common Stock will be entitled to any dividends declared by GBC in respect of such shares, nor will such holder be entitled to voting rights, or any other rights as a shareholder of GBC in respect of any such shares.

 

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(d)            Notwithstanding any other provisions of this Agreement, if and to the extent that GBC determines that it is necessary or advisable in order to prevent a violation of the laws and regulations of any such state in which the necessary state securities law or “blue sky” permits and approvals, if any, required to carry out the contemplated transactions are not timely obtained, Primary Common Stock held by Primary shareholders residing in such states (“Ineligible Shares”) shall be ineligible to receive the Per Share Stock Consideration and shall instead receive the Per Share Cash Consideration. The Exchange Agent shall convert any Ineligible Shares for which the Holder of such shares has made a Stock Election to a Cash Election Share and shall not have any obligation to provide notice of such conversion to the Holder of such Ineligible Shares.

 

2.4            Dissenting Shareholders. Any holder of Dissenters’ Shares shall not be entitled to any Merger Consideration in respect of such shares, but instead shall be entitled to receive from the Surviving Entity or its successor the value of such shares in cash as determined pursuant to applicable law; provided, that no such payment shall be made to any such dissenting shareholder unless and until such dissenting shareholder has complied with the applicable provisions of the GBCC and surrendered to Primary or the Surviving Entity the Primary Stock Certificate(s) representing the shares for which payment is being made. In the event that after the Effective Time a dissenting shareholder of Primary fails to perfect, or effectively withdraws or loses, such holder’s right to appraisal of and payment for such holder’s Dissenter Shares, GBC or the Surviving Entity shall issue and deliver to such holder of shares of Primary Common Stock, upon surrender by such holder of such holder’s Primary Stock Certificate(s), an amount of cash (without interest) equal to the Per Share Cash Consideration multiplied by the number of shares represented by such surrendered Primary Stock Certificate(s).

 

2.5            Payment Procedures.

 

(a)            At or prior to the Effective Time, GBC shall authorize the issuance of and shall deposit, or shall cause to be deposited with the Exchange Agent, for the benefit of the Primary shareholders for exchange in accordance with this Article II a sufficient number of shares of GBC Common Stock and cash for payment of the Merger Consideration pursuant to this Article II (such amount of cash and shares of GBC Common Stock, together with any dividends or distributions with respect thereto paid after the Effective Time, are referred to in this Article II as the “Conversion Fund”).

 

(b)            As provided in Section 2.3(a)(iii)  and, within five (5) business days after the Closing Date for each Primary shareholder that did not tender its Primary Stock Certificate on or before the Election Deadline pursuant to Section 2.3(a), GBC shall cause the Exchange Agent to mail to each holder of record of one or more Primary Stock Certificates the letter of transmittal and other appropriate and customary transmittal materials (which shall specify that delivery shall be effected, and risk of loss and title to the Primary Stock Certificates shall pass, only upon proper delivery of such Primary Stock Certificates to the Exchange Agent) for use in effecting the surrender of Primary Stock Certificates pursuant to this Agreement. GBC or its Exchange Agent will maintain a book entry list of GBC Common Stock to which each former holder of Primary Common Stock is entitled. Certificates evidencing GBC Common Stock into which Primary Common Stock has been converted will not be issued.

 

(c)            No interest will be paid or accrued on any portion of the Merger Consideration deliverable upon surrender of a Primary Stock Certificate.

 

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(d)            Any portion of the Conversion Fund that remains unclaimed by the former Primary shareholders twelve (12) months after the Effective Time shall be paid to the Surviving Entity, or its successors in interest. Any former Primary shareholders who have not theretofore complied with this Section 2.5 shall thereafter look only to the Surviving Entity, or its successors in interest, for the Merger Consideration, as well as any accrued and unpaid dividends or distributions on shares of GBC Common Stock deliverable in respect of each former share of Primary Common Stock such holder holds as determined pursuant to this Agreement, in each case, without any interest thereon. Notwithstanding the foregoing, none of the Surviving Entity, the Exchange Agent or any other person shall be liable to any former Primary shareholder for any amount delivered in good faith to a public official pursuant to applicable abandoned property, escheat or similar laws. Any amounts remaining unclaimed by former holders of shares of Primary Common Stock immediately prior to the time at which such amounts would otherwise escheat to, or become property of, any Governmental Entity shall, to the extent permitted by applicable law, become the property of the Surviving Entity, free and clear of any claims or interest of any such holders or their successors, assigns or personal representatives previously entitled thereto.

 

(e)            In the event any Primary Stock Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Primary Stock Certificate to be lost, stolen or destroyed and, if required by the Surviving Entity, the posting by such person of a bond in such amount as the Exchange Agent may determine is reasonably necessary as indemnity against any claim that may be made against it with respect to such Primary Stock Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Primary Stock Certificate, and in accordance with this Section 2.5, shares of GBC Common Stock and/or cash constituting the Merger Consideration deliverable in respect thereof pursuant to this Agreement.

 

(f)            If, between the date of this Agreement and the Effective Time, the outstanding shares of GBC Common Stock shall have been changed into a different number of shares or into a different class by reason of any stock dividend, subdivision, reclassification, recapitalization, split, combination or exchange of shares, the conversion price in the GBC Common Stock shall be adjusted appropriately to provide the holders of Primary Common Stock the same economic effect as contemplated by this Agreement prior to such event.

 

(g)            Each of Primary, GBC and the Exchange Agent shall be entitled to deduct and withhold from the Per Share Merger Consideration otherwise payable pursuant to this Agreement to any Primary shareholder such amounts, if any, as it is required to deduct and withhold with respect to the making of such payment under the Code or any provision of state, local or foreign Tax law. To the extent that any amounts are so withheld by Primary, GBC or the Exchange Agent, as the case may be, and timely remitted to the appropriate Governmental Entity, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Primary shareholder on whose behalf such deduction and withholding was made by Primary, GBC or the Exchange Agent, as the case may be. At least three (3) business days in advance of the Closing Date, GBC shall provide written notice to Primary of any such intended withholding (other than any withholding on amounts properly treated as wages for U.S. federal income tax purposes); provided, further, GBC shall use commercially reasonable efforts to cooperate with Primary in its efforts to obtain reduction of or relief from any such withholding obligation to the extent permitted under applicable law. Additionally, at or immediately prior to the Closing, Primary shall provide to GBC (i) a notice to the Internal Revenue Service (the “IRS”), in accordance with the requirements of Treasury Regulation Section 1.897-2(h)(2) dated as of the Closing Date, together with written authorization for GBC to deliver such notice to the IRS on behalf of Primary after the Closing, and (ii) a certificate, stating interests in Primary are not “United States real property interests” as defined in Section 897(c) of the Code for the applicable period described in Section 897(c)(1)(A)(ii) of the Code, prepared in accordance with the Treasury Regulations under Sections 897 and 1445 of the Code, each in form and substance reasonably satisfactory to GBC and validly executed by a duly authorized officer of Primary.

 

(h)            The Exchange Agent may establish such other reasonable and customary rules and procedures in connection with its duties as it may deem appropriate. GBC shall pay all charges and expenses, including those of the Exchange Agent, in connection with the distribution of the consideration provided in this Article II.

 

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2.6            Rights of Former Primary Shareholders. After the Effective Time, there shall be no transfers of Primary Common Stock on the stock transfer books of Primary, and no transfer of Primary Common Stock by any such holder shall thereafter be made or recognized. No dividends or other distributions declared with respect to GBC Common Stock and payable to the holders of record thereof after the Effective Time shall be paid to the holder of any unsurrendered Primary Stock Certificate until the holder thereof shall surrender such Primary Stock Certificate in accordance with this Article II. Promptly after the surrender of a Primary Stock Certificate in accordance with this Article II, the record holder thereof shall be entitled to receive any such dividends or other distributions, without interest thereon, which theretofore had become payable with respect to shares of GBC Common Stock into which the Primary Common Stock represented by such Primary Stock Certificate were converted at the Effective Time pursuant to Section 2.1. No holder of an unsurrendered Primary Stock Certificate shall be entitled, until surrender of such Primary Stock Certificate, to vote the shares of GBC Common Stock into which such holder’s Primary Common Stock shall have been converted until the holder thereof shall surrender such Primary Stock Certificate in accordance with this Article II. Until surrendered for exchange in accordance with the provisions of Article II, each Primary Stock Certificate theretofore representing Primary Common Stock (other than Cancelled Shares and Dissenters’ Shares) shall from and after the Effective Time represent for all purposes only the right to receive the Per Share Merger Consideration provided in this Article II in exchange therefor, subject, however, to the Surviving Entity’s obligation to pay any dividends or make any other distributions with a record date prior to the Effective Time which have been declared or made by Primary in respect of such Primary Common Stock in accordance with the terms of this Agreement and which remain unpaid at the Effective Time.

 

Article III

 

REPRESENTATIONS AND WARRANTIES OF PRIMARY

 

Except as disclosed in the disclosure schedule delivered by Primary to GBC concurrently herewith (the “Primary Disclosure Schedule”) (it being understood that (i) no item is required to be set forth as an exception to a representation or warranty if its absence would not result in the related representation or warranty being deemed untrue or incorrect, (ii) the mere inclusion of an item in the Primary Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission by Primary that such item represents a material exception or fact, event or circumstance or that such item would reasonably be expected to have a Material Adverse Effect, and (iii) any disclosures made with respect to a section of this Article III shall be deemed to qualify (1) any other section of this Article III specifically referenced or cross-referenced, and (2) other sections of this Article III to the extent it is reasonably apparent on its face (notwithstanding the absence of a specific cross reference) from a reading of the disclosure that such disclosure applies to such other sections), Primary hereby represents and warrants to GBC as follows:

 

3.1            Corporate Organization.

 

(a)            Primary is a corporation duly organized, validly existing and in good standing under the laws of the State of Georgia, is a bank holding company duly registered under the Bank Holding Company Act of 1956, as amended (the “BHC Act”) and has not elected to be treated as a financial holding company under the BHC Act. Primary has the corporate power and authority to own, lease or operate all of its properties and assets and to carry on its business as it is now being conducted in all material respects. Primary is duly licensed or qualified to do business and in good standing in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned, leased or operated by it makes such licensing, qualification or standing necessary, except where the failure to be so licensed or qualified or to be in good standing would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Primary. True and complete copies of the articles of incorporation of Primary (the “Primary Articles”), and the amended and restated bylaws of Primary (the “Primary Bylaws”), in each case, as in effect as of the date of this Agreement, have previously been made available by Primary to GBC.

 

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(b)            Except as would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Primary, each Subsidiary of Primary (a “Primary Subsidiary”) (i) is duly organized and validly existing under the laws of its jurisdiction of organization, (ii) is duly licensed or qualified to do business and, where such concept is recognized under applicable law, in good standing in all jurisdictions (whether federal, state, local or foreign) where its ownership, leasing or operation of property or the conduct of its business requires it to be so licensed or qualified or in good standing, and (iii) has all requisite corporate power and authority to own, lease or operate its properties and assets and to carry on its business as now conducted. There are no restrictions on the ability of Primary or any Subsidiary of Primary to pay dividends or distributions except, in the case of Primary or a Subsidiary that is a regulated entity, for restrictions on dividends or distributions generally applicable to all similarly regulated entities. Primary Bank is the only depository institution Subsidiary of Primary, and the deposit accounts of Primary Bank are insured by the Federal Deposit Insurance Corporation (the “FDIC”) through the Deposit Insurance Fund (as defined in Section 3(y) of the Federal Deposit Insurance Act of 1950 (the “FDI Act”)) to the fullest extent permitted by law, all premiums and assessments required to be paid in connection therewith have been paid when due, and no proceedings for the termination of such insurance are pending or threatened. Section 3.1(b) of the Primary Disclosure Schedule sets forth a true, correct and complete list of all Subsidiaries of Primary as of the date hereof. No Subsidiary of Primary is in violation of any of the provisions of its articles or certificate of incorporation or bylaws (or comparable organizational documents). True and complete copies of the organizational documents of Primary Bank as in effect as of the date of this Agreement have previously been made available by Primary to GBC. There is no person whose results of operations, cash flows, changes in shareholders’ equity or financial position are consolidated in the financial statements of Primary other than the Primary Subsidiaries.

 

3.2            Capitalization.

 

(a)            The authorized capital stock of Primary consists of 100,000,000 shares of common stock, par value $5.00 per share (“Primary Common Stock”), and 10,000,000 shares of preferred stock, par value $5.00 per share. As of October 4, 2024, there were: (i) 1,788,797 shares of Primary Common Stock issued and outstanding, (ii) no shares of preferred stock of Primary and (iii) Primary Options to purchase 503,779 shares of Primary Common Stock. All the issued and outstanding shares of Primary Common Stock have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof. There are no bonds, debentures, notes or other indebtedness that have the right to vote on any matters on which shareholders of Primary may vote. Except for the Primary Options there are no outstanding subscriptions, options, warrants, stock appreciation rights, phantom units, scrip, rights to subscribe to or purchase, preemptive rights, anti-dilutive rights, rights of first refusal or similar rights, puts, calls, commitments or agreements of any character relating to, or securities or rights convertible or exchangeable into or exercisable for, shares of capital stock or other voting or equity securities of or ownership interest in Primary, or contracts, commitments, understandings or arrangements by which Primary may become bound to issue additional shares of its capital stock or other equity or voting securities of or ownership interests in Primary, or that otherwise obligate Primary to issue, transfer, sell, purchase, redeem or otherwise acquire, any of the foregoing (collectively, “Primary Securities”). Except for the Primary Options, no equity-based awards (including any cash awards where the amount of payment is determined, in whole or in part, based on the price of any capital stock of Primary or any of its Subsidiaries) are outstanding. No Primary Subsidiary owns any capital stock of Primary. There are no voting trusts, shareholder agreements, proxies or other agreements in effect to which Primary or any of its Subsidiaries is a party with respect to the voting or transfer of Primary Common Stock, capital stock or other voting or equity securities or ownership interests of Primary or granting any shareholder or other person any registration rights.

 

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(b)            Except as would not, either individually or in the aggregate, reasonably be expected to be material to Primary, Primary owns, directly or indirectly, all the issued and outstanding shares of capital stock or other equity ownership interests of each of the Primary Subsidiaries, free and clear of any liens, claims, title defects, mortgages, pledges, charges, and security interests whatsoever, and any other encumbrances securing a payment or the performance of an obligation (collectively, “Liens”), and all of such shares or equity ownership interests are duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof. Other than the shares of capital stock or other equity ownership interests described in the previous sentence, there are no outstanding subscriptions, options, warrants, stock appreciation rights, phantom units, scrip, rights to subscribe to, preemptive rights, anti-dilutive rights, rights of first refusal or similar rights, puts, calls, commitments or agreements of any character relating to, or securities or rights convertible into or exchangeable or exercisable for, shares of capital stock or other voting or equity securities of or ownership interests in any Primary Subsidiary, or contracts, commitments, understandings or arrangements by which any Primary Subsidiary may become bound to issue additional shares of its capital stock or other equity or voting securities or ownership interests in such Primary Subsidiary, or otherwise obligating any Primary Subsidiary to issue, transfer, sell, purchase, redeem or otherwise acquire any of the foregoing.

 

3.3            Authority; No Violation.

 

(a)            Primary has full corporate power and authority to execute and deliver this Agreement and, subject to the shareholder and other actions described below, to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the Merger and the Bank Merger have been duly and validly approved by the Board of Directors of Primary. The Board of Directors of Primary has determined that the Merger, on the terms and conditions set forth in this Agreement, is advisable and in the best interests of Primary and its shareholders, has adopted and approved this Agreement and the transactions contemplated hereby (including the Merger and the Bank Merger), and has directed that this Agreement be submitted to Primary’s shareholders for approval at a meeting of such shareholders and has adopted a resolution to the foregoing effect. The execution and delivery of the Bank Merger Agreement has been duly and validly approved by the Board of Directors of Primary and the Board of Directors of Primary Bank. Both the Board of Directors of Primary and the Board of Directors of Primary Bank have determined that the Bank Merger, on the terms and conditions set forth in the Bank Merger Agreement, is advisable and in the best interests of Primary Bank and Primary as its sole shareholder. Except for the approval of this Agreement by the affirmative vote of a majority of all the votes entitled to be cast on such matter by the holders of Primary Common Stock (the “Requisite Primary Vote”), and the approval of the Bank Merger Agreement by Primary as Primary Bank’s sole shareholder, no other corporate proceedings on the part of Primary are necessary to approve this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Primary and (assuming due authorization, execution and delivery by GBC) constitutes a valid and binding obligation of Primary, enforceable against Primary in accordance with its terms (except in all cases as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, forbearance, moratorium, reorganization or similar laws of general applicability affecting the rights of creditors generally and the availability of equitable remedies (the “Enforceability Exceptions”)).

 

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(b)            Neither the execution and delivery of this Agreement by Primary nor the consummation by Primary of the transactions contemplated hereby (including the Merger and the Bank Merger), nor compliance by Primary with any of the terms or provisions hereof, will (i) violate any provision of the Primary Articles, the Primary Bylaws or the organizational documents of any Primary Subsidiary, or (ii) assuming that the consents and approvals referred to in Section 3.4 are duly obtained, (x) violate any law, statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to Primary or any of its Subsidiaries or any of their respective properties or assets, or (y) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by, or result in the creation of any Lien upon any of the respective properties or assets of Primary or any of its Subsidiaries under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which Primary or any of its Subsidiaries is a party, or by which they or any of their respective properties or assets may be bound, except (in the case of clauses (x) and (y) above) for such violations, conflicts, breaches, defaults, terminations, cancellations, accelerations or creations that, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Primary.

 

3.4            Consents and Approvals. Except for (a) the Fairness Determination, (b) the filing of any required applications, filings, waiver requests and notices, as applicable, with the Board of Governors of the Federal Reserve System (the “Federal Reserve”) under the BHC Act and approval or waiver of such applications, filings, waiver requests and notices, (c) the filing of any required applications, filings and notices, as applicable, with the FDIC under the Bank Merger Act of 1960 and approval or waiver of such applications, filings and notices, (d) the filing of any required applications, filings and notices, as applicable, with the Georgia Department of Banking and Finance (the “DBF”) and approval or waiver of such applications, filings and notices, (e) the filing of any required applications, filings and notices, as applicable, with each Applicable Agency (as defined below) and the receipt of any required consents or approvals from each Applicable Agency, (f) those additional applications, filings and notices, if any, listed on Section 3.4 of the Primary Disclosure Schedule or Section 4.4 of the GBC Disclosure Schedule and approval of such applications, filings and notices, (g) the filing of the Certificate of Merger with the Georgia Secretary pursuant to the GBCC, (h) the filing of the Bank Merger Certificate with the applicable Governmental Entity as required by applicable law, and (i) such filings and approvals as are required to be made or obtained under the securities or “blue sky” laws of various states in connection with the issuance of the shares of GBC Common Stock pursuant to this Agreement, no consents or approvals of or filings or registrations with any court, administrative agency or commission, Regulatory Agency or other governmental or regulatory authority or instrumentality or SRO (each a “Governmental Entity”) are necessary in connection with (i) the execution and delivery by Primary of this Agreement or (ii) the consummation by Primary of the Merger and the other transactions contemplated hereby (including the Bank Merger). As of the date hereof, Primary has no knowledge of any reason why the necessary regulatory approvals and consents will not be received by Primary to permit consummation of the Merger and the Bank Merger on a timely basis. As used herein, “Applicable Agencies” means the United States Department of Agriculture and the Small Business Administration.

 

3.5            Reports. Primary and each of its Subsidiaries have timely filed (or furnished, as applicable) all reports, forms, correspondence, registrations and statements, together with any amendments required to be made with respect thereto, that they were required to file (or furnish, as applicable) since January 1, 2022 with (i) any state regulatory authority, (ii) the Federal Reserve, (iii) the DBF, (iv) the FDIC, (v) any foreign regulatory authority, and (vi) any self-regulatory organization (an “SRO”) (clauses (i) – (vi), collectively “Regulatory Agencies”), including any report, form, correspondence, registration or statement required to be filed (or furnished, as applicable) pursuant to the laws, rules or regulations of the United States, any state, any foreign entity or any Regulatory Agency, and have paid all fees and assessments due and payable in connection therewith, except where the failure to file (or furnish, as applicable) such report, form, correspondence, registration or statement or to pay such fees and assessments, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Primary. Subject to Section 9.15, except for normal examinations conducted by a Regulatory Agency in the ordinary course of business of Primary and its Subsidiaries, no Regulatory Agency or governmental agency or authority has initiated or has pending any proceeding or, to the knowledge of Primary, investigation into the business or operations of Primary or any of its Subsidiaries since January 1, 2022, except where such proceedings or investigations would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Primary. Subject to Section 9.15, there (i) is no unresolved violation, criticism, or exception by any Regulatory Agency with respect to any report or statement relating to any examinations or inspections of Primary or any of its Subsidiaries, and (ii) has been no formal or informal inquiries by, or disagreements or disputes with, any Regulatory Agency with respect to the business, operations, policies or procedures of Primary or any of its Subsidiaries since January 1, 2022, in each case, which would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Primary.

 

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3.6            Financial Statements.

 

(a)            Primary has furnished to GBC true and complete copies of (i) the consolidated balance sheet of Primary and Primary Bank as of December 31, 2021, December 31, 2022 and December 31, 2023, and the related consolidated statements of operations, shareholders’ equity, and cash flows of Primary and Primary Bank, together with all related notes and schedules thereto, accompanied by the reports thereon of Primary’ independent auditors for the years ended as of such dates, and (ii) the unaudited financial statements of Primary and Primary Bank for the six months ended June 30, 2024 (collectively, the “Primary Financial Statements”). The Primary Financial Statements (including the related notes) complied as to form, as of their respective dates, in all material respects with applicable accounting requirements, have been prepared according to GAAP applied on a consistent basis during the periods and at the dates involved (except as may be indicated in the notes thereto), fairly present, in all material respects, the financial condition of Primary and its Subsidiaries, as applicable, at the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to notes and normal year-end adjustments that were not material in amount or effect).

 

(b)            Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Primary, neither Primary nor any of its Subsidiaries has any liability of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether due or to become due), except for those liabilities that are reflected or reserved against on the consolidated balance sheet of Primary for the fiscal quarter ended June 30, 2024 included in the Primary Financial Statements or liabilities incurred in the ordinary course of business consistent with past practice since June 30, 2024 or in connection with this Agreement and the transactions contemplated hereby.

 

(c)            Primary or Primary Bank has filed all required Reports of Condition and Income (“Call Reports”) since January 1, 2022 for Primary Bank. The Call Reports fairly present, in all material respects, the financial position of Primary Bank and the results of its operations at the date and for the period indicated in that Call Report in conformity with the instructions to the Call Report. Since January 1, 2022, Primary Bank has calculated its allowance for credit losses (“ACL”) (or allowance for loan and lease losses (“ALLL”) prior to the promulgation of the Interagency Policy Statement on the Allowance of Credit Losses) in accordance with (i) GAAP (ii) the Interagency Policy Statement on the Allowance for Credit Losses (or the Interagency Policy Statement on the Allowance of Loan and Lease Losses prior to the promulgation of the Interagency Policy Statement on the Allowance of Credit Losses) and (iii) all applicable rules and regulations, and, in the reasonable opinion of management, the ACL is reasonably likely to be to be adequate in all material respects.

 

(d)            Since January 1, 2022, (i) neither Primary, Primary Bank, or their respective Subsidiaries nor, to the knowledge of Primary, any director, officer, employee, auditor, accountant or representative of Primary or its Subsidiaries has received or otherwise obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of Primary or its Subsidiaries or their respective internal accounting controls relating to periods after January 1, 2022, including any material complaint, allegation, assertion or claim that Primary or its Subsidiaries has engaged in questionable accounting or auditing practices, and (ii) to the knowledge of Primary, no attorney representing Primary or its Subsidiaries, whether or not employed by Primary or its Subsidiaries, has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation, relating to periods after January 1, 2022, by Primary or its Subsidiaries or any of their officers, directors, employees or agents to the Board of Directors of Primary or the Board of Directors of Primary Bank (or any committee thereof) or to any director or officer of Primary, Primary Bank, or their respective Subsidiaries.

 

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(e)            Neither Primary nor its Subsidiaries is a party to, or has any commitment to become a party to, any joint venture, off-balance sheet partnership or any similar contract or arrangement (including any contract or arrangement relating to any transaction or relationship between or among Primary and its Subsidiaries, on the one hand, and any unconsolidated affiliate, including any structured finance, special purpose or limited purpose entity or person, on the other hand, or any “off-balance sheet arrangement”), where the result, purpose or intended effect of such contract or arrangement is to avoid disclosure of any material transaction involving, or material liabilities of, Primary or its Subsidiaries in Primary’ or its Subsidiaries’ financial statements.

 

3.7            Broker’s Fees. With the exception of the engagement of Performance Trust Capital Partners, neither Primary nor any Primary Subsidiary nor any of their respective officers or directors has employed any broker, finder or financial advisor or incurred any liability for any broker’s fees, commissions or finder’s fees in connection with the Merger or related transactions contemplated by this Agreement. Primary has disclosed to GBC as of the date hereof the material terms, including the payment of fees, of Primary’s engagement of Performance Trust Capital Partners related to the Merger and the other transactions contemplated hereunder.

 

3.8            Absence of Certain Changes or Events.

 

(a)            Since December 31, 2023, there has not been any effect, change, event, circumstance, condition, occurrence or development that has had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Primary.

 

(b)            Since December 31, 2023 through the date of this Agreement, Primary and its Subsidiaries have carried on their respective businesses in all material respects in the ordinary course.

 

3.9            Legal and Regulatory Proceedings.

 

(a)            Except as would not reasonably be expected to, either individually or in the aggregate, have a Material Adverse Effect on Primary, neither Primary nor any of its Subsidiaries is a party to any, and there are no outstanding or pending or, to the knowledge of Primary, threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations of any nature against Primary or any of its Subsidiaries or any of their current or former directors or executive officers or challenging the validity or propriety of the transactions contemplated by this Agreement.

 

(b)            Except as would not reasonably be expected to, either individually or in the aggregate, be material to Primary, there is no injunction, order, judgment, decree, or regulatory restriction imposed upon Primary, any of its Subsidiaries or the assets of Primary or any of its Subsidiaries (or that, upon consummation of the Merger, would apply to the Surviving Entity or any of its affiliates).

 

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3.10         Taxes and Tax Returns.

 

(a)            Except as would not reasonably be expected to, either individually or in the aggregate, have a Material Adverse Effect on Primary: each of Primary and its Subsidiaries has duly and timely filed (including all applicable extensions) all Tax Returns in all jurisdictions in which Tax Returns are required to be filed by it, and all such Tax Returns are true, correct and complete; neither Primary nor any of its Subsidiaries is the beneficiary of any extension of time within which to file any Tax Return (other than extensions to file Tax Returns obtained in the ordinary course); all Taxes of Primary and its Subsidiaries (whether or not shown on any Tax Returns) that are due have been fully and timely paid; each of Primary and its Subsidiaries has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, creditor, shareholder, independent contractor or other third party; each of Primary and its Subsidiaries have withheld and timely paid all Taxes required to have been withheld and paid with respect to, and have complied with, all information reporting, backup withholding, and nonresident withholding requirements; neither Primary nor any of its Subsidiaries has granted any extension or waiver of the limitation period applicable to any Tax that remains in effect (other than extension or waiver granted in the ordinary course of business); neither Primary nor any of its Subsidiaries has received written notice of assessment or proposed assessment in connection with any amount of Taxes, and there are no threatened in writing or pending disputes, claims, audits, examinations or other proceedings regarding any Tax of Primary and its Subsidiaries or the assets of Primary and its Subsidiaries; neither Primary nor any of its Subsidiaries in the last three (3) years has requested or become bound by any private letter ruling requests, closing agreements or gain recognition agreements with respect to Taxes; neither Primary nor any of its Subsidiaries is a party to or is bound by any Tax sharing, allocation or indemnification agreement or arrangement (other than such an agreement or arrangement exclusively between or among Primary and its Subsidiaries); neither Primary nor any of its Subsidiaries (A) has been a member of an affiliated group filing a consolidated federal income Tax Return for which the statute of limitations is open (other than a group the common parent of which was Primary), or (B) has any liability for the Taxes of any person (other than Primary or any of its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law) or otherwise as a transferee or successor.

 

(b)            No written claim has ever been made by a Governmental Entity in a jurisdiction where Primary and its Subsidiaries do not file Tax Returns that it is or may be subject to taxation by, or required to file a Tax Return in, that jurisdiction. There are no liens for Taxes (other than statutory liens for Taxes not yet due and payable) upon any assets of Primary or any of its Subsidiaries.

 

(c)            Neither Primary nor any of its Subsidiaries has been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code. Primary and each of its Subsidiaries have disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code.

 

(d)            Neither Primary nor any of its Subsidiaries will be required to include any material item in, or exclude any material item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) change in method of accounting for a taxable period ending on or prior to the Closing Date; (ii) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law) executed on or prior to the Closing Date; (iii) intercompany transactions or any excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law); (iv) installment sale or open transaction disposition made on or prior to the Closing date; or (v) prepaid amount received on or prior to the Closing Date.

 

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(e)            Neither Primary nor any of its Subsidiaries has been, within the past five (5) years or otherwise as part of a “plan (or series of related transactions)” within the meaning of Section 355(e) of the Code of which the Merger is also a part, a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock intending to qualify for tax-free treatment under Section 355 of the Code. Neither Primary nor any of its Subsidiaries has participated in a “listed transaction” within the meaning of Treasury Regulation Section 1.6011-4(b)(2).

 

(f)            Neither Primary nor any of its Subsidiaries has deferred the payment of any Tax or claimed or received any Tax refund or credit pursuant to the Coronavirus Aid, Relief, and Economic Security Act, any similar statutory relief, or any other Tax legislation related to the COVID-19 pandemic or pursuant to any written agreement with a Governmental Entity that remains unpaid.

 

3.11          Employees.

 

(a)            Each Primary Benefit Plan (as defined below) has been established, maintained, funded, operated and administered in all material respects in accordance with its terms and the requirements of all applicable laws, including ERISA and the Code. Neither Primary nor any of its Subsidiaries has taken any corrective action or made any filing under any voluntary correction program of the IRS, Department of Labor or any other Governmental Entity with respect to any Primary Benefit Plan in respect of any documentary or operational failure that has not been properly and fully corrected in accordance with the applicable correction program. Neither Primary, any of its Subsidiaries nor any Primary ERISA Affiliate has incurred, and, to the knowledge of Primary, no facts exist which reasonably could be expected to result in, any liability (direct or indirect, contingent or otherwise) to Primary or any Subsidiary with respect to any Primary Benefit Plan including without limitation, any liability, tax, penalty or fee under ERISA, the Code or any other applicable laws (other than to pay premiums, contributions or benefits in the ordinary course consistent with the terms of such plans). For purposes of this Agreement, the term “Primary Benefit Plans” means all employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), whether or not subject to ERISA, and all equity, bonus or incentive, deferred compensation, retiree medical or life insurance, retirement, supplemental retirement, severance, termination, change in control, retention, employment, welfare, medical, disability, fringe or other benefit plans, programs, agreements, contracts, policies, arrangements or remuneration of any kind with respect to which Primary or any Subsidiary or any other entity, trade or business, whether or not incorporated, which together with Primary or any Subsidiary would, at any relevant time, be deemed a “single employer” within the meaning of Section 414 of the Code or Section 4001 of ERISA (a “Primary ERISA Affiliate”), is a party or has any current or future obligation or liability, contingent or otherwise, or that are maintained, contributed to (or required to be contributed to) or sponsored by Primary, any of its Subsidiaries or any Primary ERISA Affiliate for the benefit of any current or former employee, officer, director or independent contractor of Primary, any of its Subsidiaries or any Primary ERISA Affiliate or the spouses, dependents and/or beneficiaries of any of the foregoing.

 

(b)            Section 3.11(b) of the Primary Disclosure Schedule sets forth a true, correct and complete list of all material Primary Benefit Plans. Primary has made available to GBC true, correct and complete copies of each material Primary Benefit Plan and any related trust or other funding vehicle or insurance policy, and the following related documents, to the extent applicable: (i) all summary plan descriptions, amendments, modifications or supplements, (ii) the most recent annual report (Form 5500) filed with the IRS, (iii) the most recently received IRS determination letter from the IRS or the opinion letter issued to the prototype sponsor with respect to each such Primary Benefit Plan intended to qualify under Section 401 of the Code, (iv) the most recently prepared actuarial report, (v) all contracts with any parties providing services or insurance to such plan, (vi) copies of material correspondence relating to any Primary Benefit Plan in the last three (3) years with all Governmental Entities, (vii) the IRS Forms 1094-C and 1095-C filed with the IRS and provided to employees for the past three years, and (viii) such other documentation with respect to any such Primary Benefit Plan as is reasonably requested by GBC. None of the Primary Benefit Plans are subject to or governed by the Laws of any jurisdiction other than the United States. No “employer” within the meaning of Section 3(5) of ERISA that is not a Primary ERISA Affiliate, other than Primary and its Subsidiaries, participates in any Primary Benefit Plan

 

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(c)            The IRS has issued a favorable determination letter or opinion with respect to each Primary Benefit Plan that is intended to be qualified under Section 401(a) of the Code (the “Primary Qualified Plans”), and the related trust, which letter or opinion has not been revoked (nor, to the knowledge of Primary, has revocation been threatened), and each such Primary Qualified Plan is so qualified and the trusts maintained thereunder that are intended to be exempt from taxation under Section 501(a) of the Code are so exempt, and, to the knowledge of Primary, there are no existing circumstances and no events have occurred or are threatened that would reasonably be expected to adversely affect the qualified status of any Primary Qualified Plan or the tax-exempt status of the related trust.

 

(d)            Neither Primary, any of its Subsidiaries nor any Primary ERISA Affiliate maintains, sponsors, contributes to or is obligated to contribute to, or within the prior ten (10) years, or has any obligation or liability, contingent or otherwise, to contribute to, or has or has ever had any liability, contingent or otherwise, under or with respect to (i) a “defined benefit plan,” as defined in Section 3(35) of ERISA, (ii) a pension plan within the meaning of Section 3(2) of ERISA that is covered by Title IV of ERISA and/or subject to the minimum funding standards of Section 302 of ERISA, Title IV of ERISA or Section 412, 430 or 4971 of the Code, (iii) a “multiple employer welfare arrangement” as defined in Section 3(40) of ERISA, or (iv) a trust that is intended to meet the requirements of Section 501(c)(9) of the Code.

 

(e)            Except as set forth in Section 3.11(e) of the Primary Disclosure Schedule, neither Primary, any of its Subsidiaries nor any Primary ERISA Affiliate maintains, sponsors, contributes to or is obligated to contribute to, or has any obligation or liability, contingent or otherwise, to contribute to, or has or has ever had any liability, contingent or otherwise, under or with respect to (i) a “multiemployer plan,” as defined in Section 3(37) or 4001(a)(3) of ERISA or (ii) a “multiple employer plan” within the meaning of Section 413(c) of the Code or Section 4063, 4064 or 4066 of ERISA.

 

(f)             Except as set forth in Section 3.11(f) of the Primary Disclosure Schedule, no Primary Benefit Plan provides for any post-employment or post-retirement health or medical or life insurance benefits for retired, former or current employees or spouses, beneficiaries or dependents thereof, except as required by Section 4980B of the Code, Part 6 of Subtitle B of Title I of ERISA or similar provisions of any state laws for which the recipient pays the full premium therefor on an after-tax basis. The aggregate liabilities of Primary and its Subsidiaries for such post-employment or post-retirement health or medical or life insurance benefits has been reported properly in the Primary Financial Statements, and Primary has the authority and legal right to terminate such post-employment or post-retirement coverage on a prospective basis, without incurring any further liabilities or obligations, except with respect to any benefits required under Section 4980B of the Code, Part 6 of Subtitle B of Title I of ERISA or similar provisions of any state laws for which the recipient pays the full premium therefor on an after-tax basis.

 

(g)            All payments, premiums, contributions, remittances and reimbursements required to be made with respect to any Primary Benefit Plan by applicable law or by any plan document or other contractual undertaking, and all premiums due or payable with respect to insurance policies funding any Primary Benefit Plan, for any period through the date hereof, have been timely made or paid in full or, to the extent not required to be made or paid on or before the date hereof, have been fully reflected on the books and records of Primary. There are no outstanding defaults or violations by any party to any Primary Benefit Plan, and no taxes, penalties or fees are owing under any Primary Benefit Plan. All reports and information relating to each Primary Benefit Plan required to be filed with any Governmental Entity have been timely filed, all reports and information relating to each Primary Benefit Plan required to be disclosed or provided to participants or their dependents or beneficiaries have been timely disclosed or provided, and, in each case, all information and disclosures contained therein were true, correct and complete in all material respects when disclosed.

 

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(h)            Each Primary Benefit Plan that is a “nonqualified deferred compensation plan” within the meaning of Code Section 409A and not otherwise exempt from Section 409A of the Code has been maintained in writing, and operated and administered, in compliance with the requirements of Code Section 409A to the extent applicable.

 

(i)             There are no pending or threatened claims (other than claims for benefits in the ordinary course consistent with the terms of the plan), lawsuits, audits, investigations or arbitrations which have been asserted or instituted, and, to Primary’ knowledge, no set of circumstances exists which may reasonably be expected to give rise to a claim, lawsuit, audit, investigation or arbitration against any Primary Benefit Plan, any trustees or fiduciaries thereof with respect to their duties to any Primary Benefit Plan, any of Primary, any Subsidiary or Primary ERISA Affiliate or any director, officer, or employee thereof, or the assets of any Primary Benefit Plan (in trust or otherwise), in respect of any Primary Benefit Plan which would have a Material Adverse Effect.

 

(j)             None of Primary, any of its Subsidiaries, any Primary ERISA Affiliate, nor, to the knowledge of Primary, any director, officer of employee thereof, or any other party in interest or disqualified person (as defined in Section 4975 of the Code or Section 406 of ERISA), has engaged in any nonexempt “prohibited transaction” (as defined in Section 4975 of the Code or Section 406 of ERISA) in respect of any Primary Benefit Plan.

 

(k)            Primary and its Subsidiaries have complied, in all material respects, with the applicable provisions of the Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”) including all provisions of the ACA applicable to their employees, including the employer shared responsibility provisions relating to the offer of “minimum essential coverage” to “full-time” employees that is “affordable” and provides “minimum value” (as defined in Code Section 4980H and related regulations) and the applicable employer information reporting provisions under Code Sections 6055 and 6056 (and all related regulations), and, to the knowledge of Primary, has not incurred, nor, does any condition exist that could reasonably be expected to subject Primary or any of its Subsidiaries, to any liability under Section 4980H of the Code and its governing regulations. Primary, each of its Subsidiaries and each Primary ERISA Affiliate have complied in all material respects with the notice and continuation coverage requirements of Section 4980B of the Code and the regulations thereunder and similar laws.

 

(l)             Except as set forth in Section 3.11(l) of the Primary Disclosure Schedule, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in conjunction with any other event) result in the acceleration of vesting, exercisability, funding or delivery of, or increase in the amount or value of, any payment, right or other benefit to any employee, officer, director or other service provider of Primary or any of its Subsidiaries, or result in any limitation on the right of Primary or any of its Subsidiaries to amend, merge, terminate or receive a reversion of assets from any Primary Benefit Plan or related trust on or after the Effective Time. Without limiting the generality of the foregoing, no amount paid or payable (whether in cash, in property, or in the form of benefits) to any employee, officer, director or other service provider of Primary or any of its Subsidiaries in connection with the transactions contemplated hereby (either solely as a result thereof or as a result of such transactions in conjunction with, related to or associated with any other event) will be an “excess parachute payment” within the meaning of Section 280G of the Code.

 

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(m)           No Primary Benefit Plan provides for the gross-up or reimbursement of Taxes under Section 409A or 4999 of the Code, or otherwise.

 

(n)            The transactions contemplated by this Agreement will not cause or require Primary or any of its affiliates to establish or make any contribution to a rabbi trust or similar funding vehicle.

 

(o)            Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Primary, there are no pending or, to Primary’ knowledge, threatened labor grievances or unfair labor practice claims or charges against Primary or any of its Subsidiaries, or any strikes or other labor disputes against Primary or any of its Subsidiaries. Neither Primary nor any of its Subsidiaries is party to or bound by any collective bargaining or similar agreement with any labor organization, or work rules or practices agreed to with any labor organization or employee association applicable to employees of Primary or any of its Subsidiaries and, there are no pending or, to the knowledge of Primary, threatened organizing efforts by any union or other group seeking to represent any employees of Primary or any of its Subsidiaries.

 

(p)            Primary and its Subsidiaries are, and have been since January 1, 2022, in compliance with all applicable laws relating to labor and employment, including those relating to labor relations, wages, hours, overtime, employee and contractor classification, discrimination, harassment, retaliation, reasonable accommodation, leaves of absence, employee compensation and benefits, plant closures or layoffs, background checks, drug and alcohol testing, civil rights, affirmative action, work authorization, immigration, safety and health, information privacy and security, unemployment insurance, workers compensation, continuation coverage under group health plans, wage payment and the related payment and withholding of Taxes, except for failures to comply that have not had and would not reasonably be expected to result in any material liability to Primary and its Subsidiaries, taken as a whole.

 

(q)            In the past five (5) years, neither Primary nor any of the Primary Subsidiaries has entered into a settlement agreement with a current or former officer, an employee or an independent contractor of the Primary or its Subsidiaries that substantially involves allegations relating to sexual harassment by either (i) an executive officer of Primary or its Subsidiaries or (ii) a senior employee of Primary or its Subsidiaries. In the past five (5) years, to the knowledge of Primary, no allegations of sexual harassment have been made against (x) an executive officer of Primary or its Subsidiaries or (y) an employee at the level of Senior Vice President (or any similarly-leveled employee) or above of Primary or its Subsidiaries.

 

(r)            Each Primary Benefit Plan that is a “pension plan” within the meaning of Section 3(2) of ERISA but is not qualified under Code Section 401(a) is exempt from Parts 2, 3 and 4 of Title I of ERISA as an unfunded plan that is maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees, pursuant to Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, and Primary has made the one-time filing with the Department of Labor with respect to each such plan. No assets of any Primary Benefit Plan are allocated to or held in a “rabbi trust” or similar funding vehicle.

 

(s)            Each individual who is or has ever been characterized as an employee or independent contractor by Primary or any of its Subsidiaries has been properly classified as such for all purposes, including participation and benefit accrual under each Primary Benefit Plan. All employees of Primary and its Subsidiaries are and have been correctly classified as exempt or nonexempt under the Fair Labor Standards Act and similar state laws, and Primary and its Subsidiaries have not received any notice from any individual or Governmental Entity disputing such classification.

 

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(t)            The Primary Benefit Plans have been administered in accordance with the Joint Notification of Extensions of Certain Timeframes for Employee Benefit Plans, Participants and Beneficiaries Affected by the COVID-19 Outbreak, Disaster Relief Notice 2021-01 and the COBRA premium assistance provisions under the American Rescue Plan Act of 2021, including proper recovery of premium credits through the FICA Tax Returns of the Company and/or the Subsidiary, if applicable.

 

3.12          Compliance with Applicable Law.

 

(a)            Primary and each of its Subsidiaries hold, and have at all times since January 1, 2022, held, all licenses, registrations, franchises, certificates, variances, permits, charters and authorizations necessary for the lawful conduct of their respective businesses and ownership of their respective properties, rights and assets under and pursuant to each (and have paid all fees and assessments due and payable in connection therewith), except where neither the cost of failure to hold nor the cost of obtaining and holding such license, registration, franchise, certificate, variance, permit, charter or authorization (nor the failure to pay any fees or assessments) would, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Primary, and, to the knowledge of Primary, no suspension or cancellation of any such necessary license, registration, franchise, certificate, variance, permit, charter or authorization is threatened.

 

(b)            Except as would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Primary, Primary and each of its Subsidiaries, since January 1, 2022, have complied with and are not in default or violation under any applicable law, statute, order, rule, regulation, policy and/or guideline of any Governmental Entity relating to Primary or any of its Subsidiaries, including all laws related to data protection or privacy (including laws relating to the privacy and security of data or information that could reasonably be used to identify any person, or that otherwise constitutes personal data or personal information under applicable law (“Personal Data”)), the USA PATRIOT Act, the Bank Secrecy Act, the Equal Credit Opportunity Act and Regulation B, the Fair Housing Act, the Community Reinvestment Act, the Fair Credit Reporting Act, the Truth in Lending Act and Regulation Z, the Home Mortgage Disclosure Act, the Fair Debt Collection Practices Act, the Electronic Fund Transfer Act, Section 5 of the Federal Trade Commission Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, any regulations promulgated by the Consumer Financial Protection Bureau, the Interagency Policy Statement on Retail Sales of Nondeposit Investment Products, the Interagency Guidance on Third-Party Relationships: Risk Management. the SAFE Mortgage Licensing Act of 2008, the Real Estate Settlement Procedures Act and Regulation X, Title V of the Gramm-Leach-Bliley Act, any and all sanctions or regulations enforced by the Office of Foreign Assets Control of the United States Department of Treasury and any other law, policy or guideline relating to bank secrecy, discriminatory lending, financing or leasing practices, consumer protection, money laundering prevention, foreign assets control, U.S. sanctions laws and regulations, Sections 23A and 23B of the Federal Reserve Act, the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), and all agency requirements relating to the origination, sale and servicing of mortgage and consumer loans. Primary and its Subsidiaries have established and maintain a system of internal controls designed to ensure compliance in all material respects by Primary and its Subsidiaries with applicable financial recordkeeping and reporting requirements of applicable money laundering prevention laws in jurisdictions where Primary and its Subsidiaries conduct business.

 

(c)            Primary Bank has received an Institution Community Reinvestment Act rating of “satisfactory” or better in its most recently completed Community Reinvestment Act examination and, to the knowledge of Primary, there are no existing facts or circumstances that would negatively affect such rating.

 

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(d)            Primary maintains a written information privacy and security program that maintains reasonable measures to protect the privacy, confidentiality and security of all Personal Data and any other material confidential information against any (i) loss or misuse, (ii) unauthorized or unlawful operations performed thereon, or (iii) other act or omission that compromises the security or confidentiality thereof (clauses (i) through (iii), a “Security Breach”). To the knowledge of Primary, Primary has not experienced any Security Breach that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Primary. To the knowledge of Primary, there are no data security or other technological vulnerabilities with respect to its information technology systems or networks that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect on Primary.

 

(e)            Without limitation, none of Primary or any of its Subsidiaries, or to the knowledge of Primary, any director, officer, employee, agent or other person acting on behalf of Primary or any of its Subsidiaries has, directly or indirectly, (i) used any funds of Primary or any of its Subsidiaries for unlawful contributions, unlawful gifts, unlawful entertainment or other expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic governmental officials or employees or to foreign or domestic political parties or campaigns from funds of Primary or any of its Subsidiaries, (iii) violated any provision that would result in the violation of the Foreign Corrupt Practices Act of 1977, as amended, or any similar law, (iv) established or maintained any unlawful fund of monies or other assets of Primary or any of its Subsidiaries, (v) made any fraudulent entry on the books or records of Primary or any of its Subsidiaries, or (vi) made any unlawful bribe, unlawful rebate, unlawful payoff, unlawful influence payment, unlawful kickback or other unlawful payment to any person, private or public, regardless of form, whether in money, property or services, to obtain favorable treatment in securing business, to obtain special concessions for Primary or any of its Subsidiaries, to pay for favorable treatment for business secured or to pay for special concessions already obtained for Primary or any of its Subsidiaries, or is currently subject to any United States sanctions administered by the Office of Foreign Assets Control of the United States Treasury Department, except, in each case, as would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Primary.

 

(f)            As of the date hereof, each of Primary and Primary Bank is “well-capitalized” (as such term is defined in the relevant regulation of the institution’s primary federal regulator).

 

(g)            Except as would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Primary, (i) Primary and each of its Subsidiaries have properly administered all accounts for which it acts as a fiduciary, including accounts for which it serves as a trustee, agent, custodian, personal representative, guardian, conservator or investment advisor, in accordance with the terms of the governing documents and applicable state, federal and foreign law; and (ii) none of Primary, any of its Subsidiaries, or any of its or its Subsidiaries’ directors, officers or employees, has committed any breach of trust or fiduciary duty with respect to any such fiduciary account, and the accountings for each such fiduciary account are true, correct and complete and accurately reflect the assets and results of such fiduciary account.

 

3.13          Certain Contracts.

 

(a)            Except as set forth in Section 3.13(a) of the Primary Disclosure Schedule, as of the date hereof, neither Primary nor any of its Subsidiaries is a party to or bound by any contract, arrangement, commitment or understanding (whether written or oral):

 

(i)             which contains a provision that materially restricts the conduct of any line of business by Primary or any of its Subsidiaries or upon consummation of the Merger will materially restrict the ability of the Surviving Entity or any of its affiliates to engage or compete in any line of business or in any geographic region (including any non-compete or client or customer non-solicitation requirement);

 

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(ii)            which is a collective bargaining agreement or similar agreement with any labor organization;

 

(iii)           any of the benefits of or obligations under which will arise or be increased or accelerated by the occurrence of the execution and delivery of this Agreement, receipt of the Requisite Primary Vote or the announcement or consummation of any of the transactions contemplated by this Agreement, or under which a right of cancellation or termination will arise as a result thereof, or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement;

 

(iv)           that grants any right of first refusal, right of first offer or similar right with respect to any material assets, rights or properties of Primary or its Subsidiaries, taken as a whole;

 

(v)            (A) that relates to the incurrence of indebtedness by Primary or any Primary Subsidiary other than (x) those entered into in the ordinary course of business and (y) deposit liabilities, trade payables, federal funds purchased, advances and loans from the Federal Home Loan Bank and securities sold under agreements to repurchase, in each case, incurred in the ordinary course of business consistent with past practice, and (B) any guaranty of any obligation for the incurrence of indebtedness, excluding endorsements made for collection, repurchase or resell agreements, letters of credit and guaranties made in the ordinary course of business, in the case of each of clauses (A) and (B), in the principal amount of $250,000 or more;

 

(vi)           relating to the lease of real property or personal property having a value in excess of $50,000 in the aggregate;

 

(vii)          that is a policy of insurance, including fidelity and bond insurance, relating to the Primary;

 

(viii)         relating to any joint venture, partnership, limited liability company agreement or other similar agreement or arrangement;

 

(ix)           which relates to capital expenditures and involves future payments in excess of $50,000 in the aggregate;

 

(x)             which is not terminable on ninety (90) days or less notice and involves the payment of more than $50,000 per annum;

 

(xi)            that is a settlement, consent or similar agreement and contains any material continuing obligations of Primary or any of its Subsidiaries;

 

(xii)           that relates to the acquisition or disposition of any person, business or asset and under which Primary or its Subsidiaries have or may have a material obligation or liability;

 

(xiii)          that relates to the employment or service of any current or former employee, director, officer or other service provider, which is not terminable by Primary or any Subsidiary without penalty or other costs on thirty (30) calendar days’ or less notice, including without limitation employment, consulting, incentive, rendition, change in control, severance, termination pay and similar agreements; or

 

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(xiv)         that provides for bonuses, incentives, retention, options, pensions, deferred compensation, retirement, profit sharing, equity, fringe benefits or similar compensatory or benefit arrangements with any current or former employees, directors, officers or other service providers.

 

Each contract, arrangement, commitment or understanding of the type described in this Section 3.13(a), whether or not set forth in the Primary Disclosure Schedule, is referred to herein as a “Primary Contract.” Primary has made available to GBC true, correct and complete copies of each Primary Contract in effect as of the date hereof.

 

(b)            (1) Each Primary Contract is valid and binding on Primary or one of its Subsidiaries, as applicable, and in full force and effect, except as, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Primary, (2) Primary and each of its Subsidiaries have in all material respects complied with and performed all obligations required to be complied with or performed by any of them to date under each Primary Contract, except where such noncompliance or nonperformance, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Primary, (3) to the knowledge of Primary, each third-party counterparty to each Primary Contract has in all material respects complied with and performed all obligations required to be complied with and performed by it to date under such Primary Contract, except where such noncompliance or nonperformance, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Primary, (4) neither Primary nor any of its Subsidiaries has knowledge of, or has received notice of, any violation of any Primary Contract by any of the other parties thereto which would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Primary and (5) no event or condition exists which constitutes or, after notice or lapse of time or both, will constitute, a material breach or default on the part of Primary or any of its Subsidiaries, or to the knowledge of Primary, any other party thereto, of or under any such Primary Contract, except where such breach or default, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Primary.

 

3.14          Agreements with Regulatory Agencies. Subject to Section 9.15, neither Primary nor any of its Subsidiaries is subject to any cease-and-desist or other order or enforcement action issued by, or is a party to any written agreement, consent agreement or memorandum of understanding with, or is a party to any commitment letter or similar undertaking to, or is subject to any order or directive by, or has been ordered to pay any civil money penalty by, or has been since January 1, 2022, a recipient of any supervisory letter from, or since January 1, 2022, has adopted any policies, procedures or board resolutions at the request or suggestion of, any Regulatory Agency or other Governmental Entity that currently restricts in any material respect or would reasonably be expected to restrict in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its ability to pay dividends, its credit or risk management policies, its management or its business (each, whether or not set forth in the Primary Disclosure Schedule, a “Primary Regulatory Agreement”), nor has Primary or any of its Subsidiaries been advised in writing, or to Primary’ knowledge, orally, since January 1, 2022, by any Regulatory Agency or other Governmental Entity that it is considering issuing, initiating, ordering, or requesting any such Primary Regulatory Agreement.

 

3.15          Risk Management Instruments. Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Primary, all interest rate swaps, caps, floors, option agreements, futures and forward contracts and other similar derivative transactions and risk management arrangements, whether entered into for the account of Primary or any of its Subsidiaries or for the account of a customer of Primary or one of its Subsidiaries, were entered into in the ordinary course of business and in accordance with applicable rules, regulations and policies of any Regulatory Agency and with counterparties reasonably believed to be financially responsible at the time and are legal, valid and binding obligations of Primary or one of its Subsidiaries enforceable in accordance with their terms (except as may be limited by the Enforceability Exceptions). Primary and each of its Subsidiaries have duly performed in all material respects all of their material obligations thereunder to the extent that such obligations to perform have accrued, and, to Primary’ knowledge, there are no material breaches, violations or defaults or allegations or assertions of such by any party thereto.

 

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3.16          Environmental Matters. Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Primary, Primary and its Subsidiaries are in compliance, and have complied since January 1, 2022, with any federal, state or local law, regulation, order, decree, permit, authorization, common law or agency requirement relating to: (a) the protection or restoration of the environment, health and safety as it relates to hazardous substance exposure or natural resource damages, (b) the handling, use, presence, disposal, release or threatened release of, or exposure to, any hazardous substance, or (c) noise, odor, wetlands, indoor air, pollution, contamination or any injury to persons or property from exposure to any hazardous substance (collectively, “Environmental Laws”). There are no legal, administrative, arbitral or other proceedings, claims or actions, or to the knowledge of Primary, any private environmental investigations or remediation activities or governmental investigations of any nature seeking to impose, or that could reasonably be expected to result in the imposition, on Primary or any of its Subsidiaries of any liability or obligation arising under any Environmental Law pending or threatened against Primary, which liability or obligation would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Primary. To the knowledge of Primary, there is no reasonable basis for any such proceeding, claim, action or governmental investigation that would impose any liability or obligation that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Primary. Primary is not subject to any agreement, order, judgment, decree, letter agreement or memorandum of agreement by or with any court, Governmental Entity, Regulatory Agency or other third party imposing any liability or obligation with respect to the foregoing that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Primary.

 

3.17          Investment Securities and Commodities. Each of Primary and its Subsidiaries has good title in all material respects to all securities and commodities owned by it (except those sold under repurchase agreements) which are material to Primary’ business on a consolidated basis, free and clear of any Lien, except to the extent such securities or commodities are pledged in the ordinary course of business to secure obligations of Primary or its Subsidiaries. Such securities and commodities are valued on the books of Primary in accordance with GAAP in all material respects. Primary and each of its Subsidiaries employ, to the extent applicable, investment, securities, risk management and other policies, practices and procedures that Primary believes are prudent and reasonable in the context of their respective businesses, and Primary and each of its Subsidiaries have, since January 1, 2022, been in compliance with such policies, practices and procedures in all material respects.

 

3.18          Real Property. Except as would not reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect on Primary, Primary or its Subsidiary (a) has good and marketable title to all the real property listed on Section 3.18 of the Primary Disclosure Schedule (except properties sold or otherwise disposed of since the date thereof in the ordinary course of business) (the “Primary Owned Property”), free and clear of all Liens, except (i) statutory Liens securing payments not yet due, (ii) Liens for real property Taxes not yet due and payable, (iii) easements, rights of way, and other similar encumbrances that do not materially affect the value or use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties, and (iv) such imperfections or irregularities of title or Liens as do not materially affect the value or use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties (collectively, “Permitted Encumbrances”), and (b) is the lessee of all leasehold estates listed on Section 3.18 of the Primary Disclosure Schedule (such leasehold estates, collectively with the Primary Owned Property, the “Primary Real Property”), free and clear of all Liens, except for Permitted Encumbrances, and is in possession of the properties purported to be leased thereunder, and each such lease is valid without default thereunder by the lessee or, to the knowledge of Primary, the lessor. There are no contractual obligations, agreements in principle or present plans for Primary to enter into new leases of real property or to renew or amend existing leases prior to the Closing Date. There are no pending or, to the knowledge of Primary, threatened condemnation proceedings or other actions, suits or proceedings against the Primary Real Property.The use and operations of, and improvements upon, the Primary Real Property, are in compliance with all applicable building, fire, zoning and other applicable laws, ordinances and regulations. The buildings and structures owned, leased or used by Primary and its Subsidiary are, taken as a whole, in good operating order (except for ordinary wear and tear), usable in the ordinary course of business, and are sufficient and adequate to carry on the business and affairs of Primary and its Subsidiary. Except as listed on Section 3.18 of the Primary Disclosure Schedule, Primary and its Subsidiary do not own, lease or use any real property in the conduct of Primary’s or its Subsidiary’s business.

 

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3.19          Intellectual Property. Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Primary: (a)(i) to the knowledge of Primary, Primary and each of its Subsidiaries owns, or is licensed to use (in each case, free and clear of any material Liens), all Intellectual Property necessary for the conduct of its business as currently conducted, (ii) to the knowledge of Primary, neither Primary nor any of its Subsidiaries have, within the past two (2) years, infringed, misappropriated or otherwise violated any other person’s rights in Intellectual Property, or violated or breached any applicable license pursuant to which Primary or any Primary Subsidiary acquired the right to use any Intellectual Property, and (iii) no person has asserted in writing to Primary or any of its Subsidiaries within the past two (2) years that Primary or any of its Subsidiaries has infringed, misappropriated or otherwise violated the Intellectual Property rights of any person; (b) to the knowledge of Primary, no person is challenging, infringing on or otherwise violating, any right of Primary or any of its Subsidiaries with respect to any Intellectual Property owned by Primary or its Subsidiaries; (c) neither Primary nor any Primary Subsidiary has received any written notice of any pending claim challenging any Intellectual Property owned by Primary or any Primary Subsidiary (including with respect to the ownership, abandonment, cancellation or enforceability thereof); and (d) Primary and its Subsidiaries have taken commercially reasonable actions to safeguard its and their material trade secrets and other confidential information, and avoid the abandonment, cancellation or unenforceability of all Intellectual Property owned by Primary and its Subsidiaries. For purposes of this Agreement, “Intellectual Property” means any intellectual property or proprietary rights of any kind arising in any jurisdiction, including in or with respect to any: trademarks, service marks, brand names, internet domain names, logos, symbols, certification marks, trade dress and other indications of origin, the goodwill associated with the foregoing and registrations in any jurisdiction of, and applications in any jurisdiction to register, the foregoing, including any extension, modification or renewal of any such registration or application; inventions, discoveries and ideas, whether patentable or not, in any jurisdiction; patents, applications for patents (including divisions, continuations, continuations in part and renewal applications), all improvements thereto, and any renewals, extensions or reissues thereof, in any jurisdiction; nonpublic information, trade secrets and know-how, including processes, technologies, protocols, formulae, prototypes and confidential information and rights in any jurisdiction to limit the use or disclosure thereof by any person; data and database rights; writings and other works, whether copyrightable or not and whether in published or unpublished works, in any jurisdiction.

 

3.20          Related Party Transactions. Except for the transactions set forth in Section 3.25(e) of the Primary Disclosure Schedules and the Primary Benefit Plans listed in Section 3.11(b) of the Primary Disclosure Schedule, there are no transactions or series of related transactions, agreements, arrangements or understandings, nor are there any currently proposed transactions or series of related transactions, between Primary or any of its Subsidiaries, on the one hand, and any current or former director or “executive officer” (as defined in Rule 3b-7 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of Primary or any of its Subsidiaries or any person who beneficially owns (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) five percent (5%) or more of the outstanding Primary Common Stock (or any of such person’s immediate family members or affiliates) (other than Subsidiaries of Primary) on the other hand, of the type required by the Exchange Act and the rules and regulations thereunder.

 

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3.21          State Takeover Laws. The Board of Directors of Primary has approved this Agreement and the transactions contemplated hereby and has taken all such other necessary actions as required to render inapplicable to such agreements and transactions the provisions of any potentially applicable takeover laws of any state, including any “moratorium,” “control share,” “fair price,” “takeover” or “interested shareholder” law or any similar provisions of the Primary Articles or Primary Bylaws (collectively, with any similar provisions of the GBC Charter or GBC Bylaws, “Takeover Statutes”).

 

3.22          Reorganization. Primary has not taken any action and has no knowledge of any fact or circumstance that could reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.

 

3.23          Opinion. Prior to the execution of this Agreement, the Board of Directors of Primary has received an opinion (which if initially rendered orally, has been or will be confirmed by written opinion of the same date) from Performance Trust Capital Partners to the effect that as of the date thereof and based upon and subject to the various assumptions made, procedures followed, the matters considered, and the terms, qualifications and limitations set forth in its written opinion, the Merger Consideration is fair from a financial point of view to the holders (other than GBC and its affiliates) of Primary Common Stock. Such opinion has not been amended or rescinded as of the date of this Agreement.

 

3.24          Primary Information. The information relating to Primary and its Subsidiaries that is provided in writing by Primary or its Subsidiaries or their respective representatives specifically for inclusion in the Proxy Statement or in any other document filed with any other Regulatory Agency or Governmental Entity in connection herewith, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading. The portion of the Proxy Statement relating to Primary or any of its Subsidiaries will comply in all material respects with applicable law.

 

3.25          Loan Portfolio.

 

(a)            As of the date hereof, except as set forth in Section 3.25(a) of the Primary Disclosure Schedule, neither Primary nor any of its Subsidiaries is a party to any written or oral loan, loan agreement, note or borrowing arrangement (including leases, credit enhancements, commitments, guarantees and interest-bearing assets) (collectively, “Loans”) in which Primary or any Subsidiary of Primary is a creditor that, as of September 30, 2024, under the terms of which the obligor was, as of September 30, 2024 over ninety (90) days or more delinquent in payment of principal or interest. Set forth in Section 3.25(a) of the Primary Disclosure Schedule is a true, correct and complete list of (A) all of the Loans of Primary and its Subsidiaries that, as of September 30, 2024, were classified by Primary as “Other Loans Specially Mentioned,” “Special Mention,” “Substandard,” “Doubtful,” “Loss,” “Classified,” “Criticized,” “Credit Risk Assets,” “Concerned Loans,” “Watch List” or words of similar import, together with the principal amount of each such Loan and the identity of the borrower thereunder and (B) each asset of Primary or any of its Subsidiaries that, as of September 30, 2024, is classified as “Other Real Estate Owned” and the book value thereof.

 

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(b)            Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Primary, each Loan of Primary or any of its Subsidiaries (i) is evidenced by notes, agreements or other evidences of indebtedness that are true, genuine and what they purport to be, (ii) to the extent carried on the books and records of Primary and its Subsidiaries as secured Loans, has been secured by valid charges, mortgages, pledges, security interests, restrictions, claims, liens or encumbrances, as applicable, which have been perfected, (iii) is the legal, valid and binding obligation of the obligor named therein, enforceable in accordance with its terms, subject to the Enforceability Exceptions; and (iv) to the extent secured by a pledge of consumer loans, none of such loans are subject to any right of offset, recission, set-off or any counterclaim or defense for which there is a reasonable possibility of an adverse determination to Primary, including the defense of usury or lack of legal capacity of any guarantor or borrower.

 

(c)            Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Primary, each outstanding Loan of Primary or any of its Subsidiaries (including Loans held for resale to investors) was solicited and originated, and is and has been administered and, where applicable, serviced, and the relevant Loan files are being maintained, in all material respects in accordance with the relevant notes or other credit or security documents, the written underwriting standards of Primary and its Subsidiaries (and, in the case of Loans held for resale to investors, the underwriting standards, if any, of the applicable investors) and with all applicable federal, state and local laws, regulations and rules.

 

(d)            None of the agreements pursuant to which Primary or any of its Subsidiaries has sold Loans or pools of Loans or participations in Loans or pools of Loans contain any obligation to repurchase such Loans or interests therein solely on account of a payment default (other than early payment defaults) by the obligor on any such Loan.

 

(e)            Except as set forth in Section 3.25(e) of the Primary Disclosure Schedule, there are no outstanding Loans made by Primary or any of its Subsidiaries to any “executive officer” or other “insider” (as each such term is defined in Regulation O promulgated by the Federal Reserve) of Primary or its Subsidiaries.

 

(f)            Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Primary, neither Primary nor any of its Subsidiaries is now nor has it ever been since January 1, 2022 subject to any fine, suspension, settlement or other administrative agreement or sanction by any Governmental Entity or Regulatory Agency relating to the origination, sale or servicing of mortgage or consumer Loans.

 

(g)            As to each Loan that is secured whether in whole or in part, by a guaranty of the United States Small Business Administration or any other Governmental Entity (collectively, “SBA Loans”), such guaranty is in full force and effect, and to Primary’ knowledge, will remain in full force and effect following the Effective Time, in each case, without any further action by Primary or any of its Subsidiaries subject to the fulfillment of their obligations under the agreement with the Small Business Administration that arise after the date hereof. There have been no oral or written communications with or notices from the United States Small Business Administration or any other Governmental Entity indicating that the guaranty of any such SBA Loan requires repair or otherwise indicating that the guaranty of any such SBA Loan is or may be at risk.

 

3.26          Insurance. Except as would not reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect on Primary and except for insurance policies underlying Primary Benefit Plans, (a) Primary and its Subsidiaries are insured with reputable insurers against such risks and in such amounts as the management of Primary and Primary Bank reasonably have determined to be prudent and consistent with industry practice, and Primary and its Subsidiaries are in compliance in all material respects with their insurance policies and are not in default under any of the terms thereof, (b) each such policy is outstanding and in full force and effect and, except for policies insuring against potential liabilities of current or former officers, directors and employees of Primary and its Subsidiaries, Primary or the relevant Subsidiary thereof is the sole beneficiary of such policies, (c) all premiums and other payments due under any such policy have been paid, and all claims thereunder have been filed in due and timely fashion, (d) there is no claim for coverage by Primary or any of its Subsidiaries pending under any insurance policy as to which coverage has been questioned, denied or disputed by the underwriters of such insurance policy, and (e) neither Primary nor any of its Subsidiaries has received notice of any threatened termination of, material premium increase with respect to, or material alteration of coverage under, any insurance policies.

 

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3.27          No Other Representations or Warranties.

 

(a)            Except for the representations and warranties made by Primary in this Article III, neither Primary nor any other person makes any express or implied representation or warranty with respect to Primary, its Subsidiaries, or their respective businesses, operations, assets, liabilities, conditions (financial or otherwise) or prospects, and Primary hereby disclaims any such other representations or warranties. In particular, without limiting the foregoing disclaimer, neither Primary nor any other person makes or has made any representation or warranty to GBC or any of its affiliates or representatives with respect to (i) any financial projection, forecast, estimate, budget or prospective information relating to Primary, any of its Subsidiaries or their respective businesses, or (ii) any oral or written information presented to GBC or any of its affiliates or representatives in the course of their due diligence investigation of Primary, the negotiation of this Agreement or in the course of the transactions contemplated hereby, except in each case, for the representations and warranties made by Primary in this Article III.

 

(b)            Primary acknowledges and agrees that neither GBC nor any other person on behalf of GBC has made or is making, and Primary has not relied upon, any express or implied representation or warranty other than those contained in Article IV.

 

Article IV

 

REPRESENTATIONS AND WARRANTIES OF GBC

 

Except as disclosed in the disclosure schedule delivered by GBC to Primary concurrently herewith (the “GBC Disclosure Schedule”) (it being understood that (i) no item is required to be set forth as an exception to a representation or warranty if its absence would not result in the related representation or warranty being deemed untrue or incorrect, (ii) the mere inclusion of an item in the GBC Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission by GBC that such item represents a material exception or fact, event or circumstance or that such item would reasonably be expected to have a Material Adverse Effect, and (iii) any disclosures made with respect to a section of this Article IV shall be deemed to qualify (1) any other section of this Article IV specifically referenced or cross-referenced, and (2) other sections of this Article IV to the extent it is reasonably apparent on its face (notwithstanding the absence of a specific cross reference) from a reading of the disclosure that such disclosure applies to such other sections), GBC hereby represents and warrants to Primary as follows:

 

4.1            Corporate Organization.

 

(a)            GBC is a corporation duly organized, validly existing and in good standing under the laws of the State of Georgia, is a bank holding company duly registered under the BHC Act and has elected to be treated as a financial holding company under the BHC Act. GBC has the corporate power and authority to own, lease or operate all of its properties and assets and to carry on its business as it is now being conducted in all material respects. GBC is duly licensed or qualified to do business and in good standing in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned, leased or operated by it makes such licensing, qualification or standing necessary, except where the failure to be so licensed or qualified or to be in good standing would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on GBC. True and complete copies of the amended and restated articles of incorporation of GBC, as amended (the “GBC Charter”) and the amended and restated bylaws of GBC, as amended (the “GBC Bylaws”), in each case, as in effect as of the date of this Agreement, have previously been made available by GBC to Primary.

 

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(b)            Except as would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on GBC, each Subsidiary of GBC (a “GBC Subsidiary”) (i) is duly organized and validly existing under the laws of its jurisdiction of organization, (ii) is duly licensed or qualified to do business and, where such concept is recognized under applicable law, in good standing in all jurisdictions (whether federal, state, local or foreign) where its ownership, leasing or operation of property or the conduct of its business requires it to be so licensed or qualified or in good standing, and (iii) has all requisite corporate power and authority to own, lease or operate its properties and assets and to carry on its business as now conducted. There are no restrictions on the ability of GBC or any Subsidiary of GBC to pay dividends or distributions except, in the case of GBC or a Subsidiary that is a regulated entity, for restrictions on dividends or distributions generally applicable to all similarly regulated entities. GBC Bank is the only depository institution Subsidiary of GBC, and the deposit accounts of GBC Bank are insured by the FDIC through the Deposit Insurance Fund (as defined in Section 3(y) of the FDI Act) to the fullest extent permitted by law, all premiums and assessments required to be paid in connection therewith have been paid when due, and no proceedings for the termination of such insurance are pending or threatened. Section 4.1(b) of the GBC Disclosure Schedule sets forth a true, correct and complete list of all Subsidiaries of GBC as of the date hereof. True and complete copies of the organizational documents of GBC Bank as in effect as of the date of this Agreement have previously been made available by GBC to Primary. There is no person whose results of operations, cash flows, changes in shareholders’ equity or financial position are consolidated in the financial statements of GBC other than the GBC Subsidiaries.

 

4.2            Capitalization.

 

(a)            The authorized capital stock of GBC consists of 40,000,000 shares of voting common stock, par value $0.01 per share (the “GBC Voting Common Stock”), 10,000,000 shares of non-voting common stock, par value $0.01 per share (the “GBC Non-Voting Common Stock”, together with the GBC Voting Common Stock, the “GBC Common Stock”), and 10,000,000 shares of preferred stock, par value $0.01 per share. As of October 4, 2024 there were (i) 7,346,586 shares of GBC Voting Common Stock issued and outstanding; (ii) no shares of GBC Non-Voting Common Stock issued and outstanding; and (iii) no shares of GBC preferred stock issued and outstanding. All the issued and outstanding shares of GBC Common Stock have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof. There are no bonds, debentures, notes or other indebtedness that have the right to vote on any matters on which shareholders of GBC may vote. Except as set forth in Section 4.2(a) of the GBC Disclosure Schedules, there are no outstanding subscriptions, options, warrants, stock appreciation rights, deferral units, scrip, rights to subscribe to or purchase, preemptive rights, anti-dilutive rights, rights of first refusal or similar rights, puts, calls, commitments or agreements of any character relating to, or securities or rights convertible or exchangeable into or exercisable for, shares of capital stock or other voting or equity securities of or ownership interest in GBC, or contracts, commitments, understandings or arrangements by which GBC may become bound to issue additional shares of its capital stock or other equity or voting securities of or ownership interests in GBC or that otherwise obligate GBC to issue, transfer, sell, purchase, redeem or otherwise acquire, any of the foregoing. Except as set forth in Section 4.2(a) of the GBC Disclosure Schedules, no equity-based awards (including any cash awards where the amount of payment is determined in whole or in part based on the price of any capital stock of GBC or any of its Subsidiaries) are outstanding. Except as set forth in Section 4.2(a) of the GBC Disclosure Schedules, there are no voting trusts, shareholder agreements, proxies or other agreements in effect to which GBC or any of its Subsidiaries is a party with respect to the voting or transfer of GBC Common Stock, capital stock or other voting or equity securities or ownership interests of GBC or granting any shareholder or other person any registration rights.

 

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(b)            Except as would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on GBC, GBC owns, directly or indirectly, all the issued and outstanding shares of capital stock or other equity ownership interests of each of the GBC Subsidiaries, free and clear of any Liens, and all of such shares or equity ownership interests are duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof.

 

4.3            Authority; No Violation.

 

(a)            GBC has full corporate power and authority to execute and deliver this Agreement and, subject to the shareholder and other actions described below, to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the Merger and the Bank Merger have been duly and validly approved by the Board of Directors of GBC. The Board of Directors of GBC has determined that the Merger, on the terms and conditions set forth in this Agreement, is advisable and in the best interests of GBC and its shareholders, has adopted and approved this Agreement and the transactions contemplated hereby (including the Merger and the Bank Merger) and has adopted a resolution to the foregoing effect. The execution and delivery of the Bank Merger Agreement has been duly and validly approved by the Board of Directors of GBC and the Board of Directors of GBC Bank. Both the Board of Directors of GBC and the Board of Directors of GBC Bank have determined that the Bank Merger, on the terms and conditions set forth in the Bank Merger Agreement, is advisable and in the best interests of GBC Bank and GBC as its sole shareholder. Except for the approval of the Bank Merger Agreement by GBC as GBC Bank’s sole shareholder, no other corporate proceedings on the part of GBC are necessary to approve this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by GBC and (assuming due authorization, execution and delivery by Primary) constitutes a valid and binding obligation of GBC, enforceable against GBC in accordance with its terms (except in all cases as such enforceability may be limited by the Enforceability Exceptions). The shares of GBC Common Stock to be issued in the Merger have been validly authorized, and when issued, will be validly issued, fully paid and nonassessable, and no current or past shareholder of GBC will have any preemptive right or similar rights in respect thereof.

 

(b)            Neither the execution and delivery of this Agreement by GBC, nor the consummation by GBC of the transactions contemplated hereby (including the Merger and the Bank Merger), nor compliance by GBC with any of the terms or provisions hereof, will (i) violate any provision of the GBC Charter, the GBC Bylaws or the organizational documents of GBC Bank, or (ii) assuming that the consents and approvals referred to in Section 4.4 are duly obtained, (x) violate any law, statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to GBC or any of its Subsidiaries or any of their respective properties or assets, or (y) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by, or result in the creation of any Lien upon any of the respective properties or assets of GBC or any of its Subsidiaries under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which GBC or any of its Subsidiaries is a party, or by which they or any of their respective properties or assets may be bound, except (in the case of clauses (x) and (y) above) for such violations, conflicts, breaches, defaults, terminations, cancellations, accelerations or creations that, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on GBC.

 

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4.4            Consents and Approvals. Except for (a) the Fairness Determination, (b) the filing of any required applications, filings, waiver requests and notices, as applicable, with the Federal Reserve under the BHC Act and approval or waiver of such applications, filings, waiver requests and notices, (c) the filing of any required applications, filings and notices, as applicable, with the FDIC under the Bank Merger Act of 1960, and approval or waiver of such applications, filings and notices, (d) the filing of any required applications, filings, waiver requests and notices, as applicable, with the DBF and approval or waiver of such applications, filings, waiver requests and notices, (e) the filing of any required applications, filings and notices, as applicable, with each Applicable Agency and the receipt of any required consents or approvals from each Applicable Agency, (f) those additional applications, filings and notices, if any, listed on Section 3.4 of the Primary Disclosure Schedule or Section 4.4 of the GBC Disclosure Schedule and approval of such applications, filings and notices, (g) the filing of the Certificate of Merger with the Georgia Secretary pursuant to the GBCC, (h) the filing of the Bank Merger Certificate with the applicable Governmental Entity as required by applicable law, and (i) such filings and approvals as are required to be made or obtained under the securities or “blue sky” laws of various states in connection with the issuance of the shares of GBC Common Stock pursuant to this Agreement, no consents or approvals of or filings or registrations with any Governmental Entity are necessary in connection with (i) the execution and delivery by GBC of this Agreement or (ii)  the consummation by GBC of the Merger and the other transactions contemplated hereby (including the Bank Merger). As of the date hereof, GBC has no knowledge of any reason why the necessary regulatory approvals and consents will not be received by GBC to permit consummation of the Merger and the Bank Merger on a timely basis.

 

4.5            Reports. GBC and each of its Subsidiaries have timely filed (or furnished, as applicable) all reports, forms, correspondence, registrations and statements, together with any amendments required to be made with respect thereto, that they were required to file (or furnish, as applicable) since January 1, 2022 with Regulatory Agencies, including any report, form, correspondence, registration or statement required to be filed (or furnished, as applicable) pursuant to the laws, rules or regulations of the United States, any state, any foreign entity or any Regulatory Agency, and have paid all fees and assessments due and payable in connection therewith, except where the failure to file (or furnish, as applicable) such report, form, correspondence, registration or statement or to pay such fees and assessments, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on GBC. Subject to Section 9.15, except for normal examinations conducted by a Regulatory Agency in the ordinary course of business of GBC and its Subsidiaries, no Regulatory Agency or governmental agency or authority has initiated or has pending any proceeding or, to the knowledge of GBC, investigation into the business or operations of GBC or any of its Subsidiaries since January 1, 2022, except where such proceedings or investigations would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on GBC. Subject to Section 9.15, there (i) is no unresolved violation, criticism, or exception by any Regulatory Agency with respect to any report or statement relating to any examinations or inspections of GBC or any of its Subsidiaries, and (ii) has been no formal or informal inquiries by, or disagreements or disputes with, any Regulatory Agency with respect to the business, operations, policies or procedures of GBC or any of its Subsidiaries since January 1, 2022, in each case, which would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on GBC.

 

4.6            Financial Statements.

 

(a)            GBC has furnished to Primary true and complete copies of (i) the consolidated balance sheet of GBC and GBC Bank as of December 31, 2021, December 31, 2022 and December 31, 2023, and the related consolidated statements of operations, shareholders’ equity, and cash flows of GBC and GBC Bank, together with all related notes and schedules thereto, accompanied by the reports thereon of GBC’s independent auditors for the years ended as of such dates, and (ii) the unaudited financial statements of GBC and GBC Bank for the six months ended June 30, 2024 (collectively, the “GBC Financial Statements”). The GBC Financial Statements (including the related notes) complied as to form, as of their respective dates, in all material respects with applicable accounting requirements, have been prepared according to GAAP applied on a consistent basis during the periods and at the dates involved (except as may be indicated in the notes thereto), fairly present, in all material respects, the financial condition of GBC and its Subsidiaries, as applicable, at the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to notes and normal year-end adjustments that were not material in amount or effect).

 

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(b)            Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on GBC, neither GBC nor any of its Subsidiaries has any liability of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether due or to become due), except for those liabilities that are reflected or reserved against on the consolidated balance sheet of GBC for the fiscal quarter ended September 30, 2024 included in the GBC Financial Statements or liabilities incurred in the ordinary course of business consistent with past practice since September 30, 2024 or in connection with this Agreement and the transactions contemplated hereby.

 

(c)            GBC has filed all required Call Reports since January 1, 2022 for GBC Bank. The Call Reports fairly present, in all material respects, the financial position of GBC Bank and the results of its operations at the date and for the period indicated in that Call Report in conformity with the instructions to the Call Report. Since January 1, 2022, GBC Bank has calculated its ACL (or ALLL prior to the promulgation of the Interagency Policy Statement on the Allowance of Credit Losses) in accordance with (i) GAAP (ii) the Interagency Policy Statement on the Allowance for Credit Losses (or the Interagency Policy Statement on the Allowance of Loan and Lease Losses prior to the promulgation of the Interagency Policy Statement on the Allowance of Credit Losses) and (iii) all applicable rules and regulations, and, in the reasonable opinion of management, the ACL is reasonably likely to be to be adequate in all material respects.

 

(d)            Since January 1, 2022, (i) neither GBC, GBC Bank, or their respective Subsidiaries nor, to the knowledge of GBC, any director, officer, employee, auditor, accountant or representative of GBC or its Subsidiaries has received or otherwise obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of GBC or its Subsidiaries or their respective internal accounting controls relating to periods after January 1, 2022, including any material complaint, allegation, assertion or claim that GBC or its Subsidiaries has engaged in questionable accounting or auditing practices, and (ii) to the knowledge of GBC, no attorney representing GBC or its Subsidiaries, whether or not employed by GBC or its Subsidiaries, has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation, relating to periods after January 1, 2022, by GBC or its Subsidiaries or any of their officers, directors, employees or agents to the Board of Directors of GBC or the Board of Directors of GBC Bank (or any committee thereof) or to any director or officer of GBC, GBC Bank, or their respective Subsidiaries.

 

(e)            Neither GBC nor its Subsidiaries is a party to, or has any commitment to become a party to, any joint venture, off-balance sheet partnership or any similar contract or arrangement (including any contract or arrangement relating to any transaction or relationship between or among GBC and its Subsidiaries, on the one hand, and any unconsolidated affiliate, including any structured finance, special purpose or limited purpose entity or person, on the other hand, or any “off-balance sheet arrangement”), where the result, purpose or intended effect of such contract or arrangement is to avoid disclosure of any material transaction involving, or material liabilities of, GBC or its Subsidiaries in GBC’ or its Subsidiaries’ financial statements.

 

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4.7            Broker’s Fees. With the exception of the engagement of Evercore Inc. (“Evercore”), neither GBC nor any GBC Subsidiary nor any of their respective officers or directors has employed any broker, finder or financial advisor or incurred any liability for any broker’s fees, commissions or finder’s fees in connection with the Merger or related transactions contemplated by this Agreement. GBC has disclosed to Primary as of the date hereof the aggregate fees provided for in connection with the engagement by GBC of Evercore related to the Merger and the other transactions contemplated hereunder.

 

4.8            Absence of Certain Changes or Events.

 

(a)            Since December 31, 2023, there has not been any effect, change, event, circumstance, condition, occurrence or development that has had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on GBC.

 

(b)            Since December 31, 2023 through the date of this Agreement, GBC and its Subsidiaries have carried on their respective businesses in all material respects in the ordinary course.

 

4.9            Legal and Regulatory Proceedings.

 

(a)            Except as would not reasonably be expected to, either individually or in the aggregate, have a Material Adverse Effect on GBC, neither GBC nor any of its Subsidiaries is a party to any, and there are no outstanding or pending or, to the knowledge of GBC, threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations of any nature against GBC or any of its Subsidiaries or any of their current or former directors or executive officers or challenging the validity or propriety of the transactions contemplated by this Agreement.

 

(b)            Except as would not reasonably be expected to, either individually or in the aggregate, be material to GBC, there is no injunction, order, judgment, decree, or regulatory restriction imposed upon GBC, any of its Subsidiaries or the assets of GBC or any of its Subsidiaries (or that, upon consummation of the Merger, would apply to the Surviving Entity or any of its affiliates).

 

4.10         Taxes and Tax Returns.

 

(a)            Except as would not reasonably be expected to, either individually or in the aggregate, have a Material Adverse Effect on GBC: each of GBC and its Subsidiaries has duly and timely filed (including all applicable extensions) all Tax Returns in all jurisdictions in which Tax Returns are required to be filed by it, and all such Tax Returns are true, correct and complete; all Taxes of GBC and its Subsidiaries (whether or not shown on any Tax Returns) that are due have been fully and timely paid; each of GBC and its Subsidiaries has withheld and paid all material Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, creditor, shareholder, independent contractor or other third party; each of GBC and its Subsidiaries have withheld and timely paid all material Taxes required to have been withheld and paid with respect to, and have complied with, all information reporting, backup withholding, and nonresident withholding requirements; neither GBC nor any of its Subsidiaries has granted any extension or waiver of the limitation period applicable to any Tax that remains in effect (other than extension or waiver granted in the ordinary course of business); neither GBC nor any of its Subsidiaries has received written notice of assessment or proposed assessment in connection with any amount of Taxes, and there are no threatened in writing or pending disputes, claims, audits, examinations or other proceedings regarding any Tax of GBC and its Subsidiaries or the assets of GBC and its Subsidiaries; neither GBC nor any of its Subsidiaries (A) has been a member of an affiliated group filing a consolidated federal income Tax Return for which the statute of limitations is open (other than a group the common parent of which was GBC)), or (B) has any liability for the Taxes of any person (other than GBC or any of its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law) or otherwise as a transferee or successor.

 

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(b)            No written claim has ever been made by a Governmental Entity in a jurisdiction where GBC and its Subsidiaries do not file Tax Returns that it is or may be subject to taxation by, or required to file a Tax Return in, that jurisdiction. There are no liens for Taxes (other than statutory liens for Taxes not yet due and payable) upon any assets of GBC or any of its Subsidiaries.

 

(c)            GBC and each of its Subsidiaries have disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code.

 

(d)            Neither GBC nor any of its Subsidiaries has participated in a “listed transaction” within the meaning of Treasury Regulation Section 1.6011-4(b)(2).

 

4.11          Compliance with Applicable Law.

 

(a)            GBC and each of its Subsidiaries hold, and have at all times since January 1, 2019, held, all licenses, registrations, franchises, certificates, variances, permits charters and authorizations necessary for the lawful conduct of their respective businesses and ownership of their respective properties, rights and assets under and pursuant to each (and have paid all fees and assessments due and payable in connection therewith), except where neither the cost of failure to hold nor the cost of obtaining and holding such license, registration, franchise, certificate, variance, permit, charter or authorization (nor the failure to pay any fees or assessments) would, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on GBC, and to the knowledge of GBC, no suspension or cancellation of any such necessary license, registration, franchise, certificate, variance, permit, charter or authorization is threatened.

 

(b)            Except as would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on GBC, GBC and each of its Subsidiaries, since January 1, 2022, have complied with and are not in default or violation under any applicable law, statute, order, rule, regulation, policy and/or guideline of any Governmental Entity relating to GBC or any of its Subsidiaries, including all laws related to data protection or privacy (including laws relating to the privacy and security of Personal Data), the USA PATRIOT Act, the Bank Secrecy Act, the Equal Credit Opportunity Act and Regulation B, the Fair Housing Act, the Community Reinvestment Act, the Fair Credit Reporting Act, the Truth in Lending Act and Regulation Z, the Home Mortgage Disclosure Act, the Fair Debt Collection Practices Act, the Electronic Fund Transfer Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, any regulations promulgated by the Consumer Financial Protection Bureau, the Interagency Policy Statement on Retail Sales of Nondeposit Investment Products, the SAFE Mortgage Licensing Act of 2008, the Real Estate Settlement Procedures Act and Regulation X, Title V of the Gramm-Leach-Bliley Act, any and all sanctions or regulations enforced by the Office of Foreign Assets Control of the United States Department of Treasury and any other law, policy or guideline relating to bank secrecy, discriminatory lending, financing or leasing practices, consumer protection, money laundering prevention, foreign assets control, U.S. sanctions laws and regulations, Sections 23A and 23B of the Federal Reserve Act, the Sarbanes-Oxley Act, and all agency requirements relating to the origination, sale and servicing of mortgage and consumer loans. GBC and its Subsidiaries have established and maintain a system of internal controls designed to ensure compliance in all material respects by GBC and its Subsidiaries with applicable financial recordkeeping and reporting requirements of applicable money laundering prevention laws in jurisdictions where GBC and its Subsidiaries conduct business.

 

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(c)            GBC Bank has received an Institution Community Reinvestment Act rating of “satisfactory” or better in its most recently completed Community Reinvestment Act examination.

 

(d)            GBC maintains a written information privacy and security program that maintains reasonable measures to protect the privacy, confidentiality and security of all Personal Data and any other material confidential information against any Security Breach. To the knowledge of GBC, GBC has not experienced any Security Breach that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on GBC. To the knowledge of GBC, there are no data security or other technological vulnerabilities with respect to its information technology systems or networks that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect on GBC.

 

(e)            As of the date hereof, each of GBC and GBC Bank is “well-capitalized” (as such term is defined in the relevant regulation of the institution’s primary federal regulator).

 

(f)            Without limitation, none of GBC or any of its Subsidiaries, or to the knowledge of GBC, any director, officer, employee, agent or other person acting on behalf of GBC or any of its Subsidiaries has, directly or indirectly, (i) used any funds of GBC or any of its Subsidiaries for unlawful contributions, unlawful gifts, unlawful entertainment or other expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic governmental officials or employees or to foreign or domestic political parties or campaigns from funds of GBC or any of its Subsidiaries, (iii) violated any provision that would result in the violation of the Foreign Corrupt Practices Act of 1977, as amended, or any similar law, (iv) established or maintained any unlawful fund of monies or other assets of GBC or any of its Subsidiaries, (v) made any fraudulent entry on the books or records of GBC or any of its Subsidiaries, or (vi) made any unlawful bribe, unlawful rebate, unlawful payoff, unlawful influence payment, unlawful kickback or other unlawful payment to any person, private or public, regardless of form, whether in money, property or services, to obtain favorable treatment in securing business, to obtain special concessions for GBC or any of its Subsidiaries, to pay for favorable treatment for business secured or to pay for special concessions already obtained for GBC or any of its Subsidiaries, or is currently subject to any United States sanctions administered by the Office of Foreign Assets Control of the United States Treasury Department, except, in each case, as would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on GBC.

 

(g)            Except as would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on GBC, (i) GBC and each of its Subsidiaries have properly administered all accounts for which it acts as a fiduciary, including accounts for which it serves as a trustee, agent, custodian, personal representative, guardian, conservator or investment advisor, in accordance with the terms of the governing documents and applicable state, federal and foreign law; and (ii) none of GBC, any of its Subsidiaries, or any of its or its Subsidiaries’ directors, officers or employees, has committed any breach of trust or fiduciary duty with respect to any such fiduciary account, and the accountings for each such fiduciary account are true, correct and complete and accurately reflect the assets and results of such fiduciary account.

 

4.12          Agreements with Regulatory Agencies. Subject to Section 9.15, neither GBC nor any of its Subsidiaries is subject to any cease-and-desist or other order or enforcement action issued by, or is a party to any written agreement, consent agreement or memorandum of understanding with, or is a party to any commitment letter or similar undertaking to, or is subject to any order or directive by, or has been ordered to pay any civil money penalty by, or has been since January 1, 2022, a recipient of any supervisory letter from, or since January 1, 2022, has adopted any policies, procedures or board resolutions at the request or suggestion of, any Regulatory Agency or other Governmental Entity that currently restricts in any material respect or would reasonably be expected to restrict in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its ability to pay dividends, its credit or risk management policies, its management or its business (each, whether or not set forth in the GBC Disclosure Schedule, an “GBC Regulatory Agreement”), nor has GBC or any of its Subsidiaries been advised in writing, or to GBC’s knowledge, orally, since January 1, 2022, by any Regulatory Agency or other Governmental Entity that it is considering issuing, initiating, ordering or requesting any such GBC Regulatory Agreement.

 

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4.13          Related Party Transactions. Except for the transactions set forth in Section 4.13(e) of the GBC Disclosure Schedules, there are no transactions or series of related transactions, agreements, arrangements or understandings, nor are there any currently proposed transactions or series of related transactions, between GBC or any of its Subsidiaries, on the one hand, and any current or former director or “executive officer” (as defined in the Exchange Act) of GBC or any of its Subsidiaries or any person who beneficially owns (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) five percent (5%) or more of the outstanding GBC Common Stock (or any of such person’s immediate family members or affiliates) (other than Subsidiaries of GBC) on the other hand, of the type required by the Exchange Act and the rules and regulations thereunder.

 

4.14          State Takeover Laws. The Board of Directors of GBC has approved this Agreement and the transactions contemplated hereby and has taken all such other necessary actions as required to render inapplicable to such agreements and transactions the provisions of any Takeover Statutes.

 

4.15          Reorganization. GBC has not taken any action and has no knowledge of any fact or circumstance that could reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.

 

4.16          GBC Information. The information relating to GBC and its Subsidiaries that is provided in writing by GBC or its Subsidiaries or their respective representatives specifically for inclusion in the Proxy Statement or in any other document filed with any other Regulatory Agency or Governmental Entity in connection herewith, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading. The portion of the Proxy Statement relating to GBC or any of its Subsidiaries will comply in all material respects with applicable law.

 

4.17          No Other Representations or Warranties.

 

(a)            Except for the representations and warranties made by GBC in this Article IV, neither GBC nor any other person makes any express or implied representation or warranty with respect to GBC, its Subsidiaries, or their respective businesses, operations, assets, liabilities, conditions (financial or otherwise) or prospects, and GBC hereby disclaims any such other representations or warranties. In particular, without limiting the foregoing disclaimer, neither GBC nor any other person makes or has made any representation or warranty to Primary or any of its affiliates or representatives with respect to (i) any financial projection, forecast, estimate, budget or prospective information relating to GBC, any of its Subsidiaries or their respective businesses, or (ii) any oral or written information presented to Primary or any of its affiliates or representatives in the course of their due diligence investigation of GBC, the negotiation of this Agreement or in the course of the transactions contemplated hereby, except in each case for the representations and warranties made by GBC in this Article IV.

 

(b)            GBC acknowledges and agrees that neither Primary nor any other person on behalf of Primary has made or is making, and GBC has not relied upon, any express or implied representation or warranty other than those contained in Article III.

 

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Article V

 

COVENANTS RELATING TO CONDUCT OF BUSINESS

 

5.1            Conduct of Businesses Prior to the Effective Time. During the period from the date of this Agreement to the Effective Time or earlier termination of this Agreement, except as expressly contemplated or permitted by this Agreement (including as set forth in Section 5.1 of the Primary Disclosure Schedule or GBC Disclosure Schedule), required by law or as consented to in writing by the other party (such consent not to be unreasonably withheld, conditioned or delayed), each of GBC and Primary shall, and shall cause each of its Subsidiaries to, (i) conduct its business in the ordinary course consistent with past practices or pursuant to a party’s strategic plan, and (ii) use reasonable best efforts to maintain and preserve intact its business organization, employees and advantageous business relationships, and (iii) take no action that would reasonably be expected to adversely affect or delay the ability of either GBC or Primary to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth in this Section 5.1, no action or failure to take action by Primary or any of its Subsidiaries or GBC or any of its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.2 (in the case of Primary or its Subsidiaries) or Section 5.3 (in the case of GBC or its Subsidiaries) shall constitute a breach of this Section 5.1 unless such action or failure to take action would constitute a breach of such provision of Section 5.2 (in the case of Primary or its Subsidiaries) or Section 5.3 (in the case of GBC or its Subsidiaries).

 

5.2            Forbearances of Primary. During the period from the date of this Agreement to the Effective Time or earlier termination of this Agreement, except as set forth in Section 5.2 of the Primary Disclosure Schedule, as expressly contemplated or permitted by this Agreement or a Primary Benefit Plan as in effect as of the date hereof or as required by law or regulation, Primary shall not, and Primary shall not permit any of its Subsidiaries to, without the prior written consent of GBC (such consent not to be unreasonably withheld, conditioned or delayed):

 

(a)            other than (1) federal funds borrowings and borrowings from the Federal Home Loan Bank, in each case, with a maturity not in excess of six (6) months, and (2) the creation of deposit liabilities or other customary banking products, issuances of letters of credit, sales of certificates of deposits, and entry into repurchase agreements, in each case (1) and (2), in the ordinary course of business on terms and in amounts consistent with past practice, incur any indebtedness for borrowed money (other than indebtedness of Primary or any of its wholly-owned Subsidiaries, on the one hand, to Primary or any of its wholly-owned Subsidiaries, on the other hand), or directly or indirectly, incur, assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations or liabilities of any other individual, corporation or other entity;

 

(b)           (1)            adjust, split, combine or reclassify any capital stock of Primary (or shares thereof);

 

(2)            make, declare, pay, set aside for payment or set a record date for any dividend, or any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or other equity or voting securities or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) or exchangeable into or exercisable for any shares of its capital stock or other equity or voting securities, including any Primary Securities or any securities of any Primary Subsidiary except cash dividends paid by any of the Subsidiaries of Primary to Primary or any of its wholly-owned Subsidiaries.

 

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(3)            grant any stock options, warrants, restricted stock units, performance stock units, phantom stock units, restricted shares or other equity-based awards or interests, or grant any person any right to acquire any Primary Securities or any securities of any Primary Subsidiary; or

 

(4)            issue, sell, transfer, encumber, or authorize the issuance, sale or transfer, or otherwise permit to become outstanding any shares of capital stock or voting securities or equity interests or securities convertible (whether currently convertible or convertible only after the passage of time of the occurrence of certain events) or exchangeable into, or exercisable for, any shares of its capital stock or other equity or voting securities, including any Primary Securities or any securities of any Primary Subsidiary, or any options, warrants, or other rights of any kind to acquire any shares of capital stock or other equity or voting securities, including any Primary Securities or any securities of any Primary Subsidiary;

 

(c)            sell, license, lease, transfer, mortgage, pledge, encumber or otherwise dispose of, or discontinue, any of its material properties (other than other real estate owned disposed of for an amount not less than 85% of its recorded investment value as of the date hereof), assets or any business to any individual, corporation or other entity other than a wholly-owned Subsidiary, or cancel, release or assign any indebtedness to any such person or any claims held by any such person, in each case, other than (x) in the ordinary course of business or (y) pursuant to contracts or agreements in force at the date of this Agreement;

 

(d)            except for foreclosure or acquisitions of control in a bona fide fiduciary capacity or in satisfaction of debts previously contracted in good faith, in each case, in the ordinary course of business, make any material investment in or acquire (whether by purchase of stock or securities, contributions to capital, property transfers, merger or consolidation, or formation of a joint venture or otherwise) any other person or all or any portion of the property, assets, debt, business, deposits or properties of any other person, in each case, other than a wholly-owned Subsidiary of Primary;

 

(e)            in each case, except for transactions in the ordinary course of business, (i) terminate, materially amend, extend or waive any material provision of, any Primary Contract or (ii) enter into any contract that would constitute an Primary Contract if in effect on the date of this Agreement, or make any change in any instrument or agreement governing the terms of any of its securities, other than normal renewals of contracts without material adverse changes of terms with respect to Primary or any of its Subsidiaries (or the Surviving Entity); provided that this clause (ii) shall not apply to the entry into of any contract in connection with any action otherwise permitted by this Section 5.2;

 

(f)            except as required pursuant to the terms of any Primary Benefit Plan as in effect as of the date of this Agreement, (A) increase in any manner the compensation, salaries, wages, commissions or consulting fees, bonus, incentives, pension, welfare, fringe or other benefits, severance or termination pay of any current or former employee, officer, director or independent contractor of Primary or any of its Subsidiaries, other than (i) increases in base compensation in the ordinary course, consistent with past practices, that do not exceed 5% individually or 3% in the aggregate after consultation with the Chief Human Resources Officer of GBC (or other increases with the written consent of the Chief Human Resources Officer of GBC), (ii) the payment of annual bonuses for completed performance periods based upon actual corporate performance, the performance of such employee and, if applicable, such employee’s business, consistent with the terms of the applicable Primary Benefit Plan as in effect as of the date hereof or as expressly contemplated under this Agreement (or other bonuses with the written consent of the Chief Human Resources Officer of GBC), or (iii) increases, retention payments, or severance determined necessary by Primary for retention purposes after consultation with, and with the written consent of, the Chief Human Resources Officer of GBC, which in the aggregate shall not exceed the amount disclosed in Section 5.2(f) of the Primary Disclosure Schedule, (B) become a party to, establish, adopt, amend, commence participation in or terminate any Primary Benefit Plan or any arrangement that would have been a Primary Benefit Plan had it been entered into prior to this Agreement, (C) grant any new awards, or amend or modify the terms of any outstanding awards, under any Primary Benefit Plan, (D) other than as contemplated by this Agreement, take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Primary Benefit Plan, or (E) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Primary Benefit Plan that is required by applicable law to be funded or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (F) subject to Section 5.2(s), except for loans or extensions of credit consistent with existing policies and practices and applicable law, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of Primary or Primary Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;

 

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(g)            (i) settle, or enter into any settlement or similar agreement with respect to, any claim, suit, action or proceeding or (ii) waive or release any material rights or claims, or agree or consent to the issuance of any injunction, decree, order or judgment restricting or otherwise affecting its business or operations or the Surviving Entity after consummation of the Merger;

 

(h)            take any action or knowingly fail to take any action where such action or failure to act could reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code;

 

(i)             amend its charter, its bylaws or comparable governing documents of its Subsidiaries;

 

(j)             (i) materially restructure or materially change its investment securities or derivatives portfolio or its interest rate exposure, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported, or (ii) acquire (other than (A) by way of foreclosure or acquisitions in a bona fide fiduciary capacity or (B) in satisfaction of debts previously contracted in good faith) any debt security or equity investment or any certificates of deposit issued by other banks, other than securities rated “AA” or higher by either Standard and Poor’s Ratings Services or Moody’s Investor Service;

 

(k)            implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP;

 

(l)             (i) enter into any new line of business, introduce any material new products or services, or introduce any material marketing campaigns or any material new sales compensation or incentive programs or arrangements, in each case, except as required by applicable law, regulation or policies imposed by any Governmental Entity; (ii) other than in the ordinary course of business consistent with past practice, change in any material respect its lending, investment, underwriting, risk and asset liability management and other banking and operating, securitization and servicing policies (including any change in the maximum ratio or similar limits as a percentage of its capital exposure applicable with respect to its loan portfolio or any segment thereof), except as required by applicable law, regulation or policies imposed by any Governmental Entity; or (iii) incur any material liability or obligation relating to retail banking and branch merchandising, marketing and advertising activities and initiatives except in the ordinary course of business;

 

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(m)            abandon or allow to lapse any material Intellectual Property, other than in the ordinary course of business consistent with past practice;

 

(n)            make, change or revoke any Tax election, change an annual Tax accounting period, adopt or change any Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, or settle any Tax claim, audit, assessment or dispute or surrender any right to claim a refund of Taxes;

 

(o)            merge or consolidate itself or any of its Subsidiaries with any other person, or restructure, reorganize or completely or partially liquidate or dissolve it or any of its Subsidiaries;

 

(p)            incur any capital expenditures or any obligations or liabilities in respect thereof, except for any capital expenditures not to exceed $50,000 individually or $250,000 in the aggregate;

 

(q)            make any changes to deposit pricing other than such changes that may be made in the ordinary course of business or consistent with safe and sound banking practices;

 

(r)            (i) make any new investment or new commitment to invest in real estate or in any real estate development project other than by way of foreclosure or deed in lieu thereof, (ii) make any new investment or new commitment to develop, or otherwise take any actions to develop any real estate owned by Primary or any of its Subsidiaries, or (iii) file any application or make any contract or commitment for the opening, relocation or closing of any, or open, relocate or close any, branch office.

 

(s)            sell, transfer or lease any properties or assets (real, personal or mixed, tangible or intangible) to, or enter into any agreement or arrangement with, any of its officers or directors or any of their immediate family members or any affiliates or associates of any of its officers or directors other than in the ordinary course of business;

 

(t)            except for loans or extensions of credit approved and/or committed as of the date of this Agreement, (i) make or renew any loan greater than $2,500,000 if secured or $500,000 if unsecured, (ii) purchase a participation in any loan or pool of loans greater than $500,000, or (iii) renew for more than 12 months any loans greater than $500,000 rated “watch” or worse without giving notice of such action within 24 hours after any loan committee meeting at which such action is approved. For purposes of this Section 5.2(t), notice shall be given by email to the Chief Risk Officer;

 

(u)            other than interest rate swaps entered into for the account of customers of Primary or any Primary Subsidiaries (i.e. “back-to-back” agreements) in the ordinary course of business, enter into any swap transaction, option, warrant, forward purchase or sale transaction, futures transaction, cap transaction, floor transaction or collar transaction relating to one or more currencies, commodities, bonds, equity securities, loans, interest rates, catastrophe events, weather-related events, credit-related events or conditions or any indexes, or any other similar transaction (including any option with respect to any of these transactions) or combination of any of these transactions, including collateralized mortgage obligations or other similar instruments or any debt or equity instruments evidencing or embedding any such types of transactions, and any related credit support, collateral or other similar arrangements related to any such transaction or transactions;

 

(v)            take any action that is intended or would reasonably be expected to (i) result in any of the conditions to the Merger set forth in Section 7.1 or Section 7.2 not being satisfied by the Termination Date, except as may be required by applicable law or (ii) prevent, delay or impair in any material respect its ability to consummate the transactions contemplated by this Agreement; or

 

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(w)           agree to take, make any commitment to take, or adopt any resolutions of its Board of Directors or similar governing body in support of, any of the actions prohibited by this Section 5.2.

 

5.3            Forbearances of GBC. During the period from the date of this Agreement to the Effective Time or earlier termination of this Agreement, except as set forth in Section 5.3 of the GBC Disclosure Schedule, as expressly contemplated by this Agreement, as required by law or as consented to in writing by Primary (such consent not to be unreasonably withheld, conditioned or delayed), GBC shall not, and shall not permit any of its Subsidiaries to:

 

(a)            adjust, split, combine or reclassify any capital stock of GBC (or shares thereof);

 

(b)            make, declare, or pay any dividend on any capital stock of GBC;

 

(c)            amend the GBC Charter or the GBC Bylaws in a manner that would materially and adversely affect the holders of Primary Common Stock, or adversely affect the holders of Primary Common Stock relative to other holders of GBC Common Stock;

 

(d)            incur any indebtedness for borrowed money (other than indebtedness of GBC or any of its wholly owned Subsidiaries to GBC or any of its Subsidiaries) that would reasonably be expected to prevent GBC or its Subsidiaries from assuming Primary’s or its Subsidiaries’ outstanding indebtedness;

 

(e)            take any action or knowingly fail to take any action where such action or failure to act could reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code;

 

(f)            take any action that is intended or would reasonably be expected to result in any of the conditions to the Merger set forth in Section 7.1 or Section 7.3 not being satisfied by the Termination Date, except as may be required by applicable law;

 

(g)            take any action that is intended or would reasonably be expected to result in a material delay in the ability of GBC or Primary to perform any of their obligations under this Agreement on a timely basis or a material delay in the ability of GBC to obtain any necessary approvals of any Governmental Entity required for the transactions contemplated hereby by the Termination Date; or

 

(h)            agree to take, make any commitment to take, or adopt any resolutions of its Board of Directors or similar governing body in support of, any of the actions prohibited by this Section 5.3.

 

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Article VI

 

ADDITIONAL AGREEMENTS

 

6.1            Regulatory Matters.

 

(a)            The parties hereto shall cooperate with each other and use their reasonable best efforts to promptly prepare and file all necessary documentation, to effect all applications, notices, petitions and filings (and in the case of the applications, notices, petitions and filings in respect of the Requisite Regulatory Approvals, use their reasonable best efforts to make such filings within thirty (30) days of the date of this Agreement), to obtain as promptly as practicable all permits, consents, waivers, approvals and authorizations of all third parties, Regulatory Agencies and Governmental Entities which are necessary or advisable to consummate the transactions contemplated by this Agreement (including the Merger and the Bank Merger), and to comply with the terms and conditions of all such permits, consents, waivers, approvals and authorizations of all such Regulatory Agencies and Governmental Entities. Primary and GBC shall each use, and shall each cause their applicable Subsidiaries to use, reasonable best efforts to obtain each such Requisite Regulatory Approval as promptly as reasonably practicable. GBC and Primary shall have the right to review in advance, and each will consult the other on, in each case, subject to applicable laws relating to the exchange of information, all the information relating to Primary or GBC, as the case may be, and any of their respective Subsidiaries, 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. In exercising the foregoing right, each of the parties hereto shall act reasonably and as promptly as practicable. The parties hereto agree that they will consult with each other with respect to obtaining all permits, consents, waivers, approvals and authorizations of all third parties and Governmental Entities necessary or advisable to consummate the transactions contemplated by this Agreement and each party will keep the other apprised of the status of matters relating to completion of the transactions contemplated in this Agreement, and each party shall consult with the other in advance of any meeting or conference with any Governmental Entity in connection with the transactions contemplated by this Agreement and, to the extent permitted by such Governmental Entity, give the other party and/or its counsel the opportunity to attend and participate in such meetings and conferences, in each case subject to applicable law; and provided, that each party shall promptly advise the other party with respect to substantive matters that are addressed in any meeting or conference with any Governmental Entity which the other party does not attend or participate in connection with or affecting the transactions contemplated by this Agreement, to the extent permitted by such Governmental Entity and subject to applicable law and Section 9.15.

 

(b)            In furtherance and not in limitation of the foregoing, each party shall use its reasonable best efforts to avoid the entry of, or to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order, whether temporary, preliminary or permanent, that would restrain, prevent or delay the Closing. Notwithstanding the foregoing, nothing contained in this Agreement shall be deemed to require GBC or Primary or any of their respective Subsidiaries, and neither Primary nor any of its Subsidiaries shall be permitted (without the prior written consent of GBC), to take any action, or commit to take any action, or agree to any condition or restriction, in connection with obtaining the foregoing permits, consents, waivers, approvals and authorizations of Governmental Entities that would reasonably be expected to have a Material Adverse Effect on the Surviving Entity and its Subsidiaries, taken as a whole, after giving effect to the Merger (a “Materially Burdensome Regulatory Condition”).

 

(c)            GBC and Primary shall, upon request, furnish each other with all information concerning themselves, their Subsidiaries, directors, officers and shareholders and such other matters as may be reasonably necessary or advisable in connection any filing, notice or application made by or on behalf of GBC, Primary or any of their respective Subsidiaries to any Governmental Entity in connection with the Merger, the Bank Merger and the other transactions contemplated by this Agreement.

 

(d)            GBC and Primary shall promptly advise each other upon receiving any communication from any Governmental Entity whose permit, consent, waiver, approval or authorization is required for consummation of the transactions contemplated by this Agreement that causes such party to believe that there is a reasonable likelihood that any Requisite Regulatory Approval will not be obtained, or that the receipt of any such permit, consent, waiver, approval or authorization will be materially delayed.

 

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6.2            Access to Information; Confidentiality.

 

(a)            Upon reasonable notice and subject to applicable laws, each of GBC and Primary, for the purposes of verifying the representations and warranties of the other and preparing for the Merger and the other matters contemplated by this Agreement, shall, and shall cause its Subsidiaries to, afford to the officers, employees, accountants, counsel, advisors and other representatives of the other party, access, during normal business hours during the period prior to the Effective Time upon prior written notice from the accessing party, to all its properties, books, contracts, commitments, personnel, information technology systems, and records, and both Primary and GBC shall reasonably cooperate with the other party in preparing to execute after the Effective Time the conversion or consolidation of systems and business operations generally, and, during such period, each of GBC and Primary shall, and shall cause its Subsidiaries to, make available to the other party (i) a copy of each report, schedule, registration statement or proxy statement and other document filed or received by it during such period pursuant to the requirements of federal securities laws or federal or state banking laws (other than reports or documents that GBC or Primary, is not permitted to disclose in accordance with Section 9.15 or otherwise under applicable law), and (ii) all other information concerning its business, properties and personnel as such party may reasonably request. Neither GBC nor Primary nor any of their respective Subsidiaries shall be required to provide access to or to disclose information where such access or disclosure would violate or prejudice the rights of GBC’s or Primary’, as the case may be, customers, jeopardize the attorney-client privilege of the institution in possession or control of such information (after giving due consideration to the existence of any common interest, joint defense or similar agreement between the parties) or contravene any law, rule, regulation, order, judgment, decree, fiduciary duty or binding agreement entered into prior to the date of this Agreement. The parties hereto will make appropriate substitute disclosure arrangements under circumstances in which the restrictions of the preceding sentence apply.

 

(b)            Each of GBC and Primary shall hold all information furnished by or on behalf of the other party or any of such party’s Subsidiaries or representatives pursuant to Section 6.2(a) in confidence to the extent required by, and in accordance with, the provisions of the non-disclosure agreement, dated August 1, 2024, between GBC and Primary (the “Non-Disclosure Agreement”).

 

(c)            No investigation by either of the parties or their respective representatives shall affect or be deemed to modify or waive the representations and warranties of the other set forth in this Agreement.

 

6.3            Non-Control. Nothing contained in this Agreement shall give either party, directly or indirectly, the right to control or direct the operations of the other party prior to the Effective Time. Prior to the Effective Time, each party shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.

 

6.4            Fairness Determination; Securities Act Compliance.

 

(a)            The shares of GBC Common Stock issuable in the Merger are intended be issued in reliance upon the exemption from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the “Securities Act”) set forth in Section 3(a)(10) thereof and Article 3 and Section 10-5-53 of Chapter 5 of Title 10 of the O.C.G.A., assuming receipt of the Fairness Determination and the issuance of the Fairness Order (as hereinafter defined). For purposes of this Agreement, “Fairness Determination” means the approval by the Securities Commissioner pursuant to O.C.G.A. §10-5-11(9) (and the rules and regulations thereunder) of the terms and conditions of the contemplated transactions and the fairness thereof such that the issuance of the Per Share Stock Consideration issuable to the Primary shareholders as contemplated by this Agreement shall qualify for the exemptions from registration available under O.C.G.A. §10-5-11(9) and Section 3(a)(10) of the Securities Act.

 

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(b)            The parties hereto shall cooperate with each other and use their reasonable best efforts to promptly prepare and cause to be filed (and use their reasonable best efforts to make such filings within sixty (60) days of the date of this Agreement) with the Securities Commissioner an application for the Fairness Determination under O.C.G.A. §10-5-11(9), including a request for hearing (the “Fairness Hearing”) and a request for the issuance of an order containing the Fairness Determination (the “Fairness Order”). GBC and Primary shall have the right to review in advance, and each will consult the other on, in each case, subject to applicable laws relating to the exchange of information, all the information relating to Primary or GBC, as the case may be, and any of their respective Subsidiaries, which appears in any filing made with, or written materials submitted to, the Securities Commissioner in connection with the application for the Fairness Determination. In exercising the foregoing right, each of the parties hereto shall act reasonably and as promptly as practicable. The parties shall use their reasonable best efforts to cause the Securities Commissioner to issue the Fairness Order, including, but not limited to, mailing a timely notice of hearing to Primary shareholders providing them with the opportunity to attend and participate in the Fairness Hearing; provided, however, that the parties shall not be required to materially and adversely modify any of the terms of this Agreement or the contemplated transactions in order to cause the Securities Commissioner to make the Fairness Determination and issue the Fairness Order.

 

(c)            In the event that (i) the Fairness Hearing is not available to the parties for reasons beyond their reasonable control, (ii) the Fairness Hearing is held but the Securities Commissioner affirmatively declines to issue the Fairness Order or does not issue the Fairness Order within a reasonable time after such Fairness Hearing (after taking into account any requests for additional information by the Securities Commissioner following such Fairness Hearing), or (iii) the exemption from registration under Section 3(a)(10) of the Securities Act is otherwise not available in connection with the contemplated transactions, then GBC and Primary shall work in good faith to amend this Agreement to provide for an alternative exemption from federal registration for the issuance of GBC Common Stock pursuant to this Agreement.

 

(d)            GBC and Primary shall use their reasonable best efforts to obtain all necessary state securities law or “blue sky” permits and approvals required to carry out the contemplated transactions, and each of GBC and Primary shall prepare and furnish such information relating to the GBC and GBC Subsidiaries or Primary and Primary Subsidiaries, as appropriate, and their respective affiliates, directors, officers, and shareholders as may be reasonably required in connection with any such action; provided that neither GBC nor Primary shall be required to register, or to register the issuance of GBC Common Stock, with any state or the securities regulators of any state (other than making notice filings, as applicable).

 

6.5            Proxy Statement; Shareholders’ Approvals.

 

(a)            As promptly as reasonably practicable following the date hereof, GBC and Primary shall prepare and Primary shall mail the Proxy Statement to the Primary shareholders. GBC will furnish to Primary the information required to be included in the Proxy Statement with respect to its business and affairs and shall have the right to review and consult with Primary on the form of, and any characterizations of such information included in, the Proxy Statement prior to its being mailed to the Primary shareholders. If at any time prior to the Effective Time any information relating to GBC or Primary, or any of their respective affiliates, officers or directors, should be discovered by GBC or Primary which should be set forth in an amendment or supplement to the Proxy Statement so that the Proxy Statement would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the party that discovers such information shall promptly notify the other party hereto and, to the extent required by law, rules or regulations, an appropriate amendment or supplement describing such information shall be promptly disseminated by the parties to the Primary shareholders.

 

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(b)            Subject to the parties’ compliance with Section 6.5(a), Primary shall cause a meeting of its shareholders (the “Primary Meeting”) to be duly called and held as soon as reasonably practicable following receipt of the Fairness Order (but in no event later than one hundred and fifty (150) days of the date of this Agreement), for the purpose of obtaining (a) the Requisite Primary Vote required in connection with this Agreement and the Merger and (b) if so desired and agreed by GBC, a vote upon other matters of the type customarily brought before a meeting of shareholders in connection with the approval of a merger agreement or the transactions contemplated thereby. Subject to Section 6.5(c), Primary and its Board of Directors shall use its reasonable best efforts to obtain from the shareholders of Primary the Requisite Primary Vote, including by communicating to the shareholders of Primary its recommendation (and including such recommendation in the Proxy Statement) that the shareholders of Primary approve this Agreement and the transactions contemplated hereby (the “Primary Board Recommendation”), and Primary and its Board of Directors shall not (i) withhold, withdraw, modify or qualify in a manner adverse to GBC the Primary Board Recommendation, (ii) fail to make the Primary Board Recommendation in the Proxy Statement, (iii) adopt, approve, recommend or endorse an Acquisition Proposal, or publicly announce an intention to adopt, approve, recommend or endorse an Acquisition Proposal, (any of the foregoing actions described in clauses (i) through (iii) a “Recommendation Change”) or (iv) execute or enter into any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement or other similar agreement (other than an Acceptable Confidentiality Agreement) providing for an Acquisition Proposal (an “Alternative Acquisition Agreement”).

 

(c)            Subject to Section 8.1 and Section 8.2, prior to the receipt of the Requisite Primary Vote, the Board of Directors of Primary may submit this Agreement to its shareholders without recommendation (which, for the avoidance of doubt, shall constitute a Recommendation Change), in which event the Board of Directors of Primary may communicate the basis for its lack of recommendation to its shareholders in the Proxy Statement or an appropriate amendment or supplement thereto to the extent required by law (although the resolutions approving this Agreement as of the date hereof may not be rescinded or amended), if (i) the Board of Directors of Primary has received after the date hereof a bona fide Acquisition Proposal which did not result from a breach of Section 6.13 (other than any breach that is unintentional or immaterial), which it believes in good faith, after receiving the advice of its outside counsel and its financial advisors, constitutes a Superior Proposal (in which event, subject to compliance with this Section 6.5(c) and prior to the receipt of the Requisite Primary Vote, the Board of Directors of Primary may cause Primary to terminate this Agreement pursuant to Section 8.1(h) in order to enter into an Alternative Acquisition Agreement with respect to such Superior Proposal), and (ii) the Board of Directors of Primary, after receiving the advice of its outside counsel and its financial advisors, determines in good faith that failure to take such actions would be inconsistent with its fiduciary duties under applicable law, in each case, if, but only if, (1) Primary has complied in all material respects with Section 6.13, (2) Primary delivers to GBC at least three (3) business days’ prior written notice of its intention to take such action, and specifies the material terms and conditions of the Superior Proposal, (3) prior to taking such action, Primary negotiates in good faith with GBC, during the three (3) business day period following Primary’ delivery of the notice referred to in such sub-clause (2) above (to the extent GBC desires to so negotiate) any revision to the terms of this Agreement that GBC desires to propose, and (4) after the conclusion of such three (3) business day period, the Board of Directors of Primary determines in good faith, after giving effect to all of the adjustments or revisions (if any) which may be offered by GBC pursuant to sub-clause (3) above, that, such Acquisition Proposal continues to constitute a Superior Proposal and it would be inconsistent with its fiduciary duties under applicable law to make or continue to make the Primary Board Recommendation (it being agreed that, in the event that, following delivery of the notice referred to in sub-clause (2) above, there is any material revision to the terms of such Acquisition Proposal, including any revision in price or other improvement in economic terms, the three (3) business day period during which the parties agree to negotiate in good faith shall be extended, if applicable, to ensure that at least two (2) business days remain to negotiate subsequent to the time Primary notifies GBC of any such material revision (it being understood that there may be multiple extensions)).

 

(d)            Notwithstanding any Recommendation Change, unless this Agreement has been terminated, the Primary Meeting shall be convened and this Agreement shall be submitted to the shareholders of Primary at such meeting for the purpose of the shareholders of Primary considering and voting on approval of this Agreement and any other matters required to be approved by the shareholders of Primary in order to consummate the transactions contemplated by this Agreement. Additionally, unless this Agreement has been terminated, Primary shall not submit to or for a vote of its shareholders any Acquisition Proposal.

 

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(e)            Primary shall adjourn or postpone the Primary Meeting if (i) as of the date of such meeting there are insufficient shares of Primary Common Stock, as applicable, represented (either in person or by proxy) to constitute the quorum necessary to conduct the business of such meeting, (ii) as of the date of such meeting Primary has not received proxies representing a sufficient number of shares necessary for the approval of this Agreement by the shareholders of Primary, or (iii) required by applicable law in order to ensure that any required supplement or amendment to the Proxy Statement Primary was required to provide to its shareholders by applicable law is provided to the shareholders of Primary a reasonable amount of time prior to such meeting; provided that, the foregoing shall not restrict in any way each of the Board of Directors of Primary from making a Recommendation Change permitted by this Section 6.5 and disclosing such Recommendation Change and the basis and reasons therefor.

 

6.6            Legal Conditions to Merger. Subject in all respects to Section 6.1 and Section 6.5(c) of this Agreement, each of GBC and Primary shall, and shall cause its Subsidiaries to, use their reasonable best efforts (a) to take, or cause to be taken, all actions necessary, proper or advisable to comply promptly with all legal requirements that may be imposed on such party or its Subsidiaries with respect to the Merger and the Bank Merger and, subject to the conditions set forth in Article VII hereof, to consummate the transactions contemplated by this Agreement and (b) to obtain (and to cooperate with the other party to obtain) any material consent, authorization, order or approval of, or any exemption by, any Governmental Entity and any other third party that is required to be obtained by Primary or GBC or any of their respective Subsidiaries in connection with the Merger, the Bank Merger and the other transactions contemplated by this Agreement.

 

6.7            Employee Matters.

 

(a)            From the Effective Time through the twelve (12) month anniversary of the Effective Time, or, if earlier, their termination of employment or other service, GBC shall provide to employees of Primary and its Subsidiaries who at the Effective Time become employees of the Surviving Entity or its Subsidiaries (the “Continuing Employees”) the base salary or base wage that is no less favorable than that paid to similarly situated employees of GBC and its Subsidiaries and employee benefits that are no less favorable in the aggregate than those generally made available to similarly situated employees of GBC and its Subsidiaries; provided that for purposes of this Section 6.7(a), “employee benefits” shall exclude equity and equity-based compensation, long-term incentives, change in control or retention bonuses or benefits, defined benefit pension benefits, nonqualified deferred compensation, retiree medical benefits and severance benefits (it being understood that the Surviving Entity shall honor contractual obligations in effect as of the date hereof with respect to (x) the “employee benefits” referred to in this Section 6.7(a) pursuant to Primary Benefit Plans listed on Section 6.7(a) of the Primary Disclosure Schedule, subject to prospective changes permitted by the terms of the applicable Primary Benefit Plan and applicable law, (y) for senior officers subject to a change of control agreement as of the date of this Agreement, the severance benefits provided under such agreement; provided that the severance benefits shall be subject to 280G of the Code and any cut-backs required to avoid characterizing any such severance benefits as “excess parachute payments” within the meaning of Section 280G of the Code, to the extent applicable, and (z) for employees not subject to a change of control agreement or other severance arrangement or plan, severance benefits equal to two (2) weeks’ pay per year of service, with a minimum of four (4) weeks and a maximum of twenty-six (26) weeks, payable in normal payroll installments (no less frequently than monthly) beginning with the payroll period immediately following any termination of employment).

 

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(b)            For purposes of GBC employee benefit plans eligibility, participation, vesting and, solely for purposes of paid time off or vacation benefits, benefit accrual (except not for any other purpose or under any defined benefit pension plan, nonqualified deferred compensation plan, retiree medical plan or any frozen plan or to the extent that such credit would result in a duplication of benefits) under the GBC employee benefit plans in which the Continuing Employee is eligible to participate, service with or credited by Primary or any of its Subsidiaries for such Continuing Employees shall be treated as service with the Surviving Entity to the same extent that such service was taken into account under the analogous Primary Benefit Plan prior to the Effective Time. With respect to any GBC employee benefit plan that constitutes a “group health plan” within the meaning of Section 5000(b)(1) of the Code and in which any Continuing Employees first become eligible to participate in the calendar year which includes the Effective Time, and in which such Continuing Employees did not participate prior to the Effective Time, GBC shall use commercially reasonable efforts to (or to cause its Subsidiary to): (A) waive all preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to such employees and their eligible dependents, to the extent such pre-existing conditions, exclusions or waiting periods did not apply under the analogous Primary Benefit Plan, as the case may be, and (B) provide each Continuing Employee and his or her eligible dependents with credit for any co-payments and deductibles paid prior to the Effective Time under the analogous Primary Benefit Plan (to the same extent that such credit was given under the analogous Primary Benefit Plan) in satisfying any applicable deductible or out-of-pocket requirements under any such GBC employee benefit plan in which such Continuing Employee first becomes eligible to participate in the calendar year which includes the Effective Time, in each case, subject to any requirements or limitation imposed by the administrative service providers and insurers with respect to the applicable GBC employee benefit plan and GBC receiving all applicable information as reasonably requested by GBC, including information regarding pre-Closing co-payments and deductibles from Primary or the applicable Continuing Employee or dependent.

 

(c)            If requested by GBC in writing delivered to Primary not less than twenty (20) business days before the Closing Date, the Board of Directors of Primary (or the appropriate committee or officers thereof) shall adopt resolutions and take such corporate action as is necessary or appropriate to terminate the Primary 401(k) Plan (the “Primary 401(k) Plan”), effective as of the day prior to the Closing Date and contingent upon the occurrence of the Effective Time. If GBC requests that the Primary 401(k) Plan be terminated, (i) Primary shall provide GBC with evidence that such plan has been terminated (the form and substance of which shall be subject to reasonable review and comment by GBC in advance of any such action) not later than two (2) days immediately preceding the Closing Date, and (ii) the Continuing Employees shall be eligible to participate, effective as of the Effective Time, in a 401(k) plan sponsored or maintained by GBC, the Surviving Entity or one of their Subsidiaries (the “GBC 401(k) Plan”) in accordance with the terms of such plan, it being agreed that there shall be no gap in participation in a tax-qualified defined contribution plan. GBC and Primary shall take any and all actions as may be reasonably required, including amendments to the Primary 401(k) Plan and/or the GBC 401(k) Plan, to permit the Continuing Employees to make rollover contributions to the GBC 401(k) Plan of “eligible rollover distributions” (within the meaning of Section 401(a)(31) of the Code) in the form of cash, notes (in the case of loans), GBC Common Stock or a combination thereof in an amount equal to the full account balance distributed to such employee from the Primary 401(k) Plan. Notwithstanding the foregoing, Primary may continue to accrue its employer contributions to such 401(k) plan on an ongoing basis consistent with ordinary business practices, and shall make the employer contributions provided by the plan for the 2024 plan year at the close of the 2024 plan year and shall make the employer contributions provided by the plan for the portion of the 2025 plan year through the plan’s termination prior to Closing based on year-to-date deferrals and compensation, and any service requirements required for allocation of such contribution shall be adjusted accordingly to reflect the partial plan year prior to Closing.

 

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(d)            On or by the Closing Date, each Primary officer identified on Section 6.7(d) of the Primary Disclosure Schedule shall enter into a settlement agreement in the form attached hereto as Exhibit D.

 

(e)            Nothing in this Agreement shall confer upon any employee, officer, director or consultant of GBC or Primary or any of their Subsidiaries or affiliates any right to continue in the employ or service of the Surviving Entity, Primary, GBC or any Subsidiary or affiliate thereof, or shall interfere with or restrict in any way the rights of the Surviving Entity, Primary, GBC or any Subsidiary or affiliate thereof to discharge or terminate the services of any employee, officer, director or consultant of GBC or Primary or any of their Subsidiaries or affiliates at any time for any reason whatsoever, with or without cause. Nothing in this Agreement shall be deemed to (i) establish, amend, or modify any Primary Benefit Plan or GBC employee benefit plan or any other benefit or employment plan, program, agreement or arrangement, or (ii) alter or limit the ability of the Surviving Entity or any of its Subsidiaries or affiliates to amend, modify or terminate any particular Primary Benefit Plan or GBC employee benefit plan or any other benefit or employment plan, program, agreement or arrangement after the Effective Time. Without limiting the generality of Section 9.12, nothing in this Agreement, express or implied, is intended to or shall confer upon any person, including any current or former employee, officer, director or consultant of GBC or Primary or any of their Subsidiaries or affiliates, any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

6.8            Indemnification; Directors’ and Officers’ Insurance.

 

(a)            From and after the Effective Time, the Surviving Entity shall indemnify and hold harmless and shall advance expenses as incurred, in each case, to the fullest extent permitted by applicable law, the Primary Articles, the Primary Bylaws and the governing or organizational documents of any Primary Subsidiary, each present and former director, officer or employee of Primary and its Subsidiaries (in each case, when acting in such capacity) (collectively, the “Primary Indemnified Parties”) against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, damages or liabilities incurred in connection with any threatened or actual claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, whether arising before or after the Effective Time, arising out of, or pertaining to, the fact that such person is or was a director, officer or employee of Primary or any of its Subsidiaries and pertaining to matters, acts or omissions existing or occurring at or prior to the Effective Time, including matters, acts or omissions occurring in connection with the approval of this Agreement and the transactions contemplated by this Agreement; provided, that in the case of advancement of expenses, any Primary Indemnified Party to whom expenses are advanced provides an undertaking to repay such advances if it is ultimately determined that such Primary Indemnified Party is not entitled to indemnification. The Surviving Entity shall reasonably cooperate with the Primary Indemnified Parties, and the Primary Indemnified Parties shall reasonably cooperate with the Surviving Entity, in the defense of any such claim, action, suit, proceeding or investigation. Without limiting the indemnification and other rights provided in this clause (a), all rights to indemnification and all limitations on liability existing in favor of the Primary Indemnified Parties as provided in any indemnification agreement in existence on the date of this Agreement and set forth on Section 6.8 of the Primary Disclosure Schedule shall survive the Merger and shall continue in full force and effect to the fullest extent permitted by law, and shall be honored by the Surviving Entity and its Subsidiaries or their respective successors as if they were the indemnifying party thereunder, without any amendment thereto.

 

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(b)            For a period of six (6) years after the Effective Time, the Surviving Entity shall cause to be maintained in effect the current policies of directors’ and officers’ liability insurance maintained by Primary (provided, that the Surviving Entity may substitute therefor policies with a substantially comparable insurer of at least the same coverage and amounts containing terms and conditions that are no less advantageous to the insured) with respect to claims against the present and former officers and directors of Primary or any of its Subsidiaries arising from facts or events which occurred at or before the Effective Time (including the approval of this Agreement and the transactions contemplated by this Agreement); provided, however, that the Surviving Entity shall not be obligated to expend, on an annual basis, an amount in excess of 300% of the current annual premium paid as of the date hereof by Primary for such insurance (the “Premium Cap”), and if such premiums for such insurance would at any time exceed the Premium Cap, then the Surviving Entity shall cause to be maintained policies of insurance which, in the Surviving Entity’s good faith determination, provide the maximum coverage available at an annual premium equal to the Premium Cap. In lieu of the foregoing, GBC or Primary, in consultation with, but only upon the consent, of GBC, may (and at the request of GBC, Primary shall use its reasonable best efforts to) obtain at or prior to the Effective Time a six (6)-year “tail” policy under Primary’ existing directors’ and officers’ insurance policy providing equivalent coverage to that described in the preceding sentence if and to the extent that the same may be obtained for an amount that, in the aggregate, does not exceed the Premium Cap.

 

(c)            The obligations of the Surviving Entity, GBC or Primary under this Section 6.8 shall not be terminated or modified after the Effective Time in a manner so as to adversely affect any Primary Indemnified Party or any other person entitled to the benefit of this Section 6.8 without the prior written consent of the affected Primary Indemnified Party or affected person.

 

(d)            The provisions of this Section 6.8 shall survive the Effective Time and are intended to be for the benefit of, and shall be enforceable by, each Primary Indemnified Party and his or her heirs and representatives. If the Surviving Entity or any of its successors or assigns (i) consolidates with or merges into any other person and is not the continuing or surviving entity of such consolidation or merger, or (ii) transfers all or substantially all of its assets or deposits to any other person or engages in any similar transaction, then in each such case, the Surviving Entity will cause proper provision to be made so that the successors and assigns of the Surviving Entity will expressly assume the obligations set forth in this Section 6.8.

 

6.9            Additional Agreements. In case at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement (including any merger between a Subsidiary of GBC, on the one hand, and a Subsidiary of Primary, on the other hand) or to vest the Surviving Entity with full title to all properties, assets, rights, approvals, immunities and franchises of any of the parties to the Merger or the Bank Merger, the proper officers and directors of each party to this Agreement and their respective Subsidiaries shall take all such necessary action as may be reasonably requested by GBC.

 

6.10            Advice of Changes. GBC and Primary shall each promptly advise the other party of any effect, change, event, circumstance, condition, occurrence or development (i) that has had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on such first party, or (ii) that such first party believes would or would reasonably be expected to cause or constitute a material breach of any of its representations, warranties, obligations, covenants or agreements contained in this Agreement that reasonably could be expected to give rise, individually or in the aggregate, to the failure of a condition in Article VII; provided, that any failure to give notice in accordance with the foregoing with respect to any breach shall not be deemed to constitute a violation of this Section 6.10 or the failure of any condition set forth in Section 7.2 or 7.3 to be satisfied, or otherwise constitute a breach of this Agreement by the party failing to give such notice, in each case, unless the underlying breach would independently result in a failure of the conditions set forth in Section 7.2 or 7.3 to be satisfied; and provided, further, that the delivery of any notice pursuant to this Section 6.10 shall not cure any breach of, or noncompliance with, any other provision of this Agreement or limit the remedies available to the party receiving such notice.

 

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6.11            Shareholder Litigation. Each party shall give the other party prompt notice of any shareholder litigation against such party or its directors or officers relating to the transactions contemplated by this Agreement. Primary shall (i) give GBC the opportunity to participate (at GBC’s expense) in the defense or settlement of any such litigation, (ii) give GBC a reasonable opportunity to review and comment on all filings or responses to be made by Primary in connection with any such litigation, and will in good faith take such comments into account and (iii) not agree to settle any such litigation without GBC’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed; provided, that the other party shall not be obligated to consent to any settlement which does not include a full release of such other party and its affiliates or which imposes an injunction or other equitable relief after the Effective Time upon the Surviving Entity or any of its affiliates.

 

6.12            Corporate Governance. Prior to the Effective Time, the Board of Directors of GBC shall take all actions necessary so that H. Boyd Pettit III and Mark Scheinfeld, each a director of Primary, immediately prior to the Effective Time shall be appointed to the Board of Directors of GBC as of the Effective Time; provided that, if either H. Boyd Pettit III and Mark Scheinfeld fails for any reason to qualify, elects not to serve, or otherwise is not appointed as a director of GBC, GBC shall, in consultation with Primary, however, in its sole discretion, appoint another member of the Board of Directors of Primary to the Board of Directors of GBC (the Primary directors being appointed hereunder, collectively, the “Primary Continuing Directors”). The Board of Directors of the Surviving Entity (or the appropriate committee thereof) shall cause the Primary Continuing Directors to be nominated for election at the 2025 annual meeting of shareholders of the Surviving Entity.

 

6.13            Acquisition Proposals. Primary will, and will use reasonable best efforts to cause its Representatives to, immediately cease and cause to be terminated any activities, discussions or negotiations conducted before the date of this Agreement with any person other than GBC with respect to any Acquisition Proposal. Primary agrees that it will not, and will cause each of its Subsidiaries not to, and use its reasonable best efforts to cause its and their respective officers, directors, employees, agents, advisors and representatives (collectively, “Representatives”) not to, directly or indirectly, (i) initiate, solicit, knowingly encourage or knowingly facilitate any inquiries or proposals with respect to any Acquisition Proposal, (ii) engage or participate in any negotiations with any person concerning any Acquisition Proposal, (iii) provide any confidential or nonpublic information or data to, or have or participate in any discussions with, any person relating to any Acquisition Proposal (except to (x) notify a person that has made or, to the knowledge of such party, is making any inquiries with respect to, or is considering making, an Acquisition Proposal, of the existence of the provisions of this Section 6.13, and (y) to seek and obtain legal or financial advice from Primary’ outside counsel and outside financial advisors), or (iv) unless this Agreement has been terminated in accordance with its terms, approve or enter into any term sheet, letter of intent, commitment, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement or other similar agreement (whether written or oral, binding or nonbinding) (other than an Acceptable Confidentiality Agreement entered into in accordance with this Section 6.13) in connection with or relating to any Acquisition Proposal. Notwithstanding the foregoing, in the event that after the date of this Agreement and prior to the receipt of the Requisite Primary Vote, Primary receives an unsolicited bona fide written Acquisition Proposal, Primary may, and may permit its Subsidiaries and its and its Subsidiaries’ Representatives to, furnish or cause to be furnished confidential or nonpublic information or data and participate in such negotiations or discussions with the person making the Acquisition Proposal if the Board of Directors of Primary concludes in good faith (after receiving the advice of outside counsel and, with respect to financial matters, its outside financial advisors) that failure to take such actions would be more likely than not to be inconsistent with its fiduciary duties under applicable law; provided, that, prior to furnishing any confidential or nonpublic information permitted to be provided pursuant to this sentence, Primary shall have provided such information to GBC and shall have entered into a confidentiality agreement with the person making such Acquisition Proposal on terms no less favorable to Primary than the Non-Disclosure Agreement (“Acceptable Confidentiality Agreement”), which confidentiality agreement shall not provide such person with any exclusive right to negotiate with Primary. Primary will promptly (and, in any event, within one business day after receipt) advise GBC following receipt of any Acquisition Proposal or any inquiry which could reasonably be expected to lead to an Acquisition Proposal and the substance thereof (including the material terms and conditions of and the identity of the person making such inquiry or Acquisition Proposal), and will keep GBC apprised of any related developments, discussions and negotiations on a current basis, including any amendments to or revisions of the terms of such inquiry or Acquisition Proposal. Primary shall use its reasonable best efforts to enforce any existing confidentiality or standstill agreements to which it or any of its Subsidiaries is a party in accordance with the terms thereof. It is agreed that any violation of the restrictions on Primary set forth in this Section 6.13 (other than any violation that is unintentional or immaterial) by any officer, director, employee, consultant, advisor or other representative of Primary or any of its Subsidiaries, in each case acting on behalf of Primary or any of its Subsidiaries, shall be a breach of this Section 6.13 by Primary.

 

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6.14            Public Announcements. Primary and GBC agree that the initial press release with respect to the execution and delivery of this Agreement shall be a release mutually agreed to by the parties. Thereafter and prior to the Effective Time, each of the parties agrees that no public release concerning this Agreement or the transactions contemplated hereby shall be issued by any party without the prior written consent of the other party (which consent shall not be unreasonably withheld, conditioned or delayed), except (i) as required by applicable law or the rules or regulations of any applicable Governmental Entity or stock exchange to which the relevant party is subject, in which case the party required to make the release or announcement shall consult with the other party about, and allow the other party reasonable time to comment on, such release or announcement in advance of such issuance, or (ii) for such releases or announcements that are consistent with other such releases or announcement made after the date of this Agreement in compliance with this Section 6.14. It is understood that GBC shall assume primary responsibility for the preparation of joint press releases relating to this Agreement, the Merger and the other transactions contemplated hereby.

 

6.15            Takeover Statutes. Neither Primary nor its Board of Directors shall take any action that would cause any Takeover Statute to become applicable to this Agreement, the Merger, or any of the other transactions contemplated hereby, and each shall take all necessary steps to exempt (or ensure the continued exemption of) the Merger and the other transactions contemplated hereby from any applicable Takeover Statute now or hereafter in effect. If any Takeover Statute may become, or may purport to be, applicable to the transactions contemplated hereby, each party and the members of their respective Boards of Directors will grant such approvals and take such actions as are necessary so that the transactions contemplated by this Agreement may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to eliminate or minimize the effects of any Takeover Statute on any of the transactions contemplated by this Agreement, including, if necessary, challenging the validity or applicability of any such Takeover Statute.

 

6.16            Certain Tax Matters. Each of Primary and GBC shall use its reasonable best efforts to cause the Merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Code. Each of Primary and GBC will, and will cause their respective Affiliates to, maintain all books and records and file all federal, state, and local income Tax Returns and schedules thereto in a manner consistent with the Merger’s qualification as a reorganization under Section 368(a)(1)(A) of the Code (and comparable provisions of any applicable state or local law).

 

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Article VII

 

CONDITIONS PRECEDENT

 

7.1            Conditions to Each Party’s Obligation to Effect the Merger. The respective obligations of the parties to effect the Merger shall be subject to the satisfaction at or prior to the Effective Time of the following conditions:

 

(a)            Shareholder Approval. The Requisite Primary Vote shall have been obtained.

 

(b)            Regulatory Approvals. (i) All Requisite Regulatory Approvals shall have been obtained and shall remain in full force and effect and all statutory waiting periods in respect thereof shall have expired or been terminated and (ii) no such Requisite Regulatory Approval shall have resulted in the imposition of any Materially Burdensome Regulatory Condition.

 

(c)            No Injunctions or Restraints; Illegality. No order, injunction or decree issued by any court or Governmental Entity of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Merger, the Bank Merger or any of the other transactions contemplated by this Agreement shall be in effect. No law, statute, rule, regulation, order, injunction or decree shall have been enacted, entered, promulgated or enforced by any Governmental Entity which prohibits or makes illegal consummation of the Merger, the Bank Merger or any of the other transactions contemplated by this Agreement.

 

(d)            Fairness Order. The Fairness Order shall have been obtained and shall remain in full force and effect.

 

7.2            Conditions to Obligations of GBC. The obligation of GBC to effect the Merger is also subject to the satisfaction, or waiver by GBC, at or prior to the Effective Time, of the following conditions:

 

(a)            Representations and Warranties. The representations and warranties of Primary set forth in Section 3.2(a) and Section 3.8(a) (in each case, after giving effect to the lead-in to Article III) shall be true and correct (other than, in the case of Section 3.2(a), such failures to be true and correct as are de minimis), in each case, as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent such representations and warranties speak as of an earlier date, in which case as of such earlier date), and the representations and warranties of Primary set forth in Section 3.1(a), Section 3.1(b) (but only with respect to Primary Bank), Section 3.3(a), Section 3.3(b)(i) and Section 3.7 (read, in each case, without giving effect to any qualification as to materiality or Material Adverse Effect set forth in such representations or warranties but, in each case, after giving effect to the lead-in to Article III) shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent such representations and warranties speak as of an earlier date, in which case as of such earlier date). All other representations and warranties of Primary set forth in this Agreement (read without giving effect to any qualification as to materiality or Material Adverse Effect set forth in such representations or warranties but, in each case, after giving effect to the lead-in to Article III) shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent such representations and warranties speak as of an earlier date, in which case as of such earlier date); provided, however, that for purposes of this sentence, such representations and warranties shall be deemed to be true and correct unless the failure or failures of such representations and warranties to be so true and correct, either individually or in the aggregate, and without giving effect to any qualification as to materiality or Material Adverse Effect set forth in such representations or warranties, has had or would reasonably be expected to have a Material Adverse Effect on Primary or the Surviving Entity. GBC shall have received a certificate dated as of the Closing Date and signed on behalf of Primary by the Chief Executive Officer or the Chief Financial Officer of Primary to the foregoing effect.

 

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(b)            Performance of Obligations of Primary. Primary shall have performed in all material respects the obligations, covenants and agreements required to be performed by it under this Agreement at or prior to the Closing Date, and GBC shall have received a certificate dated as of the Closing Date and signed on behalf of Primary by the Chief Executive Officer or the Chief Financial Officer of Primary to such effect.

 

(c)            Material Adverse Effect. There shall not have been any Material Adverse Effect with respect to Primary between the date hereof and the Closing Date.

 

7.3            Conditions to Obligations of Primary. The obligation of Primary to effect the Merger is also subject to the satisfaction, or waiver by Primary, at or prior to the Effective Time of the following conditions:

 

(a)            Representations and Warranties. The representations and warranties of GBC set forth in Section 4.2(a)  (in each case, after giving effect to the lead-in to Article IV) shall be true and correct (other than, in the case of Section 4.2(a), such failures to be true and correct as are de minimis), in each case, as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent such representations and warranties speak as of an earlier date, in which case as of such earlier date), and the representations and warranties of GBC set forth in Section 4.1(a), Section 4.1(b) (but only with respect to GBC Bank), Section 4.2(b) (but only with respect to GBC Bank), Section 4.3(a); Section 4.3(b)(i) and Section 4.7 (read without giving effect to any qualification as to materiality or Material Adverse Effect set forth in such representations or warranties but, in each case, after giving effect to the lead-in to Article IV) shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent such representations and warranties speak as of an earlier date, in which case as of such earlier date). All other representations and warranties of GBC set forth in this Agreement (read without giving effect to any qualification as to materiality or Material Adverse Effect set forth in such representations or warranties but, in each case, after giving effect to the lead-in to Article IV) shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent such representations and warranties speak as of an earlier date, in which case as of such earlier date), provided, however, that for purposes of this sentence, such representations and warranties shall be deemed to be true and correct unless the failure or failures of such representations and warranties to be so true and correct, either individually or in the aggregate, and without giving effect to any qualification as to materiality or Material Adverse Effect set forth in such representations or warranties, has had or would reasonably be expected to have a Material Adverse Effect on GBC. Primary shall have received a certificate dated as of the Closing Date and signed on behalf of GBC by the Chief Executive Officer or the Chief Financial Officer of GBC to the foregoing effect.

 

(b)            Performance of Obligations of GBC. GBC shall have performed in all material respects the obligations, covenants and agreements required to be performed by it under this Agreement at or prior to the Closing Date, and Primary shall have received a certificate dated as of the Closing Date and signed on behalf of GBC by the Chief Executive Officer or the Chief Financial Officer of GBC to such effect.

 

(c)            Material Adverse Effect. There shall not have been any Material Adverse Effect with respect to GBC between the date hereof and the Closing Date.

 

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Article VIII

 

TERMINATION AND AMENDMENT

  

8.1            Termination. This Agreement may be terminated at any time prior to the Effective Time, whether before or after receipt of the Requisite Primary Vote (except in the case of Section 8.1(e) and Section 8.1(f)):

 

(a)            by mutual written consent of GBC and Primary;

 

(b)            by either GBC or Primary if any Governmental Entity that must grant a Requisite Regulatory Approval has denied approval of the Merger or the Bank Merger and such denial has become final and nonappealable or any Governmental Entity of competent jurisdiction shall have issued a final and nonappealable order, injunction, decree or other legal restraint or prohibition permanently enjoining or otherwise prohibiting or making illegal the consummation of the Merger or the Bank Merger, unless the failure to obtain a Requisite Regulatory Approval shall be due to the failure of the party seeking to terminate this Agreement to perform or observe the obligations, covenants and agreements of such party set forth herein;

 

(c)            by either GBC or Primary if the Merger shall not have been consummated on or before the twelve (12) month anniversary of the date of this Agreement (the “Termination Date”), unless the failure of the Closing to occur by such date shall be due to the failure of the party seeking to terminate this Agreement to perform or observe the obligations, covenants and agreements of such party set forth herein;

 

(d)            by either GBC or Primary (provided, that the terminating party is not then in material breach of any representation, warranty, obligation, covenant or other agreement contained herein) if there shall have been a breach of any of the obligations, covenants or agreements or any of the representations or warranties (or any such representation or warranty shall cease to be true) set forth in this Agreement on the part of Primary, in the case of a termination by GBC, or GBC, in the case of a termination by Primary, which breach or failure to be true, either individually or in the aggregate with all other breaches by such party (or failures of such representations or warranties to be true), would constitute, if occurring or continuing on the Closing Date, the failure of a condition set forth in Section 7.2, in the case of a termination by GBC, or Section 7.3, in the case of a termination by Primary, and which is not cured within thirty (30) days following written notice to Primary, in the case of a termination by GBC, or GBC, in the case of a termination by Primary, or by its nature or timing cannot be cured during such period (or such fewer days as remain prior to the Termination Date);

 

(e)            by either GBC or Primary, at any time prior to or on the Closing Date, if, after the date hereof, there shall have occurred and be continuing any events or occurrences that, individually or in the aggregate have had or would reasonably be expected to have a Material Adverse Effect on Primary, in the case of a termination by GBC, or on GBC, in the case of a termination by Primary;

 

(f)             by GBC, prior to such time that the Requisite Primary Vote is obtained, if (i) Primary or the Board of Directors of Primary shall have made a Recommendation Change, or (ii) Primary or the Board of Directors of Primary shall have committed a Willful and Material Breach (as defined below) of its obligations under Section 6.5 or 6.13;

 

(g)            by either Primary or GBC, if the Requisite Primary Vote shall not have been obtained upon a vote thereon taken at the Primary Meeting (including any adjournment or postponement thereof); or

 

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(h)            by Primary in order to enter into an Alternative Acquisition Agreement with respect to a Superior Proposal if, prior to the time the Requisite Primary Vote is obtained, the Board of Directors of Primary authorizes Primary to enter into an Alternative Acquisition Agreement in response to a Superior Proposal, to the extent permitted by and in accordance with Section 6.5(c); provided that concurrently with such termination, Primary pays, or causes to be paid, to GBC, in immediately available funds the Termination Fee pursuant to Section 8.2.

  

8.2            Effect of Termination.

 

(a)            In the event of termination of this Agreement by either GBC or Primary as provided in Section 8.1, this Agreement shall forthwith become void and have no effect, and none of GBC, Primary, any of their respective Subsidiaries or any of the officers or directors of any of them shall have any liability of any nature whatsoever hereunder, or in connection with the transactions contemplated hereby, except that (i) Section 6.2(b) (Access to Information; Confidentiality), Section 6.14 (Public Announcements), this Section 8.2 and Article IX (other than Section 9.13) shall survive any termination of this Agreement, and (ii) notwithstanding anything to the contrary contained in this Agreement, neither GBC nor Primary shall be relieved or released from any liabilities or damages arising out of its actual and intentional common law fraud in such party’s making of its representations and warranties set forth in this Agreement (“Fraud”) or its willful and material breach of any provision of this Agreement.

 

(b)            In the event that after the date of this Agreement and prior to the termination of this Agreement, a bona fide Acquisition Proposal shall have been communicated to or otherwise made known to the Board of Directors or senior management of Primary or shall have been made directly to the shareholders of Primary or any person shall have publicly announced (and not withdrawn at least two (2) business days prior to the Primary Meeting) an Acquisition Proposal, in each case, with respect to Primary, and (A)(x) thereafter this Agreement is terminated by either GBC or Primary pursuant to Section 8.1(c) without the Requisite Primary Vote having been obtained (and all other conditions set forth in Section 7.1 and Section 7.3 were satisfied or were capable of being satisfied prior to such termination), (y) thereafter this Agreement is terminated by GBC pursuant to Section 8.1(d) as a result of a Willful and Material Breach or (z) thereafter this Agreement is terminated by GBC or Primary pursuant to Section 8.1(g) and (B) prior to the date that is twelve (12) months after the date of such termination, Primary enters into a definitive agreement or consummates a transaction with respect to an Acquisition Proposal (whether or not the same Acquisition Proposal as that referred to above), then Primary shall, on the earlier of the date it enters into such definitive agreement and the date of consummation of such transaction, pay GBC, by wire transfer of same-day funds, a fee equal to $1,100,000 (the “Termination Fee”); provided, that for purposes of this Section 8.2(b), all references in the definition of Acquisition Proposal to “twenty-five percent (25%)” shall instead refer to “fifty percent (50%).”

 

(c)            In the event that this Agreement is terminated by GBC pursuant to Section 8.1(f) then Primary shall pay GBC, by wire transfer of same-day funds, the Termination Fee within two (2) business days of the date of termination.

 

(d)            In the event that this Agreement is terminated by Primary pursuant to Section 8.1(h), then Primary shall pay GBC, by wire transfer of same-day funds, the Termination Fee concurrently with such termination.

 

(e)            Notwithstanding anything to the contrary in this Agreement, but without limiting the right of any party to recover liabilities or damages arising out of the other party’s Fraud or Willful and Material Breach (as defined above) of any provision of this Agreement, in no event shall either party be required to pay the Termination Fee more than once.

 

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(f)             Each of GBC and Primary acknowledges that the agreements contained in this Section 8.2 are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, the other party would not enter into this Agreement; accordingly, if Primary or GBC fails promptly to pay the amount due pursuant to this Section 8.2, and, in order to obtain such payment, the other party commences a suit which results in a judgment against the non-paying party for the Termination Fee or any portion thereof, such non-paying party shall pay the costs and expenses of the other party (including attorneys’ fees and expenses) in connection with such suit. In addition, if Primary or GBC fails to pay the amounts payable pursuant to this Section 8.2, then such party shall pay interest on such overdue amounts at a rate per annum equal to the “prime rate” published in the Wall Street Journal on the date on which such payment was required to be made for the period commencing as of the date that such overdue amount was originally required to be paid and ending on the date that such overdue amount is actually paid in full. The amounts payable by Primary pursuant to Section 8.1(g), Section 8.2(b) and Section 8.2(c), respectively, and this Section 8.2(f), constitute liquidated damages and not a penalty, and, except in the case of Fraud or Willful and Material Breach (as defined above), shall be the sole monetary remedy of GBC in the event of a termination of this Agreement specified in such applicable section.

  

Article IX

 

GENERAL PROVISIONS

 

9.1            Definitions. Except as otherwise provided herein, the capitalized terms set forth below shall have the following meanings:

 

“Acquisition Proposal” shall mean, other than the transactions contemplated by this Agreement, any offer, proposal or inquiry relating to, or any third-party indication of interest in, (i) any acquisition or purchase, direct or indirect, of twenty-five percent (25%) or more of the consolidated assets of Primary and its Subsidiaries or twenty-five percent (25%) or more of any class of equity or voting securities of Primary or its Subsidiaries whose assets, individually or in the aggregate, constitute twenty-five percent (25%) or more of the consolidated assets of Primary, (ii) any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in such third party beneficially owning twenty-five percent (25%) or more of any class of equity or voting securities of Primary or its Subsidiaries whose assets, individually or in the aggregate, constitute twenty-five percent (25%) or more of the consolidated assets of Primary, or (iii) a merger, consolidation, share exchange, business combination, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving Primary or its Subsidiaries whose assets, individually or in the aggregate, constitute twenty-five percent (25%) or more of the consolidated assets of Primary.

 

“Cash Election Threshold” means a number of shares of Primary Common Stock equal to the product of (i) the total number of shares of Primary Common Stock issued and outstanding as of the Election Deadline and (ii) 0.20, rounded down to the nearest whole number.

 

“Election Deadline” shall mean 5:00 p.m., Eastern time, on the later of (i) the date of the Primary Meeting and (ii) the date that GBC and Primary shall agree is as near as practicable to three (3) Business Days prior to the expected Closing Date.

 

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“Material Adverse Effect” means, with respect to GBC, Primary or the Surviving Entity, as the case may be, any effect, change, event, circumstance, condition, occurrence or development that, either individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on (i) the business, properties, assets, liabilities, results of operations or financial condition of such party and its Subsidiaries taken as a whole (provided, however, that, with respect to this clause (i), Material Adverse Effect shall not be deemed to include the impact of (A) changes, after the date hereof, in U.S. generally accepted accounting principles (“GAAP”) or applicable regulatory accounting requirements), (B) changes, after the date hereof, in laws, rules or regulations of general applicability to companies in the industries in which such party and its Subsidiaries operate, or interpretations thereof by courts or Governmental Entities (as defined below), (C) changes, after the date hereof, in global, national or regional political conditions (including the outbreak of war or acts of terrorism) or in economic or market (including equity, credit and debt markets, as well as changes in interest rates) conditions affecting the financial services industry generally and not specifically relating to such party or its Subsidiaries, (D) changes, after the date hereof, resulting from hurricanes, earthquakes, tornados, naturally-occurring floods or other natural disasters or from any outbreak of any disease or other public health event (including epidemics or pandemics), or (E) public disclosure of the execution of this Agreement, public disclosure or consummation of the transactions contemplated hereby (including any effect on a party’s relationships with its customers or employees) (it being understood that the foregoing shall not apply for purposes of the representations and warranties in Sections 3.3(b), 3.4, 4.3(b) or 4.4) or actions expressly required by this Agreement or that are taken with the prior written consent of the other party in contemplation of the transactions contemplated hereby (it being understood that this Clause (E) shall not apply to a breach of any representation or warranty related to the announcement, pendency or consummation of the transactions contemplated hereby); except, (i) with respect to subclauses (A), (B), (C), or (D) to the extent that the effects of such change are materially disproportionately adverse to the business, properties, assets, liabilities, results of operations or financial condition of such party and its Subsidiaries, taken as a whole, as compared to other companies in the industry in which such party and its Subsidiaries operate, or (ii) the ability of such party to timely consummate the transactions contemplated hereby.

  

“Merger Consideration” means the sum of (i) the aggregate Per Share Merger Consideration and (ii) the aggregate Fractional Share Cash-in-Lieu Amounts.

 

“Per Share Cash Consideration” means cash in the amount of $13.50.

 

“Per Share Merger Consideration” means either the Per Share Cash Consideration or the Per Share Stock Consideration that a share of Primary Common Stock is entitled to receive pursuant to the terms and subject to the conditions of this Agreement.

 

“Per Share Stock Consideration” means 0.5870 fully paid and nonassessable share of GBC Common Stock.

 

“Proxy Statement” means the proxy statement and prospectus and other proxy solicitation materials of Primary relating to the Primary Meeting.

 

“Requisite Regulatory Approvals” shall mean all regulatory authorizations, consents, waivers, orders and approvals (and the expiration or termination of all statutory waiting periods in respect thereof) (i) from the FDIC, the DBF and the Federal Reserve (in respect of the Merger or the Bank Merger) or (ii) referred to in Section 3.4 or Section 4.4 that are necessary to consummate the transactions contemplated by this Agreement (including the Merger and the Bank Merger), except, in the case of this clause (ii), for the Fairness Determination and any such authorizations, consents, waivers, orders or approvals the failure of which to be obtained would not be material to the Surviving Entity.

 

“Subsidiary” means any subsidiary of such person as defined in the BHC Act.

 

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“Superior Proposal” shall mean any bona fide written Acquisition Proposal which the board of directors of Primary determines, in good faith, after taking into account all legal, financial, regulatory, and other aspects of such proposal (including the amount, form, and timing of payment of consideration, the financing thereof, any associated break-up or termination fees, including those provided for in this Agreement, expense reimbursement provisions, and all conditions to consummation) and the person making the proposal, and after consulting with its outside financial advisor and outside legal counsel, is (i) more favorable from a financial point of view to Primary’ shareholders than the transactions contemplated by this Agreement (taking into account any proposal by GBC to amend the terms of this Agreement pursuant to Section 6.5(c)) and (ii) reasonably likely to be timely consummated on the terms set forth; provided, however, that for purposes of this definition of Superior Proposal, references to “twenty-five percent (25%)” in the definition of Acquisition Proposal shall be deemed to be references to “fifty percent (50%).”

 

“Tax” or “Taxes” means all federal, state, local, and foreign income, excise, gross receipts, ad valorem, profits, gains, property, capital, sales, transfer, use, license, payroll, employment, social security, severance, unemployment, withholding, duties, windfall profits, intangibles, franchise, backup withholding, value added, alternative or add-on minimum, escheat, unclaimed property, estimated and other taxes, charges, levies or like assessments, in each case, in the nature of a Tax and imposed by a Governmental Entity with jurisdiction over Taxes, together with all penalties and additions to tax and interest thereon.

 

“Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof, supplied or required to be supplied to a Governmental Entity.

 

“Willful and Material Breach” shall mean a material breach of, or material failure to perform any of the covenants or other agreements contained in, this Agreement that is a consequence of an act or failure to act by the breaching or non-performing party with actual knowledge that such party’s act or failure to act would, or would reasonably be expected to, result in or constitute such breach of or such failure of performance under this Agreement.

 

9.2            Amendment. Subject to compliance with applicable law, this Agreement may be amended by the parties hereto at any time before or after the receipt of the Requisite Primary Vote; provided, however, that after the receipt of the Requisite Primary Vote, there may not be, without further approval of the shareholders of Primary any amendment of this Agreement that requires such further approval under applicable law. This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing signed on behalf of each of the parties hereto.

 

9.3            Extension; Waiver. At any time prior to the Effective Time, each of the parties hereto may, to the extent legally allowed, (a) extend the time for the performance of any of the obligations or other acts of the other party hereto, (b) waive any inaccuracies in the representations and warranties of the other party contained in this Agreement or in any document delivered by such other party pursuant hereto, and (c) waive compliance with any of the agreements or satisfaction of any conditions for its benefit contained in this Agreement; provided, however, that after the receipt of the Requisite Primary Vote, there may not be, without further approval of the shareholders of Primary any extension or waiver of this Agreement or any portion thereof that requires such further approval under applicable law. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party, but such extension or waiver or failure to insist on strict compliance with an obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.

 

9.4            Nonsurvival of Representations, Warranties and Agreements. None of the representations, warranties, obligations, covenants and agreements in this Agreement (or in any certificate delivered pursuant to this Agreement) shall survive the Effective Time, except for Sections 6.8 and 6.12 and for those other obligations, covenants and agreements contained in this Agreement which by their terms apply in whole or in part after the Effective Time.

 

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9.5            Expenses. Except as otherwise expressly provided in this Agreement, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expense.

 

9.6            Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, by e-mail transmission (with confirmation), mailed by registered or certified mail (return receipt requested) or delivered by an express courier (with confirmation) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

 

(a)            if to Primary, to:

 

Primary Bancshares Corporation

3880 Roswell Road

Atlanta, GA 30342

Attention:             Mr. David Coxon

Email:                     [***]

 

With a copy (which shall not constitute notice) to:

 

Nelson Mullins Riley & Scarborough LLP

201 17th Street NW, Suite 1700

Atlanta, GA 30363

Attention:             Robert Klingler

Email:                     [***]

 

and

 

(b)            if to GBC, to:

 

Georgia Banking Company, Inc.

1776 Peachtree Street NW, Suite 300

Atlanta, Georgia 30309

Attention:             Bartow Morgan, Jr., Chief Executive Officer

Email:                     [***]

 

With a copy (which shall not constitute notice) to each of:

 

Troutman Pepper

600 Peachtree Street, N.E., Suite 3000

Atlanta, Georgia 30308

Attention:             James W. Stevens

Email:                     [***]

 

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9.7            Interpretation. The parties have participated jointly in negotiating and drafting this Agreement. In the event that an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement. When a reference is made in this Agreement to Articles, Sections, Exhibits or Schedules, such reference shall be to an Article or Section of or Exhibit or Schedule to this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The word “or” shall not be exclusive. References to “the date hereof” shall mean the date of this Agreement. As used in this Agreement, the “knowledge” of Primary means the actual knowledge of any of the officers of Primary listed on Section 9.7 of the Primary Disclosure Schedule, and the “knowledge” of GBC means the actual knowledge of any of the officers of GBC listed on Section 9.7 of the GBC Disclosure Schedule. As used in this Agreement, (i) the term “person” means any individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, Governmental Entity or other entity of any kind or nature, (ii) an “affiliate” of a specified person is any person that directly or indirectly controls, is controlled by, or is under common control with, such specified person, (iii) the term “made available” means any document or other information that was (a) provided by one party or its representatives to the other party and its representatives by 5:00 p.m., Eastern time, on the day prior to the date hereof or (b) included in the virtual data room of a party by 5:00 p.m., Eastern time, on the day prior to the date hereof, (iv) “business day” means any day other than a Saturday, a Sunday or a day on which banks in New York, New York are authorized by law or executive order to be closed and (v) the “transactions contemplated hereby” and “transactions contemplated by this Agreement” shall include the Merger and the Bank Merger. The Primary Disclosure Schedule and the GBC Disclosure Schedule, as well as all other schedules and all exhibits hereto, shall be deemed part of this Agreement and included in any reference to this Agreement. Nothing contained in this Agreement shall require any party or person to take any action in violation of applicable law.

 

9.8            Counterparts. This Agreement may be executed in counterparts (including by pdf), all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.

 

9.9            Entire Agreement. This Agreement (including the documents and instruments referred to herein) together with the Non-Disclosure Agreement constitutes the entire agreement among the parties and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof.

 

9.10          Governing Law; Jurisdiction.

 

(a)            This Agreement shall be governed by and construed in accordance with the internal, substantive laws of the State of Georgia applicable to agreements entered into and to be performed solely within such state, without regard to any applicable conflicts of law principles.

 

(b)            Each party agrees that it will bring any action or proceeding in respect of any claim arising out of or related to this Agreement or the transactions contemplated hereby exclusively in any federal or state court of competent jurisdiction located in the State of Georgia (the “Chosen Courts”), and, solely in connection with claims arising under this Agreement or the transactions that are the subject of this Agreement, (i) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any objection to laying venue in any such action or proceeding in the Chosen Courts, (iii) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any party, and (iv) agrees that service of process upon such party in any such action or proceeding will be effective if notice is given in accordance with Section 9.6.

 

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9.11          Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE EXTENT PERMITTED BY LAW AT THE TIME OF INSTITUTION OF THE APPLICABLE LITIGATION, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (I) NO REPRESENTATIVE, AGENT OR ATTORNEY 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, (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.

 

9.12          Assignment; Third-Party Beneficiaries. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other party. Any purported assignment in contravention hereof shall be null and void. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. Except as otherwise specifically provided in Section 6.8, which is intended to benefit each Primary Indemnified Party, this Agreement (including the documents and instruments referred to herein) is not intended to, and does not, confer upon any person other than the parties hereto any rights or remedies hereunder, including the right to rely upon the representations and warranties set forth in this Agreement. The representations and warranties in this Agreement are the product of negotiations among the parties hereto and are for the sole benefit of the parties. Any inaccuracies in such representations and warranties are subject to waiver by the parties hereto in accordance herewith without notice or liability to any other person. In some instances, the representations and warranties in this Agreement may represent an allocation among the parties hereto of risks associated with particular matters regardless of the knowledge of any of the parties hereto. Consequently, persons other than the parties may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.

 

9.13          Specific Performance. The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and, accordingly, that the parties shall be entitled to an injunction or injunctions to prevent breaches or threatened breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof (including the parties’ obligation to consummate the Merger), in addition to any other remedy to which they are entitled at law or in equity. Each of the parties hereby further waives (a) any defense in any action for specific performance that a remedy at law would be adequate, and (b) any requirement under any law to post security or a bond as a prerequisite to obtaining equitable relief.

 

9.14          Severability. Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction such that the invalid, illegal or unenforceable provision or portion thereof shall be interpreted to be only so broad as is enforceable.

 

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9.15          Confidential Supervisory Information. Notwithstanding any other provision of this Agreement, no disclosure, representation or warranty shall be made (or other action taken) pursuant to this Agreement that would involve the disclosure of confidential supervisory information (including confidential supervisory information as defined in 12 C.F.R. § 261.2(c) and as identified in 12 C.F.R. § 309.5(g)(8)) of a Governmental Entity by any party to this Agreement to the extent prohibited by applicable law. To the extent legally permissible, appropriate substitute disclosures or actions shall be made or taken under circumstances in which the limitations of the preceding sentence apply.

 

9.16          Delivery by Facsimile or Electronic Transmission. This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments or waivers hereto or thereto, to the extent signed and delivered by means of a facsimile machine or by e-mail delivery of a “.pdf” format data file, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or e-mail delivery of a “.pdf” format data file to deliver a signature to this Agreement or any amendment hereto or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or e-mail delivery of a “.pdf” format data file as a defense to the formation of a contract and each party hereto forever waives any such defense.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, Georgia Banking Company, Inc. and Primary Bancshares Corporation have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the date first above written.

 

  Georgia banking company, Inc.
     
  By: /s/ Bartow Morgan, Jr.
    Name: Bartow Morgan, Jr.
    Title: Chief Executive Officer  
     
  Primary Bancshares Corporation
     
  By: /s/ David R. Coxon
    Name: David R. Coxon
    Title:  Chief Executive Officer and President

 

[Signature Page to Agreement and Plan of Merger]

 

 

Exhibit A

 

Form of Bank Merger Agreement

 

[***]

 

 

Exhibit B

 

Form of Support Agreement

 

[***]

 

 

Exhibit C

 

Form of Option Holder Release Agreement

 

[***]

 

 

Exhibit D

 

Form of Settlement Agreement

 

[***]

 

 

 

Exhibit 2.2

 

CERTAIN CONFIDENTIAL INFORMATION (MARKED BY BRACKETS AS “[***]”) HAS
BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND
(II) IS THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR
CONFIDENTIAL.

 

AGREEMENT AND PLAN OF MERGER

 

between

 

GEORGIA BANKING COMPANY, INC.

 

and

 

TANDEM BANCORP, INC.

 

 

 

Dated February 24, 2026

 

 

 

 

TABLE OF CONTENTS

 

ARTICLE I
 
THE MERGER
       
1.1   The Merger and Bank Merger 1
1.2   Closing 2
1.3   Effective Time 2
1.4   Effects of the Merger 2
1.5   Charter of Surviving Entity 2
1.6   Bylaws of Surviving Entity 2
1.7   Tax Consequences 2
       
Article II
 
EFFECT ON CAPITAL STOCK; EXCHANGE OF SHARES
 
2.1   Conversion of Capital Stock 2
2.2   Treatment of Restricted Stock Awards 3
2.3   Treatment of Tandem Options 3
2.4   Treatment of Tandem Warrants 5
2.5   Election and Allocation Procedures 6
2.6   Dissenting Shareholders 8
2.7   Payment Procedures 9
2.8   Rights of Former Tandem Shareholders 10
       
Article III
 
REPRESENTATIONS AND WARRANTIES OF TANDEM
 
3.1   Corporate Organization 11
3.2   Capitalization 12
3.3   Authority; No Violation 13
3.4   Consents and Approvals 14
3.5   Reports 14
3.6   Financial Statements 15
3.7   Broker’s Fees 16
3.8   Absence of Certain Changes or Events 16
3.9   Legal and Regulatory Proceedings 16
3.10   Taxes and Tax Returns 16
3.11   Employees 18
3.12   Compliance with Applicable Law 21
3.13   Certain Contracts 23
3.14   Agreements with Regulatory Agencies 25
3.15   Risk Management Instruments 25
3.16   Environmental Matters 25
3.17   Investment Securities and Commodities 26
3.18   Real Property 26
3.19   Intellectual Property 26

 

i

 

 

3.20   Related Party Transactions 27
3.21   State Takeover Laws 27
3.22   Reorganization 27
3.23   Opinion 27
3.24   Tandem Information 27
3.25   Loan Portfolio 28
3.26   Insurance 29
3.27   No Other Representations or Warranties 29
       
Article IV
 
REPRESENTATIONS AND WARRANTIES OF GBC
       
4.1   Corporate Organization 30
4.2   Capitalization 31
4.3   Authority; No Violation 31
4.4   Consents and Approvals 32
4.5   Reports 32
4.6   Financial Statements 33
4.7   Broker’s Fees 34
4.8   Absence of Certain Changes or Events 34
4.9   Legal and Regulatory Proceedings 34
4.10   Taxes and Tax Returns 35
4.11   Compliance with Applicable Law 35
4.12   Agreements with Regulatory Agencies 37
4.13   Related Party Transactions 37
4.14   State Takeover Laws 37
4.15   Reorganization 37
4.16   GBC Information 37
4.17   No Other Representations or Warranties 38
       
Article V
 
COVENANTS RELATING TO CONDUCT OF BUSINESS
 
5.1   Conduct of Businesses Prior to the Effective Time 38
5.2   Forbearances of Tandem 38
5.3   Forbearances of GBC 42
       
Article VI
 
ADDITIONAL AGREEMENTS
 
6.1   Regulatory Matters 43
6.2   Access to Information; Confidentiality 44
6.3   Non-Control 45
6.4   Fairness Determination; Securities Act Compliance 45
6.5   Proxy Statement; Shareholders’ Approvals 46
6.6   Legal Conditions to Merger 47
6.7   Employee Matters 48
6.8   Indemnification; Directors’ and Officers’ Insurance 49

 

ii

 

 

6.9   Additional Agreements 51
6.10   Advice of Changes 51
6.11   Shareholder Litigation 51
6.12   Corporate Governance 51
6.13   Acquisition Proposals 52
6.14   Public Announcements 52
6.15   Takeover Statutes 53
6.16   Certain Tax Matters 53
       
Article VII
 
CONDITIONS PRECEDENT
 
7.1   Conditions to Each Party’s Obligation to Effect the Merger 53
7.2   Conditions to Obligations of GBC 54
7.3   Conditions to Obligations of Tandem 55
       
Article VIII
 
TERMINATION AND AMENDMENT
 
8.1   Termination 56
8.2   Effect of Termination 57
       
Article IX
 
GENERAL PROVISIONS
 
9.1   Definitions 58
9.2   Amendment 60
9.3   Extension; Waiver 60
9.4   Nonsurvival of Representations, Warranties and Agreements 60
9.5   Expenses 61
9.6   Notices 61
9.7   Interpretation 61
9.8   Counterparts 62
9.9   Entire Agreement 62
9.10   Governing Law; Jurisdiction 62
9.11   Waiver of Jury Trial 63
9.12   Assignment; Third-Party Beneficiaries 63
9.13   Specific Performance 63
9.14   Severability 63
9.15   Confidential Supervisory Information 64
9.16   Delivery by Electronic Transmission 64

 

iii

 

 

INDEX OF DEFINED TERMS

 

Term Section
ACA 3.11(k)
Acceptable Confidentiality Agreement 6.13
Acquisition Proposal 9.1
Affiliate 9.7
Agreement Preamble
ACL 3.6(c)
ALLL 3.6(c)
Alternative Acquisition Agreement 6.5(b)
Applicable Agencies 3.4
Bank Merger Recitals
Bank Merger Agreement Recitals
Bank Merger Certificates 1.1(b)
Bank Merger Effective Time 1.1(b)
BHC Act 3.1(a)
Business Day 9.7
Call Reports 3.6(c)
Cancelled Shares 2.1(c)
Cash Election 2.4(a)
Cash Election Shares 2.4(a)
Cash Election Threshold 9.1
Certificate of Merger 1.3
Chosen Courts 9.10(b)
Closing 1.2
Closing Date 1.2
Code Recitals
Continuing Employees 6.7(a)
Conversion Fund 2.6(a)
DBF 3.4
Dissenters’ Shares 2.1(b)
Distribution Date 2.4(a)
Effective Time 1.3
Election Deadline 9.1
Election Form 2.4(a)
Enforceability Exceptions 3.3(a)
Environmental Laws 3.16
ERISA 3.11(a)
Exchange Act 3.20
Exchange Agent 2.4(a)
Exchange Ratio 2.2(a)
Fairness Determination 6.4(a)
Fairness Hearing 6.4(b)
Fairness Order 6.4(b)
FDI Act 3.1(b)
FDIC 3.1(b)
Federal Reserve 3.4

 

iv

 

 

Fractional Share Cash-in-Lieu Amounts 2.4(c)
Fraud 8.2(a)
GAAP 3.1(a)
GBC Preamble
GBC Bank Recitals
GBC Bylaws 1.6
GBCC 1.1(a)
GBC Charter 1.5
GBC Common Stock 4.2(a)
GBC Disclosure Schedule Article IV
GBC 401(k) Plan 6.7(c)
GBC Financial Statements 4.6(a)
GBC Non-Voting Common Stock 4.2(a)
GBC Subsidiary 4.1(b)
GBC Voting Common Stock 4.2(a)
Georgia Secretary 1.3
Governmental Entity 3.4
Holder 2.4(a)
Ineligible Shares 2.4(d)
Intellectual Property 3.19
IRS 2.6(g)
Knowledge 9.7
Liens 3.2(b)
Loans 3.25(a)
Material Adverse Effect 9.1
Materially Burdensome Regulatory Condition 6.1(b)
Merger Recitals
Merger Consideration 2.4(a)
Non-Disclosure Agreement 6.2(b)
Non-Election Shares 2.4(a)
Option Cancellation Payment 2.2(a)(1)
Option Consideration 2.2(a)(3)
Option Election Notice 2.2(a)
Option Holder Release Agreements 2.2(a)
Option Shares 2.2(a)(3)
Per Share Cash Consideration 9.1
Per Share Merger Consideration 9.1
Per Share Stock Consideration 9.1
Permitted Encumbrance 3.18
Personal Data 3.12(b)
Premium Cap 6.8(b)
Proxy Statement 9.1
Recommendation Change 6.5(b)
Regulatory Agencies 3.5
Representatives 6.13
Requisite Regulatory Approvals 9.1
Requisite Tandem Vote 3.3(a)
Rollover Option 2.2(a)(2)
Rollover Warrant 2.3(a)(2)

 

v

 

 

SBA Loan 3.25(g)
Securities Act 6.4(a)
Security Breach 3.12(d)
Solomon 4.7
SRO 3.5
Stock Election 2.4(a)
Stock Election Shares 2.4(a)
Subsidiary 3.1(a)
Superior Proposal 9.1
Surviving Entity Recitals
Takeover Statutes 3.21
Tandem Preamble
Tandem 401(k) Plan 6.7(c)
Tandem Articles 3.1(a)
Tandem Bank Recitals
Tandem Benefit Plans 3.11(a)
Tandem Board Recommendation 6.5(b)
Tandem Bylaws 3.1(a)
Tandem Certificate 2.5(a)
Tandem Common Stock 3.2(a)
Tandem Continuing Director 6.12(a)
Tandem Contract 3.13(a)
Tandem Disclosure Schedule Article III
Tandem ERISA Affiliate 3.11(a)
Tandem Financial Statements 3.6(a)
Tandem Indemnified Parties 6.8(a)
Tandem Meeting 6.5(b)
Tandem Options 2.2(a)
Tandem Qualified Plans 3.11(c)
Tandem Real Property 3.18
Tandem Regulatory Agreement 3.14
Tandem Restricted Stock Award 2.2
Tandem Securities 3.2(a)
Tandem Subsidiary 3.1(b)
Tandem Warrants 2.3(a)
Tax 9.1
Tax Return 9.1
Termination Date 8.1(c)
Termination Fee 8.2(b)
Warrant Cancellation Payment 2.3(a)(1)
Warrant Consideration 2.3(a)(3)
Warrant Election Notice 2.3(a)
Warrant Holder Release Agreements 2.3(a)
Warrant Shares 2.3(a)(3)
Willful and Material Breach 8.2(a)

 

vi

 

 

AGREEMENT AND PLAN OF MERGER, dated February 24, 2026 (this “Agreement”), between Georgia Banking Company, Inc., a Georgia corporation (“GBC”), and Tandem Bancorp, Inc., a Georgia corporation (“Tandem”);

 

WHEREAS, the Boards of Directors of GBC and Tandem have unanimously determined that it is in the best interests of their respective companies and shareholders to consummate the strategic business combination transaction provided for in this Agreement, pursuant to which Tandem will, subject to the terms and conditions set forth herein, merge with and into GBC (the “Merger”), so that GBC is the surviving entity (in such capacity, the “Surviving Entity”) in the Merger;

 

WHEREAS, in furtherance thereof, the respective Boards of Directors of GBC and Tandem have unanimously approved the Merger and declared advisable and adopted this Agreement, approved the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, and, with respect to the Board of Directors of Tandem, has resolved to submit this Agreement to its shareholders for approval and to recommend that its shareholders approve this Agreement;

 

WHEREAS, for federal income tax purposes, it is intended that the Merger shall qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and this Agreement is intended to be and is adopted as a plan of reorganization for purposes of Sections 354 and 361 of the Code;

 

WHEREAS, concurrently with the execution and delivery of this Agreement, Tandem Bank, a Georgia bank and wholly-owned subsidiary of Tandem (“Tandem Bank”), and Georgia Banking Company, a Georgia bank and wholly-owned subsidiary of GBC (“GBC Bank”), entered into an agreement and plan of merger (the “Bank Merger Agreement”), pursuant to which, immediately following the Merger, and subject to it occurring, Tandem Bank will merge (the “Bank Merger”) with and into GBC Bank so that GBC Bank is the surviving entity in the Bank Merger;

 

WHEREAS, concurrently with the execution and delivery of this Agreement, as a condition and inducement for GBC to enter into this Agreement, each member of the Board of Directors of Tandem and each member of the Board of Directors of Tandem Bank entered into a director support agreement; and

 

WHEREAS, in this Agreement, the parties desire to make certain representations, warranties and agreements in connection with the Merger and also to prescribe certain conditions to the Merger.

 

NOW, THEREFORE, in consideration of the mutual covenants, representations, warranties and agreements contained herein, and intending to be legally bound hereby, the parties agree as follows:

 

Article I

 

THE MERGER

 

1.1            The Merger and Bank Merger.

 

(a)            Subject to the terms and conditions of this Agreement, in accordance with the Georgia Business Corporation Code (the “GBCC”), Tandem shall merge with and into GBC pursuant to this Agreement. GBC shall be the Surviving Entity, and shall continue its corporate existence under the laws of the State of Georgia. Upon consummation of the Merger, the separate corporate existence of Tandem shall terminate.

 

1

 

 

(b)            At the Bank Merger Effective Time, Tandem Bank will merge with and into GBC Bank. GBC Bank shall be the surviving entity in the Bank Merger and, following the Bank Merger, the separate corporate existence of Tandem Bank shall cease. The Bank Merger shall be implemented pursuant to the Bank Merger Agreement.

 

1.2            Closing. Subject to the terms and conditions of this Agreement, the closing of the Merger (the “Closing”) will take place by electronic exchange of documents at 10:00 a.m., Eastern time, on a date which shall be no later than three (3) business days after the satisfaction or waiver (subject to applicable law) of all of the conditions set forth in Article VII hereof (other than those conditions that by their nature can only be satisfied at the Closing, but subject to the satisfaction or waiver thereof), unless another date, time or place is agreed to in writing by Tandem and GBC. The date on which the Closing occurs is referred to as the “Closing Date.”

 

1.3            Effective Time. On or (if agreed by GBC and Tandem) prior to the Closing Date, GBC and Tandem shall cause to be filed a certificate of merger with the Secretary of State of the State of Georgia (the “Georgia Secretary”) in accordance with the GBCC (the “Certificate of Merger”). The Merger shall become effective at such time as specified in the Certificate of Merger in accordance with the relevant provisions of the GBCC, or at such other time as shall be provided by applicable law (such time hereinafter referred to as the “Effective Time”). GBC and Tandem shall, and shall respectively cause GBC Bank and Tandem Bank to, execute certificates or articles of merger and such other agreements, documents and certificates as are necessary to make the Bank Merger effective (“Bank Merger Certificates”) at the Bank Merger Effective Time. The Bank Merger shall become effective immediately following the Effective Time or at such later time and date as specified in the Bank Merger Agreement in accordance with applicable law (the “Bank Merger Effective Time”).

 

1.4            Effects of the Merger. At and after the Effective Time, the Merger shall have the effects set forth in the applicable provisions of the GBCC and this Agreement.

 

1.5            Charter of Surviving Entity. At the Effective Time, amended and restated articles of incorporation of GBC, as amended (the “GBC Charter”), as in effect immediately prior to the Effective Time, shall be the articles of incorporation of the Surviving Entity until thereafter amended in accordance with applicable law.

 

1.6            Bylaws of Surviving Entity. At the Effective Time, the amended and restated bylaws of GBC, as amended (the “GBC Bylaws”), as in effect immediately prior to the Effective Time, shall be the bylaws of the Surviving Entity until thereafter amended in accordance with applicable law.

 

1.7            Tax Consequences. It is intended that the Merger shall qualify as a “reorganization” within the meaning of Section 368(a) of the Code, and that this Agreement is intended to be and is adopted as a plan of reorganization for the purposes of Sections 354 and 361 of the Code.

 

Article II

 

EFFECT ON CAPITAL STOCK; EXCHANGE OF SHARES

 

2.1            Conversion of Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of GBC, Tandem, or the Subsidiaries or shareholders of any of the foregoing, the shares of the constituent corporations to the Merger shall be converted as follows:

 

(a)            Each share of capital stock of GBC issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding from and after the Effective Time and shall not be affected by the Merger.

 

2

 

 

(b)            Each share of Tandem Common Stock issued and outstanding immediately prior to the Effective Time, except for the Cancelled Shares (as defined below) and shares with respect to which the holder has properly exercised dissenters’ rights pursuant to Article 13 of the GBCC (the “Dissenters’ Shares”), shall be converted into the right to receive the Per Share Merger Consideration, which shall be payable to the holder thereof, in the manner provided in this Article II.

 

(c)            Any shares of Tandem Common Stock that are owned immediately prior to the Effective Time by Tandem, GBC or their respective Subsidiaries (in each case, other than (i) shares of Tandem Common Stock held in a fiduciary capacity that are beneficially owned by third parties and (ii) shares of Tandem Common Stock held, directly or indirectly, in respect of a debt contracted) shall be cancelled and shall cease to exist and no Per Share Merger Consideration shall be payable or delivered in exchange therefor (the “Cancelled Shares”).

 

2.2            Treatment of Restricted Stock Awards. At the Effective Time, each award of a share of Tandem Common Stock subject solely to service-based vesting, repurchase, or other lapse restriction that is outstanding immediately prior to the Effective Time (a “Tandem Restricted Stock Award”) shall fully vest per the terms of their applicable agreements and be cancelled and converted automatically to the right to receive (without interest) the Per Share Merger Consideration, which shall be payable to the holder thereof, in the manner provided in this Article II.

 

2.3            Treatment of Tandem Options.

 

(a)            Each unexpired, outstanding, and unexercised option to acquire shares of Tandem Common Stock (collectively, the “Tandem Options”), whether vested or unvested, shall, automatically and without any further action on the part of any holder thereof, be cancelled at the Effective Time and converted automatically into the right to receive, at the election of the holder, as provided by written notice of Tandem to GBC not less than thirty (30) days prior to Closing (the “Option Election Notice”), and conditioned upon the holder thereof executing and delivering to Tandem and GBC an option holder settlement and release agreement in the form attached hereto as Exhibit A (collectively, the “Option Holder Release Agreements”), either of the three following forms of consideration:

 

(1)            An amount in cash, without interest, equal to the product of (x) the number of shares of Tandem Common Stock subject to such Tandem Option immediately prior to the Effective Time times (y) the excess, if any, of the Per Share Cash Consideration over the exercise price of such Tandem Option (the “Option Cancellation Payment”); provided that if the exercise price is equal to or greater than the Per Share Cash Consideration, such Tandem Option shall be canceled without the payment of any cash or other consideration. GBC shall deliver, or cause to be delivered, the Option Cancellation Payment to each such holder of a Tandem Option no later than the fifth (5th) Business Day following the Effective Time. Option Cancellation Payments to the holders of the Tandem Options shall be subject to applicable withholding under the Code, or any provision of state, local or foreign Tax Law, with respect to the making of such payment; or

 

(2)            An option (each a “Rollover Option”) to purchase a number of shares of GBC Common Stock equal to the product (rounded down to the nearest whole number) of (x) the number of shares of Tandem Common Stock subject to such Tandem Option immediately prior to the Effective Time times (y) 0.4800 (the “Exchange Ratio”), at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of the Tandem Common Stock of such Tandem Option immediately prior to the Effective Time divided by (B) the Exchange Ratio; provided, however, that the exercise price and the number of shares of GBC Common Stock purchasable pursuant to the Rollover Options shall be determined in a manner consistent with the requirements of Section 409A of the Code; provided, further, that in the case of any Tandem Option to which Section 422 of the Code applies, the exercise price and the number of shares of GBC Common Stock purchasable pursuant to such Rollover Option shall be subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code provided that GBC makes no assurances that such Rollover Options will satisfy the requirements of Section 422 of the Code. Except as specifically provided above and/or as necessary to effect the foregoing, following the Effective Time, each Rollover Option shall continue to have the same terms as were applicable to such Tandem Option immediately prior to the Effective Time (substituting GBC and its subsidiaries for references to Tandem and its subsidiaries as applicable), which Rollover Option will be assumed by GBC in connection with GBC’s adoption and assumption of the plans under which the Tandem Options were issued following the Effective Time; or

 

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(3)            A number of shares of GBC Common Stock (the “Options Shares”, together with the Rollover Options and the Option Cancellation Payment, the “Option Consideration”) equal to the product (rounded down to the nearest whole number) of (x) the number of shares of Tandem Common Stock subject to such Tandem Option immediately prior to the Effective Time times (y) the Exchange Ratio less the number of shares of GBC Common Stock equal to the aggregate exercise price for such Tandem Options, assuming a value of $30.00 per share of GBC Common Stock. GBC shall deliver, or cause to be delivered, the Options Shares to each such holder of a Tandem Option no later than the fifth (5th) Business Day following the Effective Time. The Options Shares to be issued to such holders of the Tandem Options shall be subject to applicable withholding under the Code, or any provision of state, local or foreign Tax Law, with respect to the issuance of such shares, and GBC will withhold, or cause to be withheld, from such issuance that number of Options Shares (rounded up to the nearest whole number) that equals the applicable withholdings, assuming a value of $30.00 per share of GBC Common Stock.

 

(b)            All rounding described in this Section 2.3 shall be done on an aggregate basis per Tandem Option and any holder of a Tandem Option, the adjustment of which results in fractional shares, shall be entitled to a cash payment under this Agreement in respect of such fractional share equal to the Fractional Share Cash-in-Lieu Amounts, subject to applicable withholding under the Code, or any provision of state, local or foreign Tax Law, with respect to the making of such payment; provided that such Fractional Share Cash-in-Lieu Amount shall only be paid to the extent consistent with the requirements of Section 409A of the Code and, with respect to any Tandem Option to which Section 422 of the Code applies, Section 424(a) of the Code.

 

(c)            Prior to the Effective Time, conditioned upon the Closing, Tandem and the Board of Directors of Tandem shall adopt any resolutions and take any actions that are necessary to effect the treatment of the Tandem Options pursuant to this Section 2.3, no later than thirty (30) days prior to the Closing Date.

 

(d)            Prior to the Effective Time, conditioned upon the Closing, GBC and the Board of Directors of GBC shall adopt any resolutions and take any actions that are necessary to effect the issuance of the Rollover Options at the Effective Time and cause the issuance of the Rollover Options and any securities to be issued upon exercise of a Rollover Option to be issued in compliance with applicable federal and state securities laws.

 

(e)            In the event that any holder of Tandem Options does not make an election or if his or her election is not timely delivered or properly completed, such holder will be treated as electing to receive Option Shares pursuant to Section 2.3(a)(3).

 

 

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2.4            Treatment of Tandem Warrants.

 

(a)            Each unexpired, outstanding, and unexercised warrant to acquire shares of Tandem Common Stock (collectively, the “Tandem Warrants”), whether vested or unvested, shall, automatically and without any further action on the part of any holder thereof, be cancelled at the Effective Time and converted automatically into the right to receive, at the election of the holder, as provided by written notice of Tandem to GBC not less than thirty (30) days prior to Closing (the “Warrant Election Notice”), and conditioned upon the holder thereof executing and delivering to Tandem and GBC a warrant holder settlement and release agreement in the form attached hereto as Exhibit B (collectively, the “Warrant Holder Release Agreements”), either of the three following forms of consideration:

 

(1)            An amount in cash, without interest, equal to the product of (x) the number of shares of Tandem Common Stock subject to such Tandem Warrant immediately prior to the Effective Time times (y) the excess, if any, of the Per Share Cash Consideration over the exercise price of such Tandem Warrant (the “Warrant Cancellation Payment”); provided that if the exercise price is equal to or greater than the Per Share Cash Consideration, such Tandem Warrant shall be canceled without the payment of any cash or other consideration. GBC shall deliver, or cause to be delivered, the Warrant Cancellation Payment to each such holder of a Tandem Warrant no later than the fifth (5th) Business Day following the Effective Time. Warrant Cancellation Payments to the holders of the Tandem Warrants shall be subject to applicable withholding under the Code, or any provision of state, local or foreign Tax Law, with respect to the making of such payment; or

 

(2)            A warrant (each a “Rollover Warrant”) to purchase a number of shares of GBC Common Stock equal to the product (rounded down to the nearest whole number) of (x) the number of shares of Tandem Common Stock subject to such Tandem Warrant immediately prior to the Effective Time times (y) the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of the Tandem Common Stock of such Tandem Warrant immediately prior to the Effective Time divided by (B) the Exchange Ratio; provided, however, that the exercise price and the number of shares of GBC Common Stock purchasable pursuant to the Rollover Warrants shall be determined in a manner consistent with the requirements of Section 409A of the Code; provided, further, that in the case of any Tandem Warrant to which Section 422 of the Code applies, the exercise price and the number of shares of GBC Common Stock purchasable pursuant to such Rollover Warrant shall be subject to such adjustments as are necessary in order to satisfy the requirements of Section 424(a) of the Code provided that GBC makes no assurances that such Rollover Warrants will satisfy the requirements of Section 422 of the Code. Except as specifically provided above and/or as necessary to effect the foregoing, following the Effective Time, each Rollover Warrant shall continue to have the same terms, including vesting, as were applicable to such Tandem Warrant immediately prior to the Effective Time (substituting GBC and its subsidiaries for references to Tandem and its subsidiaries as applicable), which Rollover Warrant will be assumed by GBC in connection with GBC’s adoption and assumption of the plans under which the Tandem Warrants were issued following the Effective Time; or

 

(3)            A number of shares of GBC Common Stock (the “Warrants Shares”, together with the Rollover Warrant and the Warrant Cancellation Payment, the “Warrant Consideration”) equal to the product (rounded down to the nearest whole number) of (x) the number of shares of Tandem Common Stock subject to such Tandem Warrant immediately prior to the Effective Time times (y) the Exchange Ratio less the number of shares of GBC Common Stock equal to the aggregate exercise price for such Tandem Warrants, assuming a value of $30.00 per share of GBC Common Stock. GBC shall deliver, or cause to be delivered, the Warrants Shares to each such holder of a Tandem Warrant no later than the fifth (5th) Business Day following the Effective Time. The Warrants Shares to be issued to such holders of the Tandem Warrants shall be subject to applicable withholding under the Code, or any provision of state, local or foreign Tax Law, with respect to the issuance of such shares, and GBC will withhold, or cause to be withheld, from such issuance that number of Warrants Shares (rounded up to the nearest whole number) that equals the applicable withholdings, assuming a value of $30.00 per share of GBC Common Stock.

 

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(b)            All rounding described in this Section 2.4 shall be done on an aggregate basis per Tandem Warrant and any holder of a Tandem Warrant, the adjustment of which results in fractional shares, shall be entitled to a cash payment under this Agreement in respect of such fractional share equal to the Fractional Share Cash-in-Lieu Amounts, subject to applicable withholding under the Code, or any provision of state, local or foreign Tax Law, with respect to the making of such payment; provided that such Fractional Share Cash-in-Lieu Amounts shall only be paid to the extent consistent with the requirements of Section 409A of the Code.

 

(c)            Prior to the Effective Time, conditioned upon the Closing, Tandem and the Board of Directors of Tandem shall adopt any resolutions and take any actions that are necessary to effect the treatment of the Tandem Warrants pursuant to this Section 2.4, including the vesting of any Tandem Warrant that is unvested immediately prior to the Effective Time to fully vest and receipt from the holders of the Tandem Warrants of the executed Warrant Holder Release Agreements, no later than thirty (30) days prior to the Closing Date.

 

(d)            Prior to the Effective Time, conditioned upon the Closing, GBC and the Board of Directors of GBC shall adopt any resolutions and take any actions that are necessary to effect the issuance of the Rollover Warrants at the Effective Time and cause the issuance of the Rollover Warrants and any securities to be issued upon exercise of a Rollover Warrant to be issued in compliance with applicable federal and state securities laws.

 

(e)            In the event that any holder of Tandem Warrants does not make an election or if his or her election is not timely delivered or properly completed, such holder will be treated as electing to receive Warrant Shares pursuant to Section 2.4(a)(3).

 

2.5            Election and Allocation Procedures.

 

(a)            Election.

 

(i)            No later than thirty (30) days following the date of this Agreement, GBC shall appoint an exchange agent (the “Exchange Agent”), which is acceptable to Tandem in its reasonable discretion, for the payment and exchange of the Merger Consideration.

 

(ii)            Holders of record of Tandem Common Stock may elect to receive either shares of GBC Common Stock, cash, or a combination thereof in exchange for their shares of Tandem Common Stock; provided, however, that the aggregate number of shares of Tandem Common Stock to be converted into the right to receive the Per Share Cash Consideration pursuant to this Section 2.5(a) shall not exceed the Cash Election Threshold.

 

(iii)            An election form (“Election Form”), together with a letter of transmittal as described in Section 2.7(b), shall be distributed no less than thirty (30) days prior to the Election Deadline (such date of distribution, the “Distribution Date”), to each holder of record of one or more shares of Tandem Common Stock (each, a “Holder”) as of five (5) Business Days prior to the Distribution Date, permitting such Holder, subject to the allocation and election procedures set forth in this Section 2.5, (1) to specify the number of shares of Tandem Common Stock owned by such Holder with respect to which such Holder desires to receive the Per Share Cash Consideration (a “Cash Election” and such shares subject to a Cash Election, the “Cash Election Shares”), (2) to specify the number of shares of Tandem Common Stock owned by such Holder with respect to which such Holder desires to receive the Per Share Stock Consideration (a “Stock Election” and such shares subject to a Stock Election, the “Stock Election Shares”), or (3) to indicate that such record Holder has no preference as to the receipt of the Per Share Cash Consideration or the Per Share Stock Consideration for their shares of Tandem Common Stock held by such Holder. Holders of record of shares of Tandem Common Stock who hold such shares as nominees, trustees or in other representative capacities may submit multiple Election Forms, provided that each such Election Form covers all the shares of Tandem Common Stock held by each representative for a particular beneficial owner. Any shares of Tandem Common Stock with respect to which the Holder thereof shall not, as of the Election Deadline, have made an election by submission to the Exchange Agent of an effective, properly completed Election Form or for which the Holder has indicated no preference as to the receipt of the Per Share Cash Consideration or Per Share Stock Consideration shall be deemed “Non-Election Shares.” GBC shall make available one or more Election Forms as may reasonably be requested in writing from time to time by all persons who become holders (or beneficial owners) of Tandem Common Stock between the record date for the initial distribution of Election Forms and the close of business on the business day prior to the Election Deadline, and GBC shall provide to the Exchange Agent all information reasonably necessary for it to perform as specified herein.

 

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(iv)            An election shall have been properly made only if the Exchange Agent shall have actually received a properly completed Election Form by the Election Deadline accompanied by all materials and other information reasonably requested by the Exchange Agent to surrender one or more shares of Tandem Common Stock issued and outstanding immediately prior to the Effective Time, including, if applicable, one or more certificates that immediately prior to the Effective Time represented shares of Tandem Common Stock (or Tandem Bank capital stock, to the extent the holder failed to exchange his, her, or its certificate in connection with the reorganization of Tandem Bank into a holding company structure) (each, a “Tandem Certificate,” it being understood that any reference herein to a “Tandem Certificate” shall be deemed to include reference to book-entry account statements relating to the ownership of shares of Tandem Common Stock) (or customary affidavits and indemnification regarding the loss or destruction of such Tandem Certificates or the guaranteed delivery of such Tandem Certificate) covered by such Election Form. Any Election Form may be revoked or changed by the person submitting such Election Form to the Exchange Agent by written notice to the Exchange Agent only if such notice of revocation or change is actually received by the Exchange Agent at or prior to the Election Deadline. Any Tandem Certificate(s) relating to any revoked Election Form shall be promptly returned without charge to the person submitting the Election Form to the Exchange Agent. In addition, if a Holder either (1) does not submit a properly completed Election Form in a timely fashion or (2) revokes its Election Form prior to the Election Deadline and fails to file a new properly completed Election Form before the Election Deadline, such shares shall be designated Non-Election Shares. Subject to the terms of this Agreement and of the Election Form, the Exchange Agent shall have reasonable discretion to determine whether any election, revocation, or change has been properly or timely made and to disregard immaterial defects in the Election Forms, and any good faith decisions of the Exchange Agent regarding such matters shall be binding and conclusive.

 

(b)            Allocation. No later than five (5) Business Days after the Effective Time, GBC shall cause the Exchange Agent to effect the allocation among the Holders of rights to receive the Per Share Cash Consideration and/or the Per Share Stock Consideration, which shall be effected by the Exchange Agent in accordance with the terms of this Section 2.5(b). In order to ensure that the Cash Election Threshold is not exceeded, the parties hereby agree that the Exchange Agent, in applying the allocation rules set forth herein, shall have reasonable discretion to round calculations in order to accomplish such purpose and each good faith determination made by the Exchange Agent regarding such matters shall be binding and conclusive. For all purposes under this Section 2.5(b), in making the determination with respect to the allocation of the Merger Consideration, shares of Tandem Common Stock that are subject to the Fractional Share Cash-in-Lieu Amounts provision of Section 2.5(c), that are Ineligible Shares (as defined below), that are Dissenters’ Shares subject to the provisions of Section 2.6, shall be treated as Cash Election Shares.

 

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(i)            Oversubscription of Cash Election Shares. If the aggregate number of Cash Election Shares (the “Cash Election Number”) is greater than the Cash Election Threshold, then, at the Effective Time: (1) each Stock Election Share and Non-Election Share shall be converted into the right to receive (subject to Section 2.5(c)) the Per Share Stock Consideration; and (2) each Cash Election Share shall be converted into the right to receive (A) the Per Share Cash Consideration in respect of that number of Cash Election Shares equal to the product obtained by multiplying (x) the number of Cash Election Shares held by such Holder by (y) the fraction, the numerator of which is the Cash Election Threshold and the denominator of which is the Cash Election Number, and (B) the Per Share Stock Consideration in respect of the remainder of such Holder’s Cash Election Shares that were not converted into the right to receive the Per Share Cash Consideration pursuant to clause (A) above.

 

(ii)            No Oversubscription of Cash Election Shares. If the Cash Election Number is less than or equal to the Cash Election Threshold, then at the Effective Time: (1) all Stock Election Shares and Non-Election Shares shall be converted into the right to receive the Per Share Stock Consideration (subject to Section 2.5(c)) and (2) all Cash Election Shares shall be converted into the right to receive the Per Share Cash Consideration.

 

(c)            Notwithstanding any other provisions of this Agreement, each Tandem shareholder who would otherwise have been entitled under this Agreement to receive a fraction of a share of GBC Common Stock (after taking into account all Tandem Certificates surrendered by such Tandem shareholder) shall receive, in lieu thereof, cash (without interest) in an amount equal to such fractional part of a share of GBC Common Stock multiplied by $30.00 (the “Fractional Share Cash-in-Lieu Amounts”). No Tandem shareholder receiving Fractional Share Cash-in-Lieu Amounts for any Tandem Common Stock will be entitled to any dividends declared by GBC in respect of such shares, nor will such holder be entitled to voting rights, or any other rights as a shareholder of GBC in respect of any such shares.

 

(d)            Notwithstanding any other provisions of this Agreement, if and to the extent that GBC determines that it is necessary or advisable in order to prevent a violation of the laws and regulations of any such state in which the necessary state securities law or “blue sky” permits and approvals, if any, required to carry out the contemplated transactions are not timely obtained, Tandem Common Stock held by Tandem shareholders residing in such states (“Ineligible Shares”) shall be ineligible to receive the Per Share Stock Consideration and shall instead receive the Per Share Cash Consideration. The Exchange Agent shall convert any Ineligible Shares for which the Holder of such shares has made a Stock Election to a Cash Election Share and shall not have any obligation to provide notice of such conversion to the Holder of such Ineligible Shares.

 

2.6            Dissenting Shareholders. Any holder of Dissenters’ Shares shall not be entitled to any Merger Consideration in respect of such shares, but instead shall be entitled to receive from the Surviving Entity or its successor the value of such shares in cash as determined pursuant to applicable law; provided, that no such payment shall be made to any such dissenting shareholder unless and until such dissenting shareholder has complied with the applicable provisions of the GBCC and surrendered to Tandem or the Surviving Entity the Tandem Certificate(s) for which payment is being made. In the event that after the Effective Time a dissenting shareholder of Tandem fails to perfect, or effectively withdraws or loses, such holder’s right to appraisal of and payment for such holder’s Dissenter Shares, GBC or the Surviving Entity shall issue and deliver to such holder of shares of Tandem Common Stock, upon surrender by such holder of such holder’s Tandem Certificate(s), an amount of cash (without interest) equal to the Per Share Cash Consideration multiplied by the number of shares represented by such surrendered Tandem Certificate(s).

 

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2.7            Payment Procedures.

 

(a)            At or prior to the Effective Time, GBC shall authorize the issuance of and shall deposit, or shall cause to be deposited with the Exchange Agent, for the benefit of the Tandem shareholders for exchange in accordance with this Article II a sufficient number of shares of GBC Common Stock and cash for payment of the Merger Consideration pursuant to this Article II (such amount of cash and shares of GBC Common Stock, together with any dividends or distributions with respect thereto paid after the Effective Time, are referred to in this Article II as the “Conversion Fund”).

 

(b)            As provided in Section 2.5(a)(iii) and, within five (5) business days after the Closing Date for each Tandem shareholder that did not tender the materials reasonably requested by the Exchange Agent to surrender such Holder’s Tandem Certificate(s) on or before the Election Deadline pursuant to Section 2.5(a), GBC shall cause the Exchange Agent to distribute to each holder of record of one or more Tandem Certificate(s) the letter of transmittal and other appropriate and customary transmittal materials (which shall specify that delivery shall be effected, and risk of loss and title to the Tandem Certificate(s) shall pass, only upon proper delivery of such Tandem Certificate(s) to the Exchange Agent and include customary provisions with respect to delivery of an “agent’s message with respect to shares of Tandem Common Stock held in book-entry form and to be in such form and have such provisions as GBC and Tandem may reasonably agree) for use in effecting the surrender of Tandem Certificate(s) pursuant to this Agreement. GBC or its Exchange Agent will maintain a book entry list of GBC Common Stock to which each former holder of Tandem Common Stock is entitled. Certificates evidencing GBC Common Stock into which Tandem Common Stock has been converted will not be issued.

 

(c)            No interest will be paid or accrued on any portion of the Merger Consideration deliverable upon surrender of a Tandem Certificate.

 

(d)            Any portion of the Conversion Fund that remains unclaimed by the former Tandem shareholders twelve (12) months after the Effective Time shall be paid to the Surviving Entity, or its successors in interest. Any former Tandem shareholders who have not theretofore complied with this Section 2.5 shall thereafter look only to the Surviving Entity, or its successors in interest, for the Merger Consideration, as well as any accrued and unpaid dividends or distributions on shares of GBC Common Stock deliverable in respect of each former share of Tandem Common Stock such holder holds as determined pursuant to this Agreement, in each case, without any interest thereon. Notwithstanding the foregoing, none of the Surviving Entity, the Exchange Agent or any other person shall be liable to any former Tandem shareholder for any amount delivered in good faith to a public official pursuant to applicable abandoned property, escheat or similar laws. Any amounts remaining unclaimed by former holders of shares of Tandem Common Stock immediately prior to the time at which such amounts would otherwise escheat to, or become property of, any Governmental Entity shall, to the extent permitted by applicable law, become the property of the Surviving Entity, free and clear of any claims or interest of any such holders or their successors, assigns or personal representatives previously entitled thereto.

 

(e)            In the event any Tandem Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Tandem Certificate to be lost, stolen or destroyed and, if required by the Surviving Entity, the posting by such person of a bond in such amount as the Exchange Agent may determine is reasonably necessary as indemnity against any claim that may be made against it with respect to such Tandem Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Tandem Certificate, and in accordance with this Section 2.7, shares of GBC Common Stock and/or cash constituting the Merger Consideration deliverable in respect thereof pursuant to this Agreement.

 

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(f)            If, between the date of this Agreement and the Effective Time, the outstanding shares of GBC Common Stock shall have been changed into a different number of shares or into a different class by reason of any stock dividend, subdivision, reclassification, recapitalization, split, combination or exchange of shares, the conversion price in the GBC Common Stock shall be adjusted appropriately to provide the holders of Tandem Common Stock the same economic effect as contemplated by this Agreement prior to such event.

 

(g)            Each of Tandem, GBC and the Exchange Agent shall be entitled to deduct and withhold from the Per Share Merger Consideration otherwise payable pursuant to this Agreement to any Tandem shareholder such amounts, if any, as it is required to deduct and withhold with respect to the making of such payment under the Code or any provision of state, local or foreign Tax law. To the extent that any amounts are so withheld by Tandem, GBC or the Exchange Agent, as the case may be, and timely remitted to the appropriate Governmental Entity, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Tandem shareholder on whose behalf such deduction and withholding was made by Tandem, GBC or the Exchange Agent, as the case may be. At least three (3) business days in advance of the Closing Date, GBC shall provide written notice to Tandem of any such intended withholding (other than any withholding on amounts properly treated as wages for U.S. federal income tax purposes); provided, further, GBC shall use commercially reasonable efforts to cooperate with Tandem in its efforts to obtain reduction of or relief from any such withholding obligation to the extent permitted under applicable law. Additionally, at or immediately prior to the Closing, Tandem shall provide to GBC (i) a notice to the Internal Revenue Service (the “IRS”), in accordance with the requirements of Treasury Regulation Section 1.897-2(h)(2) dated as of the Closing Date, together with written authorization for GBC to deliver such notice to the IRS on behalf of Tandem after the Closing, and (ii) a certificate, stating interests in Tandem are not “United States real property interests” as defined in Section 897(c) of the Code for the applicable period described in Section 897(c)(1)(A)(ii) of the Code, prepared in accordance with the Treasury Regulations under Sections 897 and 1445 of the Code, each in form and substance reasonably satisfactory to GBC and validly executed by a duly authorized officer of Tandem.

 

(h)            The Exchange Agent may establish such other reasonable and customary rules and procedures in connection with its duties as it may deem appropriate. GBC shall pay all charges and expenses, including those of the Exchange Agent, in connection with the distribution of the consideration provided in this Article II.

 

2.8            Rights of Former Tandem Shareholders. After the Effective Time, there shall be no transfers of Tandem Common Stock on the stock transfer books of Tandem, and no transfer of Tandem Common Stock by any such holder shall thereafter be made or recognized. No dividends or other distributions declared with respect to GBC Common Stock and payable to the holders of record thereof after the Effective Time shall be paid to the holder of any unsurrendered Tandem Certificate until the holder thereof shall surrender such Tandem Certificate in accordance with this Article II. Promptly after the surrender of a Tandem Certificate in accordance with this Article II, the record holder thereof shall be entitled to receive any such dividends or other distributions, without interest thereon, which theretofore had become payable with respect to shares of GBC Common Stock into which the Tandem Common Stock were converted at the Effective Time pursuant to Section 2.1. No holder of an unsurrendered Tandem Certificate shall be entitled, until surrender of such Tandem Certificate, to vote the shares of GBC Common Stock into which such holder’s Tandem Common Stock shall have been converted until the holder thereof shall surrender such Tandem Certificate in accordance with this Article II. Until surrendered for exchange in accordance with the provisions of Article II, each Tandem Certificate theretofore representing Tandem Common Stock (other than Cancelled Shares and Dissenters’ Shares) shall from and after the Effective Time represent for all purposes only the right to receive the Per Share Merger Consideration provided in this Article II in exchange therefor, subject, however, to the Surviving Entity’s obligation to pay any dividends or make any other distributions with a record date prior to the Effective Time which have been declared or made by Tandem in respect of such Tandem Common Stock in accordance with the terms of this Agreement and which remain unpaid at the Effective Time.

 

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Article III

 

REPRESENTATIONS AND WARRANTIES OF TANDEM

 

Except as disclosed in the disclosure schedule delivered by Tandem to GBC concurrently herewith (the “Tandem Disclosure Schedule”) (it being understood that (i) no item is required to be set forth as an exception to a representation or warranty if its absence would not result in the related representation or warranty being deemed untrue or incorrect, (ii) the mere inclusion of an item in the Tandem Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission by Tandem that such item represents a material exception or fact, event or circumstance or that such item would reasonably be expected to have a Material Adverse Effect, and (iii) any disclosures made with respect to a section of this Article III shall be deemed to qualify (1) any other section of this Article III specifically referenced or cross-referenced, and (2) other sections of this Article III to the extent it is reasonably apparent on its face (notwithstanding the absence of a specific cross reference) from a reading of the disclosure that such disclosure applies to such other sections), Tandem hereby represents and warrants to GBC as follows:

 

3.1            Corporate Organization.

 

(a)            Tandem is a corporation duly organized, validly existing and in good standing under the laws of the State of Georgia, is a bank holding company duly registered under the Bank Holding Company Act of 1956, as amended (the “BHC Act”) and has not elected to be treated as a financial holding company under the BHC Act. Tandem has the corporate power and authority to own, lease or operate all of its properties and assets and to carry on its business as it is now being conducted in all material respects. Tandem is duly licensed or qualified to do business and in good standing in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned, leased or operated by it makes such licensing, qualification or standing necessary, except where the failure to be so licensed or qualified or to be in good standing would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Tandem. True and complete copies of the articles of incorporation of Tandem (the “Tandem Articles”), and the bylaws of Tandem (the “Tandem Bylaws”), in each case, as in effect as of the date of this Agreement, have previously been made available by Tandem to GBC.

 

(b)            Except as would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Tandem, each Subsidiary of Tandem (a “Tandem Subsidiary”) (i) is duly organized and validly existing under the laws of its jurisdiction of organization, (ii) is duly licensed or qualified to do business and, where such concept is recognized under applicable law, in good standing in all jurisdictions (whether federal, state, local or foreign) where its ownership, leasing or operation of property or the conduct of its business requires it to be so licensed or qualified or in good standing, and (iii) has all requisite corporate power and authority to own, lease or operate its properties and assets and to carry on its business as now conducted. There are no restrictions on the ability of Tandem or any Subsidiary of Tandem to pay dividends or distributions except, in the case of Tandem or a Subsidiary that is a regulated entity, for restrictions on dividends or distributions generally applicable to all similarly regulated entities. Tandem Bank is the only depository institution Subsidiary of Tandem, and the deposit accounts of Tandem Bank are insured by the Federal Deposit Insurance Corporation (the “FDIC”) through the Deposit Insurance Fund (as defined in Section 3(y) of the Federal Deposit Insurance Act of 1950 (the “FDI Act”)) to the fullest extent permitted by law, all premiums and assessments required to be paid in connection therewith have been paid when due, and no proceedings for the termination of such insurance are pending or threatened. No Subsidiary of Tandem is in violation of any of the provisions of its articles or certificate of incorporation or bylaws (or comparable organizational documents). True and complete copies of the organizational documents of Tandem Bank as in effect as of the date of this Agreement have previously been made available by Tandem to GBC. There is no person whose results of operations, cash flows, changes in shareholders’ equity or financial position are consolidated in the financial statements of Tandem other than the Tandem Subsidiaries.

 

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3.2            Capitalization.

 

(a)            The authorized capital stock of Tandem consists of 20,000,000 shares of common stock, par value $1.00 per share (“Tandem Common Stock”), and 1,000,000 shares of preferred stock, par value $1.00 per share. As of February 20, 2026, there were: (i) 2,390,334 shares of Tandem Common Stock issued and outstanding (excluding shares of Tandem Common Stock issued pursuant to Restricted Stock Awards), (ii) outstanding Restricted Stock Awards pursuant to which 11,400 shares of Tandem Common Stock were issued and outstanding, (iii) no shares of preferred stock of Tandem, (iv) Tandem Options to purchase 157,104 shares of Tandem Common Stock, and (v) Tandem Warrants to purchase 173,000 shares of Tandem Common Stock. All the issued and outstanding shares of Tandem Common Stock have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof. There are no bonds, debentures, notes or other indebtedness that have the right to vote on any matters on which shareholders of Tandem may vote. Except for the Tandem Options, Tandem Warrants, and the Tandem Restricted Stock Awards, there are no outstanding subscriptions, options, warrants, stock appreciation rights, phantom units, scrip, rights to subscribe to or purchase, preemptive rights, anti-dilutive rights, rights of first refusal or similar rights, puts, calls, commitments or agreements of any character relating to, or securities or rights convertible or exchangeable into or exercisable for, shares of capital stock or other voting or equity securities of or ownership interest in Tandem, or contracts, commitments, understandings or arrangements by which Tandem may become bound to issue additional shares of its capital stock or other equity or voting securities of or ownership interests in Tandem, or that otherwise obligate Tandem to issue, transfer, sell, purchase, redeem or otherwise acquire, any of the foregoing (collectively, “Tandem Securities”). Except for the Tandem Options, Tandem Warrants, and Tandem Restricted Stock Awards, no equity-based awards (including any cash awards where the amount of payment is determined, in whole or in part, based on the price of any capital stock of Tandem or any of its Subsidiaries) are outstanding. No Tandem Subsidiary owns any capital stock of Tandem. There are no voting trusts, shareholder agreements, proxies or other agreements in effect to which Tandem or any of its Subsidiaries is a party with respect to the voting or transfer of Tandem Common Stock, capital stock or other voting or equity securities or ownership interests of Tandem or granting any shareholder or other person any registration rights.

 

(b)            Except as would not, either individually or in the aggregate, reasonably be expected to be material to Tandem, Tandem owns, directly or indirectly, all the issued and outstanding shares of capital stock or other equity ownership interests of each of the Tandem Subsidiaries, free and clear of any liens, claims, title defects, mortgages, pledges, charges, and security interests whatsoever, and any other encumbrances securing a payment or the performance of an obligation (collectively, “Liens”), and all of such shares or equity ownership interests are duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof. Other than the shares of capital stock or other equity ownership interests described in the previous sentence, there are no outstanding subscriptions, options, warrants, stock appreciation rights, phantom units, scrip, rights to subscribe to, preemptive rights, anti-dilutive rights, rights of first refusal or similar rights, puts, calls, commitments or agreements of any character relating to, or securities or rights convertible into or exchangeable or exercisable for, shares of capital stock or other voting or equity securities of or ownership interests in any Tandem Subsidiary, or contracts, commitments, understandings or arrangements by which any Tandem Subsidiary may become bound to issue additional shares of its capital stock or other equity or voting securities or ownership interests in such Tandem Subsidiary, or otherwise obligating any Tandem Subsidiary to issue, transfer, sell, purchase, redeem or otherwise acquire any of the foregoing.

 

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3.3            Authority; No Violation.

 

(a)            Tandem has full corporate power and authority to execute and deliver this Agreement and, subject to the shareholder and other actions described below, to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the Merger and the Bank Merger have been duly and validly approved by the Board of Directors of Tandem. The Board of Directors of Tandem has determined that the Merger, on the terms and conditions set forth in this Agreement, is advisable and in the best interests of Tandem and its shareholders, has adopted and approved this Agreement and the transactions contemplated hereby (including the Merger and the Bank Merger), and has directed that this Agreement be submitted to Tandem’s shareholders for approval at a meeting of such shareholders and has adopted a resolution to the foregoing effect. The execution and delivery of the Bank Merger Agreement have been duly and validly approved by the Board of Directors of Tandem and the Board of Directors of Tandem Bank. Both the Board of Directors of Tandem and the Board of Directors of Tandem Bank have determined that the Bank Merger, on the terms and conditions set forth in the Bank Merger Agreement, is advisable and in the best interests of Tandem Bank and Tandem as its sole shareholder. Except for the approval of this Agreement by the affirmative vote of a majority of all the votes entitled to be cast on such matter by the holders of Tandem Common Stock (the “Requisite Tandem Vote”), and the approval of the Bank Merger Agreement by Tandem as Tandem Bank’s sole shareholder, no other corporate proceedings on the part of Tandem are necessary to approve this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Tandem and (assuming due authorization, execution and delivery by GBC) constitutes a valid and binding obligation of Tandem, enforceable against Tandem in accordance with its terms (except in all cases as such enforceability may be limited by bankruptcy, insolvency, fraudulent transfer, forbearance, moratorium, reorganization or similar laws of general applicability affecting the rights of creditors generally and the availability of equitable remedies (the “Enforceability Exceptions”)).

 

(b)            Except as set forth on Section 3.3(b) on the Tandem Disclosure Schedule, neither the execution and delivery of this Agreement by Tandem nor the consummation by Tandem of the transactions contemplated hereby (including the Merger and the Bank Merger), nor compliance by Tandem with any of the terms or provisions hereof, will (i) violate any provision of the Tandem Articles, the Tandem Bylaws or the organizational documents of any Tandem Subsidiary, or (ii) assuming that the consents and approvals referred to in Section 3.4 are duly obtained, (x) violate any law, statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to Tandem or any of its Subsidiaries or any of their respective properties or assets, or (y) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by, or result in the creation of any Lien upon any of the respective properties or assets of Tandem or any of its Subsidiaries under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which Tandem or any of its Subsidiaries is a party, or by which they or any of their respective properties or assets may be bound, except (in the case of clauses (x) and (y) above) for such violations, conflicts, breaches, defaults, terminations, cancellations, accelerations or creations that, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Tandem.

 

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3.4            Consents and Approvals. Except for (a) the Fairness Determination, (b) the filing of any required applications, filings, waiver requests and notices, as applicable, with the Board of Governors of the Federal Reserve System (the “Federal Reserve”) under the BHC Act and approval or waiver of such applications, filings, waiver requests and notices, (c) the filing of any required applications, filings and notices, as applicable, with the FDIC under the Bank Merger Act of 1960 and approval or waiver of such applications, filings and notices, (d) the filing of any required applications, filings and notices, as applicable, with the Georgia Department of Banking and Finance (the “DBF”) and approval or waiver of such applications, filings and notices, (e) the filing of any required applications, filings and notices, as applicable, with each Applicable Agency (as defined below) and the receipt of any required consents or approvals from each Applicable Agency, (f) those additional applications, filings and notices, if any, listed on Section 3.4 of the Tandem Disclosure Schedule and approval of such applications, filings and notices, (g) the filing of the Certificate of Merger with the Georgia Secretary pursuant to the GBCC, (h) the filing of the Bank Merger Certificate with the applicable Governmental Entity as required by applicable law, and (i) such filings and approvals as are required to be made or obtained under the securities or “blue sky” laws of various states in connection with the issuance of the shares of GBC Common Stock pursuant to this Agreement, no consents or approvals of or filings or registrations with any court, administrative agency or commission, Regulatory Agency or other governmental or regulatory authority or instrumentality or SRO (each a “Governmental Entity”) are necessary in connection with (i) the execution and delivery by Tandem of this Agreement or (ii) the consummation by Tandem of the Merger and the other transactions contemplated hereby (including the Bank Merger). As of the date hereof, Tandem has no knowledge of any reason why the necessary regulatory approvals and consents will not be received by Tandem to permit consummation of the Merger and the Bank Merger on a timely basis. As used herein, “Applicable Agencies” means the United States Department of Agriculture and the Small Business Administration.

 

3.5            Reports. Tandem and each of its Subsidiaries have timely filed (or furnished, as applicable) all reports, forms, correspondence, registrations and statements, together with any amendments required to be made with respect thereto, that they were required to file (or furnish, as applicable) since January 1, 2024 with (i) any state regulatory authority, (ii) the Federal Reserve, (iii) the DBF, (iv) the FDIC, (v) any foreign regulatory authority, and (vi) any self-regulatory organization (an “SRO”) (clauses (i) – (vi), collectively “Regulatory Agencies”), including any report, form, correspondence, registration or statement required to be filed (or furnished, as applicable) pursuant to the laws, rules or regulations of the United States, any state, any foreign entity or any Regulatory Agency, and have paid all fees and assessments due and payable in connection therewith, except where the failure to file (or furnish, as applicable) such report, form, correspondence, registration or statement or to pay such fees and assessments, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Tandem. Subject to Section 9.15, except for normal examinations conducted by a Regulatory Agency in the ordinary course of business of Tandem and its Subsidiaries, no Regulatory Agency or governmental agency or authority has initiated or has pending any proceeding or, to the knowledge of Tandem, investigation into the business or operations of Tandem or any of its Subsidiaries since January 1, 2024, except where such proceedings or investigations would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Tandem. Subject to Section 9.15, there (i) is no unresolved violation, criticism, or exception by any Regulatory Agency with respect to any report or statement relating to any examinations or inspections of Tandem or any of its Subsidiaries, and (ii) has been no formal or informal inquiries by, or disagreements or disputes with, any Regulatory Agency with respect to the business, operations, policies or procedures of Tandem or any of its Subsidiaries since January 1, 2024, in each case, which would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Tandem.

 

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3.6            Financial Statements.

 

(a)            Tandem has furnished to GBC true and complete copies of (i) the consolidated balance sheet of Tandem and Tandem Bank as of December 31, 2022, December 31, 2023 and December 31, 2024, and the related consolidated statements of operations, shareholders’ equity, and cash flows of Tandem and Tandem Bank, together with all related notes and schedules thereto, accompanied by the reports thereon of Tandem’ independent auditors for the years ended as of such dates, and (ii) the unaudited financial statements of Tandem and Tandem Bank for the twelve months ended December 31, 2025 (collectively, the “Tandem Financial Statements”). The Tandem Financial Statements (including the related notes) complied as to form, as of their respective dates, in all material respects with applicable accounting requirements, have been prepared according to GAAP applied on a consistent basis during the periods and at the dates involved (except as may be indicated in the notes thereto), fairly present, in all material respects, the financial condition of Tandem and its Subsidiaries, as applicable, at the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to notes and normal year-end adjustments that were not material in amount or effect).

 

(b)            Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Tandem, neither Tandem nor any of its Subsidiaries has any liability of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether due or to become due), except for those liabilities that are reflected or reserved against on the consolidated balance sheet of Tandem for the month ended December 31, 2025 included in the Tandem Financial Statements or liabilities incurred in the ordinary course of business consistent with past practice since December 31, 2025 or in connection with this Agreement and the transactions contemplated hereby.

 

(c)            Tandem or Tandem Bank has filed all required Reports of Condition and Income (“Call Reports”) since January 1, 2024 for Tandem Bank. The Call Reports fairly present, in all material respects, the financial position of Tandem Bank and the results of its operations at the date and for the period indicated in that Call Report in conformity with the instructions to the Call Report. Since January 1, 2024, Tandem Bank has calculated its allowance for credit losses (“ACL”) (or allowance for loan and lease losses (“ALLL”) prior to the promulgation of the Interagency Policy Statement on the Allowance of Credit Losses) in accordance with (i) GAAP (ii) the Interagency Policy Statement on the Allowance for Credit Losses (or the Interagency Policy Statement on the Allowance of Loan and Lease Losses prior to the promulgation of the Interagency Policy Statement on the Allowance of Credit Losses) and (iii) all applicable rules and regulations, and, in the reasonable opinion of management, the ACL is reasonably likely to be to be adequate in all material respects.

 

(d)            Since January 1, 2024, (i) neither Tandem, Tandem Bank, or their respective Subsidiaries nor, to the knowledge of Tandem, any director, officer, employee, auditor, accountant or representative of Tandem or its Subsidiaries has received or otherwise obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of Tandem or its Subsidiaries or their respective internal accounting controls relating to periods after January 1, 2024, including any material complaint, allegation, assertion or claim that Tandem or its Subsidiaries has engaged in questionable accounting or auditing practices, and (ii) to the knowledge of Tandem, no attorney representing Tandem or its Subsidiaries, whether or not employed by Tandem or its Subsidiaries, has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation, relating to periods after January 1, 2024, by Tandem or its Subsidiaries or any of their officers, directors, employees or agents to the Board of Directors of Tandem or the Board of Directors of Tandem Bank (or any committee thereof) or to any director or officer of Tandem, Tandem Bank, or their respective Subsidiaries.

 

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(e)            Neither Tandem nor its Subsidiaries is a party to, or has any commitment to become a party to, any joint venture, off-balance sheet partnership or any similar contract or arrangement (including any contract or arrangement relating to any transaction or relationship between or among Tandem and its Subsidiaries, on the one hand, and any unconsolidated affiliate, including any structured finance, special purpose or limited purpose entity or person, on the other hand, or any “off-balance sheet arrangement”), where the result, purpose or intended effect of such contract or arrangement is to avoid disclosure of any material transaction involving, or material liabilities of, Tandem or its Subsidiaries in Tandem’ or its Subsidiaries’ financial statements.

 

3.7            Broker’s Fees. With the exception of the engagement of Performance Trust Capital Partners, neither Tandem nor any Tandem Subsidiary nor any of their respective officers or directors has employed any broker, finder or financial advisor or incurred any liability for any broker’s fees, commissions or finder’s fees in connection with the Merger or related transactions contemplated by this Agreement. Tandem has disclosed to GBC as of the date hereof the material terms, including the payment of fees, of Tandem’s engagement of Performance Trust Capital Partners related to the Merger and the other transactions contemplated hereunder.

 

3.8            Absence of Certain Changes or Events.

 

(a)            Since December 31, 2024, there has not been any effect, change, event, circumstance, condition, occurrence or development that has had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Tandem.

 

(b)            Since December 31, 2024 through the date of this Agreement, Tandem and its Subsidiaries have carried on their respective businesses in all material respects in the ordinary course.

 

3.9            Legal and Regulatory Proceedings.

 

(a)            Except as would not reasonably be expected to, either individually or in the aggregate, have a Material Adverse Effect on Tandem, neither Tandem nor any of its Subsidiaries is a party to any, and there are no outstanding or pending or, to the knowledge of Tandem, threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations of any nature against Tandem or any of its Subsidiaries or any of their current or former directors or executive officers or challenging the validity or propriety of the transactions contemplated by this Agreement.

 

(b)            Except as would not reasonably be expected to, either individually or in the aggregate, be material to Tandem, there is no injunction, order, judgment, decree, or regulatory restriction imposed upon Tandem, any of its Subsidiaries or the assets of Tandem or any of its Subsidiaries (or that, upon consummation of the Merger, would apply to the Surviving Entity or any of its affiliates).

 

3.10          Taxes and Tax Returns.

 

(a)            Except as would not reasonably be expected to, either individually or in the aggregate, have a Material Adverse Effect on Tandem: each of Tandem and its Subsidiaries has duly and timely filed (including all applicable extensions) all Tax Returns in all jurisdictions in which Tax Returns are required to be filed by it, and all such Tax Returns are true, correct and complete; neither Tandem nor any of its Subsidiaries is the beneficiary of any extension of time within which to file any Tax Return (other than extensions to file Tax Returns obtained in the ordinary course); all Taxes of Tandem and its Subsidiaries (whether or not shown on any Tax Returns) that are due have been fully and timely paid; each of Tandem and its Subsidiaries has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, creditor, shareholder, independent contractor or other third party; each of Tandem and its Subsidiaries have withheld and timely paid all Taxes required to have been withheld and paid with respect to, and have complied with, all information reporting, backup withholding, and nonresident withholding requirements; neither Tandem nor any of its Subsidiaries has granted any extension or waiver of the limitation period applicable to any Tax that remains in effect (other than extension or waiver granted in the ordinary course of business); neither Tandem nor any of its Subsidiaries has received written notice of assessment or proposed assessment in connection with any amount of Taxes, and there are no threatened in writing or pending disputes, claims, audits, examinations or other proceedings regarding any Tax of Tandem and its Subsidiaries or the assets of Tandem and its Subsidiaries; neither Tandem nor any of its Subsidiaries in the last three (3) years has requested or become bound by any private letter ruling requests, closing agreements or gain recognition agreements with respect to Taxes; neither Tandem nor any of its Subsidiaries is a party to or is bound by any Tax sharing, allocation or indemnification agreement or arrangement (other than such an agreement or arrangement exclusively between or among Tandem and its Subsidiaries); neither Tandem nor any of its Subsidiaries (A) has been a member of an affiliated group filing a consolidated federal income Tax Return for which the statute of limitations is open (other than a group the common parent of which was Tandem), or (B) has any liability for the Taxes of any person (other than Tandem or any of its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law) or otherwise as a transferee or successor.

 

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(b)            No written claim has ever been made by a Governmental Entity in a jurisdiction where Tandem and its Subsidiaries do not file Tax Returns that it is or may be subject to taxation by, or required to file a Tax Return in, that jurisdiction. There are no liens for Taxes (other than statutory liens for Taxes not yet due and payable) upon any assets of Tandem or any of its Subsidiaries.

 

(c)            Neither Tandem nor any of its Subsidiaries has been a United States real property holding corporation within the meaning of Section 897(c)(2) of the Code during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code. Tandem and each of its Subsidiaries have disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code.

 

(d)            Neither Tandem nor any of its Subsidiaries will be required to include any material item in, or exclude any material item of deduction from, taxable income for any taxable period (or portion thereof) ending after the Closing Date as a result of any: (i) change in method of accounting for a taxable period ending on or prior to the Closing Date; (ii) “closing agreement” as described in Section 7121 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law) executed on or prior to the Closing Date; (iii) intercompany transactions or any excess loss account described in Treasury Regulations under Section 1502 of the Code (or any corresponding or similar provision of state, local or foreign income Tax law); (iv) installment sale or open transaction disposition made on or prior to the Closing date; or (v) prepaid amount received on or prior to the Closing Date.

 

(e)            Neither Tandem nor any of its Subsidiaries has been, within the past five (5) years or otherwise as part of a “plan (or series of related transactions)” within the meaning of Section 355(e) of the Code of which the Merger is also a part, a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock intending to qualify for tax-free treatment under Section 355 of the Code. Neither Tandem nor any of its Subsidiaries has participated in a “listed transaction” within the meaning of Treasury Regulation Section 1.6011-4(b)(2).

 

(f)            Neither Tandem nor any of its Subsidiaries has deferred the payment of any Tax or claimed or received any Tax refund or credit pursuant to the Coronavirus Aid, Relief, and Economic Security Act, any similar statutory relief, or any other Tax legislation related to the COVID-19 pandemic or pursuant to any written agreement with a Governmental Entity that remains unpaid.

 

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3.11          Employees.

 

(a)            Each Tandem Benefit Plan (as defined below) has been established, maintained, funded, operated and administered in all material respects in accordance with its terms and the requirements of all applicable laws, including ERISA and the Code. Neither Tandem nor any of its Subsidiaries has taken any corrective action or made any filing under any voluntary correction program of the IRS, Department of Labor or any other Governmental Entity with respect to any Tandem Benefit Plan in respect of any documentary or operational failure that has not been properly and fully corrected in accordance with the applicable correction program. Neither Tandem, any of its Subsidiaries nor any Tandem ERISA Affiliate has incurred, and, to the knowledge of Tandem, no facts exist which reasonably could be expected to result in, any liability (direct or indirect, contingent or otherwise) to Tandem or any Subsidiary with respect to any Tandem Benefit Plan including without limitation, any liability, tax, penalty or fee under ERISA, the Code or any other applicable laws (other than to pay premiums, contributions or benefits in the ordinary course consistent with the terms of such plans). For purposes of this Agreement, the term “Tandem Benefit Plans” means all employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), whether or not subject to ERISA, and all equity, bonus or incentive, deferred compensation, retiree medical or life insurance, retirement, supplemental retirement, severance, termination, change in control, retention, employment, welfare, medical, disability, fringe or other benefit plans, programs, agreements, contracts, policies, arrangements or remuneration of any kind with respect to which Tandem or any Subsidiary or any other entity, trade or business, whether or not incorporated, which together with Tandem or any Subsidiary would, at any relevant time, be deemed a “single employer” within the meaning of Section 414 of the Code or Section 4001 of ERISA (a “Tandem ERISA Affiliate”), is a party or has any current or future obligation or liability, contingent or otherwise, or that are maintained, contributed to (or required to be contributed to) or sponsored by Tandem, any of its Subsidiaries or any Tandem ERISA Affiliate for the benefit of any current or former employee, officer, director or independent contractor of Tandem, any of its Subsidiaries or any Tandem ERISA Affiliate or the spouses, dependents and/or beneficiaries of any of the foregoing.

 

(b)            Section 3.11(b) of the Tandem Disclosure Schedule sets forth a true, correct and complete list of all material Tandem Benefit Plans. Tandem has made available to GBC true, correct and complete copies of each material Tandem Benefit Plan and any related trust or other funding vehicle or insurance policy, and the following related documents, to the extent applicable: (i) all summary plan descriptions, amendments, modifications or supplements, (ii) the most recent annual report (Form 5500) filed with the IRS, (iii) the most recently received IRS determination letter from the IRS or the opinion letter issued to the prototype sponsor with respect to each such Tandem Benefit Plan intended to qualify under Section 401 of the Code, (iv) the most recently prepared actuarial report, (v) all contracts with any parties providing services or insurance to such plan, (vi) copies of material correspondence relating to any Tandem Benefit Plan in the last three (3) years with all Governmental Entities, (vii) the IRS Forms 1094-C and 1095-C filed with the IRS and provided to employees for the past three years, and (viii) such other documentation with respect to any such Tandem Benefit Plan as is reasonably requested by GBC. None of the Tandem Benefit Plans are subject to or governed by the Laws of any jurisdiction other than the United States. No “employer” within the meaning of Section 3(5) of ERISA that is not a Tandem ERISA Affiliate, other than Tandem and its Subsidiaries, participates in any Tandem Benefit Plan

 

(c)            The IRS has issued a favorable determination letter or opinion with respect to each Tandem Benefit Plan that is intended to be qualified under Section 401(a) of the Code (the “Tandem Qualified Plans”), and the related trust, which letter or, to the knowledge of Tandem, opinion has not been revoked (nor, to the knowledge of Tandem, has revocation been threatened), and, to the knowledge of Tandem, there are no existing circumstances and no events have occurred or are threatened that would reasonably be expected to adversely affect the qualified status of any Tandem Qualified Plan or the tax-exempt status of the related trust.

 

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(d)            Neither Tandem, any of its Subsidiaries nor any Tandem ERISA Affiliate maintains, sponsors, contributes to or is obligated to contribute to, or within the prior ten (10) years has had any obligation to contribute to, or liability under or respect to, contingent or otherwise, (i) a “defined benefit plan,” as defined in Section 3(35) of ERISA, (ii) a pension plan within the meaning of Section 3(2) of ERISA that is covered by Title IV of ERISA and/or subject to the minimum funding standards of Section 302 of ERISA, Title IV of ERISA or Section 412, 430 or 4971 of the Code, (iii) a “multiple employer welfare arrangement” as defined in Section 3(40) of ERISA, or (iv) a trust that is intended to meet the requirements of Section 501(c)(9) of the Code.

 

(e)            Neither Tandem, any of its Subsidiaries nor any Tandem ERISA Affiliate maintains, sponsors, contributes to or is obligated to contribute to, or has ever had any obligation or liability, contingent or otherwise, under or with respect to (i) a “multiemployer plan,” as defined in Section 3(37) or 4001(a)(3) of ERISA or (ii) a “multiple employer plan” within the meaning of Section 413(c) of the Code or Section 4063, 4064 or 4066 of ERISA.

 

(f)            Except as set forth on Section 3.11(f) on the Tandem Disclosure Schedule, no Tandem Benefit Plan provides for any post-employment or post-retirement health or medical or life insurance benefits for retired, former or current employees or spouses, beneficiaries or dependents thereof, except as required by Section 4980B of the Code, Part 6 of Subtitle B of Title I of ERISA or similar provisions of any state laws for which the recipient pays the full premium therefor on an after-tax basis.

 

(g)            All payments, premiums, contributions, remittances and reimbursements required to be made with respect to any Tandem Benefit Plan by applicable law or by any plan document or other contractual undertaking, and all premiums due or payable with respect to insurance policies funding any Tandem Benefit Plan, for any period through the date hereof, have been timely made or paid in full or, to the extent not required to be made or paid on or before the date hereof, have been fully reflected on the books and records of Tandem. There are no outstanding defaults or material violations by any party to any Tandem Benefit Plan, and no material taxes, penalties or fees are owing under any Tandem Benefit Plan. All reports and information relating to each Tandem Benefit Plan required to be filed with any Governmental Entity have been timely filed, all reports and information relating to each Tandem Benefit Plan required to be disclosed or provided to participants or their dependents or beneficiaries have been timely disclosed or provided, and, in each case, all information and disclosures contained therein were true, correct and complete in all material respects when disclosed.

 

(h)            Each Tandem Benefit Plan that is a “nonqualified deferred compensation plan” within the meaning of Code Section 409A and not otherwise exempt from Section 409A of the Code has been maintained in writing, and operated and administered, in compliance with the requirements of Code Section 409A to the extent applicable.

 

(i)             There are no pending or threatened claims (other than claims for benefits in the ordinary course consistent with the terms of the plan), lawsuits, audits, investigations or arbitrations which have been asserted or instituted, and, to Tandem’ knowledge, no set of circumstances exists which may reasonably be expected to give rise to a claim, lawsuit, audit, investigation or arbitration against any Tandem Benefit Plan, any trustees or fiduciaries thereof with respect to their duties to any Tandem Benefit Plan, any of Tandem, any Subsidiary or Tandem ERISA Affiliate or any director, officer, or employee thereof, or the assets of any Tandem Benefit Plan (in trust or otherwise), in respect of any Tandem Benefit Plan which would have a Material Adverse Effect.

 

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(j)             None of Tandem, any of its Subsidiaries, any Tandem ERISA Affiliate, nor, to the knowledge of Tandem, any director, officer of employee thereof, or any other party in interest or disqualified person (as defined in Section 4975 of the Code or Section 406 of ERISA), has engaged in any nonexempt “prohibited transaction” (as defined in Section 4975 of the Code or Section 406 of ERISA) in respect of any Tandem Benefit Plan.

 

(k)            Tandem and its Subsidiaries have complied, in all material respects, with the applicable provisions of the Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”) including all provisions of the ACA applicable to their employees, including the employer shared responsibility provisions relating to the offer of “minimum essential coverage” to “full-time” employees that is “affordable” and provides “minimum value” (as defined in Code Section 4980H and related regulations) and the applicable employer information reporting provisions under Code Sections 6055 and 6056 (and all related regulations), and, to the knowledge of Tandem, have not incurred, nor does any condition exist that could reasonably be expected to subject Tandem or any of its Subsidiaries to, any liability under Section 4980H of the Code and its governing regulations. Tandem, each of its Subsidiaries and each Tandem ERISA Affiliate have complied in all material respects with the notice and continuation coverage requirements of Section 4980B of the Code and the regulations thereunder and similar laws.

 

(l)             Except as set forth in Section 3.11(l) of the Tandem Disclosure Schedule, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (either alone or in conjunction with any other event) result in the acceleration of vesting, exercisability, funding or delivery of, or increase in the amount or value of, any payment, right or other benefit to any employee, officer, director or other service provider of Tandem or any of its Subsidiaries, or result in any limitation on the right of Tandem or any of its Subsidiaries to amend, merge, terminate or receive a reversion of assets from any Tandem Benefit Plan or related trust on or after the Effective Time. Without limiting the generality of the foregoing, no amount paid or payable (whether in cash, in property, or in the form of benefits) to any employee, officer, director or other service provider of Tandem or any of its Subsidiaries in connection with the transactions contemplated hereby (either solely as a result thereof or as a result of such transactions in conjunction with, related to or associated with any other event) will be an “excess parachute payment” within the meaning of Section 280G of the Code.

 

(m)           No Tandem Benefit Plan provides for the gross-up or reimbursement of Taxes under Section 409A or 4999 of the Code, or otherwise.

 

(n)            The transactions contemplated by this Agreement will not cause or require Tandem or any of its affiliates to establish or make any contribution to a rabbi trust or similar funding vehicle.

 

(o)            Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Tandem, there are no pending or, to Tandem’ knowledge, threatened labor grievances or unfair labor practice claims or charges against Tandem or any of its Subsidiaries, or any strikes or other labor disputes against Tandem or any of its Subsidiaries. Neither Tandem nor any of its Subsidiaries is party to or bound by any collective bargaining or similar agreement with any labor organization, or work rules or practices agreed to with any labor organization or employee association applicable to employees of Tandem or any of its Subsidiaries and, there are no pending or, to the knowledge of Tandem, threatened organizing efforts by any union or other group seeking to represent any employees of Tandem or any of its Subsidiaries.

 

(p)            Tandem and its Subsidiaries are, and have been since January 1, 2024, in compliance with all applicable laws relating to labor and employment, including those relating to labor relations, wages, hours, overtime, employee and contractor classification, discrimination, harassment, retaliation, reasonable accommodation, leaves of absence, employee compensation and benefits, plant closures or layoffs, background checks, drug and alcohol testing, civil rights, affirmative action, work authorization, immigration, safety and health, information privacy and security, unemployment insurance, workers compensation, continuation coverage under group health plans, wage payment and the related payment and withholding of Taxes, except for failures to comply that have not had and would not reasonably be expected to result in any material liability to Tandem and its Subsidiaries, taken as a whole.

 

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(q)            In the past five (5) years, neither Tandem nor any of the Tandem Subsidiaries has entered into a settlement agreement with a current or former officer, an employee or an independent contractor of the Tandem or its Subsidiaries that substantially involves allegations relating to sexual harassment by either (i) an executive officer of Tandem or its Subsidiaries or (ii) a senior employee of Tandem or its Subsidiaries. In the past five (5) years, to the knowledge of Tandem, no allegations of sexual harassment have been made against (x) an executive officer of Tandem or its Subsidiaries or (y) an employee at the level of Senior Vice President (or any similarly-leveled employee) or above of Tandem or its Subsidiaries.

 

(r)            Each Tandem Benefit Plan that is a “pension plan” within the meaning of Section 3(2) of ERISA but is not qualified under Code Section 401(a) is exempt from Parts 2, 3 and 4 of Title I of ERISA as an unfunded plan that is maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees, pursuant to Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, and Tandem has made the one-time filing with the Department of Labor with respect to each such plan. No assets of any Tandem Benefit Plan are allocated to or held in a “rabbi trust” or similar funding vehicle.

 

(s)            Each individual who is or has ever been characterized as an employee or independent contractor by Tandem or any of its Subsidiaries has been properly classified as such for all purposes, including participation and benefit accrual under each Tandem Benefit Plan. All employees of Tandem and its Subsidiaries are and have been correctly classified as exempt or nonexempt under the Fair Labor Standards Act and similar state laws, and Tandem and its Subsidiaries have not received any notice from any individual or Governmental Entity disputing such classification.

 

(t)            The Tandem Benefit Plans have been administered in accordance with the Joint Notification of Extensions of Certain Timeframes for Employee Benefit Plans, Participants and Beneficiaries Affected by the COVID-19 Outbreak, Disaster Relief Notice 2021-01 and the COBRA premium assistance provisions under the American Rescue Plan Act of 2021, including proper recovery of premium credits through the FICA Tax Returns of the Company and/or the Subsidiary, if applicable.

 

3.12          Compliance with Applicable Law.

 

(a)            Tandem and each of its Subsidiaries hold, and have at all times since January 1, 2024, held, all licenses, registrations, franchises, certificates, variances, permits, charters and authorizations necessary for the lawful conduct of their respective businesses and ownership of their respective properties, rights and assets under and pursuant to each (and have paid all fees and assessments due and payable in connection therewith), except where neither the cost of failure to hold nor the cost of obtaining and holding such license, registration, franchise, certificate, variance, permit, charter or authorization (nor the failure to pay any fees or assessments) would, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Tandem, and, to the knowledge of Tandem, no suspension or cancellation of any such necessary license, registration, franchise, certificate, variance, permit, charter or authorization is threatened.

 

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(b)            Except as would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Tandem, Tandem and each of its Subsidiaries, since January 1, 2024, have complied with and are not in default or violation under any applicable law, statute, order, rule, regulation, policy and/or guideline of any Governmental Entity relating to Tandem or any of its Subsidiaries, including all laws related to data protection or privacy (including laws relating to the privacy and security of data or information that could reasonably be used to identify any person, or that otherwise constitutes personal data or personal information under applicable law (“Personal Data”)), the USA PATRIOT Act, the Bank Secrecy Act, the Equal Credit Opportunity Act and Regulation B, the Fair Housing Act, the Community Reinvestment Act, the Fair Credit Reporting Act, the Truth in Lending Act and Regulation Z, the Home Mortgage Disclosure Act, the Fair Debt Collection Practices Act, the Electronic Fund Transfer Act, Section 5 of the Federal Trade Commission Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, any regulations promulgated by the Consumer Financial Protection Bureau, the Interagency Policy Statement on Retail Sales of Nondeposit Investment Products, the Interagency Guidance on Third-Party Relationships: Risk Management. the SAFE Mortgage Licensing Act of 2008, the Real Estate Settlement Procedures Act and Regulation X, Title V of the Gramm-Leach-Bliley Act, any and all sanctions or regulations enforced by the Office of Foreign Assets Control of the United States Department of Treasury and any other law, policy or guideline relating to bank secrecy, discriminatory lending, financing or leasing practices, consumer protection, money laundering prevention, foreign assets control, U.S. sanctions laws and regulations, Sections 23A and 23B of the Federal Reserve Act, and all agency requirements relating to the origination, sale and servicing of mortgage and consumer loans. Tandem and its Subsidiaries have established and maintain a system of internal controls designed to ensure compliance in all material respects by Tandem and its Subsidiaries with applicable financial recordkeeping and reporting requirements of applicable money laundering prevention laws in jurisdictions where Tandem and its Subsidiaries conduct business.

 

(c)            Tandem Bank has received an Institution Community Reinvestment Act rating of “satisfactory” or better in its most recently completed Community Reinvestment Act examination and, to the knowledge of Tandem, there are no existing facts or circumstances that would negatively affect such rating.

 

(d)            Tandem maintains a written information privacy and security program that maintains reasonable measures to protect the privacy, confidentiality and security of all Personal Data and any other material confidential information against any (i) loss or misuse, (ii) unauthorized or unlawful operations performed thereon, or (iii) other act or omission that compromises the security or confidentiality thereof (clauses (i) through (iii), a “Security Breach”). To the knowledge of Tandem, Tandem has not experienced any Security Breach that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Tandem. To the knowledge of Tandem, there are no data security or other technological vulnerabilities with respect to its information technology systems or networks that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect on Tandem.

 

(e)            Without limitation, none of Tandem or any of its Subsidiaries, or to the knowledge of Tandem, any director, officer, employee, agent or other person acting on behalf of Tandem or any of its Subsidiaries has, directly or indirectly, (i) used any funds of Tandem or any of its Subsidiaries for unlawful contributions, unlawful gifts, unlawful entertainment or other expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic governmental officials or employees or to foreign or domestic political parties or campaigns from funds of Tandem or any of its Subsidiaries, (iii) violated any provision that would result in the violation of the Foreign Corrupt Practices Act of 1977, as amended, or any similar law, (iv) established or maintained any unlawful fund of monies or other assets of Tandem or any of its Subsidiaries, (v) made any fraudulent entry on the books or records of Tandem or any of its Subsidiaries, or (vi) made any unlawful bribe, unlawful rebate, unlawful payoff, unlawful influence payment, unlawful kickback or other unlawful payment to any person, private or public, regardless of form, whether in money, property or services, to obtain favorable treatment in securing business, to obtain special concessions for Tandem or any of its Subsidiaries, to pay for favorable treatment for business secured or to pay for special concessions already obtained for Tandem or any of its Subsidiaries, or is currently subject to any United States sanctions administered by the Office of Foreign Assets Control of the United States Treasury Department, except, in each case, as would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Tandem.

 

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(f)            As of the date hereof, each of Tandem and Tandem Bank is “well-capitalized” (as such term is defined in the relevant regulation of the institution’s Tandem federal regulator).

 

(g)            Tandem Bank has not offered or engaged in providing any individual or corporate trust services or administers any accounts for which it acts as a fiduciary, including, but not limited to, any accounts in which it serves as a trustee, agent, custodian, personal representative, guardian, conservator, or investment advisor.

 

3.13          Certain Contracts.

 

(a)            Except as set forth in Section 3.13(a) of the Tandem Disclosure Schedule, as of the date hereof, neither Tandem nor any of its Subsidiaries is a party to or bound by any contract, arrangement, commitment or understanding (whether written or oral):

 

(i)             which contains a provision that materially restricts the conduct of any line of business by Tandem or any of its Subsidiaries or upon consummation of the Merger will materially restrict the ability of the Surviving Entity or any of its affiliates to engage or compete in any line of business or in any geographic region (including any non-compete or client or customer non-solicitation requirement);

 

(ii)            which is a collective bargaining agreement or similar agreement with any labor organization;

 

(iii)           any of the benefits of or obligations under which will arise or be increased or accelerated by the occurrence of the execution and delivery of this Agreement, receipt of the Requisite Tandem Vote or the announcement or consummation of any of the transactions contemplated by this Agreement, or under which a right of cancellation or termination will arise as a result thereof, or the value of any of the benefits of which will be calculated on the basis of any of the transactions contemplated by this Agreement;

 

(iv)           that grants any right of first refusal, right of first offer or similar right with respect to any material assets, rights or properties of Tandem or its Subsidiaries, taken as a whole;

 

(v)            (A) that relates to the incurrence of indebtedness by Tandem or any Tandem Subsidiary other than (x) those entered into in the ordinary course of business and (y) deposit liabilities, trade payables, federal funds purchased, advances and loans from the Federal Home Loan Bank and securities sold under agreements to repurchase, in each case, incurred in the ordinary course of business consistent with past practice, and (B) any guaranty of any obligation for the incurrence of indebtedness, excluding endorsements made for collection, repurchase or resell agreements, letters of credit and guaranties made in the ordinary course of business, in the case of each of clauses (A) and (B), in the principal amount of $250,000 or more;

 

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(vi)           relating to the lease of real property or personal property having a value in excess of $75,000 in the aggregate;

 

(vii)          that is a policy of insurance, including fidelity and bond insurance, relating to the Tandem;

 

(viii)         relating to any joint venture, partnership, limited liability company agreement or other similar agreement or arrangement;

 

(ix)            which relates to capital expenditures and involves future payments in excess of $75,000 in the aggregate;

 

(x)             which is not terminable on ninety (90) days or less notice and involves the payment of more than $75,000 per annum;

 

(xi)            that is a settlement, consent or similar agreement and contains any material continuing obligations of Tandem or any of its Subsidiaries;

 

(xii)           that relates to the acquisition or disposition of any person, business or asset and under which Tandem or its Subsidiaries have or may have a material obligation or liability;

 

(xiii)          that relates to the employment or service of any current or former employee, director, officer or other service provider, which is not terminable by Tandem or any Subsidiary without penalty or other costs on thirty (30) calendar days’ or less notice, including without limitation employment, consulting, incentive, rendition, change in control, severance, termination pay and similar agreements; or

 

(xiv)         that provides for bonuses, incentives, retention, options, pensions, deferred compensation, retirement, profit sharing, equity, fringe benefits or similar compensatory or benefit arrangements with any current or former employees, directors, officers or other service providers.

 

Each contract, arrangement, commitment or understanding of the type described in this Section 3.13(a), whether or not set forth in the Tandem Disclosure Schedule, is referred to herein as a “Tandem Contract.” Tandem has made available to GBC true, correct and complete copies of each Tandem Contract in effect as of the date hereof.

 

(b)            (1) Each Tandem Contract is valid and binding on Tandem or one of its Subsidiaries, as applicable, and in full force and effect, except as, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Tandem, (1) Tandem and each of its Subsidiaries have in all material respects complied with and performed all obligations required to be complied with or performed by any of them to date under each Tandem Contract, except where such noncompliance or nonperformance, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Tandem, (2) to the knowledge of Tandem, each third-party counterparty to each Tandem Contract has in all material respects complied with and performed all obligations required to be complied with and performed by it to date under such Tandem Contract, except where such noncompliance or nonperformance, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Tandem, (4) neither Tandem nor any of its Subsidiaries has knowledge of, or has received notice of, any violation of any Tandem Contract by any of the other parties thereto which would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Tandem and (5) no event or condition exists which constitutes or, after notice or lapse of time or both, will constitute, a material breach or default on the part of Tandem or any of its Subsidiaries, or to the knowledge of Tandem, any other party thereto, of or under any such Tandem Contract, except where such breach or default, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on Tandem.

 

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3.14          Agreements with Regulatory Agencies. Subject to Section 9.15, neither Tandem nor any of its Subsidiaries is subject to any cease-and-desist or other order or enforcement action issued by, or is a party to any written agreement, consent agreement or memorandum of understanding with, or is a party to any commitment letter or similar undertaking to, or is subject to any order or directive by, or has been ordered to pay any civil money penalty by, or has been since January 1, 2024, a recipient of any supervisory letter from, or since January 1, 2024, has adopted any policies, procedures or board resolutions at the request or suggestion of, any Regulatory Agency or other Governmental Entity that currently restricts in any material respect or would reasonably be expected to restrict in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its ability to pay dividends, its credit or risk management policies, its management or its business (each, whether or not set forth in the Tandem Disclosure Schedule, a “Tandem Regulatory Agreement”), nor has Tandem or any of its Subsidiaries been advised in writing, or to Tandem’ knowledge, orally, since January 1, 2024, by any Regulatory Agency or other Governmental Entity that it is considering issuing, initiating, ordering, or requesting any such Tandem Regulatory Agreement.

 

3.15          Risk Management Instruments. Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Tandem, all interest rate swaps, caps, floors, option agreements, futures and forward contracts and other similar derivative transactions and risk management arrangements, whether entered into for the account of Tandem or any of its Subsidiaries or for the account of a customer of Tandem or one of its Subsidiaries, were entered into in the ordinary course of business and in accordance with applicable rules, regulations and policies of any Regulatory Agency and with counterparties reasonably believed to be financially responsible at the time and are legal, valid and binding obligations of Tandem or one of its Subsidiaries enforceable in accordance with their terms (except as may be limited by the Enforceability Exceptions). Tandem and each of its Subsidiaries have duly performed in all material respects all of their material obligations thereunder to the extent that such obligations to perform have accrued, and, to Tandem’ knowledge, there are no material breaches, violations or defaults or allegations or assertions of such by any party thereto.

 

3.16          Environmental Matters. Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Tandem, Tandem and its Subsidiaries are in compliance, and have complied since January 1, 2024, with any federal, state or local law, regulation, order, decree, permit, authorization, common law or agency requirement relating to: (a) the protection or restoration of the environment, health and safety as it relates to hazardous substance exposure or natural resource damages, (b) the handling, use, presence, disposal, release or threatened release of, or exposure to, any hazardous substance, or (c) noise, odor, wetlands, indoor air, pollution, contamination or any injury to persons or property from exposure to any hazardous substance (collectively, “Environmental Laws”). There are no legal, administrative, arbitral or other proceedings, claims or actions, or to the knowledge of Tandem, any private environmental investigations or remediation activities or governmental investigations of any nature seeking to impose, or that could reasonably be expected to result in the imposition, on Tandem or any of its Subsidiaries of any liability or obligation arising under any Environmental Law pending or threatened against Tandem, which liability or obligation would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Tandem. To the knowledge of Tandem, there is no reasonable basis for any such proceeding, claim, action or governmental investigation that would impose any liability or obligation that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Tandem. Tandem is not subject to any agreement, order, judgment, decree, letter agreement or memorandum of agreement by or with any court, Governmental Entity, Regulatory Agency or other third party imposing any liability or obligation with respect to the foregoing that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Tandem.

 

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3.17          Investment Securities and Commodities. Each of Tandem and its Subsidiaries has good title in all material respects to all securities and commodities owned by it (except those sold under repurchase agreements) which are material to Tandem’ business on a consolidated basis, free and clear of any Lien, except to the extent such securities or commodities are pledged in the ordinary course of business to secure obligations of Tandem or its Subsidiaries. Such securities and commodities are valued on the books of Tandem in accordance with GAAP in all material respects. Tandem and each of its Subsidiaries employ, to the extent applicable, investment, securities, risk management and other policies, practices and procedures that Tandem believes are prudent and reasonable in the context of their respective businesses, and Tandem and each of its Subsidiaries have, since January 1, 2024, been in compliance with such policies, practices and procedures in all material respects.

 

3.18          Real Property. Neither Tandem nor any Subsidiary owns or holds legal or equitable title to any real property. Except as would not reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect on Tandem, Tandem or its Subsidiary is the lessee of all leasehold estates listed on Section 3.18 of the Tandem Disclosure Schedule (such leasehold estates, collectively, the “Tandem Real Property”), free and clear of all Liens, except for such imperfections or irregularities of title or Liens as do not materially affect the value or use of the properties or assets subject thereto or affected thereby or otherwise materially impair business operations at such properties, and is in possession of the properties purported to be leased thereunder, and each such lease is valid without default thereunder by the lessee or, to the knowledge of Tandem, the lessor. There are no contractual obligations, agreements in principle or present plans for Tandem to enter into new leases of real property or to renew or amend existing leases prior to the Closing Date. There are no pending or, to the knowledge of Tandem, threatened condemnation proceedings or other actions, suits or proceedings against the Tandem Real Property. To the knowledge of Tandem, the use and operations of, and improvements upon, the Tandem Real Property, are in compliance with all applicable building, fire, zoning and other applicable laws, ordinances and regulations. The buildings and structures leased or used by Tandem and its Subsidiary are, taken as a whole, in good operating order (except for ordinary wear and tear), usable in the ordinary course of business, and are sufficient and adequate to carry on the business and affairs of Tandem and its Subsidiary. Except as listed on Section 3.18 of the Tandem Disclosure Schedule, Tandem and its Subsidiary do not own, lease or use any real property in the conduct of Tandem’s or its Subsidiary’s business.

 

3.19          Intellectual Property. Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Tandem: (a)(i) to the knowledge of Tandem, Tandem and each of its Subsidiaries owns, or is licensed to use (in each case, free and clear of any material Liens), all Intellectual Property necessary for the conduct of its business as currently conducted, (ii) to the knowledge of Tandem, neither Tandem nor any of its Subsidiaries have, within the past two (2) years, infringed, misappropriated or otherwise violated any other person’s rights in Intellectual Property, or violated or breached any applicable license pursuant to which Tandem or any Tandem Subsidiary acquired the right to use any Intellectual Property, and (iii) no person has asserted in writing to Tandem or any of its Subsidiaries within the past two (2) years that Tandem or any of its Subsidiaries has infringed, misappropriated or otherwise violated the Intellectual Property rights of any person; (b) to the knowledge of Tandem, no person is challenging, infringing on or otherwise violating, any right of Tandem or any of its Subsidiaries with respect to any Intellectual Property owned by Tandem or its Subsidiaries; (c) neither Tandem nor any Tandem Subsidiary has received any written notice of any pending claim challenging any Intellectual Property owned by Tandem or any Tandem Subsidiary (including with respect to the ownership, abandonment, cancellation or enforceability thereof); and (d) Tandem and its Subsidiaries have taken commercially reasonable actions to safeguard its and their material trade secrets and other confidential information, and avoid the abandonment, cancellation or unenforceability of all Intellectual Property owned by Tandem and its Subsidiaries. For purposes of this Agreement, “Intellectual Property” means any intellectual property or proprietary rights of any kind arising in any jurisdiction, including in or with respect to any: trademarks, service marks, brand names, internet domain names, logos, symbols, certification marks, trade dress and other indications of origin, the goodwill associated with the foregoing and registrations in any jurisdiction of, and applications in any jurisdiction to register, the foregoing, including any extension, modification or renewal of any such registration or application; inventions, discoveries and ideas, whether patentable or not, in any jurisdiction; patents, applications for patents (including divisions, continuations, continuations in part and renewal applications), all improvements thereto, and any renewals, extensions or reissues thereof, in any jurisdiction; nonpublic information, trade secrets and know-how, including processes, technologies, protocols, formulae, prototypes and confidential information and rights in any jurisdiction to limit the use or disclosure thereof by any person; data and database rights; writings and other works, whether copyrightable or not and whether in published or unpublished works, in any jurisdiction.

 

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3.20          Related Party Transactions. Except for the transactions set forth in Section 3.25(e) of the Tandem Disclosure Schedules and the Tandem Benefit Plans listed in Section 3.11(b) of the Tandem Disclosure Schedule, there are no transactions or series of related transactions, agreements, arrangements or understandings, nor are there any currently proposed transactions or series of related transactions, between Tandem or any of its Subsidiaries, on the one hand, and any current or former director or “executive officer” (as defined in Rule 3b-7 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of Tandem or any of its Subsidiaries or any person who beneficially owns (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) five percent (5%) or more of the outstanding Tandem Common Stock (or any of such person’s immediate family members or affiliates) (other than Subsidiaries of Tandem) on the other hand, of the type required by the Exchange Act and the rules and regulations thereunder.

 

3.21          State Takeover Laws. The Board of Directors of Tandem has approved this Agreement and the transactions contemplated hereby and has taken all such other necessary actions as required to render inapplicable to such agreements and transactions the provisions of any potentially applicable takeover laws of any state, including any “moratorium,” “control share,” “fair price,” “takeover” or “interested shareholder” law or any similar provisions of the Tandem Articles or Tandem Bylaws (collectively, with any similar provisions of the GBC Charter or GBC Bylaws, “Takeover Statutes”).

 

3.22          Reorganization. Tandem has not taken any action and has no knowledge of any fact or circumstance that could reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.

 

3.23          Opinion. Prior to the execution of this Agreement, the Board of Directors of Tandem has received an opinion (which if initially rendered orally, has been or will be confirmed by written opinion of the same date) from Performance Trust Capital Partners to the effect that as of the date thereof and based upon and subject to the various assumptions made, procedures followed, the matters considered, and the terms, qualifications and limitations set forth in its written opinion, the Merger Consideration is fair from a financial point of view to the holders (other than GBC and its affiliates) of Tandem Common Stock. Such opinion has not been amended or rescinded as of the date of this Agreement.

 

3.24          Tandem Information. The information relating to Tandem and its Subsidiaries that is provided in writing by Tandem or its Subsidiaries or their respective representatives specifically for inclusion in the Proxy Statement or in any other document filed with any other Regulatory Agency or Governmental Entity in connection herewith, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading. The portion of the Proxy Statement relating to Tandem or any of its Subsidiaries will comply in all material respects with applicable law.

 

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3.25          Loan Portfolio.

 

(a)            As of the date hereof, neither Tandem nor any of its Subsidiaries is a party to any written or oral loan, loan agreement, note or borrowing arrangement (including leases, credit enhancements, commitments, guarantees and interest-bearing assets) (collectively, “Loans”) in which Tandem or any Subsidiary of Tandem is a creditor that, as of December 31, 2025, under the terms of which the obligor was, as of December 31, 2025 over ninety (90) days or more delinquent in payment of principal or interest. Set forth in Section 3.25(a) of the Tandem Disclosure Schedule is a true, correct and complete list of (A) all of the Loans of Tandem and its Subsidiaries that, as of December 31, 2025, were classified by Tandem as “Other Loans Specially Mentioned,” “Special Mention,” “Substandard,” “Doubtful,” “Loss,” “Classified,” “Criticized,” “Credit Risk Assets,” “Concerned Loans,” “Watch List” or words of similar import, together with the principal amount of each such Loan and the identity of the borrower thereunder and (B) each asset of Tandem or any of its Subsidiaries that, as of December 31, 2025, is classified as “Other Real Estate Owned” and the book value thereof.

 

(b)            Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Tandem, each Loan of Tandem or any of its Subsidiaries (i) is evidenced by notes, agreements or other evidences of indebtedness that are true, genuine and what they purport to be, (ii) to the extent carried on the books and records of Tandem and its Subsidiaries as secured Loans, has been secured by valid charges, mortgages, pledges, security interests, restrictions, claims, liens or encumbrances, as applicable, which have been perfected, (iii) is the legal, valid and binding obligation of the obligor named therein, enforceable in accordance with its terms, subject to the Enforceability Exceptions; and (iv) to the extent secured by a pledge of consumer loans, none of such loans are subject to any right of offset, recission, set-off or any counterclaim or defense for which there is a reasonable possibility of an adverse determination to Tandem, including the defense of usury or lack of legal capacity of any guarantor or borrower.

 

(c)            Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Tandem, each outstanding Loan of Tandem or any of its Subsidiaries (including Loans held for resale to investors) was solicited and originated, and is and has been administered and, where applicable, serviced, and the relevant Loan files are being maintained, in all material respects in accordance with the relevant notes or other credit or security documents, the written underwriting standards of Tandem and its Subsidiaries (and, in the case of Loans held for resale to investors, the underwriting standards, if any, of the applicable investors) and with all applicable federal, state and local laws, regulations and rules.

 

(d)            None of the agreements pursuant to which Tandem or any of its Subsidiaries has sold Loans or pools of Loans or participations in Loans or pools of Loans contain any obligation to repurchase such Loans or interests therein solely on account of a payment default (other than early payment defaults) by the obligor on any such Loan.

 

(e)            Except as set forth in Section 3.25(e) of the Tandem Disclosure Schedule, there are no outstanding Loans made by Tandem or any of its Subsidiaries to any “executive officer” or other “insider” (as each such term is defined in Regulation O promulgated by the Federal Reserve) of Tandem or its Subsidiaries.

 

(f)            Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on Tandem, neither Tandem nor any of its Subsidiaries is now nor has it ever been since January 1, 2024 subject to any fine, suspension, settlement or other administrative agreement or sanction by any Governmental Entity or Regulatory Agency relating to the origination, sale or servicing of mortgage or consumer Loans.

 

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(g)            As to each Loan that is secured whether in whole or in part, by a guaranty of the United States Small Business Administration or any other Governmental Entity (collectively, “SBA Loans”), such guaranty is in full force and effect, and to Tandem’s knowledge, will remain in full force and effect following the Effective Time, in each case, without any further action by Tandem or any of its Subsidiaries subject to the fulfillment of their obligations under the agreement with the United States Small Business Administration that arise after the date hereof. There have been no oral or written communications with or notices from the United States Small Business Administration or any other Governmental Entity indicating that the guaranty of any such SBA Loan requires repair or otherwise indicating that the guaranty of any such SBA Loan is or may be at risk.

 

3.26          Insurance. Except as would not reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect on Tandem and except for insurance policies underlying Tandem Benefit Plans, (a) Tandem and its Subsidiaries are insured with reputable insurers against such risks and in such amounts as the management of Tandem and Tandem Bank reasonably have determined to be prudent and consistent with industry practice, and Tandem and its Subsidiaries are in compliance in all material respects with their insurance policies and are not in default under any of the terms thereof, (b) each such policy is outstanding and in full force and effect and, except for policies insuring against potential liabilities of current or former officers, directors and employees of Tandem and its Subsidiaries, Tandem or the relevant Subsidiary thereof is the sole beneficiary of such policies, (c) all premiums and other payments due under any such policy have been paid, and all claims thereunder have been filed in due and timely fashion, (d) there is no claim for coverage by Tandem or any of its Subsidiaries pending under any insurance policy as to which coverage has been questioned, denied or disputed by the underwriters of such insurance policy, and (e) neither Tandem nor any of its Subsidiaries has received notice of any threatened termination of, material premium increase with respect to, or material alteration of coverage under, any insurance policies.

 

3.27          No Other Representations or Warranties.

 

(a)            Except for the representations and warranties made by Tandem in this Article III, neither Tandem nor any other person makes any express or implied representation or warranty with respect to Tandem, its Subsidiaries, or their respective businesses, operations, assets, liabilities, conditions (financial or otherwise) or prospects, and Tandem hereby disclaims any such other representations or warranties. In particular, without limiting the foregoing disclaimer, neither Tandem nor any other person makes or has made any representation or warranty to GBC or any of its affiliates or representatives with respect to (i) any financial projection, forecast, estimate, budget or prospective information relating to Tandem, any of its Subsidiaries or their respective businesses, or (ii) any oral or written information presented to GBC or any of its affiliates or representatives in the course of their due diligence investigation of Tandem, the negotiation of this Agreement or in the course of the transactions contemplated hereby, except in each case, for the representations and warranties made by Tandem in this Article III.

 

(b)            Tandem acknowledges and agrees that neither GBC nor any other person on behalf of GBC has made or is making, and Tandem has not relied upon, any express or implied representation or warranty other than those contained in Article IV.

 

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Article IV

 

REPRESENTATIONS AND WARRANTIES OF GBC

 

Except as disclosed in the disclosure schedule delivered by GBC to Tandem concurrently herewith (the “GBC Disclosure Schedule”) (it being understood that (i) no item is required to be set forth as an exception to a representation or warranty if its absence would not result in the related representation or warranty being deemed untrue or incorrect, (ii) the mere inclusion of an item in the GBC Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission by GBC that such item represents a material exception or fact, event or circumstance or that such item would reasonably be expected to have a Material Adverse Effect, and (iii) any disclosures made with respect to a section of this Article IV shall be deemed to qualify (1) any other section of this Article IV specifically referenced or cross-referenced, and (2) other sections of this Article IV to the extent it is reasonably apparent on its face (notwithstanding the absence of a specific cross reference) from a reading of the disclosure that such disclosure applies to such other sections), GBC hereby represents and warrants to Tandem as follows:

 

4.1            Corporate Organization.

 

(a)            GBC is a corporation duly organized, validly existing and in good standing under the laws of the State of Georgia, is a bank holding company duly registered under the BHC Act and has elected to be treated as a financial holding company under the BHC Act. GBC has the corporate power and authority to own, lease or operate all of its properties and assets and to carry on its business as it is now being conducted in all material respects. GBC is duly licensed or qualified to do business and in good standing in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned, leased or operated by it makes such licensing, qualification or standing necessary, except where the failure to be so licensed or qualified or to be in good standing would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on GBC. True and complete copies of the GBC Charter and the GBC Bylaws, in each case, as in effect as of the date of this Agreement, have previously been made available by GBC to Tandem.

 

(b)            Except as would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on GBC, each Subsidiary of GBC (a “GBC Subsidiary”) (i) is duly organized and validly existing under the laws of its jurisdiction of organization, (ii) is duly licensed or qualified to do business and, where such concept is recognized under applicable law, in good standing in all jurisdictions (whether federal, state, local or foreign) where its ownership, leasing or operation of property or the conduct of its business requires it to be so licensed or qualified or in good standing, and (iii) has all requisite corporate power and authority to own, lease or operate its properties and assets and to carry on its business as now conducted. There are no restrictions on the ability of GBC or any Subsidiary of GBC to pay dividends or distributions except, in the case of GBC or a Subsidiary that is a regulated entity, for restrictions on dividends or distributions generally applicable to all similarly regulated entities. GBC Bank is the only depository institution Subsidiary of GBC, and the deposit accounts of GBC Bank are insured by the FDIC through the Deposit Insurance Fund (as defined in Section 3(y) of the FDI Act) to the fullest extent permitted by law, all premiums and assessments required to be paid in connection therewith have been paid when due, and no proceedings for the termination of such insurance are pending or threatened. True and complete copies of the organizational documents of GBC Bank as in effect as of the date of this Agreement have previously been made available by GBC to Tandem. There is no person whose results of operations, cash flows, changes in shareholders’ equity or financial position are consolidated in the financial statements of GBC other than the GBC Subsidiaries.

 

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4.2            Capitalization.

 

(a)            The authorized capital stock of GBC consists of 40,000,000 shares of voting common stock, par value $0.01 per share (the “GBC Voting Common Stock”), 10,000,000 shares of non-voting common stock, par value $0.01 per share (the “GBC Non-Voting Common Stock”, together with the GBC Voting Common Stock, the “GBC Common Stock”), and 10,000,000 shares of preferred stock, par value $0.01 per share. As of February 19, 2026 there were (i) 8,444,343 shares of GBC Voting Common Stock issued and outstanding; (ii) no shares of GBC Non-Voting Common Stock issued and outstanding; and (iii) no shares of GBC preferred stock issued and outstanding. All the issued and outstanding shares of GBC Common Stock have been duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof. There are no bonds, debentures, notes or other indebtedness that have the right to vote on any matters on which shareholders of GBC may vote. Except as set forth in Section 4.2(a) of the GBC Disclosure Schedules, there are no outstanding subscriptions, options, warrants, stock appreciation rights, deferral units, scrip, rights to subscribe to or purchase, preemptive rights, anti-dilutive rights, rights of first refusal or similar rights, puts, calls, commitments or agreements of any character relating to, or securities or rights convertible or exchangeable into or exercisable for, shares of capital stock or other voting or equity securities of or ownership interest in GBC, or contracts, commitments, understandings or arrangements by which GBC may become bound to issue additional shares of its capital stock or other equity or voting securities of or ownership interests in GBC or that otherwise obligate GBC to issue, transfer, sell, purchase, redeem or otherwise acquire, any of the foregoing. Except as set forth in Section 4.2(a) of the GBC Disclosure Schedules, no equity-based awards (including any cash awards where the amount of payment is determined in whole or in part based on the price of any capital stock of GBC or any of its Subsidiaries) are outstanding. Except as set forth in Section 4.2(a) of the GBC Disclosure Schedules, there are no voting trusts, shareholder agreements, proxies or other agreements in effect to which GBC or any of its Subsidiaries is a party with respect to the voting or transfer of GBC Common Stock, capital stock or other voting or equity securities or ownership interests of GBC or granting any shareholder or other person any registration rights.

 

(b)            Except as would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on GBC, GBC owns, directly or indirectly, all the issued and outstanding shares of capital stock or other equity ownership interests of each of the GBC Subsidiaries, free and clear of any Liens, and all of such shares or equity ownership interests are duly authorized and validly issued and are fully paid, nonassessable and free of preemptive rights, with no personal liability attaching to the ownership thereof.

 

4.3            Authority; No Violation.

 

(a)            GBC has full corporate power and authority to execute and deliver this Agreement and, subject to the shareholder and other actions described below, to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the Merger and the Bank Merger have been duly and validly approved by the Board of Directors of GBC. The Board of Directors of GBC has determined that the Merger, on the terms and conditions set forth in this Agreement, is advisable and in the best interests of GBC and its shareholders, has adopted and approved this Agreement and the transactions contemplated hereby (including the Merger and the Bank Merger) and has adopted a resolution to the foregoing effect. The execution and delivery of the Bank Merger Agreement have been duly and validly approved by the Board of Directors of GBC and the Board of Directors of GBC Bank. Both the Board of Directors of GBC and the Board of Directors of GBC Bank have determined that the Bank Merger, on the terms and conditions set forth in the Bank Merger Agreement, is advisable and in the best interests of GBC Bank and GBC as its sole shareholder. Except for the approval of the Bank Merger Agreement by GBC as GBC Bank’s sole shareholder, no other corporate proceedings on the part of GBC are necessary to approve this Agreement or to consummate the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by GBC and (assuming due authorization, execution and delivery by Tandem) constitutes a valid and binding obligation of GBC, enforceable against GBC in accordance with its terms (except in all cases as such enforceability may be limited by the Enforceability Exceptions). The shares of GBC Common Stock to be issued in the Merger have been validly authorized, and when issued, will be validly issued, fully paid and nonassessable, and no current or past shareholder of GBC will have any preemptive right or similar rights in respect thereof.

 

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(b)            Neither the execution and delivery of this Agreement by GBC, nor the consummation by GBC of the transactions contemplated hereby (including the Merger and the Bank Merger), nor compliance by GBC with any of the terms or provisions hereof, will (i) violate any provision of the GBC Charter, the GBC Bylaws or the organizational documents of GBC Bank, or (ii) assuming that the consents and approvals referred to in Section 4.4 are duly obtained, (x) violate any law, statute, code, ordinance, rule, regulation, judgment, order, writ, decree or injunction applicable to GBC or any of its Subsidiaries or any of their respective properties or assets, or (y) violate, conflict with, result in a breach of any provision of or the loss of any benefit under, constitute a default (or an event which, with notice or lapse of time, or both, would constitute a default) under, result in the termination of or a right of termination or cancellation under, accelerate the performance required by, or result in the creation of any Lien upon any of the respective properties or assets of GBC or any of its Subsidiaries under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease, agreement or other instrument or obligation to which GBC or any of its Subsidiaries is a party, or by which they or any of their respective properties or assets may be bound, except (in the case of clauses (x) and (y) above) for such violations, conflicts, breaches, defaults, terminations, cancellations, accelerations or creations that, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on GBC.

 

4.4            Consents and Approvals. Except for (a) the Fairness Determination, (b) the filing of any required applications, filings, waiver requests and notices, as applicable, with the Federal Reserve under the BHC Act and approval or waiver of such applications, filings, waiver requests and notices, (c) the filing of any required applications, filings and notices, as applicable, with the FDIC under the Bank Merger Act of 1960, and approval or waiver of such applications, filings and notices, (d) the filing of any required applications, filings, waiver requests and notices, as applicable, with the DBF and approval or waiver of such applications, filings, waiver requests and notices, (e) the filing of any required applications, filings and notices, as applicable, with each Applicable Agency and the receipt of any required consents or approvals from each Applicable Agency, (f) those additional applications, filings and notices, if any, listed on Section 3.4 of the Tandem Disclosure Schedule and approval of such applications, filings and notices, (g) the filing of the Certificate of Merger with the Georgia Secretary pursuant to the GBCC, (h) the filing of the Bank Merger Certificate with the applicable Governmental Entity as required by applicable law, and (i) such filings and approvals as are required to be made or obtained under the securities or “blue sky” laws of various states in connection with the issuance of the shares of GBC Common Stock pursuant to this Agreement, no consents or approvals of or filings or registrations with any Governmental Entity are necessary in connection with (i) the execution and delivery by GBC of this Agreement or (ii) the consummation by GBC of the Merger and the other transactions contemplated hereby (including the Bank Merger). As of the date hereof, GBC has no knowledge of any reason why the necessary regulatory approvals and consents will not be received by GBC to permit consummation of the Merger and the Bank Merger on a timely basis.

 

4.5            Reports. GBC and each of its Subsidiaries have timely filed (or furnished, as applicable) all reports, forms, correspondence, registrations and statements, together with any amendments required to be made with respect thereto, that they were required to file (or furnish, as applicable) since January 1, 2024 with Regulatory Agencies, including any report, form, correspondence, registration or statement required to be filed (or furnished, as applicable) pursuant to the laws, rules or regulations of the United States, any state, any foreign entity or any Regulatory Agency, and have paid all fees and assessments due and payable in connection therewith, except where the failure to file (or furnish, as applicable) such report, form, correspondence, registration or statement or to pay such fees and assessments, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on GBC. Subject to Section 9.15, except for normal examinations conducted by a Regulatory Agency in the ordinary course of business of GBC and its Subsidiaries, no Regulatory Agency or governmental agency or authority has initiated or has pending any proceeding or, to the knowledge of GBC, investigation into the business or operations of GBC or any of its Subsidiaries since January 1, 2024, except where such proceedings or investigations would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on GBC. Subject to Section 9.15, there (i) is no unresolved violation, criticism, or exception by any Regulatory Agency with respect to any report or statement relating to any examinations or inspections of GBC or any of its Subsidiaries, and (ii) has been no formal or informal inquiries by, or disagreements or disputes with, any Regulatory Agency with respect to the business, operations, policies or procedures of GBC or any of its Subsidiaries since January 1, 2024, in each case, which would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on GBC.

 

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4.6            Financial Statements.

 

(a)            GBC has furnished to Tandem true and complete copies of (i) the consolidated balance sheet of GBC and GBC Bank as of December 31, 2022, December 31, 2023 and December 31, 2024, and the related consolidated statements of operations, shareholders’ equity, and cash flows of GBC and GBC Bank, together with all related notes and schedules thereto, accompanied by the reports thereon of GBC’s independent auditors for the years ended as of such dates, and (ii) the unaudited financial statements of GBC and GBC Bank for the twelve months ended December 31, 2025 (collectively, the “GBC Financial Statements”). The GBC Financial Statements (including the related notes) complied as to form, as of their respective dates, in all material respects with applicable accounting requirements, have been prepared according to GAAP applied on a consistent basis during the periods and at the dates involved (except as may be indicated in the notes thereto), fairly present, in all material respects, the financial condition of GBC and its Subsidiaries, as applicable, at the dates thereof and the results of operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to notes and normal year-end adjustments that were not material in amount or effect).

 

(b)            Except as would not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on GBC, neither GBC nor any of its Subsidiaries has any liability of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether due or to become due), except for those liabilities that are reflected or reserved against on the consolidated balance sheet of GBC for the fiscal quarter ended December 31, 2025 included in the GBC Financial Statements or liabilities incurred in the ordinary course of business consistent with past practice since December 31, 2025 or in connection with this Agreement and the transactions contemplated hereby.

 

(c)            GBC has filed all required Call Reports since January 1, 2024 for GBC Bank. The Call Reports fairly present, in all material respects, the financial position of GBC Bank and the results of its operations at the date and for the period indicated in that Call Report in conformity with the instructions to the Call Report. Since January 1, 2024, GBC Bank has calculated its ACL (or ALLL prior to the promulgation of the Interagency Policy Statement on the Allowance of Credit Losses) in accordance with (i) GAAP (ii) the Interagency Policy Statement on the Allowance for Credit Losses (or the Interagency Policy Statement on the Allowance of Loan and Lease Losses prior to the promulgation of the Interagency Policy Statement on the Allowance of Credit Losses) and (iii) all applicable rules and regulations, and, in the reasonable opinion of management, the ACL is reasonably likely to be to be adequate in all material respects.

 

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(d)            Since January 1, 2024, (i) neither GBC, GBC Bank, or their respective Subsidiaries nor, to the knowledge of GBC, any director, officer, employee, auditor, accountant or representative of GBC or its Subsidiaries has received or otherwise obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of GBC or its Subsidiaries or their respective internal accounting controls relating to periods after January 1, 2024, including any material complaint, allegation, assertion or claim that GBC or its Subsidiaries has engaged in questionable accounting or auditing practices, and (ii) to the knowledge of GBC, no attorney representing GBC or its Subsidiaries, whether or not employed by GBC or its Subsidiaries, has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation, relating to periods after January 1, 2024, by GBC or its Subsidiaries or any of their officers, directors, employees or agents to the Board of Directors of GBC or the Board of Directors of GBC Bank (or any committee thereof) or to any director or officer of GBC, GBC Bank, or their respective Subsidiaries.

 

(e)            Neither GBC nor its Subsidiaries is a party to, or has any commitment to become a party to, any joint venture, off-balance sheet partnership or any similar contract or arrangement (including any contract or arrangement relating to any transaction or relationship between or among GBC and its Subsidiaries, on the one hand, and any unconsolidated affiliate, including any structured finance, special purpose or limited purpose entity or person, on the other hand, or any “off-balance sheet arrangement”), where the result, purpose or intended effect of such contract or arrangement is to avoid disclosure of any material transaction involving, or material liabilities of, GBC or its Subsidiaries in GBC’ or its Subsidiaries’ financial statements.

 

4.7            Broker’s Fees. With the exception of the engagement of Solomon Partners, L.P. (“Solomon”), neither GBC nor any GBC Subsidiary nor any of their respective officers or directors has employed any broker, finder or financial advisor or incurred any liability for any broker’s fees, commissions or finder’s fees in connection with the Merger or related transactions contemplated by this Agreement. GBC has disclosed to Tandem as of the date hereof the aggregate fees provided for in connection with the engagement by GBC of Solomon related to the Merger and the other transactions contemplated hereunder.

 

4.8            Absence of Certain Changes or Events.

 

(a)            Since December 31, 2024, there has not been any effect, change, event, circumstance, condition, occurrence or development that has had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on GBC.

 

(b)            Since December 31, 2024 through the date of this Agreement, GBC and its Subsidiaries have carried on their respective businesses in all material respects in the ordinary course.

 

4.9            Legal and Regulatory Proceedings.

 

(a)            Except as would not reasonably be expected to, either individually or in the aggregate, have a Material Adverse Effect on GBC, neither GBC nor any of its Subsidiaries is a party to any, and there are no outstanding or pending or, to the knowledge of GBC, threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations of any nature against GBC or any of its Subsidiaries or any of their current or former directors or executive officers or challenging the validity or propriety of the transactions contemplated by this Agreement.

 

(b)            Except as would not reasonably be expected to, either individually or in the aggregate, be material to GBC, there is no injunction, order, judgment, decree, or regulatory restriction imposed upon GBC, any of its Subsidiaries or the assets of GBC or any of its Subsidiaries (or that, upon consummation of the Merger, would apply to the Surviving Entity or any of its affiliates).

 

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4.10          Taxes and Tax Returns.

 

(a)            Except as would not reasonably be expected to, either individually or in the aggregate, have a Material Adverse Effect on GBC: each of GBC and its Subsidiaries has duly and timely filed (including all applicable extensions) all Tax Returns in all jurisdictions in which Tax Returns are required to be filed by it, and all such Tax Returns are true, correct and complete; all Taxes of GBC and its Subsidiaries (whether or not shown on any Tax Returns) that are due have been fully and timely paid; each of GBC and its Subsidiaries has withheld and paid all material Taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, creditor, shareholder, independent contractor or other third party; each of GBC and its Subsidiaries have withheld and timely paid all material Taxes required to have been withheld and paid with respect to, and have complied with, all information reporting, backup withholding, and nonresident withholding requirements; neither GBC nor any of its Subsidiaries has granted any extension or waiver of the limitation period applicable to any Tax that remains in effect (other than extension or waiver granted in the ordinary course of business); neither GBC nor any of its Subsidiaries has received written notice of assessment or proposed assessment in connection with any amount of Taxes, and there are no threatened in writing or pending disputes, claims, audits, examinations or other proceedings regarding any Tax of GBC and its Subsidiaries or the assets of GBC and its Subsidiaries; neither GBC nor any of its Subsidiaries (A) has been a member of an affiliated group filing a consolidated federal income Tax Return for which the statute of limitations is open (other than a group the common parent of which was GBC)), or (B) has any liability for the Taxes of any person (other than GBC or any of its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign law) or otherwise as a transferee or successor.

 

(b)            No written claim has ever been made by a Governmental Entity in a jurisdiction where GBC and its Subsidiaries do not file Tax Returns that it is or may be subject to taxation by, or required to file a Tax Return in, that jurisdiction. There are no liens for Taxes (other than statutory liens for Taxes not yet due and payable) upon any assets of GBC or any of its Subsidiaries.

 

(c)            GBC and each of its Subsidiaries have disclosed on its federal income Tax Returns all positions taken therein that could give rise to a substantial understatement of federal income Tax within the meaning of Section 6662 of the Code.

 

(d)            Neither GBC nor any of its Subsidiaries has participated in a “listed transaction” within the meaning of Treasury Regulation Section 1.6011-4(b)(2).

 

4.11          Compliance with Applicable Law.

 

(a)            GBC and each of its Subsidiaries hold, and have at all times since January 1, 2021, held, all licenses, registrations, franchises, certificates, variances, permits charters and authorizations necessary for the lawful conduct of their respective businesses and ownership of their respective properties, rights and assets under and pursuant to each (and have paid all fees and assessments due and payable in connection therewith), except where neither the cost of failure to hold nor the cost of obtaining and holding such license, registration, franchise, certificate, variance, permit, charter or authorization (nor the failure to pay any fees or assessments) would, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on GBC, and to the knowledge of GBC, no suspension or cancellation of any such necessary license, registration, franchise, certificate, variance, permit, charter or authorization is threatened.

 

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(b)            Except as would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on GBC, GBC and each of its Subsidiaries, since January 1, 2024, have complied with and are not in default or violation under any applicable law, statute, order, rule, regulation, policy and/or guideline of any Governmental Entity relating to GBC or any of its Subsidiaries, including all laws related to data protection or privacy (including laws relating to the privacy and security of Personal Data), the USA PATRIOT Act, the Bank Secrecy Act, the Equal Credit Opportunity Act and Regulation B, the Fair Housing Act, the Community Reinvestment Act, the Fair Credit Reporting Act, the Truth in Lending Act and Regulation Z, the Home Mortgage Disclosure Act, the Fair Debt Collection Practices Act, the Electronic Fund Transfer Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, any regulations promulgated by the Consumer Financial Protection Bureau, the Interagency Policy Statement on Retail Sales of Nondeposit Investment Products, the SAFE Mortgage Licensing Act of 2008, the Real Estate Settlement Procedures Act and Regulation X, Title V of the Gramm-Leach-Bliley Act, any and all sanctions or regulations enforced by the Office of Foreign Assets Control of the United States Department of Treasury and any other law, policy or guideline relating to bank secrecy, discriminatory lending, financing or leasing practices, consumer protection, money laundering prevention, foreign assets control, U.S. sanctions laws and regulations, Sections 23A and 23B of the Federal Reserve Act, and all agency requirements relating to the origination, sale and servicing of mortgage and consumer loans. GBC and its Subsidiaries have established and maintain a system of internal controls designed to ensure compliance in all material respects by GBC and its Subsidiaries with applicable financial recordkeeping and reporting requirements of applicable money laundering prevention laws in jurisdictions where GBC and its Subsidiaries conduct business.

 

(c)            GBC Bank has received an Institution Community Reinvestment Act rating of “satisfactory” or better in its most recently completed Community Reinvestment Act examination.

 

(d)            GBC maintains a written information privacy and security program that maintains reasonable measures to protect the privacy, confidentiality and security of all Personal Data and any other material confidential information against any Security Breach. To the knowledge of GBC, GBC has not experienced any Security Breach that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on GBC. To the knowledge of GBC, there are no data security or other technological vulnerabilities with respect to its information technology systems or networks that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect on GBC.

 

(e)            As of the date hereof, each of GBC and GBC Bank is “well-capitalized” (as such term is defined in the relevant regulation of the institution’s federal regulator).

 

(f)            Without limitation, none of GBC or any of its Subsidiaries, or to the knowledge of GBC, any director, officer, employee, agent or other person acting on behalf of GBC or any of its Subsidiaries has, directly or indirectly, (i) used any funds of GBC or any of its Subsidiaries for unlawful contributions, unlawful gifts, unlawful entertainment or other expenses relating to political activity, (ii) made any unlawful payment to foreign or domestic governmental officials or employees or to foreign or domestic political parties or campaigns from funds of GBC or any of its Subsidiaries, (iii) violated any provision that would result in the violation of the Foreign Corrupt Practices Act of 1977, as amended, or any similar law, (iv) established or maintained any unlawful fund of monies or other assets of GBC or any of its Subsidiaries, (v) made any fraudulent entry on the books or records of GBC or any of its Subsidiaries, or (vi) made any unlawful bribe, unlawful rebate, unlawful payoff, unlawful influence payment, unlawful kickback or other unlawful payment to any person, private or public, regardless of form, whether in money, property or services, to obtain favorable treatment in securing business, to obtain special concessions for GBC or any of its Subsidiaries, to pay for favorable treatment for business secured or to pay for special concessions already obtained for GBC or any of its Subsidiaries, or is currently subject to any United States sanctions administered by the Office of Foreign Assets Control of the United States Treasury Department, except, in each case, as would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on GBC.

 

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(g)            Except as would not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on GBC, (i) GBC and each of its Subsidiaries have properly administered all accounts for which it acts as a fiduciary, including accounts for which it serves as a trustee, agent, custodian, personal representative, guardian, conservator or investment advisor, in accordance with the terms of the governing documents and applicable state, federal and foreign law; and (ii) none of GBC, any of its Subsidiaries, or any of its or its Subsidiaries’ directors, officers or employees, has committed any breach of trust or fiduciary duty with respect to any such fiduciary account, and the accountings for each such fiduciary account are true, correct and complete and accurately reflect the assets and results of such fiduciary account.

 

4.12          Agreements with Regulatory Agencies. Subject to Section 9.15, neither GBC nor any of its Subsidiaries is subject to any cease-and-desist or other order or enforcement action issued by, or is a party to any written agreement, consent agreement or memorandum of understanding with, or is a party to any commitment letter or similar undertaking to, or is subject to any order or directive by, or has been ordered to pay any civil money penalty by, or has been since January 1, 2024, a recipient of any supervisory letter from, or since January 1, 2024, has adopted any policies, procedures or board resolutions at the request or suggestion of, any Regulatory Agency or other Governmental Entity that currently restricts in any material respect or would reasonably be expected to restrict in any material respect the conduct of its business or that in any material manner relates to its capital adequacy, its ability to pay dividends, its credit or risk management policies, its management or its business (each, whether or not set forth in the GBC Disclosure Schedule, an “GBC Regulatory Agreement”), nor has GBC or any of its Subsidiaries been advised in writing, or to GBC’s knowledge, orally, since January 1, 2024, by any Regulatory Agency or other Governmental Entity that it is considering issuing, initiating, ordering or requesting any such GBC Regulatory Agreement.

 

4.13          Related Party Transactions. Except for the transactions set forth in Section 4.13 of the GBC Disclosure Schedules, there are no transactions or series of related transactions, agreements, arrangements or understandings, nor are there any currently proposed transactions or series of related transactions, between GBC or any of its Subsidiaries, on the one hand, and any current or former director or “executive officer” (as defined in the Exchange Act) of GBC or any of its Subsidiaries or any person who beneficially owns (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) five percent (5%) or more of the outstanding GBC Common Stock (or any of such person’s immediate family members or affiliates) (other than Subsidiaries of GBC) on the other hand, of the type required by the Exchange Act and the rules and regulations thereunder.

 

4.14          State Takeover Laws. The Board of Directors of GBC has approved this Agreement and the transactions contemplated hereby and has taken all such other necessary actions as required to render inapplicable to such agreements and transactions the provisions of any Takeover Statutes.

 

4.15          Reorganization. GBC has not taken any action and has no knowledge of any fact or circumstance that could reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code.

 

4.16          GBC Information. The information relating to GBC and its Subsidiaries that is provided in writing by GBC or its Subsidiaries or their respective representatives specifically for inclusion in the Proxy Statement or in any other document filed with any other Regulatory Agency or Governmental Entity in connection herewith, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances in which they are made, not misleading. The portion of the Proxy Statement relating to GBC or any of its Subsidiaries will comply in all material respects with applicable law.

 

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4.17          No Other Representations or Warranties.

 

(a)            Except for the representations and warranties made by GBC in this Article IV, neither GBC nor any other person makes any express or implied representation or warranty with respect to GBC, its Subsidiaries, or their respective businesses, operations, assets, liabilities, conditions (financial or otherwise) or prospects, and GBC hereby disclaims any such other representations or warranties. In particular, without limiting the foregoing disclaimer, neither GBC nor any other person makes or has made any representation or warranty to Tandem or any of its affiliates or representatives with respect to (i) any financial projection, forecast, estimate, budget or prospective information relating to GBC, any of its Subsidiaries or their respective businesses, or (ii) any oral or written information presented to Tandem or any of its affiliates or representatives in the course of their due diligence investigation of GBC, the negotiation of this Agreement or in the course of the transactions contemplated hereby, except in each case for the representations and warranties made by GBC in this Article IV.

 

(b)            GBC acknowledges and agrees that neither Tandem nor any other person on behalf of Tandem has made or is making, and GBC has not relied upon, any express or implied representation or warranty other than those contained in Article III.

 

Article V

 

COVENANTS RELATING TO CONDUCT OF BUSINESS

 

5.1            Conduct of Businesses Prior to the Effective Time. During the period from the date of this Agreement to the Effective Time or earlier termination of this Agreement, except as expressly contemplated or permitted by this Agreement (including as set forth in Section 5.1 of the Tandem Disclosure Schedule or GBC Disclosure Schedule), required by law or as consented to in writing by the other party (such consent not to be unreasonably withheld, conditioned or delayed), each of GBC and Tandem shall, and shall cause each of its Subsidiaries to, (i) conduct its business in the ordinary course consistent with past practices or pursuant to a party’s strategic plan, and (ii) use reasonable best efforts to maintain and preserve intact its business organization, employees and advantageous business relationships, and (iii) take no action that would reasonably be expected to adversely affect or delay the ability of either GBC or Tandem to obtain any necessary approvals of any Regulatory Agency or other Governmental Entity required for the transactions contemplated hereby or to perform its covenants and agreements under this Agreement or to consummate the transactions contemplated hereby on a timely basis. Notwithstanding anything to the contrary set forth in this Section 5.1, no action or failure to take action by Tandem or any of its Subsidiaries or GBC or any of its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.2 (in the case of Tandem or its Subsidiaries) or Section 5.3 (in the case of GBC or its Subsidiaries) shall constitute a breach of this Section 5.1 unless such action or failure to take action would constitute a breach of such provision of Section 5.2 (in the case of Tandem or its Subsidiaries) or Section 5.3 (in the case of GBC or its Subsidiaries).

 

5.2            Forbearances of Tandem. During the period from the date of this Agreement to the Effective Time or earlier termination of this Agreement, except as set forth in Section 5.2 of the Tandem Disclosure Schedule, as expressly contemplated or permitted by this Agreement or a Tandem Benefit Plan as in effect as of the date hereof or as required by law or regulation, Tandem shall not, and Tandem shall not permit any of its Subsidiaries to, without the prior written consent of GBC (such consent not to be unreasonably withheld, conditioned or delayed):

 

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(a)            other than (1) federal funds borrowings and borrowings from the Federal Home Loan Bank, in each case, with a maturity not in excess of six (6) months, and (2) the creation of deposit liabilities or other customary banking products, issuances of letters of credit, sales of certificates of deposits, and entry into repurchase agreements, in each case (1) and (2), in the ordinary course of business on terms and in amounts consistent with past practice, incur any indebtedness for borrowed money (other than indebtedness of Tandem or any of its wholly-owned Subsidiaries, on the one hand, to Tandem or any of its wholly-owned Subsidiaries, on the other hand), or directly or indirectly, incur, assume, guarantee, endorse or otherwise as an accommodation become responsible for the obligations or liabilities of any other individual, corporation or other entity;

 

(b)

 

(1)            adjust, split, combine or reclassify any capital stock of Tandem (or shares thereof);

 

(2)            make, declare, pay, set aside for payment or set a record date for any dividend, or any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire, any shares of its capital stock or other equity or voting securities or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) or exchangeable into or exercisable for any shares of its capital stock or other equity or voting securities, including any Tandem Securities or any securities of any Tandem Subsidiary except cash dividends paid by any of the Subsidiaries of Tandem to Tandem or any of its wholly-owned Subsidiaries.

 

(3)            grant any stock options, warrants, restricted stock units, performance stock units, phantom stock units, restricted shares or other equity-based awards or interests, or grant any person any right to acquire any Tandem Securities or any securities of any Tandem Subsidiary; or

 

(4)            issue, sell, transfer, encumber, or authorize the issuance, sale or transfer, or otherwise permit to become outstanding any shares of capital stock or voting securities or equity interests or securities convertible (whether currently convertible or convertible only after the passage of time of the occurrence of certain events) or exchangeable into, or exercisable for, any shares of its capital stock or other equity or voting securities, including any Tandem Securities or any securities of any Tandem Subsidiary, or any options, warrants, or other rights of any kind to acquire any shares of capital stock or other equity or voting securities, including any Tandem Securities or any securities of any Tandem Subsidiary;

 

(c)            sell, license, lease, transfer, mortgage, pledge, encumber or otherwise dispose of, or discontinue, any of its material properties (other than other real estate owned disposed of for an amount not less than 85% of its recorded investment value as of the date hereof), assets or any business to any individual, corporation or other entity other than a wholly-owned Subsidiary, or cancel, release or assign any indebtedness to any such person or any claims held by any such person, in each case, other than (x) in the ordinary course of business or (y) pursuant to contracts or agreements in force at the date of this Agreement;

 

(d)            except for foreclosure or acquisitions of control in a bona fide fiduciary capacity or in satisfaction of debts previously contracted in good faith, in each case, in the ordinary course of business, make any material investment in or acquire (whether by purchase of stock or securities, contributions to capital, property transfers, merger or consolidation, or formation of a joint venture or otherwise) any other person or all or any portion of the property, assets, debt, business, deposits or properties of any other person, in each case, other than a wholly-owned Subsidiary of Tandem;

 

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(e)            in each case, except for transactions in the ordinary course of business, (i) terminate, materially amend, extend or waive any material provision of, any Tandem Contract or (ii) enter into any contract that would constitute an Tandem Contract if in effect on the date of this Agreement, or make any change in any instrument or agreement governing the terms of any of its securities, other than normal renewals of contracts without material adverse changes of terms with respect to Tandem or any of its Subsidiaries (or the Surviving Entity); provided that this clause (ii) shall not apply to the entry into of any contract in connection with any action otherwise permitted by this Section 5.2;

 

(f)            except as required pursuant to the terms of any Tandem Benefit Plan as in effect as of the date of this Agreement, (A) increase in any manner the compensation, salaries, wages, commissions or consulting fees, bonus, incentives, pension, welfare, fringe or other benefits, severance or termination pay of any current or former employee, officer, director or independent contractor of Tandem or any of its Subsidiaries, other than (i) increases in base compensation in the ordinary course, consistent with past practices, that do not exceed 5% individually or 3% in the aggregate after consultation with the Chief Human Resources Officer of GBC (or other increases with the written consent of the Chief Human Resources Officer of GBC), (ii) the payment of annual bonuses for completed performance periods based upon actual corporate performance, the performance of such employee and, if applicable, such employee’s business, consistent with the terms of the applicable Tandem Benefit Plan as in effect as of the date hereof or as expressly contemplated under this Agreement (or other bonuses with the written consent of the Chief Human Resources Officer of GBC), or (iii) increases, retention payments, or severance determined necessary by Tandem for retention purposes after consultation with, and with the written consent of, the Chief Human Resources Officer of GBC, which in the aggregate shall not exceed the amount disclosed in Section 5.2(f) of the Tandem Disclosure Schedule, (B) other than as contemplated by this Agreement, become a party to, establish, adopt, amend, commence participation in or terminate any Tandem Benefit Plan or any arrangement that would have been a Tandem Benefit Plan had it been entered into prior to this Agreement, (C) grant any new awards, or amend or modify the terms of any outstanding awards, under any Tandem Benefit Plan, (D) other than as contemplated by this Agreement, take any action to accelerate the vesting or lapsing of restrictions or payment, or fund or in any other way secure the payment, of compensation or benefits under any Tandem Benefit Plan, or (E) materially change any actuarial or other assumptions used to calculate funding obligations with respect to any Tandem Benefit Plan that is required by applicable law to be funded or change the manner in which contributions to such plans are made or the basis on which such contributions are determined, except as may be required by GAAP or (F) subject to Section 5.2(s), except for loans or extensions of credit consistent with existing policies and practices and applicable law, make or increase any loan or other extension of credit, or commit to make or increase any such loan or extension of credit, to any director or executive officer of Tandem or Tandem Bank, or any entity controlled, directly or indirectly, by any of the foregoing, other than renewals of existing loans or commitments to loan;

 

(g)            (i) settle, or enter into any settlement or similar agreement with respect to, any claim, suit, action or proceeding or (ii) waive or release any material rights or claims, or agree or consent to the issuance of any injunction, decree, order or judgment restricting or otherwise affecting its business or operations or the Surviving Entity after consummation of the Merger;

 

(h)            take any action or knowingly fail to take any action where such action or failure to act could reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code;

 

(i)             amend its charter, its bylaws or comparable governing documents of its Subsidiaries;

 

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(j)             (i) materially restructure or materially change its investment securities or derivatives portfolio or its interest rate exposure, through purchases, sales or otherwise, or the manner in which the portfolio is classified or reported, or (ii) acquire (other than (A) by way of foreclosure or acquisitions in a bona fide fiduciary capacity or (B) in satisfaction of debts previously contracted in good faith) any debt security or equity investment or any certificates of deposit issued by other banks, other than securities rated “AA” or higher by either Standard and Poor’s Ratings Services or Moody’s Investor Service;

 

(k)            implement or adopt any change in its accounting principles, practices or methods, other than as may be required by GAAP;

 

(l)            (i) enter into any new line of business, introduce any material new products or services, or introduce any material marketing campaigns or any material new sales compensation or incentive programs or arrangements, in each case, except as required by applicable law, regulation or policies imposed by any Governmental Entity; (ii) other than in the ordinary course of business consistent with past practice, change in any material respect its lending, investment, underwriting, risk and asset liability management and other banking and operating, securitization and servicing policies (including any change in the maximum ratio or similar limits as a percentage of its capital exposure applicable with respect to its loan portfolio or any segment thereof), except as required by applicable law, regulation or policies imposed by any Governmental Entity; or (iii) incur any material liability or obligation relating to retail banking and branch merchandising, marketing and advertising activities and initiatives except in the ordinary course of business;

 

(m)           abandon or allow to lapse any material Intellectual Property, other than in the ordinary course of business consistent with past practice;

 

(n)            make, change or revoke any Tax election, change an annual Tax accounting period, adopt or change any Tax accounting method, file any amended Tax Return, enter into any closing agreement with respect to Taxes, or settle any Tax claim, audit, assessment or dispute or surrender any right to claim a refund of Taxes;

 

(o)            merge or consolidate itself or any of its Subsidiaries with any other person, or restructure, reorganize or completely or partially liquidate or dissolve it or any of its Subsidiaries;

 

(p)            incur any capital expenditures or any obligations or liabilities in respect thereof, except for any capital expenditures not to exceed $50,000 individually or $250,000 in the aggregate;

 

(q)            make any changes to deposit pricing other than such changes that may be made in the ordinary course of business or consistent with safe and sound banking practices;

 

(r)             (i) make any new investment or new commitment to invest in real estate or in any real estate development project other than by way of foreclosure or deed in lieu thereof, (ii) make any new investment or new commitment to develop, or otherwise take any actions to develop any real estate owned by Tandem or any of its Subsidiaries, or (iii) file any application or make any contract or commitment for the opening, relocation or closing of any, or open, relocate or close any, branch office.

 

(s)            sell, transfer or lease any properties or assets (real, personal or mixed, tangible or intangible) to, or enter into any agreement or arrangement with, any of its officers or directors or any of their immediate family members or any affiliates or associates of any of its officers or directors other than in the ordinary course of business;

 

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(t)            except for loans or extensions of credit approved and/or committed as of the date of this Agreement, (i) make or renew any loan greater than $3,000,000 if secured or $500,000 if unsecured, (ii) purchase a participation in any loan or pool of loans greater than $500,000, or (iii) renew for more than 12 months any loans greater than $500,000 rated “watch” or worse without giving notice of such action within 24 hours after any loan committee meeting at which such action is approved. For purposes of this Section 5.2(t), notice shall be given by email to the Chief Risk Officer of GBC;

 

(u)            other than interest rate swaps entered into for the account of customers of Tandem or any Tandem Subsidiaries (i.e. “back-to-back” agreements) in the ordinary course of business, enter into any swap transaction, option, warrant, forward purchase or sale transaction, futures transaction, cap transaction, floor transaction or collar transaction relating to one or more currencies, commodities, bonds, equity securities, loans, interest rates, catastrophe events, weather-related events, credit-related events or conditions or any indexes, or any other similar transaction (including any option with respect to any of these transactions) or combination of any of these transactions, including collateralized mortgage obligations or other similar instruments or any debt or equity instruments evidencing or embedding any such types of transactions, and any related credit support, collateral or other similar arrangements related to any such transaction or transactions;

 

(v)            take any action that is intended or would reasonably be expected to (i) result in any of the conditions to the Merger set forth in Section 7.1 or Section 7.2 not being satisfied by the Termination Date, except as may be required by applicable law or (ii) prevent, delay or impair in any material respect its ability to consummate the transactions contemplated by this Agreement; or

 

(w)           agree to take, make any commitment to take, or adopt any resolutions of its Board of Directors or similar governing body in support of, any of the actions prohibited by this Section 5.2.

 

5.3            Forbearances of GBC. During the period from the date of this Agreement to the Effective Time or earlier termination of this Agreement, except as set forth in Section 5.3 of the GBC Disclosure Schedule, as expressly contemplated by this Agreement, as required by law or as consented to in writing by Tandem (such consent not to be unreasonably withheld, conditioned or delayed), GBC shall not, and shall not permit any of its Subsidiaries to:

 

(a)            adjust, split, combine or reclassify any capital stock of GBC (or shares thereof);

 

(b)            make, declare, or pay any dividend on any capital stock of GBC;

 

(c)            amend the GBC Charter or the GBC Bylaws in a manner that would materially and adversely affect the holders of Tandem Common Stock, or adversely affect the holders of Tandem Common Stock relative to other holders of GBC Common Stock;

 

(d)            incur any indebtedness for borrowed money (other than indebtedness of GBC or any of its wholly owned Subsidiaries to GBC or any of its Subsidiaries) that would reasonably be expected to prevent GBC or its Subsidiaries from assuming Tandem’s or its Subsidiaries’ outstanding indebtedness;

 

(e)            take any action or knowingly fail to take any action where such action or failure to act could reasonably be expected to prevent the Merger from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code;

 

(f)            take any action that is intended or would reasonably be expected to result in any of the conditions to the Merger set forth in Section 7.1 or Section 7.3 not being satisfied by the Termination Date, except as may be required by applicable law;

 

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(g)            take any action that is intended or would reasonably be expected to result in a material delay in the ability of GBC or Tandem to perform any of their obligations under this Agreement on a timely basis or a material delay in the ability of GBC to obtain any necessary approvals of any Governmental Entity required for the transactions contemplated hereby by the Termination Date; or

 

(h)            agree to take, make any commitment to take, or adopt any resolutions of its Board of Directors or similar governing body in support of, any of the actions prohibited by this Section 5.3.

 

Article VI

 

ADDITIONAL AGREEMENTS

 

6.1            Regulatory Matters.

 

(a)            The parties hereto shall cooperate with each other and use their reasonable best efforts to promptly prepare and file all necessary documentation, to effect all applications, notices, petitions and filings (and in the case of the applications, notices, petitions and filings in respect of the Requisite Regulatory Approvals, use their reasonable best efforts to make such filings within thirty (30) days of the date of this Agreement), to obtain as promptly as practicable all permits, consents, waivers, approvals and authorizations of all third parties, Regulatory Agencies and Governmental Entities which are necessary or advisable to consummate the transactions contemplated by this Agreement (including the Merger and the Bank Merger), and to comply with the terms and conditions of all such permits, consents, waivers, approvals and authorizations of all such Regulatory Agencies and Governmental Entities. Tandem and GBC shall each use, and shall each cause their applicable Subsidiaries to use, reasonable best efforts to obtain each such Requisite Regulatory Approval as promptly as reasonably practicable. GBC and Tandem shall have the right to review in advance, and each will consult the other on, in each case, subject to applicable laws relating to the exchange of information, all the information relating to Tandem or GBC, as the case may be, and any of their respective Subsidiaries, 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. In exercising the foregoing right, each of the parties hereto shall act reasonably and as promptly as practicable. The parties hereto agree that they will consult with each other with respect to obtaining all permits, consents, waivers, approvals and authorizations of all third parties and Governmental Entities necessary or advisable to consummate the transactions contemplated by this Agreement and each party will keep the other apprised of the status of matters relating to completion of the transactions contemplated in this Agreement, and each party shall consult with the other in advance of any meeting or conference with any Governmental Entity in connection with the transactions contemplated by this Agreement and, to the extent permitted by such Governmental Entity, give the other party and/or its counsel the opportunity to attend and participate in such meetings and conferences, in each case subject to applicable law; and provided, that each party shall promptly advise the other party with respect to substantive matters that are addressed in any meeting or conference with any Governmental Entity which the other party does not attend or participate in connection with or affecting the transactions contemplated by this Agreement, to the extent permitted by such Governmental Entity and subject to applicable law and Section 9.15.

 

(b)            In furtherance and not in limitation of the foregoing, each party shall use its reasonable best efforts to avoid the entry of, or to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order, whether temporary, preliminary or permanent, that would restrain, prevent or delay the Closing. Notwithstanding the foregoing, nothing contained in this Agreement shall be deemed to require GBC or Tandem or any of their respective Subsidiaries, and neither Tandem nor any of its Subsidiaries shall be permitted (without the prior written consent of GBC), to take any action, or commit to take any action, or agree to any condition or restriction, in connection with obtaining the foregoing permits, consents, waivers, approvals and authorizations of Governmental Entities that would reasonably be expected to have a Material Adverse Effect on the Surviving Entity and its Subsidiaries, taken as a whole, after giving effect to the Merger (a “Materially Burdensome Regulatory Condition”).

 

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(c)            GBC and Tandem shall, upon request, furnish each other with all information concerning themselves, their Subsidiaries, directors, officers and shareholders and such other matters as may be reasonably necessary or advisable in connection any filing, notice or application made by or on behalf of GBC, Tandem or any of their respective Subsidiaries to any Governmental Entity in connection with the Merger, the Bank Merger and the other transactions contemplated by this Agreement.

 

(d)            GBC and Tandem shall promptly advise each other upon receiving any communication from any Governmental Entity whose permit, consent, waiver, approval or authorization is required for consummation of the transactions contemplated by this Agreement that causes such party to believe that there is a reasonable likelihood that any Requisite Regulatory Approval will not be obtained, or that the receipt of any such permit, consent, waiver, approval or authorization will be materially delayed.

 

6.2            Access to Information; Confidentiality.

 

(a)            Upon reasonable notice and subject to applicable laws, each of GBC and Tandem, for the purposes of verifying the representations and warranties of the other and preparing for the Merger and the other matters contemplated by this Agreement, shall, and shall cause its Subsidiaries to, afford to the officers, employees, accountants, counsel, advisors and other representatives of the other party, access, during normal business hours during the period prior to the Effective Time upon prior written notice from the accessing party, to all its properties, books, contracts, commitments, personnel, information technology systems, and records, and both Tandem and GBC shall reasonably cooperate with the other party in preparing to execute after the Effective Time the conversion or consolidation of systems and business operations generally, and, during such period, each of GBC and Tandem shall, and shall cause its Subsidiaries to, make available to the other party (i) a copy of each report, schedule, registration statement or proxy statement and other document filed or received by it during such period pursuant to the requirements of federal securities laws or federal or state banking laws (other than reports or documents that GBC or Tandem, is not permitted to disclose in accordance with Section 9.15 or otherwise under applicable law), and (ii) all other information concerning its business, properties and personnel as such party may reasonably request. Neither GBC nor Tandem nor any of their respective Subsidiaries shall be required to provide access to or to disclose information where such access or disclosure would violate or prejudice the rights of GBC’s or Tandem’, as the case may be, customers, jeopardize the attorney-client privilege of the institution in possession or control of such information (after giving due consideration to the existence of any common interest, joint defense or similar agreement between the parties) or contravene any law, rule, regulation, order, judgment, decree, fiduciary duty or binding agreement entered into prior to the date of this Agreement. The parties hereto will make appropriate substitute disclosure arrangements under circumstances in which the restrictions of the preceding sentence apply.

 

(b)            Each of GBC and Tandem shall hold all information furnished by or on behalf of the other party or any of such party’s Subsidiaries or representatives pursuant to Section 6.2(a) in confidence to the extent required by, and in accordance with, the provisions of the non-disclosure agreement, dated February 19, 2026 between GBC and Tandem (the “Non-Disclosure Agreement”).

 

(c)            No investigation by either of the parties or their respective representatives shall affect or be deemed to modify or waive the representations and warranties of the other set forth in this Agreement.

 

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6.3            Non-Control. Nothing contained in this Agreement shall give either party, directly or indirectly, the right to control or direct the operations of the other party prior to the Effective Time. Prior to the Effective Time, each party shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its and its Subsidiaries’ respective operations.

 

6.4            Fairness Determination; Securities Act Compliance.

 

(a)            The shares of GBC Common Stock issuable in the Merger are intended be issued in reliance upon the exemption from the registration requirements of Section 5 of the Securities Act of 1933, as amended (the “Securities Act”) set forth in Section 3(a)(10) thereof and Article 3 and Section 10-5-53 of Chapter 5 of Title 10 of the O.C.G.A., assuming receipt of the Fairness Determination and the issuance of the Fairness Order (as hereinafter defined). For purposes of this Agreement, “Fairness Determination” means the approval by the Securities Commissioner pursuant to O.C.G.A. §10-5-11(9) (and the rules and regulations thereunder) of the terms and conditions of the contemplated transactions and the fairness thereof such that the issuance of the Per Share Stock Consideration issuable to the Tandem shareholders as contemplated by this Agreement shall qualify for the exemptions from registration available under O.C.G.A. §10-5-11(9) and Section 3(a)(10) of the Securities Act.

 

(b)            The parties hereto shall cooperate with each other and use their reasonable best efforts to promptly prepare and cause to be filed (and use their reasonable best efforts to make such filings within forty-five (45) days of the date of this Agreement) with the Securities Commissioner an application for the Fairness Determination under O.C.G.A. §10-5-11(9), including a request for hearing (the “Fairness Hearing”) and a request for the issuance of an order containing the Fairness Determination (the “Fairness Order”). GBC and Tandem shall have the right to review in advance, and each will consult the other on, in each case, subject to applicable laws relating to the exchange of information, all the information relating to Tandem or GBC, as the case may be, and any of their respective Subsidiaries, which appears in any filing made with, or written materials submitted to, the Securities Commissioner in connection with the application for the Fairness Determination. In exercising the foregoing right, each of the parties hereto shall act reasonably and as promptly as practicable. The parties shall use their reasonable best efforts to cause the Securities Commissioner to issue the Fairness Order, including, but not limited to, mailing a timely notice of hearing to Tandem shareholders providing them with the opportunity to attend and participate in the Fairness Hearing; provided, however, that the parties shall not be required to materially and adversely modify any of the terms of this Agreement or the contemplated transactions in order to cause the Securities Commissioner to make the Fairness Determination and issue the Fairness Order.

 

(c)            In the event that (i) the Fairness Hearing is not available to the parties for reasons beyond their reasonable control, (ii) the Fairness Hearing is held but the Securities Commissioner affirmatively declines to issue the Fairness Order or does not issue the Fairness Order within a reasonable time after such Fairness Hearing (after taking into account any requests for additional information by the Securities Commissioner following such Fairness Hearing), or (iii) the exemption from registration under Section 3(a)(10) of the Securities Act is otherwise not available in connection with the contemplated transactions, then GBC and Tandem shall work in good faith to amend this Agreement to provide for an alternative exemption from federal registration for the issuance of GBC Common Stock pursuant to this Agreement.

 

(d)            GBC and Tandem shall use their reasonable best efforts to obtain all necessary state securities law or “blue sky” permits and approvals required to carry out the contemplated transactions, and each of GBC and Tandem shall prepare and furnish such information relating to the GBC and GBC Subsidiaries or Tandem and Tandem Subsidiaries, as appropriate, and their respective affiliates, directors, officers, and shareholders as may be reasonably required in connection with any such action; provided that neither GBC nor Tandem shall be required to register, or to register the issuance of GBC Common Stock, with any state or the securities regulators of any state (other than making notice filings, as applicable).

 

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6.5            Proxy Statement; Shareholders’ Approvals.

 

(a)            As promptly as reasonably practicable following the date hereof, GBC and Tandem shall prepare and Tandem shall distribute the Proxy Statement to the Tandem shareholders. GBC will furnish to Tandem the information required to be included in the Proxy Statement with respect to its business and affairs and shall have the right to review and consult with Tandem on the form of, and any characterizations of such information included in, the Proxy Statement prior to its being distributed to the Tandem shareholders. If at any time prior to the Effective Time any information relating to GBC or Tandem, or any of their respective affiliates, officers or directors, should be discovered by GBC or Tandem which should be set forth in an amendment or supplement to the Proxy Statement so that the Proxy Statement would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, the party that discovers such information shall promptly notify the other party hereto and, to the extent required by law, rules or regulations, an appropriate amendment or supplement describing such information shall be promptly disseminated by the parties to the Tandem shareholders.

 

(b)            Subject to the parties’ compliance with Section 6.5(a), Tandem shall cause a meeting of its shareholders (the “Tandem Meeting”) to be duly called and held as soon as reasonably practicable following receipt of the Fairness Order (but in no event later than ninety (90) days following the date of this Agreement), for the purpose of obtaining (a) the Requisite Tandem Vote required in connection with this Agreement and the Merger and (b) if so desired and agreed by GBC, a vote upon other matters of the type customarily brought before a meeting of shareholders in connection with the approval of a merger agreement or the transactions contemplated thereby. Subject to Section 6.5(c), Tandem and its Board of Directors shall use its reasonable best efforts to obtain from the shareholders of Tandem the Requisite Tandem Vote, including by communicating to the shareholders of Tandem its recommendation (and including such recommendation in the Proxy Statement) that the shareholders of Tandem approve this Agreement and the transactions contemplated hereby (the “Tandem Board Recommendation”), and Tandem and its Board of Directors shall not (i) withhold, withdraw, modify or qualify in a manner adverse to GBC the Tandem Board Recommendation, (ii) fail to make the Tandem Board Recommendation in the Proxy Statement, (iii) adopt, approve, recommend or endorse an Acquisition Proposal, or publicly announce an intention to adopt, approve, recommend or endorse an Acquisition Proposal, (any of the foregoing actions described in clauses (i) through (iii) a “Recommendation Change”) or (iv) execute or enter into any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement or other similar agreement (other than an Acceptable Confidentiality Agreement) providing for an Acquisition Proposal (an “Alternative Acquisition Agreement”).

 

(c)            Subject to Section 8.1 and Section 8.2, prior to the receipt of the Requisite Tandem Vote, the Board of Directors of Tandem may submit this Agreement to its shareholders without recommendation (which, for the avoidance of doubt, shall constitute a Recommendation Change), in which event the Board of Directors of Tandem may communicate the basis for its lack of recommendation to its shareholders in the Proxy Statement or an appropriate amendment or supplement thereto to the extent required by law (although the resolutions approving this Agreement as of the date hereof may not be rescinded or amended), if (i) the Board of Directors of Tandem has received after the date hereof a bona fide Acquisition Proposal which did not result from a breach of Section 6.13 (other than any breach that is unintentional or immaterial), which it believes in good faith, after receiving the advice of its outside counsel and its financial advisors, constitutes a Superior Proposal (in which event, subject to compliance with this Section 6.5(c) and prior to the receipt of the Requisite Tandem Vote, the Board of Directors of Tandem may cause Tandem to terminate this Agreement pursuant to Section 8.1(h) in order to enter into an Alternative Acquisition Agreement with respect to such Superior Proposal), and (ii) the Board of Directors of Tandem, after receiving the advice of its outside counsel and its financial advisors, determines in good faith that failure to take such actions would be inconsistent with its fiduciary duties under applicable law, in each case, if, but only if, (1) Tandem has complied in all material respects with Section 6.13, (2) Tandem delivers to GBC at least three (3) business days’ prior written notice of its intention to take such action, and specifies the material terms and conditions of the Superior Proposal, (3) prior to taking such action, Tandem negotiates in good faith with GBC, during the three (3) business day period following Tandem’ delivery of the notice referred to in such sub-clause (2) above (to the extent GBC desires to so negotiate) any revision to the terms of this Agreement that GBC desires to propose, and (4) after the conclusion of such three (3) business day period, the Board of Directors of Tandem determines in good faith, after giving effect to all of the adjustments or revisions (if any) which may be offered by GBC pursuant to sub-clause (3) above, that, such Acquisition Proposal continues to constitute a Superior Proposal and it would be inconsistent with its fiduciary duties under applicable law to make or continue to make the Tandem Board Recommendation (it being agreed that, in the event that, following delivery of the notice referred to in sub-clause (2) above, there is any material revision to the terms of such Acquisition Proposal, including any revision in price or other improvement in economic terms, the three (3) business day period during which the parties agree to negotiate in good faith shall be extended, if applicable, to ensure that at least two (2) business days remain to negotiate subsequent to the time Tandem notifies GBC of any such material revision (it being understood that there may be multiple extensions)).

 

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(d)            Notwithstanding any Recommendation Change, unless this Agreement has been terminated, the Tandem Meeting shall be convened and this Agreement shall be submitted to the shareholders of Tandem at such meeting for the purpose of the shareholders of Tandem considering and voting on approval of this Agreement and any other matters required to be approved by the shareholders of Tandem in order to consummate the transactions contemplated by this Agreement. Additionally, unless this Agreement has been terminated, Tandem shall not submit to or for a vote of its shareholders any Acquisition Proposal.

 

(e)            Tandem shall adjourn or postpone the Tandem Meeting if (i) as of the date of such meeting there are insufficient shares of Tandem Common Stock, as applicable, represented (either in person or by proxy) to constitute the quorum necessary to conduct the business of such meeting, (ii) as of the date of such meeting Tandem has not received proxies representing a sufficient number of shares necessary for the approval of this Agreement by the shareholders of Tandem, or (iii) required by applicable law in order to ensure that any required supplement or amendment to the Proxy Statement Tandem was required to provide to its shareholders by applicable law is provided to the shareholders of Tandem a reasonable amount of time prior to such meeting; provided that, the foregoing shall not restrict in any way each of the Board of Directors of Tandem from making a Recommendation Change permitted by this Section 6.5 and disclosing such Recommendation Change and the basis and reasons therefor.

 

6.6            Legal Conditions to Merger. Subject in all respects to Section 6.1 and Section 6.5(c) of this Agreement, each of GBC and Tandem shall, and shall cause its Subsidiaries to, use their reasonable best efforts (a) to take, or cause to be taken, all actions necessary, proper or advisable to comply promptly with all legal requirements that may be imposed on such party or its Subsidiaries with respect to the Merger and the Bank Merger and, subject to the conditions set forth in Article VII hereof, to consummate the transactions contemplated by this Agreement and (b) to obtain (and to cooperate with the other party to obtain) any material consent, authorization, order or approval of, or any exemption by, any Governmental Entity and any other third party that is required to be obtained by Tandem or GBC or any of their respective Subsidiaries in connection with the Merger, the Bank Merger and the other transactions contemplated by this Agreement.

 

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6.7            Employee Matters.

 

(a)            From the Effective Time through the twelve (12) month anniversary of the Effective Time, or, if earlier, their termination of employment or other service, GBC shall provide to employees of Tandem and its Subsidiaries who at the Effective Time become employees of the Surviving Entity or its Subsidiaries (the “Continuing Employees”) the base salary or base wage that is no less favorable than that paid to similarly situated employees of GBC and its Subsidiaries and employee benefits that are no less favorable in the aggregate than those generally made available to similarly situated employees of GBC and its Subsidiaries; provided that for purposes of this Section 6.7(a), “employee benefits” shall exclude equity and equity-based compensation, long-term incentives, change in control or retention bonuses or benefits, defined benefit pension benefits, nonqualified deferred compensation, retiree medical benefits and severance benefits (it being understood that the Surviving Entity shall honor contractual obligations in effect as of the date hereof with respect to (x) the “employee benefits” referred to in this Section 6.7(a) pursuant to Tandem Benefit Plans listed on Section 6.7(a) of the Tandem Disclosure Schedule, subject to prospective changes permitted by the terms of the applicable Tandem Benefit Plan and applicable law, (y) for senior officers subject to a change of control agreement as of the date of this Agreement, the severance benefits provided under such agreement; provided that the severance benefits shall be subject to 280G of the Code and any cut-backs set forth in any such agreement required to avoid characterizing any such severance benefits as “excess parachute payments” within the meaning of Section 280G of the Code, to the extent applicable, and (z) for employees not subject to a change of control agreement or other severance arrangement or plan, severance benefits equal to two (2) weeks’ pay per year of service, with a minimum of four (4) weeks and a maximum of twenty-six (26) weeks, payable in normal payroll installments (no less frequently than monthly) beginning with the payroll period immediately following any termination of employment).

 

(b)            For purposes of GBC employee benefit plans eligibility, participation, vesting and, solely for purposes of paid time off or vacation benefits, benefit accrual (except not for any other purpose or under any defined benefit pension plan, nonqualified deferred compensation plan, retiree medical plan or any frozen plan or to the extent that such credit would result in a duplication of benefits) under the GBC employee benefit plans in which the Continuing Employee is eligible to participate, service with or credited by Tandem or any of its Subsidiaries for such Continuing Employees shall be treated as service with the Surviving Entity to the same extent that such service was taken into account under the analogous Tandem Benefit Plan prior to the Effective Time. With respect to any GBC employee benefit plan that constitutes a “group health plan” within the meaning of Section 5000(b)(1) of the Code and in which any Continuing Employees first become eligible to participate at or following the Effective Time, and in which such Continuing Employees did not participate prior to the Effective Time, GBC shall use commercially reasonable efforts to (or to cause its Subsidiary to): (A) waive all preexisting conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to such employees and their eligible dependents, to the extent such pre-existing conditions, exclusions or waiting periods did not apply under the analogous Tandem Benefit Plan, as the case may be, and (B) provide each Continuing Employee and his or her eligible dependents with credit for any co-payments and deductibles paid prior to the Effective Time under the analogous Tandem Benefit Plan (to the same extent that such credit was given under the analogous Tandem Benefit Plan) and during the applicable plan year for the GBC employee benefit plan in satisfying any applicable deductible or out-of-pocket requirements under any such GBC employee benefit plan in which such Continuing Employee first becomes eligible to participate at or following the Effective Time, in each case, subject to any requirements or limitation imposed by the administrative service providers and insurers with respect to the applicable GBC employee benefit plan and GBC receiving all applicable information as reasonably requested by GBC, including information regarding pre-Closing co-payments and deductibles from Tandem or the applicable Continuing Employee or dependent.

 

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(c)            If requested by GBC in writing delivered to Tandem not less than twenty (20) business days before the Closing Date, the Board of Directors of Tandem (or the appropriate committee or officers thereof) shall adopt resolutions and take such corporate action as is necessary or appropriate to terminate the Tandem 401(k) Plan (the “Tandem 401(k) Plan”), effective as of the day prior to the Closing Date and contingent upon the occurrence of the Effective Time. If GBC requests that the Tandem 401(k) Plan be terminated, (i) Tandem shall provide GBC with evidence that such plan has been terminated (the form and substance of which shall be subject to reasonable review and comment by GBC in advance of any such action) not later than two (2) days immediately preceding the Closing Date, and (ii) the Continuing Employees shall be eligible to participate, effective as of the Effective Time, in a 401(k) plan sponsored or maintained by GBC, the Surviving Entity or one of their Subsidiaries (the “GBC 401(k) Plan”) in accordance with the terms of such plan, it being agreed that there shall be no gap in participation in a tax-qualified defined contribution plan. GBC and Tandem shall take any and all actions as may be reasonably required, including amendments to the Tandem 401(k) Plan and/or the GBC 401(k) Plan, to permit the Continuing Employees to make rollover contributions to the GBC 401(k) Plan of “eligible rollover distributions” (within the meaning of Section 401(a)(31) of the Code) in the form of cash, notes (in the case of loans) or a combination thereof in an amount equal to the full account balance distributed to such employee from the Tandem 401(k) Plan. Notwithstanding the foregoing, Tandem may continue to accrue its employer contributions to such 401(k) plan on an ongoing basis consistent with ordinary business practices, shall make the employer contributions provided by the plan for the portion of the 2026 plan year through the plan’s termination prior to Closing based on year-to-date deferrals and compensation, and any service requirements required for allocation of such contribution shall be adjusted accordingly to reflect the partial plan year prior to Closing.

 

(d)            GBC shall take such actions as are reasonably necessary to assume the plans under which the Tandem Options were issued as of the Effective Time and to issue Rollover Options and Rollover Warrants as described in Sections 2.3 and 2.4.

 

(e)            Nothing in this Agreement shall confer upon any employee, officer, director or consultant of GBC or Tandem or any of their Subsidiaries or affiliates any right to continue in the employ or service of the Surviving Entity, Tandem, GBC or any Subsidiary or affiliate thereof, or shall interfere with or restrict in any way the rights of the Surviving Entity, Tandem, GBC or any Subsidiary or affiliate thereof to discharge or terminate the services of any employee, officer, director or consultant of GBC or Tandem or any of their Subsidiaries or affiliates at any time for any reason whatsoever, with or without cause. Nothing in this Agreement shall be deemed to (i) establish, amend, or modify any Tandem Benefit Plan or GBC employee benefit plan or any other benefit or employment plan, program, agreement or arrangement, or (ii) alter or limit the ability of the Surviving Entity or any of its Subsidiaries or affiliates to amend, modify or terminate any particular Tandem Benefit Plan or GBC employee benefit plan or any other benefit or employment plan, program, agreement or arrangement after the Effective Time. Without limiting the generality of Section 9.12, nothing in this Agreement, express or implied, is intended to or shall confer upon any person, including any current or former employee, officer, director or consultant of GBC or Tandem or any of their Subsidiaries or affiliates, any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

 

6.8            Indemnification; Directors’ and Officers’ Insurance.

 

(a)            From and after the Effective Time, the Surviving Entity shall indemnify and hold harmless and shall advance expenses as incurred, in each case, to the fullest extent permitted by applicable law, the Tandem Articles, the Tandem Bylaws and the governing or organizational documents of any Tandem Subsidiary, each present and former director, officer or employee of Tandem and its Subsidiaries (in each case, when acting in such capacity) (collectively, the “Tandem Indemnified Parties”) against any costs or expenses (including reasonable attorneys’ fees), judgments, fines, losses, damages or liabilities incurred in connection with any threatened or actual claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative, whether arising before or after the Effective Time, arising out of, or pertaining to, the fact that such person is or was a director, officer or employee of Tandem or any of its Subsidiaries and pertaining to matters, acts or omissions existing or occurring at or prior to the Effective Time, including matters, acts or omissions occurring in connection with the approval of this Agreement and the transactions contemplated by this Agreement; provided, that in the case of advancement of expenses, any Tandem Indemnified Party to whom expenses are advanced provides an undertaking to repay such advances if it is ultimately determined that such Tandem Indemnified Party is not entitled to indemnification. The Surviving Entity shall reasonably cooperate with the Tandem Indemnified Parties, and the Tandem Indemnified Parties shall reasonably cooperate with the Surviving Entity, in the defense of any such claim, action, suit, proceeding or investigation. Without limiting the indemnification and other rights provided in this clause (a), all rights to indemnification and all limitations on liability existing in favor of the Tandem Indemnified Parties as provided in any indemnification agreement in existence on the date of this Agreement and set forth on Section 6.8 of the Tandem Disclosure Schedule shall survive the Merger and shall continue in full force and effect to the fullest extent permitted by law, and shall be honored by the Surviving Entity and its Subsidiaries or their respective successors as if they were the indemnifying party thereunder, without any amendment thereto.

 

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(b)            For a period of six (6) years after the Effective Time, the Surviving Entity shall cause to be maintained in effect the current policies of directors’ and officers’ liability insurance maintained by Tandem (provided, that the Surviving Entity may substitute therefor policies with a substantially comparable insurer of at least the same coverage and amounts containing terms and conditions that are no less advantageous to the insured) with respect to claims against the present and former officers and directors of Tandem or any of its Subsidiaries arising from facts or events which occurred at or before the Effective Time (including the approval of this Agreement and the transactions contemplated by this Agreement); provided, however, that the Surviving Entity shall not be obligated to expend, on an annual basis, an amount in excess of 300% of the current annual premium paid as of the date hereof by Tandem for such insurance (the “Premium Cap”), and if such premiums for such insurance would at any time exceed the Premium Cap, then the Surviving Entity shall cause to be maintained policies of insurance which, in the Surviving Entity’s good faith determination, provide the maximum coverage available at an annual premium equal to the Premium Cap. In lieu of the foregoing, GBC or Tandem, in consultation with, but only upon the consent, of GBC, may (and at the request of GBC, Tandem shall use its reasonable best efforts to) obtain at or prior to the Effective Time a six (6)-year “tail” policy under Tandem’ existing directors’ and officers’ insurance policy providing equivalent coverage to that described in the preceding sentence if and to the extent that the same may be obtained for an amount that, in the aggregate, does not exceed the Premium Cap.

 

(c)            The obligations of the Surviving Entity, GBC or Tandem under this Section 6.8 shall not be terminated or modified after the Effective Time in a manner so as to adversely affect any Tandem Indemnified Party or any other person entitled to the benefit of this Section 6.8 without the prior written consent of the affected Tandem Indemnified Party or affected person.

 

(d)            The provisions of this Section 6.8 shall survive the Effective Time and are intended to be for the benefit of, and shall be enforceable by, each Tandem Indemnified Party and his or her heirs and representatives. If the Surviving Entity or any of its successors or assigns (i) consolidates with or merges into any other person and is not the continuing or surviving entity of such consolidation or merger, or (ii) transfers all or substantially all of its assets or deposits to any other person or engages in any similar transaction, then in each such case, the Surviving Entity will cause proper provision to be made so that the successors and assigns of the Surviving Entity will expressly assume the obligations set forth in this Section 6.8.

 

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6.9            Additional Agreements. In case at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement (including any merger between a Subsidiary of GBC, on the one hand, and a Subsidiary of Tandem, on the other hand) or to vest the Surviving Entity with full title to all properties, assets, rights, approvals, immunities and franchises of any of the parties to the Merger or the Bank Merger, the proper officers and directors of each party to this Agreement and their respective Subsidiaries shall take all such necessary action as may be reasonably requested by GBC.

 

6.10          Advice of Changes. GBC and Tandem shall each promptly advise the other party of any effect, change, event, circumstance, condition, occurrence or development (i) that has had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect on such first party, or (ii) that such first party believes would or would reasonably be expected to cause or constitute a material breach of any of its representations, warranties, obligations, covenants or agreements contained in this Agreement that reasonably could be expected to give rise, individually or in the aggregate, to the failure of a condition in Article VII; provided, that any failure to give notice in accordance with the foregoing with respect to any breach shall not be deemed to constitute a violation of this Section 6.10 or the failure of any condition set forth in Section 7.2 or 7.3 to be satisfied, or otherwise constitute a breach of this Agreement by the party failing to give such notice, in each case, unless the underlying breach would independently result in a failure of the conditions set forth in Section 7.2 or 7.3 to be satisfied; and provided, further, that the delivery of any notice pursuant to this Section 6.10 shall not cure any breach of, or noncompliance with, any other provision of this Agreement or limit the remedies available to the party receiving such notice.

 

6.11          Shareholder Litigation. Each party shall give the other party prompt notice of any shareholder litigation against such party or its directors or officers relating to the transactions contemplated by this Agreement. Tandem shall (i) give GBC the opportunity to participate (at GBC’s expense) in the defense or settlement of any such litigation, (ii) give GBC a reasonable opportunity to review and comment on all filings or responses to be made by Tandem in connection with any such litigation, and will in good faith take such comments into account and (iii) not agree to settle any such litigation without GBC’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed; provided, that the other party shall not be obligated to consent to any settlement which does not include a full release of such other party and its affiliates or which imposes an injunction or other equitable relief after the Effective Time upon the Surviving Entity or any of its affiliates.

 

6.12          Corporate Governance. Prior to the Effective Time, the Board of Directors of GBC shall take all actions necessary to cause the Board of Directors of GBC to be increased by one and shall appoint one individual from the Tandem board of directors immediately prior to the Effective Time designated by Tandem and reasonably acceptable to the GBC Board of Directors to serve as a director of the Surviving Entity as of the Effective Time (the Tandem director being appointed hereunder, the “Tandem Continuing Director”). The Board of Directors of the Surviving Entity (or the appropriate committee thereof) shall cause the Tandem Continuing Director to be nominated for election at (a) the 2026 annual meeting of shareholders of the Surviving Entity, if such meeting occurs subsequent to the Effective Time, and (b) the 2027 annual meeting of shareholders of the Surviving Entity.

 

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6.13          Acquisition Proposals. Tandem will, and will use reasonable best efforts to cause its Representatives to, immediately cease and cause to be terminated any activities, discussions or negotiations conducted before the date of this Agreement with any person other than GBC with respect to any Acquisition Proposal. Tandem agrees that it will not, and will cause each of its Subsidiaries not to, and use its reasonable best efforts to cause its and their respective officers, directors, employees, agents, advisors and representatives (collectively, “Representatives”) not to, directly or indirectly, (i) initiate, solicit, knowingly encourage or knowingly facilitate any inquiries or proposals with respect to any Acquisition Proposal, (ii) engage or participate in any negotiations with any person concerning any Acquisition Proposal, (iii) provide any confidential or nonpublic information or data to, or have or participate in any discussions with, any person relating to any Acquisition Proposal (except to (x) notify a person that has made or, to the knowledge of such party, is making any inquiries with respect to, or is considering making, an Acquisition Proposal, of the existence of the provisions of this Section 6.13, and (y) to seek and obtain legal or financial advice from Tandem’ outside counsel and outside financial advisors), or (iv) unless this Agreement has been terminated in accordance with its terms, approve or enter into any term sheet, letter of intent, commitment, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement or other similar agreement (whether written or oral, binding or nonbinding) (other than an Acceptable Confidentiality Agreement entered into in accordance with this Section 6.13) in connection with or relating to any Acquisition Proposal. Notwithstanding the foregoing, in the event that after the date of this Agreement and prior to the receipt of the Requisite Tandem Vote, Tandem receives an unsolicited bona fide written Acquisition Proposal, Tandem may, and may permit its Subsidiaries and its and its Subsidiaries’ Representatives to, furnish or cause to be furnished confidential or nonpublic information or data and participate in such negotiations or discussions with the person making the Acquisition Proposal if the Board of Directors of Tandem concludes in good faith (after receiving the advice of outside counsel and, with respect to financial matters, its outside financial advisors) that failure to take such actions would be more likely than not to be inconsistent with its fiduciary duties under applicable law; provided, that, prior to furnishing any confidential or nonpublic information permitted to be provided pursuant to this sentence, Tandem shall have provided such information to GBC and shall have entered into a confidentiality agreement with the person making such Acquisition Proposal on terms no less favorable to Tandem than the Non-Disclosure Agreement (“Acceptable Confidentiality Agreement”), which confidentiality agreement shall not provide such person with any exclusive right to negotiate with Tandem. Tandem will promptly (and, in any event, within one business day after receipt) advise GBC following receipt of any Acquisition Proposal or any inquiry which could reasonably be expected to lead to an Acquisition Proposal and the substance thereof (including the material terms and conditions of and the identity of the person making such inquiry or Acquisition Proposal), and will keep GBC apprised of any related developments, discussions and negotiations on a current basis, including any amendments to or revisions of the terms of such inquiry or Acquisition Proposal. Tandem shall use its reasonable best efforts to enforce any existing confidentiality or standstill agreements to which it or any of its Subsidiaries is a party in accordance with the terms thereof. It is agreed that any violation of the restrictions on Tandem set forth in this Section 6.13 (other than any violation that is unintentional or immaterial) by any officer, director, employee, consultant, advisor or other representative of Tandem or any of its Subsidiaries, in each case acting on behalf of Tandem or any of its Subsidiaries, shall be a breach of this Section 6.13 by Tandem.

 

6.14          Public Announcements. Tandem and GBC agree that the initial press release with respect to the execution and delivery of this Agreement shall be a release mutually agreed to by the parties. Thereafter and prior to the Effective Time, each of the parties agrees that no public release concerning this Agreement or the transactions contemplated hereby shall be issued by any party without the prior written consent of the other party (which consent shall not be unreasonably withheld, conditioned or delayed), except (i) as required by applicable law or the rules or regulations of any applicable Governmental Entity or stock exchange to which the relevant party is subject, in which case the party required to make the release or announcement shall consult with the other party about, and allow the other party reasonable time to comment on, such release or announcement in advance of such issuance, or (ii) for such releases or announcements that are consistent with other such releases or announcement made after the date of this Agreement in compliance with this Section 6.14. It is understood that GBC shall assume Tandem responsibility for the preparation of joint press releases relating to this Agreement, the Merger and the other transactions contemplated hereby.

 

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6.15          Takeover Statutes. Neither Tandem nor its Board of Directors shall take any action that would cause any Takeover Statute to become applicable to this Agreement, the Merger, or any of the other transactions contemplated hereby, and each shall take all necessary steps to exempt (or ensure the continued exemption of) the Merger and the other transactions contemplated hereby from any applicable Takeover Statute now or hereafter in effect. If any Takeover Statute may become, or may purport to be, applicable to the transactions contemplated hereby, each party and the members of their respective Boards of Directors will grant such approvals and take such actions as are necessary so that the transactions contemplated by this Agreement may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to eliminate or minimize the effects of any Takeover Statute on any of the transactions contemplated by this Agreement, including, if necessary, challenging the validity or applicability of any such Takeover Statute.

 

6.16          Certain Tax Matters. Each of Tandem and GBC shall use its reasonable best efforts to cause the Merger to qualify as a “reorganization” within the meaning of Section 368(a) of the Code. Each of Tandem and GBC will, and will cause their respective Affiliates to, maintain all books and records and file all federal, state, and local income Tax Returns and schedules thereto in a manner consistent with the Merger’s qualification as a reorganization under Section 368(a)(1)(A) of the Code (and comparable provisions of any applicable state or local law). Each of Tandem and GBC shall use its reasonable best efforts and shall cooperate with one another to obtain the opinion of counsel referred to in Section 7.2(d) and Section 7.3(d). In connection with the foregoing, (a) Tandem shall deliver to the counsel that is delivering the opinion referred to in Section 7.2(d) and Section 7.3(d) a duly executed letter of representations customary for transactions of this type and reasonably satisfactory to either such counsel (the “Tandem Tax Certificate”), and (b) GBC shall deliver to the counsel that is delivering the opinion referred to in Section 7.2(d) and Section 7.3(d) a duly executed letter of representations customary for transactions of this type and reasonably satisfactory to either such counsel (the “GBC Tax Certificate”), in the case of each of clauses (a) and (b), at such times as either such counsel shall reasonably request.

 

Article VII

 

CONDITIONS PRECEDENT

 

7.1            Conditions to Each Party’s Obligation to Effect the Merger. The respective obligations of the parties to effect the Merger shall be subject to the satisfaction at or prior to the Effective Time of the following conditions:

 

(a)            Shareholder Approval. The Requisite Tandem Vote shall have been obtained.

 

(b)            Regulatory Approvals. (i) All Requisite Regulatory Approvals shall have been obtained and shall remain in full force and effect and all statutory waiting periods in respect thereof shall have expired or been terminated and (ii) no such Requisite Regulatory Approval shall have resulted in the imposition of any Materially Burdensome Regulatory Condition.

 

(c)            No Injunctions or Restraints; Illegality. No order, injunction or decree issued by any court or Governmental Entity of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Merger, the Bank Merger or any of the other transactions contemplated by this Agreement shall be in effect. No law, statute, rule, regulation, order, injunction or decree shall have been enacted, entered, promulgated or enforced by any Governmental Entity which prohibits or makes illegal consummation of the Merger, the Bank Merger or any of the other transactions contemplated by this Agreement.

 

(d)            Fairness Order. The Fairness Order shall have been obtained and shall remain in full force and effect.

 

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(e)            Employee Arrangements. GBC shall have entered into the employee arrangements described in Section 7.1(e) of the Tandem Disclosure Schedule and such arrangements shall become effective as of the Effective Time.

 

7.2            Conditions to Obligations of GBC. The obligation of GBC to effect the Merger is also subject to the satisfaction, or waiver by GBC, at or prior to the Effective Time, of the following conditions:

 

(a)            Representations and Warranties. The representations and warranties of Tandem set forth in Section 3.2(a) and Section 3.8(a) (in each case, after giving effect to the lead-in to Article III) shall be true and correct (other than, in the case of Section 3.2(a), such failures to be true and correct as are de minimis), in each case, as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent such representations and warranties speak as of an earlier date, in which case as of such earlier date), and the representations and warranties of Tandem set forth in Section 3.1(a), Section 3.1(b) (but only with respect to Tandem Bank), Section 3.3(a), Section 3.3(b)(i) and Section 3.7 (read, in each case, without giving effect to any qualification as to materiality or Material Adverse Effect set forth in such representations or warranties but, in each case, after giving effect to the lead-in to Article III) shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent such representations and warranties speak as of an earlier date, in which case as of such earlier date). All other representations and warranties of Tandem set forth in this Agreement (read without giving effect to any qualification as to materiality or Material Adverse Effect set forth in such representations or warranties but, in each case, after giving effect to the lead-in to Article III) shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent such representations and warranties speak as of an earlier date, in which case as of such earlier date); provided, however, that for purposes of this sentence, such representations and warranties shall be deemed to be true and correct unless the failure or failures of such representations and warranties to be so true and correct, either individually or in the aggregate, and without giving effect to any qualification as to materiality or Material Adverse Effect set forth in such representations or warranties, has had or would reasonably be expected to have a Material Adverse Effect on Tandem or the Surviving Entity. GBC shall have received a certificate dated as of the Closing Date and signed on behalf of Tandem by the Chief Executive Officer or the Chief Financial Officer of Tandem to the foregoing effect.

 

(b)            Performance of Obligations of Tandem. Tandem shall have performed in all material respects the obligations, covenants and agreements required to be performed by it under this Agreement at or prior to the Closing Date, and GBC shall have received a certificate dated as of the Closing Date and signed on behalf of Tandem by the Chief Executive Officer or the Chief Financial Officer of Tandem to such effect.

 

(c)            Material Adverse Effect. There shall not have been any Material Adverse Effect with respect to Tandem between the date hereof and the Closing Date.

 

(d)            Tangible Book Value. Tandem’s tangible book value, excluding any one-time costs and expenses incurred in connection with this Agreement and the transactions contemplated by it, as of the Measurement Date shall be at least $25,000,000. For purposes of this Section 7.2(d), “Measurement Date” means (i) if the Closing Date occurs after the 15th day of a month, the close of business for the month which immediately precedes the month in which the Closing Date occurs, or (ii) if the Closing Date occurs on or before the 15th day of a month, the close of business for the month which is two months prior to the month in which the Closing Date occurs.

 

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(e)            Federal Tax Opinion. GBC shall have received the opinion from Troutman Pepper Locke LLP, in form and substance reasonably satisfactory to GBC, dated as of the Closing Date, to the effect that, on the basis of facts, representations, and assumptions set froth or referred to in such opinion, the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. In rendering such opinion, counsel may require and rely upon representations contained in the GBC Tax Certificate and the Tandem Tax Certificate.

 

7.3            Conditions to Obligations of Tandem. The obligation of Tandem to effect the Merger is also subject to the satisfaction, or waiver by Tandem, at or prior to the Effective Time of the following conditions:

 

(a)            Representations and Warranties. The representations and warranties of GBC set forth in Section 4.2(a)  (in each case, after giving effect to the lead-in to Article IV) shall be true and correct (other than, in the case of Section 4.2(a), such failures to be true and correct as are de minimis), in each case, as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent such representations and warranties speak as of an earlier date, in which case as of such earlier date), and the representations and warranties of GBC set forth in Section 4.1(a), Section 4.1(b) (but only with respect to GBC Bank), Section 4.2(b) (but only with respect to GBC Bank), Section 4.3(a); Section 4.3(b)(i) and Section 4.7 (read without giving effect to any qualification as to materiality or Material Adverse Effect set forth in such representations or warranties but, in each case, after giving effect to the lead-in to Article IV) shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent such representations and warranties speak as of an earlier date, in which case as of such earlier date). All other representations and warranties of GBC set forth in this Agreement (read without giving effect to any qualification as to materiality or Material Adverse Effect set forth in such representations or warranties but, in each case, after giving effect to the lead-in to Article IV) shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date as though made on and as of the Closing Date (except to the extent such representations and warranties speak as of an earlier date, in which case as of such earlier date), provided, however, that for purposes of this sentence, such representations and warranties shall be deemed to be true and correct unless the failure or failures of such representations and warranties to be so true and correct, either individually or in the aggregate, and without giving effect to any qualification as to materiality or Material Adverse Effect set forth in such representations or warranties, has had or would reasonably be expected to have a Material Adverse Effect on GBC. Tandem shall have received a certificate dated as of the Closing Date and signed on behalf of GBC by the Chief Executive Officer or the Chief Financial Officer of GBC to the foregoing effect.

 

(b)            Performance of Obligations of GBC. GBC shall have performed in all material respects the obligations, covenants and agreements required to be performed by it under this Agreement at or prior to the Closing Date, and Tandem shall have received a certificate dated as of the Closing Date and signed on behalf of GBC by the Chief Executive Officer or the Chief Financial Officer of GBC to such effect.

 

(c)            Material Adverse Effect. There shall not have been any Material Adverse Effect with respect to GBC between the date hereof and the Closing Date.

 

(d)            Federal Tax Opinion. Tandem shall have received the opinion from Nelson Mullins Riley & Scarborough LLP, in form and substance reasonably satisfactory to Tandem, dated as of the Closing Date, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion, the Merger will qualify as a “reorganization” within the meaning of Section 368(a) of the Code. In rendering such opinion, counsel may require and rely upon representations contained in the GBC Tax Certificate and the Tandem Tax Certificate.

 

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Article VIII

 

TERMINATION AND AMENDMENT

 

8.1            Termination. This Agreement may be terminated at any time prior to the Effective Time, whether before or after receipt of the Requisite Tandem Vote (except in the case of Section 8.1(e) and Section 8.1(f)):

 

(a)            by mutual written consent of GBC and Tandem;

 

(b)            by either GBC or Tandem if any Governmental Entity that must grant a Requisite Regulatory Approval has denied approval of the Merger or the Bank Merger and such denial has become final and nonappealable or any Governmental Entity of competent jurisdiction shall have issued a final and nonappealable order, injunction, decree or other legal restraint or prohibition permanently enjoining or otherwise prohibiting or making illegal the consummation of the Merger or the Bank Merger, unless the failure to obtain a Requisite Regulatory Approval shall be due to the failure of the party seeking to terminate this Agreement to perform or observe the obligations, covenants and agreements of such party set forth herein;

 

(c)            by either GBC or Tandem if the Merger shall not have been consummated on or before the twelve (12) month anniversary of the date of this Agreement (the “Termination Date”), unless the failure of the Closing to occur by such date shall be due to the failure of the party seeking to terminate this Agreement to perform or observe the obligations, covenants and agreements of such party set forth herein;

 

(d)            by either GBC or Tandem (provided, that the terminating party is not then in material breach of any representation, warranty, obligation, covenant or other agreement contained herein) if there shall have been a breach of any of the obligations, covenants or agreements or any of the representations or warranties (or any such representation or warranty shall cease to be true) set forth in this Agreement on the part of Tandem, in the case of a termination by GBC, or GBC, in the case of a termination by Tandem, which breach or failure to be true, either individually or in the aggregate with all other breaches by such party (or failures of such representations or warranties to be true), would constitute, if occurring or continuing on the Closing Date, the failure of a condition set forth in Section 7.2, in the case of a termination by GBC, or Section 7.3, in the case of a termination by Tandem, and which is not cured within thirty (30) days following written notice to Tandem, in the case of a termination by GBC, or GBC, in the case of a termination by Tandem, or by its nature or timing cannot be cured during such period (or such fewer days as remain prior to the Termination Date);

 

(e)            by either GBC or Tandem, at any time prior to or on the Closing Date, if, after the date hereof, there shall have occurred and be continuing any events or occurrences that, individually or in the aggregate have had or would reasonably be expected to have a Material Adverse Effect on Tandem, in the case of a termination by GBC, or on GBC, in the case of a termination by Tandem;

 

(f)            by GBC, prior to such time that the Requisite Tandem Vote is obtained, if (i) Tandem or the Board of Directors of Tandem shall have made a Recommendation Change, or (ii) Tandem or the Board of Directors of Tandem shall have committed a Willful and Material Breach (as defined below) of its obligations under Section 6.5 or 6.13;

 

(g)            by either Tandem or GBC, if the Requisite Tandem Vote shall not have been obtained upon a vote thereon taken at the Tandem Meeting (including any adjournment or postponement thereof); or

 

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(h)            by Tandem in order to enter into an Alternative Acquisition Agreement with respect to a Superior Proposal if, prior to the time the Requisite Tandem Vote is obtained, the Board of Directors of Tandem authorizes Tandem to enter into an Alternative Acquisition Agreement in response to a Superior Proposal, to the extent permitted by and in accordance with Section 6.5(c); provided that concurrently with such termination, Tandem pays, or causes to be paid, to GBC, in immediately available funds the Termination Fee pursuant to Section 8.2.

 

8.2            Effect of Termination.

 

(a)            In the event of termination of this Agreement by either GBC or Tandem as provided in Section 8.1, this Agreement shall forthwith become void and have no effect, and none of GBC, Tandem, any of their respective Subsidiaries or any of the officers or directors of any of them shall have any liability of any nature whatsoever hereunder, or in connection with the transactions contemplated hereby, except that (i) Section 6.2(b) (Access to Information; Confidentiality), Section 6.14 (Public Announcements), this Section 8.2 and Article IX (other than Section 9.13) shall survive any termination of this Agreement, and (ii) notwithstanding anything to the contrary contained in this Agreement, neither GBC nor Tandem shall be relieved or released from any liabilities or damages arising out of its actual and intentional common law fraud in such party’s making of its representations and warranties set forth in this Agreement (“Fraud”) or its willful and material breach of any provision of this Agreement.

 

(b)            In the event that after the date of this Agreement and prior to the termination of this Agreement, a bona fide Acquisition Proposal shall have been communicated to or otherwise made known to the Board of Directors or senior management of Tandem or shall have been made directly to the shareholders of Tandem or any person shall have publicly announced (and not withdrawn at least two (2) business days prior to the Tandem Meeting) an Acquisition Proposal, in each case, with respect to Tandem, and (A)(x) thereafter this Agreement is terminated by either GBC or Tandem pursuant to Section 8.1(c) without the Requisite Tandem Vote having been obtained (and all other conditions set forth in Section 7.1 and Section 7.3 were satisfied or were capable of being satisfied prior to such termination), (y) thereafter this Agreement is terminated by GBC pursuant to Section 8.1(d) as a result of a Willful and Material Breach or (z) thereafter this Agreement is terminated by GBC or Tandem pursuant to Section 8.1(g) and (B) prior to the date that is twelve (12) months after the date of such termination, Tandem enters into a definitive agreement or consummates a transaction with respect to an Acquisition Proposal (whether or not the same Acquisition Proposal as that referred to above), then Tandem shall, on the earlier of the date it enters into such definitive agreement and the date of consummation of such transaction, pay GBC, by wire transfer of same-day funds, a fee equal to $1,600,000 (the “Termination Fee”); provided, that for purposes of this Section 8.2(b), all references in the definition of Acquisition Proposal to “twenty-five percent (25%)” shall instead refer to “fifty percent (50%).”

 

(c)            In the event that this Agreement is terminated by GBC pursuant to Section 8.1(f) then Tandem shall pay GBC, by wire transfer of same-day funds, the Termination Fee within two (2) business days of the date of termination.

 

(d)            In the event that this Agreement is terminated by Tandem pursuant to Section 8.1(h), then Tandem shall pay GBC, by wire transfer of same-day funds, the Termination Fee concurrently with such termination.

 

(e)            Notwithstanding anything to the contrary in this Agreement, but without limiting the right of any party to recover liabilities or damages arising out of the other party’s Fraud or Willful and Material Breach (as defined above) of any provision of this Agreement, in no event shall either party be required to pay the Termination Fee more than once.

 

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(f)            Each of GBC and Tandem acknowledges that the agreements contained in this Section 8.2 are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, the other party would not enter into this Agreement; accordingly, if Tandem or GBC fails promptly to pay the amount due pursuant to this Section 8.2, and, in order to obtain such payment, the other party commences a suit which results in a judgment against the non-paying party for the Termination Fee or any portion thereof, such non-paying party shall pay the costs and expenses of the other party (including attorneys’ fees and expenses) in connection with such suit. In addition, if Tandem or GBC fails to pay the amounts payable pursuant to this Section 8.2, then such party shall pay interest on such overdue amounts at a rate per annum equal to the “prime rate” published in the Wall Street Journal on the date on which such payment was required to be made for the period commencing as of the date that such overdue amount was originally required to be paid and ending on the date that such overdue amount is actually paid in full. The amounts payable by Tandem pursuant to Section 8.1(g), Section 8.2(b) and Section 8.2(c), respectively, and this Section 8.2(f), constitute liquidated damages and not a penalty, and, except in the case of Fraud or Willful and Material Breach (as defined above), shall be the sole monetary remedy of GBC in the event of a termination of this Agreement specified in such applicable section.

 

Article IX

 

GENERAL PROVISIONS

 

9.1            Definitions. Except as otherwise provided herein, the capitalized terms set forth below shall have the following meanings:

 

“Acquisition Proposal” shall mean, other than the transactions contemplated by this Agreement, any offer, proposal or inquiry relating to, or any third-party indication of interest in, (i) any acquisition or purchase, direct or indirect, of twenty-five percent (25%) or more of the consolidated assets of Tandem and its Subsidiaries or twenty-five percent (25%) or more of any class of equity or voting securities of Tandem or its Subsidiaries whose assets, individually or in the aggregate, constitute twenty-five percent (25%) or more of the consolidated assets of Tandem, (ii) any tender offer (including a self-tender offer) or exchange offer that, if consummated, would result in such third party beneficially owning twenty-five percent (25%) or more of any class of equity or voting securities of Tandem or its Subsidiaries whose assets, individually or in the aggregate, constitute twenty-five percent (25%) or more of the consolidated assets of Tandem, or (iii) a merger, consolidation, share exchange, business combination, reorganization, recapitalization, liquidation, dissolution or other similar transaction involving Tandem or its Subsidiaries whose assets, individually or in the aggregate, constitute twenty-five percent (25%) or more of the consolidated assets of Tandem.

 

“Cash Election Threshold” means a number of shares of Tandem Common Stock equal to the product of (i) the total number of shares of Tandem Common Stock issued and outstanding as of the Election Deadline and (ii) 0.25, rounded down to the nearest whole number.

 

“Election Deadline” shall mean 5:00 p.m., Eastern time, on the later of (i) the date of the Tandem Meeting and (ii) the date that GBC and Tandem shall agree is as near as practicable to three (3) Business Days prior to the expected Closing Date.

 

“Material Adverse Effect” means, with respect to GBC, Tandem or the Surviving Entity, as the case may be, any effect, change, event, circumstance, condition, occurrence or development that, either individually or in the aggregate, has had or would reasonably be expected to have a material adverse effect on (i) the business, properties, assets, liabilities, results of operations or financial condition of such party and its Subsidiaries taken as a whole (provided, however, that, with respect to this clause (i), Material Adverse Effect shall not be deemed to include the impact of (A) changes, after the date hereof, in U.S. generally accepted accounting principles (“GAAP”) or applicable regulatory accounting requirements), (B) changes, after the date hereof, in laws, rules or regulations of general applicability to companies in the industries in which such party and its Subsidiaries operate, or interpretations thereof by courts or Governmental Entities (as defined below), (C) changes, after the date hereof, in global, national or regional political conditions (including the outbreak of war or acts of terrorism) or in economic or market (including equity, credit and debt markets, as well as changes in interest rates) conditions affecting the financial services industry generally and not specifically relating to such party or its Subsidiaries, (D) changes, after the date hereof, resulting from hurricanes, earthquakes, tornados, naturally-occurring floods or other natural disasters or from any outbreak of any disease or other public health event (including epidemics or pandemics), or (E) public disclosure of the execution of this Agreement, public disclosure or consummation of the transactions contemplated hereby (including any effect on a party’s relationships with its customers or employees) (it being understood that the foregoing shall not apply for purposes of the representations and warranties in Sections 3.3(b), 3.4, 4.3(b) or 4.4) or actions expressly required by this Agreement or that are taken with the prior written consent of the other party in contemplation of the transactions contemplated hereby (it being understood that this Clause (E) shall not apply to a breach of any representation or warranty related to the announcement, pendency or consummation of the transactions contemplated hereby); except, (i) with respect to subclauses (A), (B), (C), or (D) to the extent that the effects of such change are materially disproportionately adverse to the business, properties, assets, liabilities, results of operations or financial condition of such party and its Subsidiaries, taken as a whole, as compared to other companies in the industry in which such party and its Subsidiaries operate, or (ii) the ability of such party to timely consummate the transactions contemplated hereby.

 

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“Merger Consideration” means the sum of (i) the aggregate Per Share Merger Consideration and (ii) the aggregate Fractional Share Cash-in-Lieu Amounts.

 

“Per Share Cash Consideration” means cash in the amount of $14.40.

 

“Per Share Merger Consideration” means either the Per Share Cash Consideration or the Per Share Stock Consideration that a share of Tandem Common Stock is entitled to receive pursuant to the terms and subject to the conditions of this Agreement.

 

“Per Share Stock Consideration” means 0.4800 fully paid and nonassessable share of GBC Common Stock.

 

“Proxy Statement” means the proxy statement and prospectus and other proxy solicitation materials of Tandem relating to the Tandem Meeting.

 

“Requisite Regulatory Approvals” shall mean all regulatory authorizations, consents, waivers, orders and approvals (and the expiration or termination of all statutory waiting periods in respect thereof) (i) from the FDIC, the DBF and the Federal Reserve (in respect of the Merger or the Bank Merger) or (ii) referred to in Section 3.4 or Section 4.4 that are necessary to consummate the transactions contemplated by this Agreement (including the Merger and the Bank Merger), except, in the case of this clause (ii), for the Fairness Determination and any such authorizations, consents, waivers, orders or approvals the failure of which to be obtained would not be material to the Surviving Entity.

 

“Subsidiary” means any subsidiary of such person as defined in the BHC Act.

 

“Superior Proposal” shall mean any bona fide written Acquisition Proposal which the board of directors of Tandem determines, in good faith, after taking into account all legal, financial, regulatory, and other aspects of such proposal (including the amount, form, and timing of payment of consideration, the financing thereof, any associated break-up or termination fees, including those provided for in this Agreement, expense reimbursement provisions, and all conditions to consummation) and the person making the proposal, and after consulting with its outside financial advisor and outside legal counsel, is (i) more favorable from a financial point of view to Tandem’ shareholders than the transactions contemplated by this Agreement (taking into account any proposal by GBC to amend the terms of this Agreement pursuant to Section 6.5(c)) and (ii) reasonably likely to be timely consummated on the terms set forth; provided, however, that for purposes of this definition of Superior Proposal, references to “twenty-five percent (25%)” in the definition of Acquisition Proposal shall be deemed to be references to “fifty percent (50%).”

 

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“Tax” or “Taxes” means all federal, state, local, and foreign income, excise, gross receipts, ad valorem, profits, gains, property, capital, sales, transfer, use, license, payroll, employment, social security, severance, unemployment, withholding, duties, windfall profits, intangibles, franchise, backup withholding, value added, alternative or add-on minimum, escheat, unclaimed property, estimated and other taxes, charges, levies or like assessments, in each case, in the nature of a Tax and imposed by a Governmental Entity with jurisdiction over Taxes, together with all penalties and additions to tax and interest thereon.

 

“Tax Return” means any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof, supplied or required to be supplied to a Governmental Entity.

 

“Willful and Material Breach” shall mean a material breach of, or material failure to perform any of the covenants or other agreements contained in, this Agreement that is a consequence of an act or failure to act by the breaching or non-performing party with actual knowledge that such party’s act or failure to act would, or would reasonably be expected to, result in or constitute such breach of or such failure of performance under this Agreement.

 

9.2            Amendment. Subject to compliance with applicable law, this Agreement may be amended by the parties hereto at any time before or after the receipt of the Requisite Tandem Vote; provided, however, that after the receipt of the Requisite Tandem Vote, there may not be, without further approval of the shareholders of Tandem any amendment of this Agreement that requires such further approval under applicable law. This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing signed on behalf of each of the parties hereto.

 

9.3            Extension; Waiver. At any time prior to the Effective Time, each of the parties hereto may, to the extent legally allowed, (a) extend the time for the performance of any of the obligations or other acts of the other party hereto, (b) waive any inaccuracies in the representations and warranties of the other party contained in this Agreement or in any document delivered by such other party pursuant hereto, and (c) waive compliance with any of the agreements or satisfaction of any conditions for its benefit contained in this Agreement; provided, however, that after the receipt of the Requisite Tandem Vote, there may not be, without further approval of the shareholders of Tandem any extension or waiver of this Agreement or any portion thereof that requires such further approval under applicable law. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of such party, but such extension or waiver or failure to insist on strict compliance with an obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.

 

9.4            Nonsurvival of Representations, Warranties and Agreements. None of the representations, warranties, obligations, covenants and agreements in this Agreement (or in any certificate delivered pursuant to this Agreement) shall survive the Effective Time, except for Sections 6.8 and 6.12 and for those other obligations, covenants and agreements contained in this Agreement which by their terms apply in whole or in part after the Effective Time.

 

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9.5            Expenses. Except as otherwise expressly provided in this Agreement, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expense.

 

9.6            Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, by e-mail transmission (with confirmation), mailed by registered or certified mail (return receipt requested) or delivered by an express courier (with confirmation) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

 

(a)            if to Tandem, to:

 

Tandem Bancorp, Inc.

2356 Main St

Tucker, GA 30084

Attention: Charles DeWitt

Email: [***]

 

With a copy (which shall not constitute notice) to:

 

Nelson Mullins Riley & Scarborough LLP

201 17th Street NW, Suite 1700

Atlanta, GA 30363

Attention: Brennan Ryan

Email: [***]

 

and

 

(b)            if to GBC, to:

 

Georgia Banking Company, Inc.

1776 Peachtree Street NW, Suite 300

Atlanta, Georgia 30309

Attention: Bartow Morgan, Jr., Chief Executive Officer

Email: [***]

 

With a copy (which shall not constitute notice) to each of:

 

Troutman Pepper Locke LLP

600 Peachtree Street, N.E., Suite 3000

Atlanta, Georgia 30308

Attention: James W. Stevens

Email: [***]

 

9.7            Interpretation. The parties have participated jointly in negotiating and drafting this Agreement. In the event that an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement. When a reference is made in this Agreement to Articles, Sections, Exhibits or Schedules, such reference shall be to an Article or Section of or Exhibit or Schedule to this Agreement unless otherwise indicated. The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The word “or” shall not be exclusive. References to “the date hereof” shall mean the date of this Agreement. As used in this Agreement, the “knowledge” of Tandem means the actual knowledge of any of the officers of Tandem listed on Section 9.7 of the Tandem Disclosure Schedule, and the “knowledge” of GBC means the actual knowledge of any of the officers of GBC listed on Section 9.7 of the GBC Disclosure Schedule. As used in this Agreement, (i) the term “person” means any individual, corporation (including not-for-profit), general or limited partnership, limited liability company, joint venture, estate, trust, association, organization, Governmental Entity or other entity of any kind or nature, (ii) an “affiliate” of a specified person is any person that directly or indirectly controls, is controlled by, or is under common control with, such specified person, (iii) the term “made available” means any document or other information that was (a) provided by one party or its representatives to the other party and its representatives by 5:00 p.m., Eastern time, on the day prior to the date hereof or (b) included in the virtual data room of a party by 5:00 p.m., Eastern time, on the day prior to the date hereof, (iv) “business day” means any day other than a Saturday, a Sunday or a day on which banks in New York, New York are authorized by law or executive order to be closed and (v) the “transactions contemplated hereby” and “transactions contemplated by this Agreement” shall include the Merger and the Bank Merger. The Tandem Disclosure Schedule and the GBC Disclosure Schedule, as well as all other schedules and all exhibits hereto, shall be deemed part of this Agreement and included in any reference to this Agreement. Nothing contained in this Agreement shall require any party or person to take any action in violation of applicable law.

 

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9.8            Counterparts. This Agreement may be executed in counterparts (including by pdf), all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties and delivered to the other parties, it being understood that all parties need not sign the same counterpart.

 

9.9            Entire Agreement. This Agreement (including the documents and instruments referred to herein) together with the Non-Disclosure Agreement constitutes the entire agreement among the parties and supersedes all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof.

 

9.10          Governing Law; Jurisdiction.

 

(a)            This Agreement shall be governed by and construed in accordance with the internal, substantive laws of the State of Georgia applicable to agreements entered into and to be performed solely within such state, without regard to any applicable conflicts of law principles.

 

(b)            Each party agrees that it will bring any action or proceeding in respect of any claim arising out of or related to this Agreement or the transactions contemplated hereby exclusively in any federal or state court of competent jurisdiction located in the State of Georgia (the “Chosen Courts”), and, solely in connection with claims arising under this Agreement or the transactions that are the subject of this Agreement, (i) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any objection to laying venue in any such action or proceeding in the Chosen Courts, (iii) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any party, and (iv) agrees that service of process upon such party in any such action or proceeding will be effective if notice is given in accordance with Section 9.6.

 

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9.11          Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE EXTENT PERMITTED BY LAW AT THE TIME OF INSTITUTION OF THE APPLICABLE LITIGATION, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (I) NO REPRESENTATIVE, AGENT OR ATTORNEY 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, (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.11.

 

9.12          Assignment; Third-Party Beneficiaries. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other party. Any purported assignment in contravention hereof shall be null and void. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. Except as otherwise specifically provided in Section 6.8, which is intended to benefit each Tandem Indemnified Party, this Agreement (including the documents and instruments referred to herein) is not intended to, and does not, confer upon any person other than the parties hereto any rights or remedies hereunder, including the right to rely upon the representations and warranties set forth in this Agreement. The representations and warranties in this Agreement are the product of negotiations among the parties hereto and are for the sole benefit of the parties. Any inaccuracies in such representations and warranties are subject to waiver by the parties hereto in accordance herewith without notice or liability to any other person. In some instances, the representations and warranties in this Agreement may represent an allocation among the parties hereto of risks associated with particular matters regardless of the knowledge of any of the parties hereto. Consequently, persons other than the parties may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.

 

9.13          Specific Performance. The parties hereto agree that irreparable damage would occur if any provision of this Agreement were not performed in accordance with the terms hereof and, accordingly, that the parties shall be entitled to an injunction or injunctions to prevent breaches or threatened breaches of this Agreement or to enforce specifically the performance of the terms and provisions hereof (including the parties’ obligation to consummate the Merger), in addition to any other remedy to which they are entitled at law or in equity. Each of the parties hereby further waives (a) any defense in any action for specific performance that a remedy at law would be adequate, and (b) any requirement under any law to post security or a bond as a prerequisite to obtaining equitable relief.

 

9.14          Severability. Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction such that the invalid, illegal or unenforceable provision or portion thereof shall be interpreted to be only so broad as is enforceable.

 

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9.15          Confidential Supervisory Information. Notwithstanding any other provision of this Agreement, no disclosure, representation or warranty shall be made (or other action taken) pursuant to this Agreement that would involve the disclosure of confidential supervisory information (including confidential supervisory information as defined in 12 C.F.R. § 261.2(c) and as identified in 12 C.F.R. § 309.5(g)(8)) of a Governmental Entity by any party to this Agreement to the extent prohibited by applicable law. To the extent legally permissible, appropriate substitute disclosures or actions shall be made or taken under circumstances in which the limitations of the preceding sentence apply.

 

9.16          Delivery by Electronic Transmission. This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments or waivers hereto or thereto, to the extent signed and delivered by e-mail delivery of a “.pdf” format data file, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No party hereto or to any such agreement or instrument shall raise the use of e-mail delivery of a “.pdf” format data file to deliver a signature to this Agreement or any amendment hereto or the fact that any signature or agreement or instrument was transmitted or communicated through the use of e-mail delivery of a “.pdf” format data file as a defense to the formation of a contract and each party hereto forever waives any such defense.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, Georgia Banking Company, Inc. and Tandem Bancorp, Inc. have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the date first above written.

 

  Georgia banking company, Inc. 
       
  By:   /s/ Bartow Morgan, Jr.
      Bartow Morgan, Jr.
      Chief Executive Officer 

 

  Tandem BANCORP, Inc. 
       
  By:   /s/ Charles M. DeWitt III
      Charles M. DeWitt III
      Chairman and Chief Executive Officer

 

[Signature Page to Agreement and Plan of Merger]

 

 

 

 

Exhibit A

 

Form of Option Holder Release Agreement

 

[***]

 

 

 

 

Exhibit B

 

Form of Warrant Holder Release Agreement

 

[***]

 

 

 

 

Exhibit 3.1

ARTICLES OF INCORPORATION
OF
GEORGIA BANKING COMPANY, INC.

 

ARTICLE ONE
NAME

 

The name of the corporation is Georgia Banking Company, Inc. (the "Corporation").

 

ARTICLE TWO

INITIAL REGISTERED OFFICE AND AGENT

 

The street address and county of the initial registered office of the corporation shall be at 999 Peachtree Street, N.E., Suite 1400, Atlanta, Georgia 30309. The initial registered agent of the corporation at such address shall be Neil E. Grayson.

 

ARTICLE THREE
CAPITALIZATION

 

The Corporation shall have the authority, exercisable by its board of directors (the "Board of Directors"), to issue up to 10,000,000 shares of voting common stock, par value $.01 per share (the "Common Stock").

 

The Corporation shall have the authority, exercisable by its Board of Directors, to issue up to 10,000,000 shares of preferred stock, par value $.01 per share (the "Preferred Stock"), any part or all of which shares of Preferred Stock may be established and designated from time to time by the Board of Directors by filing an amendment to these Articles of Incorporation (a "Preferred Stock Designation"), which is effective without shareholder action, in accordance with the appropriate provisions of the Georgia Business Corporation Code (the "Code") in such series and with such preferences, limitations, and relative rights as may be determined by the Board of Directors. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of the majority of the shares of Common Stock, without a vote of the holders of the shares of Preferred Stock, or of any series thereof, unless a vote of any such holders is required by law or pursuant to the Preferred Stock Designation or Preferred Stock Designations establishing the series of Preferred Stock.

 

 

 

 

ARTICLE FOUR

MAILING ADDRESS OF PRINCIPAL OFFICE

 

The mailing address of the initial principal office of the corporation is as follows:

 

999 Peachtree Street, N.E.
First Union Plaza, Suite 1400
Atlanta, Georgia 30309

 

ARTICLE FIVE

LIMITATION ON DIRECTOR LIABILITY

 

No director of the corporation shall be personally liable to the corporation or its shareholders for monetary damages for breach of the duty of care or any other duty as a director, except that such liability shall not be eliminated for:

 

(i)            any appropriation, in violation of the director's duties, of any business opportunity of the corporation;

 

(ii)           acts or omissions that involve intentional misconduct or a knowing violation of law;

 

(iii)          liability under Section 14-2-832 (or any successor provision or redesignation thereof) of the Code; and

 

(iv)          any transaction from which the director received an improper personal benefit.

 

If at any time the Code shall have been amended to authorize the further elimination or limitation of the liability of a director, then the liability of each director of the corporation shall be eliminated or limited to the fullest extent permitted by the Code, as so amended, without further action by the shareholders, unless the provisions of the Code, as amended, require further action by the shareholders.

 

Any repeal or modification of the foregoing provisions of this Article Six shall not adversely affect the elimination or limitation of liability or alleged liability pursuant hereto of any director of the corporation for or with respect to any alleged act or omission of the director occurring prior to such a repeal or modification.

 

 

 

 

ARTICLE SIX

INITIAL DIRECTORS

 

The name and address of the initial director of the corporation is:

 

R. Elliott Miller

12180 Mountain Laurel Drive

Roswell, Georgia 30075

 

ARTICLE SEVEN

CONSIDERATION OF OTHER CONSTITUENCIES

 

In discharging the duties of their respective positions and in determining what is in the best interests of the Corporation, the Board of Directors, committees of the Board of Directors, and individual directors, in addition to considering the effects of any actions on the Corporation and its shareholders, may consider the interests of the employees, customers, suppliers, creditors, and other constituencies of the Corporation and its subsidiaries, the communities and geographical areas in which the Corporation and its subsidiaries operate or are located, and all other factors such directors consider pertinent. This provision solely grants discretionary authority to the directors and shall not be deemed to provide to any other constituency any right to be considered.

 

ARTICLE EIGHT

NAME AND ADDRESS OF THE SOLE INCORPORATOR

 

The sole incorporator is Neil E. Grayson, whose address is 999 Peachtree Street, N.E., Suite 1400, First Union Plaza, Atlanta, Georgia 30309.

 

IN WITNESS WHEREOF, the undersigned has executed these Articles of Incorporation as of the date indicated below.

 

  /s/ Neil E. Grayson
  Neil E. Grayson
  Sole Incorporator
   
  Date: March 24, 1998

  

 

 

 

ARTICLES OF AMENDMENT 

OF 

Georgia banking company, INC.

 

Pursuant to Section 14-2-1006 of the Georgia Business Corporation Code (the “BCC”), Georgia Banking Company, Inc., a Georgia corporation, hereby submits the following Articles of Amendment:

 

1.            The name of the corporation is Georgia Banking Company, Inc. (the “Corporation”).

 

2.            The Articles of Incorporation of the Corporation are amended as follows:

 

(a)              Amendment to Article Three. Article Three of the Articles of Incorporation of the Corporation is amended by deleting the first paragraph of Article Three and replacing it with the following in lieu thereof.

 

“The Corporation shall have the authority, exercisable by its board of directors (the “Board of Directors”), to issue a total of 50,000,000 shares of common stock, consisting of 40,000,000 shares of voting common stock, par value $0.01 per share (the “Common Stock”), and 10,000,000 shares of non-voting common stock, par value $0.01 per share (the “Non-Voting Common Stock”), having the powers, rights, and preferences, and the qualifications, limitations and restrictions thereof, as set forth in Exhibit A attached hereto. Subject to the provisions of any applicable law or the Bylaws of the Corporation (as from time to time amended) with respect to fixing the record date for the determination of shareholders entitled to vote, and except as otherwise provided by any applicable law or the by the resolution or resolutions of the Board of Directors providing for the issue of any series of Preferred Stock, the holders of the Common Stock shall have and possess exclusive voting power and rights for the election of directors and for all other purposes, with each share being entitled to one vote.”

 

(b)              Non-Voting Common Stock. The Articles of Incorporation of the Corporation are amended by adding the powers, rights, and preferences, and the qualifications, limitations, and restrictions thereof, of the Non-Voting Common Stock as set forth in Exhibit A attached hereto.

 

[Remainder of Page Intentionally Left Blank]

 

 

 

 

CERTIFICATE OF DESIGNATIONS 

OF 

NON-VOTING COMMON STOCK 

OF 

Georgia banking company, INC.

 

The shares of Non-Voting Common Stock of the Corporation shall have the following terms and provisions:

 

1.Definitions.

 

a.“Affiliate” has the meaning set forth in 12 C.F.R. Section 225.2(a) or any successor provision.

 

b.“Articles of Incorporation” means the Articles of Incorporation of the Corporation, as amended and in effect from time and time.

 

c.“Board of Directors” means the board of directors of the Corporation.

 

d.A “business day” means any day other than a Saturday or a Sunday or a day on which banks in Georgia are authorized or required by law, executive order or regulation to close.

 

e.“Certificate” means a certificate representing one (1) or more shares of Non-Voting Common Stock.

 

f.“Common Stock” means the voting common stock of the Corporation, par value 0.01 per share.

 

g.“Conversion” has the meaning set forth in Section 5.

 

h.“Conversion Date” means the date that a share of Non-Voting Common Stock is converted into Common Stock in accordance with Section 5.

 

i.“Corporation” means Georgia Banking Company, Inc., a Georgia corporation.

 

j.“Dividends” has the meaning set forth in Section 3.

 

k.“Liquidation Distribution” has the meaning set forth in Section 4.

 

l.“Non-Voting Common Stock” has the meaning set forth in Section 2.

 

m.“Permissible Transfer” means a transfer by the holder of Non-Voting Common Stock (i) to the Corporation; (ii) in a widespread public distribution of Common Stock or Non-Voting Common Stock; (iii) that is part of an offering that is not a widespread public distribution of Common Stock or Non-Voting Common Stock but is one in which no one transferee (or group of associated transferees) acquires the rights to receive two percent (2%) or more of any class of the Voting Securities of the Corporation then outstanding (including pursuant to a related series of transfers); (iv) that is part of a transfer of Common Stock or Non-Voting Common Stock to an underwriter for the purpose of conducting a widespread public distribution; (v) to a transferee that controls more than fifty percent (50%) of the Voting Securities of the Corporation without giving effect to such transfer; or (vi) that is part of a transaction approved by the Board of Governors of the Federal Reserve System (the “Federal Reserve”).

 

 

 

 

n.“Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, or any other form of entity not specifically listed herein.

 

o.“Voting Security” has the meaning set forth in 12 C.F.R. Section 225.2(q) or any successor provision.

 

2.Designation; Number of Shares. The class of shares of capital stock hereby authorized shall be designated as “Non-Voting Common Stock”. The number of authorized shares of the Non-Voting Common Stock shall be 10,000,000 shares. The Non-Voting Common Stock shall have a par value of $0.01 per share. Each share of Non-Voting Common Stock has the designations, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, or terms or conditions of redemption as described herein. Each share of Non-Voting Common Stock is identical in all respects to every other share of Non-Voting Common Stock.

 

3.Dividends. The Non-Voting Common Stock will rank pari passu with the Common Stock with respect to the payment of dividends or distributions, whether payable in cash, securities, options or other property, and with respect to issuance, grant or sale of any rights to purchase stock, warrants, securities or other property (collectively, the “Dividends”). Accordingly, the holders of record of Non-Voting Common Stock will be entitled to receive as, when, and if declared by the Board of Directors, Dividends in the same per share amount as paid on the Common Stock, and no Dividends will be payable on the Common Stock or any other class or series of capital stock ranking with respect to Dividends pari passu with the Common Stock unless a Dividend identical to that paid on the Common Stock is payable at the same time on the Non-Voting Common Stock in an amount per share of Non-Voting Common Stock equal to the product of (a) the per share Dividend declared and paid in respect of each share of Common Stock and (b) the number of shares of Common Stock into which such share of Non-Voting Common Stock is then convertible (without regard to any limitations on conversion of the Non-Voting Common Stock); provided, however, that if a stock Dividend is declared on Common Stock payable solely in Common Stock, the holders of Non-Voting Common Stock will be entitled to a stock Dividend payable solely in shares of Non-Voting Common Stock. Dividends that are payable on Non-Voting Common Stock will be payable to the holders of record of Non-Voting Common Stock as they appear on the stock register of the Corporation on the applicable record date, as determined by the Board of Directors, which record date will be the same as the record date for the equivalent Dividend of the Common Stock. In the event that the Board of Directors does not declare or pay any Dividends with respect to shares of Common Stock, then the holders of Non-Voting Common Stock will have no right to receive any Dividends.

 

4.Liquidation.

 

a.Rank. The Non-Voting Common Stock will, with respect to rights upon liquidation, winding up and dissolution, rank (i) subordinate and junior in right of payment to all other securities of the Corporation which, by their respective terms, are senior to the Non-Voting Common Stock or the Common Stock, and (ii) pari passu with the Common Stock. Not in limitation of anything contained herein, and for purposes of clarity, the Non-Voting Common Stock is subordinated to the general creditors and subordinated debt holders of the Corporation, and the depositors of the Corporation’s bank subsidiaries, in any receivership, insolvency, liquidation or similar proceeding.

 

 

 

 

b.Liquidation Distributions. In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, holders of Non-Voting Common Stock will be entitled to receive, for each share of Non-Voting Common Stock, out of the assets of the Corporation or proceeds thereof (whether capital or surplus) available for distribution to stockholders of the Corporation, subject to the rights of any Persons to whom the Non-Voting Common Stock is subordinate, a distribution (“Liquidation Distribution”) equal to (i) any authorized and declared, but unpaid, Dividends with respect to such share of Non-Voting Common Stock at the time of such liquidation, dissolution or winding up, and (ii) the amount the holder of such share of Non-Voting Common Stock would receive in respect of such share if such share had been converted into shares of Common Stock at the then applicable conversion rate at the time of such liquidation, dissolution or winding up (assuming the conversion of all shares of Non-Voting Common Stock at such time, without regard to any limitations on conversion of the Non-Voting Common Stock). All Liquidating Distributions to the holders of the Non-Voting Common Stock and Common Stock set forth in clause (ii) above will be made pro rata to the holders thereof.

 

c.Merger, Consolidation and Sale of Assets Not Liquidation. For purposes of this Section 4, the merger or consolidation of the Corporation with any other corporation or other entity, including a merger or consolidation in which the holders of Non-Voting Common Stock receive cash, securities or other property for their shares, or the sale, lease or exchange (for cash, securities or property) of all or substantially all of the assets of the Corporation, will not constitute a liquidation, dissolution or winding up of the Corporation.

 

5.Conversion.

 

a.General.

 

i.A holder of Non-Voting Common Stock shall be permitted to convert shares of Non-Voting Common Stock into shares of Common Stock at any time or from time to time, provided that upon such conversion the holder, together with all Affiliates of the holder, will not own or control in the aggregate more than nine point nine (9.9%) of the Common Stock (or of any class of Voting Securities issued by the Corporation), excluding for the purpose of this calculation any reduction in ownership resulting from transfers by such holder of Voting Securities of the Corporation (which, for the avoidance of doubt, does not include Non-Voting Common Stock). In any such conversion, each share of Non-Voting Common Stock will convert initially into one (1) share of Common Stock, subject to adjustment as provided in Section 6 below.

 

ii.Each share of Non-Voting Common Stock will automatically convert into one (1) share of Common Stock, without any further action on the part of any holder, subject to adjustment as provided in Section 6 below, on the date a holder of Non-Voting Common Stock transfers any shares of Non-Voting Common Stock to a non-Affiliate of the holder in a Permissible Transfer.

 

iii.To effect any permitted conversion under Section 5(a)(i) or Section 5(a)(ii), the holder shall surrender the certificate or certificates evidencing such shares of Non-Voting Common Stock, duly endorsed, at the registered office of the Corporation, and provide written instructions to the Corporation as to the number of shares for which such conversion shall be effected, together with any appropriate documentation that may be reasonably required by the Corporation. Upon the surrender of such certificate(s), the Corporation will issue and deliver to such holder (in the case of a conversion under Section 5(a)(i)) or such holder’s transferee (in the case of a conversion under Section 5(a)(ii)) a certificate or certificates for the number of shares of Common Stock into which the Non-Voting Common Stock has been converted and, in the event that such conversion is with respect to some, but not all, of the holder’s shares of Non-Voting Common Stock, the Corporation shall deliver to such holder a certificate or certificate(s) representing the number of shares of Non-Voting Common Stock that were not converted to Common Stock.

 

 

 

 

iv.All shares of Common Stock delivered upon conversion of the Non-Voting Common Stock shall be duly authorized, validly issued, fully paid and non-assessable, free and clear of all liens, claims, security interests, charges and other encumbrances.

 

b.Reservation of Shares Issuable Upon Conversion. The Corporation will at all times reserve and keep available out of its authorized but unissued Common Stock solely for the purpose of effecting the conversion of the Non-Voting Common Stock such number of shares of Common Stock as will from time to time be sufficient to effect the conversion of all outstanding Non-Voting Common Stock; and if at any time the number of shares of authorized but unissued Common Stock will not be sufficient to effect the conversion of all then outstanding Non-Voting Common Stock, the Corporation will take such action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued Common Stock to such number of shares as will be sufficient for such purpose.

 

c.No Impairment. The Corporation will not, by amendment of its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times in good faith assist in the carrying out of all the provisions of this Section 5 and in the taking of all such actions as may be necessary or appropriate in order to protect the conversion rights of the holders of the Non-Voting Common Stock against impairment.

 

6.Adjustments.

 

a.Combinations or Divisions of Common Stock. In the event that the Corporation at any time or from time to time will effect a division of the Common Stock into a greater number of shares (by stock split, reclassification or otherwise other than by payment of a Dividend in Common Stock or in any right to acquire the Common Stock), or in the event the outstanding Common Stock will be combined or consolidated, by reclassification, reverse stock split or otherwise, into a lesser number of shares of the Common Stock, then the dividend, liquidation, and conversion rights of each share of Non-Voting Common Stock in effect immediately prior to such event will, concurrently with the effectiveness of such event, be proportionately decreased or increased, as appropriate.

 

 

 

 

b.Reclassification, Exchange or Substitution. If the Common Stock is changed into the same or a different number of shares of any other class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a division or combination of shares provided for in Section 6(a) above), (1) the conversion ratio then in effect will, concurrently with the effectiveness of such transaction, be adjusted so that each share of the Non-Voting Common Stock will be convertible into, in lieu of the number of shares of Common Stock which the holders of the Non-Voting Common Stock would otherwise have been entitled to receive, a number of shares of such other class or classes of stock equal to the product of (i) the number of shares of such other class or classes of stock that a holder of a share of Common Stock would be entitled to receive in such transaction and (ii) the number of shares of Common Stock into which such share of Non-Voting Common Stock is then convertible (without regard to any limitations on conversion of the Non-Voting Common Stock) immediately before that transaction and (2) the Dividend and Liquidation Distribution rights then in effect will, concurrently with the effectiveness of such transaction, be adjusted so that each share of Non-Voting Common Stock will be entitled to a Dividend and Liquidation Distribution right, in lieu of with respect to the number of shares of Common Stock which the holders of the Non-Voting Common Stock would otherwise have been entitled to receive, with respect to a number of shares of such other class or classes of stock equal to the product of (i) the number of shares of such other class or classes of stock that a holder of a share of Common Stock would be entitled to receive in such transaction and (ii) the number of shares of Common Stock into which such share of Non-Voting Common Stock is then convertible (without regard to any limitations on conversion of the Non-Voting Common Stock) immediately before that transaction.

 

c.Certificates as to Adjustments. Upon the occurrence of each adjustment or readjustment pursuant to this Section 6, the Corporation at its expense will promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder of Non-Voting Common Stock a certificate executed by the Corporation’s President (or other appropriate officer) setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation will, upon the written request at any time of any holder of Non-Voting Common Stock, furnish or cause to be furnished to such holder a like certificate setting forth (i) such adjustments and readjustments, and (ii) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of the Non-Voting Common Stock.

 

7.Reorganization, Mergers, Consolidations or Sales of Assets. If at any time or from time to time there will be a capital reorganization of the Common Stock (other than a subdivision, combination, reclassification or exchange of shares otherwise provided for in Section 6) or a merger or consolidation of the Corporation with or into another corporation, or the sale of all or substantially all the Corporation’s properties and assets to any other Person, then, as a part of such reorganization, merger, consolidation or sale, provision will be made so that the holders of the Non-Voting Common Stock will thereafter be entitled to receive upon conversion of the Non-Voting Common Stock, the number of shares of stock or other securities or property of the Corporation, or of the successor company resulting from such merger or consolidation or sale, to which a holder of that number of shares of Common Stock deliverable upon conversion of the Non-Voting Common Stock would have been entitled to receive on such capital reorganization, merger, consolidation or sale (without regard to any limitations on conversion of the Non-Voting Common Stock).

 

8.Redemption. Except to the extent a liquidation under Section 4 may be deemed to be a redemption, the Non-Voting Common Stock will not be redeemable at the option of the Corporation or any holder of Non-Voting Common Stock at any time. Notwithstanding the foregoing, the Corporation will not be prohibited from repurchasing or otherwise acquiring shares of Non-Voting Common Stock in voluntary transactions with the holders thereof, subject to compliance with any applicable legal or regulatory requirements, including applicable regulatory capital requirements. Any shares of Non-Voting Common Stock repurchased or otherwise acquired may be reissued as additional shares of Non-Voting Common Stock.

 

 

 

 

9.Voting Rights. The holders of Non-Voting Common Stock will not have any voting rights, except as provided for herein and as may otherwise from time to time be required by law.

 

10.Protective Provisions. So long as any shares of Non-Voting Common Stock are issued and outstanding, the Corporation will not (including by means of merger, consolidation or otherwise), without obtaining the approval (by vote or written consent) of the holders of a majority of the issued and outstanding shares of Non-Voting Common Stock, (a) alter or change the rights, preferences, privileges or restrictions provided for the benefit of the holders of the Non-Voting Common Stock, (b) increase or decrease the authorized number of shares of Non-Voting Common Stock or (c) enter into any agreement, merger or business consolidation, or engage in any other transaction, or take any action that would, in any of such instances, have the effect of changing any preference or any relative or other right provided for the benefit of the holders of the Non-Voting Common Stock. In the event that the Corporation offers to repurchase shares of Common Stock, the Corporation shall offer to repurchase shares of Non-Voting Common Stock pro rata based upon the number of shares of Common Stock such holders would be entitled to receive if such shares were converted into shares of Common Stock immediately prior to such repurchase.

 

11.Notices. All notices required or permitted to be given by the Corporation with respect to the Non-Voting Common Stock shall be in writing, and if delivered by first class United States mail, postage prepaid, to the holders of the Non-Voting Common Stock at their last addresses as they shall appear upon the books of the Corporation, shall be conclusively presumed to have been duly given, whether or not the holder actually receives such notice; provided, however, that failure to duly give such notice by mail, or any defect in such notice, to the holders of any stock designated for repurchase, shall not affect the validity of the proceedings for the repurchase of any other shares of Non-Voting Common Stock, or of any other matter required to be presented for the approval of the holders of the Non-Voting Common Stock.

 

12.Record Holders. To the fullest extent permitted by law, the Corporation will be entitled to recognize the record holder of any share of Non-Voting Common Stock as the true and lawful owner thereof for all purposes and will not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other Person, whether or not it will have express or other notice thereof.

 

13.Term. The Non-Voting Common Stock shall have perpetual term unless converted in accordance with Section 5.

 

14.No Preemptive Rights. The holders of Non-Voting Common Stock are not entitled to any preemptive or preferential right to purchase or subscribe for any capital stock, obligations, warrants or other securities or rights of the Corporation, except for any such rights that may be granted by way of separate contract or agreement to one or more holders of Non-Voting Common Stock.

 

15.Replacement Certificates. In the event that any Certificate will have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if required by the Corporation, the posting by such Person of a bond in such amount as the Corporation may determine is necessary as indemnity against any claim that may be made against it with respect to such Certificate, the Corporation will deliver in exchange for such lost, stolen or destroyed Certificate a replacement Certificate.

 

16.Other Rights. The shares of Non-Voting Common Stock have no preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, or rights, other than as set forth herein or as provided by applicable law.

 

 

 

SECOND ARTICLES OF AMENDMENT

OF

Georgia banking company, INC.

 

Pursuant to Section 14-2-1006 of the Georgia Business Corporation Code (the “GBCC”), Georgia Banking Company, Inc., a Georgia corporation, hereby submits the following Articles of Amendment:

 

1.     The name of the corporation is Georgia Banking Company, Inc. (the “Corporation”).

 

2.     The Articles of Incorporation of the Corporation are amended as follows:

 

(a)   The Articles of Incorporation, as amended, are further amended by the deletion of Section 1(m) of Exhibit A in its entirety and replacement with the new Section 1(m) of Exhibit A as follows:

 

“m.         “Permissible Transfer” means a transfer or assignment by a holder or other transferee or assignee of such initial or any subsequent holder of Non-Voting Common Stock (i) to the Corporation, (ii) in a widespread public distribution of Common Stock or Non-Voting Common Stock, (iii) to a transferee or assignee that would control more than fifty percent (50%) of every class of the Corporation’s outstanding Voting Securities without any transfer from the transferor, (iv) in a transaction in which no transferee or assignee (or group of associated transferees or assignees) would receive two percent (2%) or more of any class of Voting Securities of the Corporation outstanding (including pursuant to a related series of transfers) at such time or (v) that is part of a transfer of Common Stock or Non-Voting Common Stock to an underwriter for the purpose of conducting a widespread public distribution.”

 

(b)   The Articles of Incorporation, as amended, are further amended by the deletion of Section 2 of Exhibit A in its entirety and replacement with the new Section 2 of Exhibit A as follows:

 

“2.                  Designation; Number of Shares. The class of shares of capital stock hereby authorized shall be designated as “Non-Voting Common Stock.” The number of authorized shares of the Non-Voting Common Stock shall be 10,000,000 shares. The Non-Voting Common Stock shall have a par value of $0.01 per share. Each share of Non-Voting Common Stock has the designations, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, or terms or conditions of redemption as described herein. Each share of Non-Voting Common Stock is identical in all respects to every other share of Non-Voting Common Stock.”

 

(c)   The Articles of Incorporation, as amended, are further amended by the deletion of Section 5(a) of Exhibit A in its entirety and replacement with the new Section 5(a) of Exhibit A as follows:

 

“5.                  Conversion.

 

a.General.

 

i.Each share of Non-Voting Common Stock shall remain Non-Voting Common Stock for as long as it is owned or controlled by the initial holder or any other transferee or assignee of such initial or any subsequent holder; provided, that any such share of Non-Voting Common Stock may convert into an equal number of shares of Common Stock (A) in the hands of the initial holder or any transferee or assignee upon an issuance of Common Stock by the Corporation (including, without limitation, the issuance of Common Stock in respect of equity based compensation granted to directors or employees of the Corporation) or other event having a dilutive effect on such holder’s ownership of Common Stock (each, a “Triggering Event”); provided that no such conversion shall cause the holder, together with all Affiliates of the holder, to own or control a greater percentage of the Common Stock (or of any class of Voting Securities issued by the Corporation) than such holder, together with all Affiliates of the holder, owned or controlled immediately prior to such Triggering Event or (B) pursuant to a Permissible Transfer. In any such conversion, each share of Non-Voting Common Stock will convert into one (1) share of Common Stock, subject to adjustment as provided in Section 6 below.

 

 

 

 

ii.Upon any permitted conversion under Section 5(a)(i), the holder shall surrender the certificate or certificates (if any) evidencing such shares of Non-Voting Common Stock, duly endorsed, at the registered office of the Corporation, and upon the surrender of such certificate(s), and if the Corporation elects to issue physical certificates, in the event that such conversion is with respect to some, but not all, of the holder’s shares of Non-Voting Common Stock, the Corporation shall deliver to such holder a certificate or certificate(s) representing the number of shares of Non-Voting Common Stock that were not converted to Common Stock. In any conversion that is permitted pursuant to Section 5(a)(i), the conversion of the applicable shares of Non-Voting Common Stock into an equal number of shares of Common Stock shall be deemed to have been effected as of the effectiveness of such conversion (in the case of Section 5(a)(i)(A)) or Permissible Transfer (in the case of Section 5(a)(i)(B)), all rights of the holder or transferor, as the case maybe, shall cease with respect to such shares of Non-Voting Common Stock at such time and the holder or transferee, as the case may be, shall receive shares of Common Stock in such conversion or transfer which shall be issued in such holder’s or transferee’s name on the stock transfer books of the Corporation.

 

iii.All shares of Common Stock delivered upon conversion of the Non-Voting Common Stock shall be duly authorized, validly issued, fully paid and non-assessable, free and clear of all liens, claims, security interests, charges and other encumbrances.

 

(d)   The Articles of Incorporation, as amended, are further amended by the deletion of Section 7 of Exhibit A in its entirety and replacement with the new Section 7 of Exhibit A as follows:

 

“7.                  Reorganization, Mergers, Consolidations or Sales of Assets. If at any time or from time to time there will be a capital reorganization of the Common Stock (other than a subdivision, combination, reclassification or exchange of shares otherwise provided for in Section 6) or a merger or consolidation of the Corporation with or into another corporation, or the sale of all or substantially all the Corporation’s properties and assets to any other Person, then, as a part of such reorganization, merger, consolidation or sale, provision will be made so that the holders of the Non-Voting Common Stock will thereafter be entitled to receive upon conversion of the Non-Voting Common Stock, the number of shares of stock or other securities or property of the Corporation, or of the successor company resulting from such merger or consolidation or sale, to which a holder of that number of shares of Common Stock deliverable upon conversion of the Non-Voting Common Stock would have been entitled to receive on such capital reorganization, merger, consolidation or sale (without regard to any limitations on conversion of the Non-Voting Common Stock). Notwithstanding any other provision hereof, if a conversion of Non-Voting Common Stock is to be made in connection with a merger, reorganization, consolidation, reclassification or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property or in any dissolution or liquidation, the conversion of any shares of Non-Voting Common Stock may, at the election of the holder thereof, be conditioned upon the consummation of such event or transaction, in which case such conversion shall not be deemed to be effective until such event or transaction has been consummated.”

 

 

 

 

(e)   The Articles of Incorporation, as amended, are further amended by the deletion of Section 10 of Exhibit A in its entirety and replacement with the new Section 10 of Exhibit A as follows:

 

“10.                Protective Provisions. So long as any shares of Non-Voting Common Stock are issued and outstanding, the Corporation will not (including by means of merger, consolidation or otherwise), without obtaining the approval (by vote or written consent) of the holders of a majority of the issued and outstanding shares of Non-Voting Common Stock, (a) alter or change the rights, preferences, privileges or restrictions provided for the benefit of the holders of the Non-Voting Common Stock, or (b) increase or decrease the authorized number of shares of Non-Voting Common Stock. In the event that the Corporation offers to repurchase shares of Common Stock, the Corporation shall offer to repurchase shares of Non-Voting Common Stock pro rata based upon the number of shares of Common Stock such holders would be entitled to receive if such shares were converted into shares of Common Stock immediately prior to such repurchase.”

 

3.     This amendment was adopted by the Board of Directors of the Corporation at a meeting duly convened and held on June 14, 2026. Shareholder approval was not required in accordance with the provisions of Section 14-2-1105 of the GBCC.

 

4.     These Articles of Amendment shall be effective at the time and on the date they are filed with the Georgia Secretary of State.

 

 

 

 

IN WITNESS WHEREOF, the undersigned has executed these Articles of Amendment on this 15th day of June, 2026.

 

  GEORGIA BANKING COMPANY, INC.
   
   
  By: /s/ Bartow Morgan, Jr.
    Bartow Morgan, Jr.
    Chief Executive Officer

 

 

 

 

Exhibit 3.2

 

 

 

 

GEORGIA BANKING COMPANY, INC.

 

AMENDED AND RESTATED

 

BYLAWS

 

 

 

 

 

 

TABLE OF CONTENTS

 

    Page
     
ARTICLE I OFFICES 1
Section 1. Registered Office 1
Section 2. Other Offices 1
ARTICLE II SHAREHOLDERS’ MEETINGS 1
Section 1. Annual Meetings 1
Section 2. Special Meetings 1
Section 3. Notice of Meetings 1
Section 4. Quorum 1
Section 5. Voting 2
Section 6. Consent of Shareholders 2
Section 7. List of Shareholders 2
Section 8. Notice of Business 3
ARTICLE III DIRECTORS 5
Section 1. Powers 5
Section 2. Number, Election and Term 5
Section 3. Vacancies 5
Section 4. Meetings and Notice 5
Section 5. Quorum 6
Section 6. Consent of Directors 6
Section 7. Committees 6
Section 8. Removal of Directors 6
Section 9. Compensation of Directors 6
ARTICLE IV OFFICERS 7
Section 1. Number 7
Section 2. Compensation 7
Section 3. Term of Office 7
Section 4. Removal 7
Section 5. Vacancies 7
Section 6. Powers and Duties 7
Section 7. Voting Securities of Any Business Organization 9
ARTICLE V CERTIFICATES FOR SHARES 9
Section 1. Share Certificates 9
Section 2. Lost Certificates 9

 

-i-

 

 

Section 3. Transfer 10
Section 4. Record Date 10
Section 5. Transfer Agent and Registrar 10
ARTICLE VI INDEMNIFICATION 10
Section 1. Authority to Indemnify 10
Section 2. Mandatory Indemnification 11
Section 3. Advance for Expenses 11
Section 4. Court-ordered Indemnification and Advances for Expenses 11
Section 5. Determination of Indemnification 11
Section 6. Authorization of Indemnification 12
Section 7. Other Rights 12
Section 8. Insurance 12
Section 9. Continuation of Expenses 12
Section 10. Severability 12
ARTICLE VII GENERAL PROVISIONS 13
Section 1. Dividends 13
Section 2. Fiscal Year 13
Section 3. Seal 13
Section 4. Annual Statements 13
Section 5. Notice 13
ARTICLE VIII AMENDMENTS 14

 

-ii-

 

 

ARTICLE I

OFFICES

 

Section 1.         Registered Office. The registered office of Georgia Banking Company, Inc. (the “Corporation”) shall be in the State of Georgia, County of Fulton.

 

Section 2.         Other Offices. The Corporation may also have offices at such other places both within and without the State of Georgia as the Board of Directors of the Corporation (the “Board of Directors”) may from time to time determine and the business of the Corporation may require or make desirable.

 

ARTICLE II 

SHAREHOLDERS’ MEETINGS

 

Section 1.         Annual Meetings. The annual meeting of shareholders shall be held at the principal office of the Corporation or at such other place in the United States as may be determined by the Board of Directors, at such time and on such date following the close of the fiscal year as shall be determined by the Board of Directors, for the purpose of electing directors and transacting such other business as may properly be brought before the meeting.

 

Section 2.         Special Meetings. Special meetings of shareholders shall be held at the principal office of the Corporation or at such other place in the United States as may be designated in the notice of said meetings, upon call of the Chief Executive Officer or the Board of Directors, and shall be called by the Secretary when so directed by the Board of Directors. Special meetings of shareholders may also be called at the request in writing of shareholders owning at least fifteen percent of the issued and outstanding capital stock of the Corporation entitled to vote in an election of directors. Any such request by the shareholders shall state the purposes for which the meeting is to be called.

 

Section 3.         Notice of Meetings. Written notice of every meeting of shareholders, stating the place, date and hour of the meeting, and in the case of a special meeting, the purposes of the meeting, shall be given personally or by mail to each shareholder of record entitled to vote at such meeting not less than ten nor more than sixty days before the date of the meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail with first class postage thereon prepaid addressed to the shareholder at his or her address as it appears on the Corporation’s record of shareholders. Attendance of a shareholder at a meeting of shareholders shall constitute a waiver of notice of such meeting and of all objections to the place or time of the meeting, or the manner in which it has been called or convened, except when a shareholder attends a meeting solely for the purpose of stating, at the beginning of the meeting, any such objection to the transaction of any business. Notice need not be given to any shareholder who signs a waiver of notice, in person or by proxy, either before or after the meeting.

 

Section 4.         Quorum. The holders of a majority of the Corporation’s issued and outstanding stock and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the shareholders except as otherwise provided by statute, by the Corporation’s Articles of Incorporation, as amended, or by these Amended and Restated Bylaws. The shareholders at a meeting at which a quorum was present may continue to transact business at the meeting or at any adjournment thereof, notwithstanding the withdrawal of enough shareholders to leave less than a quorum, except as otherwise provided by statute, by the Corporation’s Articles of Incorporation, as amended, or by these Amended and Restated Bylaws. If a quorum is not present or represented at any meeting of the shareholders, then the holders of a majority of the shares entitled to vote thereat, present in person or represented by proxy, may adjourn the meeting from time to time, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which might have been transacted at the meeting as originally notified. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting complying with Section 3 of this Article II shall be given to each shareholder of record entitled to vote at the meeting.

 

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Section 5.         Voting. When a quorum is present at any meeting, the vote of the holders of a majority of the shares entitled to vote thereat, present in person or represented by proxy, shall decide any question brought before such meeting, unless the question is one upon which, by express provision of law or of the Articles of Incorporation, as amended, a different vote is required, in which case such express provision shall govern and control the decision of the question. Each outstanding share having voting rights on any question or matter brought before a meeting shall be entitled to one vote in person, by proxy, or by electronic proxy on any such question or matter, with each share to be voted in person, by proxy, or by electronic proxy by the person registered on the books of the Corporation, but no proxy shall be voted or acted upon after eleven months from its date, unless otherwise provided in the proxy.

 

Section 6.         Consent of Shareholders. Any action required or permitted to be taken at a shareholders’ meeting may be taken without a meeting if the action is taken by persons who would be entitled to vote at a meeting shares having voting power to cast not less than the minimum number (or numbers, in the case of voting by groups) of votes that would be necessary to authorize or take the action at a meeting at which all shareholders entitled to vote were present and voted. The action must be evidenced by one or more written consents bearing the date of signature and describing the action taken, signed by shareholders entitled to take action without a meeting and delivered to the Corporation for inclusion in the minutes or filing with the corporate records. If the action is taken by less than all of the shareholders entitled to vote on the action, all voting shareholders on the record date who did not participate in taking the action shall be given written notice of the action taken, and shall be furnished with the same material that would have been required to be sent to shareholders in a notice of a meeting at which the proposed action would have been submitted to the shareholders for action, including notice of any applicable dissenters’ rights, not more than ten days after taking the action without a meeting.

 

Section 7.         List of Shareholders. The Corporation shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its shareholders, giving their names and addresses and the number, class and series, if any, of the shares held by each. The officer who has charge of the stock transfer books of the Corporation shall prepare and make, before every meeting of shareholders or any adjournment thereof, a complete list of the shareholders entitled to vote at the meeting or any adjournment thereof, arranged in alphabetical order, with the address of and the number and class and series, if any, of shares held by each. The list shall be produced and kept open at the time and place of the meeting and shall be subject to inspection by any shareholder during the whole time of the meeting for the purposes thereof. The said list may be the Corporation’s regular record of shareholders if it is arranged in alphabetical order or contains an alphabetical index.

 

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Section 8.        Notice of Business. No business may be transacted at an annual meeting of shareholders, other than business that is either (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors (or any duly authorized committee thereof), (b) otherwise properly brought before the annual meeting by or at the direction of the Board of Directors (or any duly authorized committee thereof), or (c) otherwise properly brought before the annual meeting by any shareholder of the Corporation (i) who is a shareholder of record on the date of the giving of the notice provided for in this Section 8 of Article II and on the record date for the determination of shareholders entitled to vote at such annual meeting and (ii) who complies with the notice procedures set forth in this Section 8 of Article II. The nomination by a shareholder of any person for election as a director, other than the persons nominated by the Board of Directors or any duly authorized committee thereof, shall be considered business other than business specified in clauses (a) and (b) above and shall be permitted only upon compliance with the requirements of this Section 8 of Article II.

 

In addition to any other applicable requirements for business to be properly brought before an annual meeting by a shareholder, such shareholder must have given timely notice thereof in proper written form to the Secretary of the Corporation.

 

To be timely, a shareholder’s notice to the Secretary must be delivered to or mailed and received at the principal executive offices of the Corporation not less than one hundred twenty (120) days nor more than one hundred fifty (150) days prior to the anniversary date of the immediately preceding annual meeting of shareholders; provided, however, that in the event that the annual meeting is called for a date that is not within sixty (60) days before or after such anniversary date, notice by the shareholder in order to be timely must be so received not later than the close of business on the tenth (10th) day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure of the date of the annual meeting was made, whichever first occurs.

 

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To be in proper written form, a shareholder’s notice to the Secretary must set forth as to each matter such shareholder proposes to bring before the annual meeting (a) a description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, containing all material information related thereto, including: (i) the text of any proposal to be submitted for a shareholder vote (“Shareholder Proposal”) (including the text of any resolution proposed for consideration and in the event that such Shareholder Proposal includes a proposal to amend the bylaws of the Corporation, the language of the proposed amendment); (ii) the reasons for submission of such Shareholder Proposal at the meeting and (iii) any material interest in such Shareholder Proposal of each natural person, corporation, partnership, trust or any other type of legal entity or recognized ownership vehicle submitting the Shareholder Proposal, acting in concert with the shareholder who is submitting the Shareholder Proposal or on whose behalf the Shareholder Proposal is being submitted (individually, “Proponent”, collectively, “Proponents”), (b) the name and business address of the Proponent(s), (c) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by the Proponent(s), (d) a description of all arrangements or understandings (including any derivative or short positions, profits interests, options, warrants, convertible securities, stock appreciation or similar rights, hedging transactions, and borrowed or loaned shares) that have been entered into as of the date of such written notice by, between or on behalf of the Proponent(s), on whose behalf the Shareholder Proposal is being made, whether or not such instrument or right shall be subject to settlement in underlying shares of capital stock of the Corporation, the effect or intent of which is to mitigate loss to, manage risk or benefit of share price changes for, or increase or decrease the voting power of any Proponent(s) with respect to the securities of the Corporation, (e) a representation that the Proponent(s) intend(s) to appear in person or by proxy at the annual meeting to bring such business before the meeting, (f) in the case of the nomination of a person as a director, a brief description of the background and credentials of such person including (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) the class and number of shares of the Corporation which are beneficially owned by such person, and (iv) any other information relating to such person that is required to be disclosed in solicitations of proxies for election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (including without limitation such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), and (g) a representation whether the Proponent(s) intend(s) or is part of a group which intend(s) (i) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt the Shareholder Proposal or (ii) to otherwise solicit proxies from shareholders in support of such Shareholder Proposal.

 

No business shall be conducted at the annual meeting of shareholders except business brought before the annual meeting in accordance with the procedures set forth in this Section 8 of Article II; provided, however, that, once business has been properly brought before the annual meeting in accordance with such procedures, nothing in this Section 8 of Article II shall be deemed to preclude discussion by any shareholder of any such business. If the chairman of an annual meeting determines that business was not properly brought before the meeting in accordance with the foregoing procedures, the chairman of such annual meeting shall declare to the meeting that the business was not properly brought before the meeting and such business shall not be transacted.

 

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ARTICLE III

DIRECTORS

 

Section 1.         Powers. Except as otherwise provided by any legal agreement among shareholders, the property, affairs and business of the Corporation shall be managed and directed by its Board of Directors, which may exercise all powers of the Corporation and do all lawful acts and things which are not by law, by the Articles of Incorporation, as amended, by these Amended and Restated Bylaws, by any agreement among shareholders, or by any agreement between shareholders and the Corporation, directed or required to be exercised or done by the shareholders.

 

Section 2.         Number, Election and Term. The number of directors which shall constitute the whole Board of Directors shall consist of five to twenty-five members, and the number of directors shall be increased or decreased from time to time, within the minimum and maximum, by the shareholders by the affirmative vote of a majority of all the shares entitled to vote in an election of directors; or by the Board of Directors by the affirmative vote of a majority of the directors then in office. The directors shall be elected by plurality vote at the annual meeting of shareholders, and each director shall hold office until his or her successor is elected and qualified or until his or her earlier death, resignation or removal. Directors shall be natural persons who have attained the age of 18 years, but need not be residents of the State of Georgia.

 

Section 3.         Vacancies. Vacancies, including vacancies resulting from any increase in the number of directors, may be filled by a majority of the directors then in office, though less than a quorum, or by a sole remaining director, and a director so chosen shall hold office until the next annual election and until his or her successor is duly elected and qualified unless sooner displaced. If there are no directors in office, then vacancies shall be filled through election by the shareholders.

 

Section 4.         Meetings and Notice. The Board of Directors of the Corporation may hold meetings, both regular and special, either within or without the State of Georgia. Members of the Board of Directors, or any committee thereof, and observers appointed in accordance with any agreement among shareholders or any agreement between shareholders and the Corporation may participate in or attend a meeting of such Board of Directors or committee by means of a conference telephone, video conference or similar communications equipment by means of which all persons participating in the meeting can hear each other simultaneously. Participation by such means shall constitute presence in person at such meeting. Meetings of the Board of Directors may be called by any director. Notice shall be given to each director in person, or by written notice mailed, or sent by facsimile or electronic mail, to his or her business address at least five business days prior to such meeting. Notice need not be given to any director who signs a waiver of notice either before or after the meeting. Attendance of a director at a meeting shall constitute a waiver of notice of such meeting and waiver of all objections to the place and time of the meeting, or the manner in which it has been called or convened, except when the director states, at the beginning of the meeting, any such objection or objections to the transaction of business.

 

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Section 5.         Quorum. Except as otherwise required by law, the presence of at least a majority of the number of directors in office immediately prior to such meeting shall constitute a quorum for the transaction of business, and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by law, by the Articles of Incorporation, as amended, or by these Amended and Restated Bylaws. If a quorum shall not be present at any meeting of the Board of Directors, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

 

Section 6.         Consent of Directors. Unless otherwise restricted by the Articles of Incorporation, as amended, or these Amended and Restated Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent thereto in writing, setting forth the action so taken, and the writing or writings are filed with the minutes of the proceedings of the Board of Directors or committee. Such consent shall have the same force and effect as a unanimous vote of the Board of Directors.

 

Section 7.         Committees. The Board of Directors may designate from among its members an executive committee or one or more other standing or ad hoc committees, each consisting of one or more directors, who serve at the pleasure of the Board of Directors. Subject to the limitations imposed by the Georgia Business Corporation Code (“GBCC”), each committee shall have the authority set forth in the resolution establishing the committee or in any other resolution of the Board of Directors specifying, enlarging, or limiting the authority of the committee.

 

A majority of each committee may determine its action and may fix the time and places of its meetings, unless otherwise provided by the Board of Directors.

 

Section 8.         Removal of Directors. At any shareholders’ meeting with respect to which notice of such purpose has been given, any director may be removed from office, with or without cause, by the vote of shareholders representing a majority of the issued and outstanding capital stock entitled to vote for the election of directors, and his or her successor may be elected at the same or at any subsequent meeting of shareholders; provided that to the extent any vacancy created by such removal is not filled by such an election within sixty days after such removal, the remaining directors shall, by majority vote, fill any such vacancy.

 

Section 9. Compensation of Directors. Directors shall be entitled to such reasonable compensation for their services as directors or members of any committee of the Board of Directors as shall be fixed from time to time by resolution adopted by the Board of Directors, and shall also be entitled to reimbursement for any reasonable expenses incurred in attending any meeting of the Board of Directors or of any committee.

 

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ARTICLE IV

OFFICERS

 

Section 1.         Number. The officers of the Corporation shall be chosen by the Board of Directors and shall be a Chief Executive Officer, a Secretary and a Treasurer. The Board of Directors may also choose as officers of the Corporation a President and one or more Vice Presidents, Assistant Secretaries and Assistant Treasurers and may elect or appoint, or authorize specific senior officers to appoint, the person who shall hold such other offices. Any number of offices, except the offices of the Chief Executive Officer and Secretary, may he held by the same person. The Board of Directors may appoint such other officers and agents as it shall deem necessary who shall hold their offices for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors.

 

Section 2.         Compensation. Any compensation committee designated by the Board of Directors in accordance with Article III, Section 7 may review and make recommendations to the Board of Directors with respect to all salary, bonus and long-term incentive awards for officers and directors of the Corporation, including recommending performance goals and certifying that performance goals have been attained. No officer shall be prevented by these Amended and Restated Bylaws from receiving such salary by reason of the fact that he or she is also a director of the Corporation or a member of any committee of the Board of Directors.

 

Section 3.         Term of Office. Unless otherwise provided by resolution of the Board of Directors, the principal officers shall be chosen annually by the Board of Directors at the first meeting of the Board of Directors following the annual meeting of shareholders of the Corporation, or as soon thereafter as is possible and convenient. Subordinate officers may be elected from time to time. Each officer shall serve until his or her successor shall have been chosen and qualified, or until his or her earlier death, resignation or removal.

 

Section 4.         Removal. Any officer (regardless of how elected or appointed) may be removed from office at any time, with or without cause, by the Board of Directors whenever in its judgment the best interest of the Corporation will be served thereby and any officer appointed by the Chief Executive Officer or another senior officer may also be removed, with or without cause, by the Chief Executive Officer or by any senior officer authorized to have appointed the officer to be removed whenever in his or her judgment the best interest of the Corporation will be served thereby.

 

Section 5.         Vacancies. Any vacancy in an office resulting from any cause may be filled by the Board of Directors for the unexpired portion of the officer’s term.

 

Section 6.         Powers and Duties. Except as hereinafter provided, the officers of the Corporation shall each have such powers and duties as generally pertain to their respective offices, as well as such powers and duties as from time to time may be conferred by the Board of Directors. The officers of the Corporation shall include, but not be limited to:

 

(a)            Chief Executive Officer. The Chief Executive Officer shall have general supervision of the business of the Corporation, shall see that all orders and resolutions of the Board of Directors are carried into effect, and shall report to the Board of Directors. The Chief Executive Officer also shall have the authority to execute bonds, mortgages, and other contracts and instruments requiring a seal, under the seal of the Corporation. The Chief Executive Officer shall have the power to endorse, when sold, assigned, transferred or otherwise disposed of by the Corporation, all certificates or shares of stock, bonds, or other securities issued by other corporations, associations, trusts, whether public or private, or by any government agency thereof, and owned or held by the Corporation, and to make, execute and deliver all instruments.

 

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(b)            President or Vice Presidents. The President or Vice Presidents (in order of the Senior Executive Vice Presidents, Executive Vice Presidents, Senior Vice Presidents and other Vice Presidents, each class in order of the seniority of its respective members or as designated by resolution of the Board of Directors) shall, in the absence or disability of the Chief Executive Officer, perform the duties and exercise the powers of said officers, and shall perform such other duties and exercise such other powers as the Board of Directors or the Chief Executive Officer may prescribe. One or more Vice Presidents may be designated by the Board of Directors as “Senior Executive Vice President,” “Executive Vice President” or “Senior Vice President.”

 

(c)            Secretary. The Secretary shall attend all meetings of the Board of Directors and all meetings of the shareholders and record all the proceedings of the meetings of the Corporation and of the Board of Directors in a book to be kept for that purpose and shall perform like duties for the standing committees when required. The Secretary shall give, or cause to be given, notice of all meetings of the shareholders and special meetings of the Board of Directors, and shall perform such other duties as may be prescribed by the Board of Directors or the Chief Executive Officer, under whose supervision he shall be. The Secretary shall have custody of the corporate seal of the Corporation and he, or an Assistant Secretary, shall have authority to affix the same to any instrument requiring it and when so affixed, it may be attested by his or her signature or by the signature of such Assistant Secretary. The Board of Directors may give general authority to any other officer to affix the seal of the Corporation and to attest the affixing by his or her signature. The Secretary shall perform whatever additional duties and have whatever additional powers that the Board of Directors may from time to time assign to the Secretary.

 

(d)            Assistant Secretary. The Assistant Secretary, or, if there be more than one, the Assistant Secretaries in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Secretary or in the event of the Secretary’s inability or refusal to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

 

(e)            Treasurer. The Treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the Chief Executive Officer and the Board of Directors, at its regular meetings, or when the Board of Directors so requires, an account of all his or her transactions as treasurer and of the financial condition of the Corporation. If required by the Board of Directors, the Treasurer shall give the Corporation a bond (which shall be renewed every six years) in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his or her office and for the restoration to the Corporation, in case of his or her death, resignation, retirement or removal, of all books, papers, vouchers, money and other property of whatever kind in his or her possession or under his or her control belonging to the Corporation.

 

(f)            Assistant Treasurer. The Assistant Treasurer, or, if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors (or if there be no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of the Treasurer’s inability or refusal to act, perform the duties and exercise the powers of the treasurer and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.

 

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Section 7.         Voting Securities of Any Business Organization. Unless otherwise ordered by the Board of Directors, the Chief Executive Officer, President or any Executive Vice President shall have full power and authority on behalf of the Corporation to attend and to act and vote at any meetings of security holders of any business organization in which the Corporation may hold securities, and at such meetings shall possess and may exercise any and all rights and powers incident to the ownership of such securities which the Corporation might have possessed and exercised if it had been present. The Board of Directors by resolution from time to time may confer like powers upon any other person or persons.

 

ARTICLE V

CERTIFICATES FOR SHARES

 

Section 1.         Share Certificates. The interest of each shareholder in the Corporation may be certificated or uncertificated, and may be evidenced by registration in the holder’s name in uncertificated, book-entry form on the books of the Corporation in accordance with a direct registration system. Within reasonable time after the issuance or transfer of uncertificated stock, the Corporation shall send to the registered owner thereof a written notice that shall set forth the name of the Corporation, that the Corporation is organized under the laws of the State of Georgia, the name of the shareholder, the number and class (and designation of the series, if any) of the shares represented, and any restrictions on the transfer or registration of such shares of stock imposed by the Articles of Incorporation, as amended, or by these Amended and Restated Bylaws, any agreement among shareholders or any agreement between shareholders and the Corporation. Every holder of fully-paid stock in the Corporation shall be entitled, upon request, to have a certificate in such form as the Board of Directors may from time to time prescribe. The certificates representing shares of stock of the Corporation shall be in such form as may be approved by the Board of Directors, which certificates representing shares shall be issued to the shareholder of the Corporation in numerical order from the stock book of the Corporation, and each of which shall bear the name of the Corporation, the name of the shareholder, and the number and class of shares and designation of the series, if any, represented by the certificate, and which shall be signed by the Chief Executive Officer, or any President or Vice President and may be signed by the Secretary or an Assistant Secretary; and which shall be sealed with the seal of the Corporation.

 

Section 2.         Lost Certificates. The Board of Directors may direct that a new certificate be issued in place of any certificate theretofore issued by the Corporation and alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate to be lost, stolen or destroyed. When authorizing such issue of a new certificate, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his or her legal representative, to advertise the same in such manner as it shall require and/or give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.

 

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Section 3.         Transfer. Shares of the Corporation shall be transferable in the manner prescribed by GBCC, the Articles of Incorporation, as amended, and these Amended and Restated Bylaws or as otherwise determined by the Board of Directors from time to time and not inconsistent with the GBCC, the Articles of Incorporation, as amended, or these Amended and Restated Bylaws. Transfers of shares shall be made on the books of the Corporation only by the holder of record thereof, by such person's attorney lawfully constituted in writing and, in the case of certificated shares, upon the surrender of the certificate thereof, which shall be cancelled before a new certificate or uncertificated shares shall be issued. No transfer of shares shall be valid as against the Corporation for any purpose until it shall have been entered in the stock records of the Corporation by an entry showing from and to whom transferred.

 

Section 4.         Record Date. In order that the Corporation may determine the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights with respect to any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than seventy days and, in case of a meeting of shareholders, not less than ten days, prior to the date on which the particular action requiring such determination of shareholders is to be taken. If no record date is fixed for the determination of shareholders entitled to notice of and to vote at any meeting of shareholders, the record date shall be at the close of business on the day next preceding the day on which the notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. If no record date is fixed for other purposes, the record date shall be at the close of business on the day next preceding the day on which the Board of Directors adopts the resolution relating thereto. A determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders shall apply to any adjournment of the meeting unless the Board of Directors shall fix a new record date for the adjourned meeting.

 

Section 5.         Transfer Agent and Registrar. The Board of Directors may appoint one or more transfer agents or one or more transfer clerks and one or more registrars, and may require all certificates of stock to bear the signature or signatures of any of them.

 

ARTICLE VI

INDEMNIFICATION

 

Section 1.         Authority to Indemnify. The Corporation shall indemnify or obligate itself to indemnify an individual made a party to a proceeding because he or she is or was a director, officer, employee, or agent of the Corporation (or was serving at the request of the Corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust. or other enterprise) for reasonable expenses, judgments, fines, penalties, and amounts paid in settlement (including attorneys’ fees), incurred in connection with the proceeding if the individual conducted himself or herself in good faith and reasonably believed that such conduct was (a) in the case of conduct in his or her official capacity, in the best interests of the Corporation, (b) in all other cases. at least not opposed to the best interests of the Corporation, and (c) in the case of any criminal proceeding, he or she had no reasonable cause to believe such conduct was unlawful. The termination of a proceeding by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent is not, of itself. determinative that the director, officer, employee, or agent did not meet the standard of conduct set forth above. Indemnification permitted under this Section in connection with a proceeding by, or in the right of, the Corporation is limited to reasonable expenses incurred in connection with the proceeding if it is determined that the director, officer, employee, or agent has met the relevant standard of conduct under this Section.

 

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Section 2.         Mandatory Indemnification. To the extent that a director, officer, employee, or agent of the Corporation has been wholly successful, on the merits or otherwise, in the defense of any proceeding to which he or she was a party, or in defense of any claim, issue, or matter therein, because he or she is or was a director, officer, employee, or agent of the Corporation, the Corporation shall indemnify the director, employee, or agent against reasonable expenses incurred by him or her in connection therewith.

 

Section 3.         Advance for Expenses. The Corporation shall pay for or reimburse the reasonable expenses incurred by a director, officer, employee, or agent of the Corporation who is a party to a proceeding in advance of final disposition of the proceeding if (a) he or she furnishes the Corporation written affirmation of his or her good faith belief that he or she has met the standard of conduct set forth in Section 1 of this Article, and (b) he or she furnishes the Corporation a written undertaking, executed personally or on his or her behalf, to repay any advance if it is ultimately determined that he or she is not entitled to indemnification. The undertaking required by this Section must be an unlimited general obligation, but need not be secured and may he accepted without reference to financial ability to make repayment.

 

Section 4.         Court-ordered Indemnification and Advances for Expenses. A director, officer, employee, or agent of the Corporation who is a party to a proceeding may apply for indemnification or advances for expenses to the court conducting the proceeding or to another court of competent jurisdiction.

 

Section 5.         Determination of Indemnification. Except as provided in Section 2 and except as may be ordered by the court, the Corporation may not indemnify a director, officer, employee, or agent under Section 1 unless authorized thereunder and a determination has been made in the specific case that indemnification of the director, officer, employee, or agent is permissible in the circumstances because he or she has met the standard of conduct set forth in Section 1. The determination shall be made:

 

(a)            If there are two or more disinterested directors, by the Board of Directors by a majority vote of all the disinterested directors (a majority of whom shall for such purpose constitute a quorum) or by a majority of the members of a committee of two or more disinterested directors appointed by such a vote;

 

(b)            By special legal counsel:

 

(i)       selected in the manner prescribed in paragraph (a) of this Section 6; or

 

(ii)      if there are fewer than two disinterested directors, selected by the Board of Directors (in which selection directors who do not qualify as disinterested directors may participate); or

 

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(c)            By the shareholders, but shares owned by or voted under the control of a director who at the time does not qualify as a disinterested director may not be voted on the determination.

 

Section 6.         Authorization of Indemnification. Authorization of indemnification or an obligation to indemnify and evaluation as to the reasonableness of expenses shall be made in the same manner as the determination that indemnification is permissible, except that if the determination is made by special legal counsel, authorization of indemnification and evaluation as to reasonableness of expenses shall be made by those entitled under paragraph (b) of Section 5 to select counsel.

 

Section 7.         Other Rights. The indemnification and advancement of expenses provided by or granted pursuant to this Article VI shall not be deemed exclusive of any other rights, in respect of indemnification or otherwise, to which those seeking indemnification or advancement of expenses may be entitled under any bylaw, resolution, agreement, or contract, either specifically or in general terms, approved by the affirmative vote of the holders of a majority of the shares entitled to vote thereon, taken at a meeting the notice of which specified that such bylaw, resolution, or agreement would be placed before the shareholders, both as to action by a director, trustee, officer, employee, or agent in his or her official capacity and as to action in another capacity while holding such office or position; except that no such other rights, in respect to indemnification or otherwise, may be provided or granted to a director, trustee, officer, employee, or agent pursuant to this Section 7 by the Corporation for liability for (a) any appropriation, in violation of his or her duties, of any business opportunity of the Corporation; (b) acts or omissions which involve intentional misconduct or a knowing violation of law; (c) the types of liability set forth in GBCC Section 14-2-832, or any successor provision, dealing with illegal or unauthorized distributions of corporate assets, whether as dividends or in liquidation of the Corporation or otherwise; or (d) any transaction from which he or she received an improper material tangible personal benefit. Neither the amendment or repeal of this Article VI nor the adoption of any provision to these Amended and Restated Bylaws inconsistent with this Article  VI shall eliminate or adversely affect any right or protection of any director, officer, employee, or agent of the Corporation existing immediately prior to such amendment or repeal or adoption.

 

Section 8.         Insurance. The Corporation may purchase and maintain insurance on behalf of an individual who is or was a director, officer, employee, or agent of the Corporation or who, while a director, officer, employee, or agent of the Corporation, is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership joint venture, trust, employee benefit plan, or other entity against liability asserted against or incurred by him or her in that capacity or arising from his or her status as a director, officer, employee, or agent whether or not the Corporation would have power to indemnify him or her against the same liability under this Article VI.

 

Section 9.         Continuation of Expenses. The indemnification and advancement of expenses provided by or granted pursuant to this Article VI shall continue as to a person who has ceased to be a director, trustee, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.

 

Section 10.         Severability. Each of the Sections of this Article VI, and each of the clauses set forth herein, shall be deemed separate and independent, and should any part of any such Section or clause be declared invalid or unenforceable by any court of competent jurisdiction, such invalidity or unenforceability shall in no way render invalid or unenforceable any other part thereof or any separate Section or clause of this Article VI that is not declared invalid or unenforceable.

 

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ARTICLE VII

GENERAL PROVISIONS

 

Section 1.         Dividends. Dividends upon the capital stock of the Corporation, subject to the provisions of the Articles of Incorporation, as amended, if any, may be declared by the Board of Directors at any regular or special meetings, pursuant to law. Dividends may be paid in cash, in property, or in shares of the Corporation’s capital stock, subject to the provisions of the Articles of Incorporation, as amended. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the directors shall think conducive to the interest of the Corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.

 

Section 2.         Fiscal Year. Except as otherwise determined by the Board of Directors, the fiscal year of the Corporation shall end on December 31 of each year.

 

Section 3.         Seal. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words “Corporate Seal” and “Georgia”. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. In the event it is inconvenient to use such seal at any time, the signature of the Corporation followed by the word “Seal” enclosed in parentheses shall be deemed the seal of the Corporation.

 

Section 4.         Annual Statements. Not later than four months after the close of each fiscal year, and in any case prior to the next annual meeting of shareholders, the Corporation shall prepare:

 

(1)            a balance sheet showing in reasonable detail the financial condition of the Corporation as of the close of its fiscal year; and

 

(2)            a profit and loss statement showing the results of its operations during its fiscal year.

 

Upon written request, the Corporation promptly shall mail to any shareholder of record a copy of the most recent such balance sheet and profit and loss statement.

 

Section 5.         Notice.

 

(a)            Whenever these Amended and Restated Bylaws require notice to be given to any shareholder or to any director, the notice may be given by mail, in person, by courier delivery, by telephone, or by email, telegram, cablegram, or similar electronic means. Whenever notice is given to a shareholder or director by mail, the notice shall be sent by depositing the notice in a post office or letter box in a postage-prepaid, sealed envelope addressed to the shareholder or director at his or her address as it appears on the books of the Corporation. Any such written notice given by mail shall be effective: (i) if given to shareholders, as such, at the time the same is deposited in the United States mail; and (ii) in all other cases, at the earliest of (x) when delivered, properly addressed, to the addressee's last known principal place of business or residence, (y) three days after its deposit in the mail, as evidenced by the postmark, if mailed with first-class postage prepaid and correctly addressed, or (z) on the date shown on the return receipt, if sent by registered or certified mail, return receipt requested, and the receipt is signed by or on behalf of the addressee. Whenever notice is given to a shareholder or director by any means other than mail, the notice shall be deemed given when received.

 

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(b)            In calculating time periods for notice, when a period of time measured in days, weeks, months, years, or other measurement of time is prescribed for the exercise of any privilege or the discharge of any duty, the first day shall not be counted but the last day shall be counted.

 

ARTICLE VIII

AMENDMENTS

 

The Board of Directors shall have power to alter, amend or repeal the Amended and Restated Bylaws or adopt new Bylaws by majority vote of all of the directors, except Article III, Section 9, except with respect to the Board of Directors’ authority to fill vacancies; provided, however, any Bylaws adopted by the Board of Directors may be altered, amended or repealed and new Bylaws adopted, by the majority vote of all the shareholders entitled to vote thereon.

 

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Exhibit 4.1

GRAPHIC

GRAPHIC

 

Exhibit 4.2

 

CERTAIN CONFIDENTIAL INFORMATION (MARKED BY BRACKETS AS “[***]”) HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is dated as of December 31, 2020 by and between Wingshooter Acquisition Corp., a Georgia corporation (the “Company”), and Patriot Financial Partners III, L.P., a Delaware limited partnership (the “Purchaser”).

 

WHEREAS, this Agreement is made pursuant to the Stock Purchase Agreement, dated as of December 31, 2020, by and between the Company and the Purchaser (the “Purchase Agreement”);

 

WHEREAS, the Company and Georgia Banking Company, Inc. (“Georgia Banking Company”) entered into that certain Amended and Restated Agreement and Plan of Merger, dated November 11, 2020 (the “Merger Agreement”), pursuant to which the Company will merge with and into Georgia Banking Company, with Georgia Banking Company being the surviving entity (the “Acquisition”);

 

WHEREAS, references to the Company in this Agreement following the Acquisition shall be deemed to be references to Georgia Banking Company; and

 

WHEREAS, in order to induce the Purchaser to enter into the Purchase Agreement, the Company has agreed to grant the Purchaser the rights set forth below.

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Purchaser agree as follows:

 

1.            Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

 

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person.

 

“Agreement” shall have the meaning set forth in the Preamble.

 

“Allowable Grace Period” has the meaning set forth in Section 6.

 

“Business Day” means a day other than a Saturday or Sunday or other day on which banks located in New York City are authorized or required by law to close.

 

“Capital Stock” means, with respect to any Person at any time, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of capital stock, securities convertible into or exchangeable or exercisable for any of its shares, interests, participations or other equivalents, partnership interests (whether general or limited), limited liability company interests, or equivalent ownership interests in or issued by such Person.

 

 

 

 

“Closing Date” has the meaning set forth in the Purchase Agreement.

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Stock” means the voting common stock of the Company, par value $0.01 per share, and any securities into which such shares of voting common stock may hereinafter be reclassified including, but without limitation, the shares of Georgia Banking Company common stock, par value $0.01 per share, converted after the effective time of the Acquisition (the “Converted Shares”).

 

“Company” shall have the meaning set forth in the Preamble.

 

“Company Securities” shall mean (i) the Common Stock and (ii) all shares existing or hereafter authorized of any class of preferred stock of the Company which has the right (subject always to the rights of any class or series of preferred stock of the Company ranking senior to or pari passu with such preferred stock) to participate in the distribution of the assets and earnings of the Company, including (without duplication) any shares of capital stock into which Company Securities may be converted (as a result of recapitalization, share exchange or similar event) or are issued with respect to Company Securities, including, without limitation, with respect to any stock split or stock dividend, or a successor security.

 

“Effective Date” means the date that the Registration Statement, filed pursuant to Section 2(a), is first declared effective by the Commission.

 

“Effectiveness Deadline” means, with respect to the Initial Registration Statement or the New Registration Statement, the fifth (5th) Trading Day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not be “reviewed” or will not be subject to further review; provided that if the Effectiveness Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business, the Effectiveness Deadline shall be extended to the next Business Day on which the Commission is open for business.

 

“Effectiveness Period” shall have the meaning set forth in Section 2(b).

 

“Event” shall have the meaning set forth in Section 2(c).

 

“Event Date” shall have the meaning set forth in Section 2(c).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Filing Deadline” means, with respect to the Initial Registration Statement required to be filed pursuant to Section 2(a), the date that is the fourth (4th) anniversary of the Closing Date; provided that if the Filing Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business, the Filing Deadline shall be extended to the next Business Day on which the Commission is open for business.

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“FINRA” shall have the meaning set forth in Section 5.

 

“Georgia Courts” means the courts of the State of Georgia and the United States District Courts located in the City of Atlanta.

 

“Grace Period” shall have the meaning set forth in Section 6.

 

“Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.

 

“Holders Counsel” shall have the meaning set forth in Section 6(a). “Indemnified Party” shall have the meaning set forth in Section 8(c). “Indemnifying Party” shall have the meaning set forth in Section 8(c). “Initial Registration Statement” shall have the meaning set forth in Section 2(a).

 

“Investor Rights Agreement” shall mean that certain Investor Rights Agreement by and the between the Company and the Purchaser, dated as of the date hereof.

 

“Liquidated Damages” shall have the meaning set forth in Section 2(c).

 

“Losses” shall have the meaning set forth in Section 8(a).

 

“New Registration Statement” shall have the meaning set forth in Section 2(a).

 

“New Securities” shall mean any equity (including Common Stock and preferred stock), or any securities, warrants, rights, options or debt that is convertible or exchangeable into equity or that includes an equity component (such as an “equity kicker”) (including any hybrid security) of the Company.

 

“Non-Responsive Holder” shall have the meaning set forth in Section 9(d).

 

“OTC Pink” means the marketplace for trading over-the-counter stocks provided and operated by OTC Markets Group, Inc.

 

“Other Securities” means shares of Common Stock or shares of other Capital Stock of the Company that are contractually entitled to registration rights or Capital Stock that the Company is registering pursuant to a Registration Statement.

 

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Piggyback Registration” shall have the meaning set forth in Section 3(a).

 

“Principal Market” means the Trading Market on which the Common Stock is primarily listed on and quoted for trading.

 

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“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

 

“Purchase Agreement” shall have the meaning set forth in the Recitals.

 

“Purchaser” shall have the meaning set forth in the Preamble.

 

“Registrable Securities” means all of the Shares, Underlying Shares issued upon exercise of warrants, options and other rights to acquire Underlying Shares, any New Securities acquired pursuant to the Investor Rights Agreement and any Shares or Underlying Shares issued or issuable in respect of the Shares or the Underlying Shares by way of conversion, exchange, stock dividend, split or combination, recapitalization, merger, consolidation, other reorganization or otherwise, provided that the Shares or the Underlying Shares shall cease to be Registrable Securities upon the earliest to occur of the following: (A) a sale pursuant to a Registration Statement or Rule 144 under the Securities Act (in which case, only such security sold shall cease to be a Registrable Security); (B) becoming eligible for sale without time, volume or manner of sale restrictions by the Holders under Rule 144; (C) if such Shares or Underlying Shares have ceased to be outstanding; (D) the date a Registration Statement becomes effective including such Shares or Underlying Shares; or (E) if such Shares or Underlying Shares have been sold in a private transaction in which the Holder’s rights under this Agreement have not been assigned to the transferee.

 

“Registration Statements” means any one or more registration statements of the Company filed under the Securities Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement (including without limitation the Prospectus, the Initial Registration Statement, the New Registration Statement and any Remainder Registration Statements), amendments and supplements to such Registration Statements, including post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such Registration Statements.

 

“Requested Information” shall have the meaning set forth in Section 9(d).

 

“Required Registration Statement” means any Initial Registration Statement, New Registration Statement, or Remainder Registration Statement.

 

“Remainder Registration Statement” shall have the meaning set forth in Section 2(a).

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any successor rule thereto.

 

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“Rule 144A” means Rule 144A promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any successor rule thereto.

 

“Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any successor rule thereto.

 

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any successor rule thereto.

 

“SEC Guidance” means (i) any publicly available written guidance, comments, requirements or requests of the Commission staff and (ii) the Securities Act.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Shares” means the shares of Common Stock issued or issuable to the Purchaser pursuant to the Purchase Agreement and, following the Acquisition, the Converted Shares.

 

“Shelf Offering” shall have the meaning set forth in Section 4(a).

 

“Take-Down Notice” shall have the meaning set forth in Section 4(a).

 

“Trading Day” means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported in the OTC Pink; provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

 

“Trading Market” means whichever of the New York Stock Exchange, the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.

 

“Underlying Shares” means the shares of Common Stock.

 

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2.            Mandatory Registration.

 

(a)            On or prior to the Filing Deadline, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all of the Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 or, if Rule 415 is not available for offers and sales of the Registrable Securities, by such other means of distribution of Registrable Securities as the Company may reasonably determine (the “Initial Registration Statement”). Notwithstanding the registration obligations set forth in this Section 2, in the event that the Commission informs the Company that all such Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company agrees to promptly (i) inform each of the Holders thereof and, as applicable, file the Initial Registration Statement, or use its commercially reasonable efforts to file amendments to the Initial Registration Statement as required by the Commission and/or (ii) withdraw the Initial Registration Statement and file a new registration statement (a “New Registration Statement”), in either case covering the maximum number of Registrable Securities permitted to be registered by the Commission, on such form available to the Company to register for resale the Registrable Securities as a secondary offering; provided, that prior to filing such amendment or New Registration Statement, the Company shall be obligated to use its commercially reasonable efforts to advocate with the Commission for the registration of all of the Registrable Securities in accordance with the SEC Guidance, including without limitation, Securities Act Rules Compliance and Disclosure Interpretation 612.09, or any successor thereto. Notwithstanding any other provision of this Agreement, if any SEC Guidance sets forth a limitation of the number of Registrable Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used commercial reasonable efforts to reasonably advocate with the Commission for the registration of all or a greater number of Registrable Securities), the number of Registrable Securities to be registered on such Registration Statement will be reduced pro rata on the basis of the aggregate number of Registrable Securities owned by each such person, and under such circumstances, the Company will not be subject to the payment of Liquidated Damages in Section 2(c). In the event the Company amends the Initial Registration Statement or files a New Registration Statement, as the case may be, under clauses (i) or (ii) above, the Company will use its commercially reasonable efforts to file with the Commission, as promptly as allowed by the Commission or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration statements on such form available to the Company to register for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement, as amended, or the New Registration Statement (the “Remainder Registration Statements”). No Holder shall be named as an “underwriter” in any Registration Statement without such Holder’s prior written consent, which shall not be unreasonably withheld.

 

(b)            The Company shall use its commercially reasonable efforts to cause each Required Registration Statement to be declared effective by the Commission as soon as practicable, and, with respect to the Initial Registration Statement or the New Registration Statement, as applicable, no later than the Effectiveness Deadline, and shall use its commercially reasonable efforts to keep each Required Registration Statement continuously effective under the Securities Act until the earlier of (i) such time as all of the Registrable Securities covered by such Required Registration Statement have been publicly sold by the Holders or (ii) the date that all Registrable Securities covered by such Required Registration Statement may be sold by the Holders without volume or manner of sale restrictions under Rule 144, as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed and reasonably acceptable to the Company’s transfer agent (the “Effectiveness Period”); provided, however, if the Company does not meet the eligibility requirements for filing on Form S-3 (or any successor registration statement form) at the time of filing of a Required Registration Statement, the Effectiveness Period shall not exceed 180 days following the Effective Date. The Company shall request effectiveness of a Required Registration Statement as of 5:00 p.m., New York City time, on a Trading Day. The Company shall promptly notify the Holders via facsimile or electronic mail of a “.pdf” format data file of the effectiveness of a Registration Statement within one (1) Business Day of the Effective Date. The Company shall file a final Prospectus for a Required Registration Statement with the Commission, as required by Rule 424(b) as promptly as reasonably practicable following the Effective Date.

 

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(c)            If: (i) the Initial Registration Statement is not filed with the Commission on or prior to the Filing Deadline, (ii) the Initial Registration Statement or the New Registration Statement, as applicable, is not declared effective by the Commission (or otherwise does not become effective) for any reason on or prior to the Effectiveness Deadline, or (iii) after its Effective Date, (A) such Registration Statement ceases to be effective for any reason (including without limitation by reason of a stop order, or the Company’s failure to update the Registration Statement), to remain continuously effective as to all Registrable Securities for which it is required to be effective, or (B) the Purchaser is not permitted to utilize the Prospectus therein to resell such Registrable Securities (other than during an Allowable Grace Period), (iv) a Grace Period applicable to a Required Registration Statement exceeds the length of an Allowable Grace Period, or (v) after the Filing Deadline, and only in the event a Registration Statement is not effective or available to sell all Registrable Securities, the Purchaser is unable to sell Registrable Securities without restriction under Rule 144, (any such failure or breach in clauses (i) through (v) above being referred to as an “Event,” and, for purposes of clauses (i), (ii), (iii) or (v), the date on which such Event occurs, or for purposes of clause (iv) the date on which such Allowable Grace Period is exceeded, being referred to as an “Event Date”), then in addition to any other rights the Purchaser may have hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to the Purchaser an amount in cash or shares of Common Stock, at the election of the Purchaser, as liquidated damages and not as a penalty (“Liquidated Damages”), equal to 1.0% of the aggregate purchase price paid by the Purchaser pursuant to the Purchase Agreement for any Registrable Securities held by the Purchaser on the Event Date. If the Purchaser elects to receive payment in Common Shares, the value of the Common Shares will be the closing market price on the Trading Market on the Event Date or if the Event Date is not a Trading Day, the next preceding Trading Day. The parties agree that notwithstanding anything to the contrary herein or in the Purchase Agreement, no Liquidated Damages shall be payable (i) if as of the relevant Event Date, the Registrable Securities may be sold by the Purchaser without volume or manner of sale restrictions under Rule 144, as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed and reasonably acceptable to the Company’s transfer agent, (ii) if any action or inaction taken by the Purchaser caused an Event, (iii) in the event the Purchaser is unable to lawfully sell any of its Registrable Securities (including, without limitation, in the event a Grace Period exceeds the length of an Allowable Grace Period) because of possession of material non-public information or (iv) with respect to any period after the expiration of the Effectiveness Period (it being understood that this clause shall not relieve the Company of any Liquidated Damages accruing prior to the expiration of the Effectiveness Period). If the Company fails to pay any Liquidated Damages pursuant to this Section 2(c) in full within ten (10) Business Days after the date payable, the Company will pay interest on the amount of Liquidated Damages then owing to the Purchaser at a rate of 1.0% per month on an annualized basis (or such lesser maximum amount that is permitted to be paid by applicable law) to the Purchaser, accruing daily from the date such Liquidated Damages are due until such amounts, plus all such interest thereon, are paid in full. The Liquidated Damages pursuant to the terms hereof shall apply on a daily pro-rata basis for any portion of a month prior to the cure of an Event, except in the case of the first Event Date. With respect to the Purchaser, the Effectiveness Deadline for a Required Registration Statement shall be extended without default or Liquidated Damages hereunder in the event that the Company’s failure to obtain the effectiveness of the Registration Statement on a timely basis results from the failure of the Purchaser to timely provide the Company with information requested by the Company and necessary to complete the Registration Statement in accordance with the requirements of the Securities Act (in which case the Effectiveness Deadline would be extended with respect to Registrable Securities held by the Purchaser).

 

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3.            Piggyback Registration.

 

(a)            If the Company intends to file a Registration Statement covering a primary or secondary offering of any of its Common Stock or Other Securities, whether or not the sale is for its own account, which is not a registration solely to implement an employee benefit plan pursuant to a registration statement on Form S-8 (or successor form), a registration statement on Form S-4 (or successor form) or a transaction to which Rule 145 or any other similar rule of the Commission is applicable, the Company will promptly (and in any event at least ten (10) Business Days before the anticipated filing date) give written notice to the Holders of its intention to effect such a registration. The Company will effect the registration under the Securities Act of all Registrable Securities that the Holder(s) request(s) be included in such registration (a “Piggyback Registration”) by a written notice delivered to the Company within five (5) Business Days after the notice given by the Company in the preceding sentence. Subject to Section 3(b), securities requested to be included in a Company registration pursuant to this Section 3 shall be included by the Company on the same form of Registration Statement as has been selected by the Company for the securities the Company is registering for sale referred to above. The Holders shall be permitted to withdraw all or part of the Registrable Securities from the Piggyback Registration at any time at least two (2) Business Days prior to the effective date of the Registration Statement relating to such Piggyback Registration. If the Company elects to terminate any registration filed under this Section 3 prior to the effectiveness of such registration, the Company will have no obligation to register the securities sought to be included by the Holders in such registration under this Section 3. There shall be no limit to the number of Piggybank Registrations pursuant to this Section 3.

 

(b)            If a Registration Statement under this Section 3 relates to an underwritten offering and the managing underwriter(s) advise(s) the Company that in its or their reasonable opinion the number of securities requested to be included in such offering exceeds the number which can be sold without adversely affecting the marketability of such offering (including an adverse effect on the per share offering price), the Company will include in such registration or Prospectus only such number of securities that in the reasonable opinion of such underwriter(s) can be sold without adversely affecting the marketability of the offering (including an adverse effect on the per share offering price), which securities will be so included in the following order of priority: (i) first, the Common Stock and other securities the Company proposes to sell, (ii) second, the Registrable Securities of the Holders who have requested inclusion of Registrable Securities pursuant to this Section 3, pro rata on the basis of the aggregate number of such securities or shares owned by each such person, or as such Holders may otherwise agree, and (iii) third, any other securities of the Company that have been requested to be so included, subject to the terms of this Agreement. The Company shall select the investment banking firm or firms to act as the lead underwriter or underwriters in connection with an underwritten offering made pursuant to this Section 3. No Holder may participate in any underwritten registration under this Section 3 unless such Holder (i) agrees to sell the Registrable Securities it desires to have covered by the underwritten offering on the basis provided in any underwriting arrangements in customary form and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

 

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4.            Underwritten Shelf Offerings.

 

(a)            At any time that a shelf Registration Statement covering Registrable Securities pursuant to Section 2 or Section 3 is effective, if any Holder delivers a notice to the Company (a “Take-Down Notice”) stating that it intends to sell all or part of its Registrable Securities included by it on the shelf Registration Statement (a “Shelf Offering”), then the Company shall amend or supplement the shelf Registration Statement as may be necessary in order to enable such Registrable Securities to be distributed pursuant to the Shelf Offering (taking into account the inclusion of Registrable Securities by any other Holders pursuant to this Section 4(a)). In connection with any Shelf Offering, including any Shelf Offering that is an underwritten offering, such proposing Holder(s) shall also deliver the Take-Down Notice to all other Holders included on such shelf Registration Statement and permit each such Holder to include its Registrable Securities included on the shelf Registration Statement in the Shelf Offering if such Holder notifies the proposing Holder(s) and the Company within five (5) Business Days after delivery of the Take-Down Notice to such Holder.

 

(b)            The Company shall have no obligation to effect an underwritten offering under this Section 4 on behalf of the Holders electing to participate in such offering unless the expected gross proceeds from such offering exceed $2,000,000.

 

(c)            If a Shelf Offering of Registrable Securities included in a Required Registration Statement is to be conducted as an underwritten offering, then the Holders of the majority of the Registrable Securities included in a Required Registration Statement shall select the investment banking firm or firms to act as the lead underwriter or underwriters in connection with such offering; provided, that such selection shall be reasonably acceptable to the Company. If, in connection with any such underwritten offering, the managing underwriter(s) advise(s) the Company that in its or their reasonable opinion the number of securities requested to be included in such offering exceeds the number which can be sold without adversely affecting the marketability of such offering (including an adverse effect on the per share offering price), the Company will include in such registration or Prospectus only such number of securities that in the reasonable opinion of such underwriter(s) can be sold without adversely affecting the marketability of the offering (including an adverse effect on the per share offering price), which securities will be so included in the following order of priority: (i) first, the Registrable Securities of the Holders who have requested registration of Registrable Securities pursuant to this Section 4, pro rata on the basis of the aggregate number of such securities or shares owned by each such person, or as the Holders may otherwise agree amongst themselves, (ii) second, the Common Stock and other securities the Company proposes to sell, and (iii) third, any other securities of the Company that have been requested to be so included, subject to the terms of this Agreement. No Holder may participate in any underwritten registration under this Section 4 unless such Holder (i) agrees to sell the Registrable Securities it desires to include in the underwritten offering on the basis provided in any underwriting arrangements in customary form and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

 

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(d)            In addition to Sections (a) and (b) of this Section 4, a Shelf Offering of Registrable Securities included on a Piggyback Registration Statement initiated by Holders shall be subject to the procedures set forth in Section 3.

 

5.            Restrictions on Public Sale by Holders of Registrable Securities. Each Holder agrees, in connection with any underwritten offering of Common Stock pursuant to a Registration Statement (whether or not such Holder elected to include Registrable Securities in such Registration Statement), if requested (pursuant to a written notice) by the managing underwriter or underwriters in an underwritten offering, not to effect any public sale or distribution of any Registrable Securities (except as part of such underwritten offering), including a sale pursuant to Rule 144, or to make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any Registrable Securities, any other equity securities of the Company or any securities convertible into or exchangeable or exercisable for any equity securities of the Company, other than to an Affiliate or other Holder that has agreed to the same restriction, without the prior written consent of the Company or such underwriter, as the case may be, during the period commencing on the date of the request (which shall be no earlier than seven (7) days prior to the expected “pricing” of such offering) and continuing for not more than 180 days (with respect to an offering pursuant to the Initial Registration Statement) or 60 days after the date of the Prospectus (or Prospectus supplement if the offering is made pursuant to a “shelf” registration), or such shorter time as shall be required by the managing underwriter, pursuant to which such public offering shall be made, plus an extension period, which shall be no longer than 17 days, as may be proposed by the managing underwriter to address the regulations of the Financial Industry Regulatory Authority, Inc. (“FINRA”) regarding the publishing of research, or such lesser period as is required by the managing underwriter; provided, that, each Holder will agree to such restricted period only if all executive officers and directors of the Company enter into similar agreements, and the Company has used reasonable best efforts to cause all other holders of at least 5% of the Company’s voting securities to enter into similar agreements.

 

6.            Registration Procedures. Subject to Section 2(c), if and whenever the Company is required to use its reasonable best efforts to effect the registration of any Registrable Securities under the Securities Act as provided in Section 2 and Section 3 hereof, the Company shall effect such registration to permit the sale of such Registrable Securities in accordance with the intended method or methods of disposition thereof, and pursuant thereto the Company shall cooperate in the sale of the securities and shall, as expeditiously as possible:

 

(a)            prepare and file with the SEC a Registration Statement or Registration Statements on such form as shall be available for the sale of the Registrable Securities by the applicable Holders thereof or by the Company in accordance with the intended method or methods of distribution thereof, and use its reasonable best efforts to cause such Registration Statement to become effective and to remain effective as provided herein (including by means of a shelf registration statement pursuant to Rule 415 under the Securities Act if so requested and if the Company is then eligible to use such registration); provided, however, that not less than three (3) Trading Days before filing a Registration Statement or Prospectus or any amendments or supplements thereto (including documents that would be incorporated or deemed to be incorporated therein by reference), the Company shall furnish or otherwise make available to the Holders and to one counsel designated by the Holders of a majority of the outstanding Registrable Securities (“Holders Counsel”), copies of all such documents proposed to be filed, which documents will be subject to the reasonable review and comment of Holders Counsel, and such other documents reasonably requested by Holders Counsel, including any comment letter(s) from the Commission, and, if requested by such counsel, provide such counsel reasonable opportunity to participate in the preparation of such Registration Statement and each Prospectus included therein and such other opportunities to conduct a reasonable investigation within the meaning of the Securities Act, including reasonable access to the Company’s books and records, officers, accountants and other advisors, in all cases subject to Section 6(p) below; provided further, however, that the Company shall not file any Registration Statement containing information to which Holders Counsel reasonably objects in good faith, unless the Company shall be advised by its counsel that the information objected to is required under the Securities Act;

 

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(b)            (i) prepare and file with the Commission such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement continuously effective as to the applicable Registrable Securities for its Effectiveness Period (except during an Allowable Grace Period) and comply in all material respects with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement; (ii) cause the related Prospectus to be supplemented by any Prospectus supplement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of the securities covered by such Registration Statement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act (except during an Allowable Grace Period); (iii) respond as promptly as reasonably practicable to any comments received from the Commission with respect to each Registration Statement or any amendment thereto and, as promptly as reasonably possible, provide the Holders Counsel true and complete copies of all correspondence from and to the Commission relating to such Registration Statement that pertains to the Holders as “Selling Shareholders”; and (iv) comply in all material respects with the applicable provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by a Registration Statement until such time as all of such Registrable Securities shall have been disposed of (subject to the terms of this Agreement) in accordance with the intended methods of disposition by the Holders thereof as set forth in such Registration Statement as so amended or in such Prospectus as so supplemented; provided, that each Holder shall be responsible for the delivery of the Prospectus to the Persons to whom such Holder sells any of the Registrable Securities (including in accordance with Rule 172 under the Securities Act), and each Holder agrees to dispose of Registrable Securities in compliance with applicable federal and state securities laws. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 6(b)) by reason of the Company filing a report on Form 10- K, Form 10-Q or Form 8- K or any analogous report under the Exchange Act, the Company shall have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the Commission as promptly as practicable.

 

(c)            notify each selling Holder, Holders Counsel and the managing underwriters, if any, promptly, and (if requested by any such Person) confirm such notice in writing, (i) when a Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to a Registration Statement or related Prospectus or for additional information, (iii) of the issuance by the Commission of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, and (v) if the Company has knowledge of the happening of any event that makes any statement made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in such Registration Statement, Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (which notice shall notify the selling Holders only of the occurrence of such an event and shall provide no additional information regarding such event to the extent such information would constitute material non-public information);

 

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(d)            use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement, or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction at the earliest date reasonably practical;

 

(e)            if requested by the managing underwriters, if any, or the Purchaser or the Holders of a majority of the then outstanding Registrable Securities being sold in connection with an underwritten offering, promptly include in a Prospectus supplement or post-effective amendment such information as the managing underwriters, if any, and the Purchaser or such Holders may reasonably request in order to permit the intended method of distribution of such securities and make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received such request; provided, however, that the Company shall not be required to take any actions under this Section 6(e) that are not, in the opinion of counsel for the Company, in compliance with applicable law;

 

(f)            furnish or make available to each selling Holder, Holders Counsel and each managing underwriter, if any, without charge, at least one conformed copy of the Registration Statement, the Prospectus and Prospectus supplement(s), if applicable, and each post-effective amendment thereto, including financial statements (but excluding schedules, all documents incorporated or deemed to be incorporated therein by reference, and all exhibits, unless requested in writing by such Holder, counsel or underwriter);

 

(g)            promptly deliver to each selling Holder, Holders Counsel, and the underwriters, if any, without charge, as many copies of the Prospectus or Prospectuses (including each form of Prospectus) and each amendment or supplement thereto as such Persons may reasonably request from time to time in connection with the distribution of the Registrable Securities; and the Company, subject to the last paragraph of this Section 6, hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any such amendment or supplement thereto;

 

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(h)            prior to any public offering, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders, the underwriters, if any, and Holders Counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or “Blue Sky” laws of such jurisdictions within the United States as any seller or underwriter reasonably requests in writing and to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to take any other action that may be necessary or advisable to enable such Holders to consummate the disposition of such Registrable Securities in such jurisdiction; provided, however, that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it is not then so qualified or (ii) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject;

 

(i)            cooperate with the selling Holders and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates (not bearing any legends) representing Registrable Securities to be sold after receiving written representations from each selling Holder that the Registrable Securities represented by the certificates so delivered by such Holder will be transferred in accordance with the Registration Statement, and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters, if any, or such Holders may request at least two (2) Business Days prior to any sale of Registrable Securities in a firm commitment public offering, but in any other such sale, within ten (10) Business Days prior to having to issue the securities;

 

(j)            upon the occurrence of, and its knowledge of, any event contemplated by Sections 6(c)(ii)-(v) above, as promptly as practicable, as applicable: (i) use its commercially reasonable efforts to prevent the issuance of any stop order or obtain its withdrawal at the earliest possible moment if the stop order has been issued, or (ii) prepare a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder, such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

 

(k)            prior to the effective date of the Registration Statement relating to the Registrable Securities, provide a CUSIP number for the Registrable Securities;

 

(l)            provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by such Registration Statement from and after a date not later than the effective date of such Registration Statement;

 

(m)            use its commercially reasonable efforts to cause all Registrable Securities to be offered (i) in connection with the Initial Registration Statement to be listed on a Trading Market (other than OTC Bulletin Board) and (ii) in connection with any other public offering, to be listed on each Trading Market on which securities of the same series or class issued by the Company are then listed, or if no such similar securities are then listed, on a Trading Market (other than the OTC Bulletin Board) selected by the Company, as the case may be, prior to the effectiveness of the relevant Registration Statement; provided, however, if the Registrable Securities that are the subject of an effective Registration Statement are not listed on a Trading Market (other than the OTC Bulletin Board) by the date that is four years and six months following the Closing Date, while continuing to use its commercially reasonable efforts to cause all such Registrable Securities to be listed on a Trading Market (other than the OTC Bulletin Board), the Company shall use commercially reasonable efforts to promptly cause all such Registrable Securities to be qualified for trading in an over-the-counter market operated by OTC Markets Group, Inc.;

 

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(n)            with respect to any sale of Registrable Securities pursuant to a firm commitment underwritten offering, enter into such agreements (including an underwriting agreement in form, scope and substance as is customary in underwritten offerings) reasonably requested by the Purchaser or the Holders of a majority of the Registrable Securities being sold in connection therewith (including those reasonably requested by the managing underwriters, if any) to expedite or facilitate the disposition of such Registrable Securities, and in such connection, (i) make such representations and warranties to the selling Holders and the underwriters, if any, with respect to the business of the Company and its subsidiaries, and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings, and, if true, confirm the same if and when requested, (ii) use its commercially reasonable efforts to furnish to the selling Holders opinions of counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if any, and Holders Counsel), addressed to each selling Holder of Registrable Securities and each of the underwriters, if any, covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such counsel and underwriters, (iii) use its commercially reasonable efforts to obtain “cold comfort” letters and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement) who have certified the financial statements included in such Registration Statement, addressed to each selling Holder of Registrable Securities (unless such accountants shall be prohibited from so addressing such letters by applicable standards of the accounting profession) and each of the underwriters, if any, such letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters in connection with underwritten offerings and (v) deliver such documents and certificates as may be reasonably requested by the Purchaser or the Holders of a majority of the Registrable Securities being sold pursuant to such Registration Statement, Holders Counsel and the managing underwriters, if any, to evidence the continued validity of the representations and warranties made pursuant to Section 6(n)(i) above and to evidence compliance with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company. The above shall be done at each closing under such underwriting or similar agreement, or as and to the extent required thereunder;

 

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(o)            make available for inspection by a representative of the selling Holder of Registrable Securities, any underwriter participating in any such disposition of Registrable Securities, if any, and any attorneys or accountants retained by such selling Holders or underwriter, at the offices where normally kept, during reasonable business hours, all financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries, and cause the officers, directors and employees of the Company and its subsidiaries to supply all information in each case reasonably requested by any such representative, underwriter, attorney or accountant in connection with such Registration Statement; provided, however, that any information that is not generally publicly available at the time of delivery of such information shall be kept confidential by such Persons unless (i) disclosure of such information is required by court or administrative order, (ii) disclosure of such information, in the opinion of counsel to such Person, is required by law or applicable legal process, or (iii) such information becomes generally available to the public other than as a result of a non-permitted disclosure or failure to safeguard by such Person. In the case of a proposed disclosure pursuant to (i) or (ii) above, such Person shall be required to give the Company written notice of the proposed disclosure prior to such disclosure (to the extent permitted by law) and, if requested by the Company, assist the Company in seeking to prevent or limit the proposed disclosure. Without limiting the foregoing, no such information shall be used by such Person as the basis for any market transactions in securities of the Company or its subsidiaries in violation of law;

 

(p)            cause its officers to use their commercially reasonable efforts to support the marketing of the Registrable Securities covered by the Registration Statement (including, without limitation, participation in “road shows”);

 

(q)            cooperate with each seller of Registrable Securities and each underwriter or agent participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the FINRA; and

 

(r)            if the Company becomes eligible to use Form S-3 during the term of this Agreement, the Company shall use its commercially reasonable efforts to maintain eligibility for use of Form S-3 (or any successor form thereto) for the registration of the resale of the Registrable Securities.

 

Notwithstanding anything to the contrary herein, at any time after the Registration Statement has been declared effective by the Commission, the Company may delay the disclosure of material non-public information concerning the Company if the disclosure of such information at the time is not, in the good faith judgment of the Company, in the best interests of the Company (such delay, a “Grace Period”). During the Grace Period, the Company shall not be required to maintain the effectiveness of any Registration Statement filed hereunder and, in any event, Holders shall suspend sales of Registrable Securities pursuant to such Registration Statements during the pendency of the Grace Period provided, the Company shall promptly (i) notify the Purchaser in writing of the existence of material non-public information giving rise to a Grace Period or the need to file a post-effective amendment, as applicable, and the date on which such Grace Period will begin, (ii) use commercially reasonable efforts to terminate a Grace Period as promptly as practicable provided that such termination is, in the good faith judgment of the Company, in the best interest of the Company and (iii) notify the Purchaser in writing of the date on which the Grace Period ends; provided, further, that, with respect to a Required Registration Statement only, no single Grace Period shall exceed sixty (60) consecutive days, and during any three hundred sixty-five (365) day period, the aggregate of all Grace Periods shall not exceed an aggregate of one hundred twenty (120) days (each Grace Period complying with this provision being an “Allowable Grace Period”). For purposes of determining the length of a Grace Period, the Grace Period shall be deemed to begin on and include the date the Purchaser receives the notice referred to in clause (i) above and shall end on and include the later of the date the Purchaser receives the notice referred to in clause (iii) above and the date referred to in such notice; provided, that no Grace Period shall be longer than an Allowable Grace Period. Notwithstanding anything to the contrary, the Company shall use commercially reasonable efforts to cause its transfer agent to deliver unlegended Shares to a transferee of the Purchaser in accordance with the terms of the Purchase Agreement in connection with any sale of Registrable Securities with respect to which the Purchaser has entered into an irrevocable contract for sale prior to the Purchaser’s receipt of the notice of a Grace Period and for which the Purchaser has not yet settled.

 

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The Company may require each Holder of Registrable Securities as to which any registration is being effected to furnish to the Company in writing such information required in connection with such registration regarding such seller and the distribution of such Registrable Securities as the Company may, from time to time, reasonably request in writing, and the Company may exclude from such registration the Registrable Securities of any Holder who unreasonably fails to furnish such information within a reasonable time after receiving such request.

 

Each Holder of Registrable Securities covered by such Registration Statement agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Sections 6(c)(ii), 6(c)(iii), 6(c)(iv) or 6(c)(v) hereof, such Holder will forthwith discontinue disposition of such Registrable Securities covered by such Registration Statement or Prospectus until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(j) hereof, or until it is advised in writing by the Company that the use of the applicable Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus; provided, however, that the time periods under Section 2 with respect to the length of time that the effectiveness of a Registration Statement must be maintained shall automatically be extended by the amount of time the Holder is required to discontinue disposition of such securities.

 

7.            Registration Expenses. All fees and expenses incident to the Company’s performance of or compliance with its obligations under this Agreement (excluding any underwriting discounts and selling commissions, stock transfer taxes and fees of counsel for the Holders) shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence that are the Company’s responsibility shall include, without limitation, (a) all registration and filing fees (including, without limitation, fees and expenses (i) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading, (ii) with respect to compliance with applicable state securities or Blue Sky laws (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as requested by the Holders) and (iii) if not previously paid by the Company in connection with an issuer filing, with respect to any filing that may be required to be made by any broker through which a Holder intends to make sales of Registrable Securities with FINRA pursuant to FINRA Rule 5110, so long as the broker is receiving no more than a customary brokerage commission in connection with such sale), (b) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is reasonably requested by the Holders of a majority of the Registrable Securities included in the Registration Statement), (c) messenger, telephone and delivery expenses of the Company, (d) fees and disbursements of counsel for the Company, (e) Securities Act liability insurance, if the Company so desires such insurance, (f) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement, and (g) those expenses of the selling Holders actually and reasonably incurred, including without limitation, the reasonable fees of Holders Counsel up to $50,000. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder.

 

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The Company shall not be required to pay (i) fees and disbursements of any counsel retained by any Holder or by any underwriter (except as set forth in clauses 7(a)(ii) and 7(g)), or (ii) any underwriter’s fees (including discounts, commissions or fees of underwriters, selling brokers, dealer managers or similar securities industry professionals) relating to the distribution of the Registrable Securities (other than with respect to Registrable Securities sold by the Company or as otherwise set forth in this Section 7).

 

8.            Indemnification.

 

(a)            Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless, to the fullest extent permitted by law, each Holder, the officers, directors, agents, general partners, managing members, managers, Affiliates, employees and investment advisers of such Holder, each Person who controls each such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, general partners, managing members, managers, Affiliates, employees and investment advisers of each such controlling person, and each underwriter, if any, and each Person who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) such underwriter, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and reasonable attorneys’ fees and any legal or other fees or expenses incurred by such party in connection with any investigation or Proceeding), expenses, judgments, fines, penalties, charges and amounts paid in settlement (collectively, “Losses”), as incurred, arising out of or based upon (i) any untrue statement (or alleged untrue statement) of a material fact contained in any Registration Statement, any preliminary, final or summary Prospectus, contained therein or related thereto, or any amendment or supplement thereto, together with the documents incorporated by reference therein, or any free writing prospectus utilized in connection therewith, incident to any such registration, qualification, or compliance, or based on 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, or (ii) any violation or alleged violation by the Company of the Securities Act, Exchange Act, or any state securities law or any rule or regulation thereunder, and (without limitation of the other portions of this Section 8(a)) will reimburse each such Holder and each Person who controls each such Holder, each such underwriter, and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, loss, damage, liability, or action; provided that the Company will not be liable to a Holder or underwriter in any such case to the extent that any such Losses arise out of or are based on any untrue statement or omission by such Holder or underwriter, but only to the extent that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such Registration Statement, preliminary, final or summary Prospectus, contained therein or related thereto, or any amendment or supplement thereto, together with the documents incorporated by reference therein, or any free writing prospectus utilized in connection therewith in reliance upon and in conformity with written information that is furnished to the Company by such Holder or underwriter for use therein and relates to such Holder or underwriter, as applicable. It is agreed that the indemnity agreement contained in this Section 8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld).

 

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(b)            Indemnification by Holders. Each Holder shall, notwithstanding any termination of this Agreement, indemnify and hold harmless, to the fullest extent permitted by law, severally and not jointly with any other Holders, the Company, its directors, its officers who sign the Registration Statement, and each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) and all other prospective sellers, from and against all Losses arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in such Registration Statement under which such Registrable Securities were registered under the Securities Act, any preliminary, final or summary Prospectus, contained therein or related thereto, or any amendment or supplement thereto, together with the documents incorporated by reference therein, or any free writing prospectus utilized in connection therewith, incident to any such registration, qualification, or compliance, or based on 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, and will (without limitation of the other portions of this Section 8(b)) reimburse the Company, its directors, its officers who sign the Registration Statement, and each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) and all other prospective sellers for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability, or action, in each case to the extent, but only to the extent, that such untrue statement or omission is made in such Registration Statement, preliminary, final or summary Prospectus, contained therein or related thereto, or any amendment or supplement thereto, together with the documents incorporated by reference therein, or any free writing prospectus utilized in connection therewith in reliance upon and in conformity with written information that is furnished to the Company by such Holder for inclusion therein and that relates to such Holder; provided, however, that the obligations of such Holder hereunder shall not apply to amounts paid in settlement of any such claims, losses, damages, or liabilities (or actions in respect thereof) if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably withheld); and provided, further, that the liability of such Holder shall be limited to the net proceeds received by such selling Holder from the sale of Registrable Securities covered by such Registration Statement.

 

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(c)            Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of one (1) counsel reasonably satisfactory to the Indemnified Party and the payment of all reasonable and documented fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such written notice within a reasonable time of commencement of any such Proceeding shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that such failure shall have materially and adversely prejudiced the Indemnifying Party in its ability to defend such Proceeding.

 

An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel in writing that a conflict of interest exists if the same counsel were to represent such Indemnified Party and the Indemnifying Party; provided, that the Indemnifying Party shall not be liable for the fees and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld, delayed or unreasonably conditioned. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

 

Subject to the terms of this Agreement, all documented fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section 8(c)) shall be paid to the Indemnified Party, as incurred, within twenty (20) Trading Days of written notice thereof to the Indemnifying Party; provided, that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is finally judicially determined to not be entitled to indemnification hereunder.

 

(d)            Contribution. If a claim for indemnification under Section 8(a) or 8(b) is unavailable to an Indemnified Party (other than in accordance with its terms) or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party, on the one hand, and Indemnified Party, on the other hand, in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party, on the one hand, and Indemnified Party, on the other hand, shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section 8(d) was available to such party in accordance with its terms. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in this paragraph. Notwithstanding the provisions of this Section 8(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty 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.

 

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(e)            The indemnity and contribution agreements contained in this Section 8 are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties and are not in diminution or limitation of the indemnification provisions under the Purchase Agreement.

 

9.            Miscellaneous.

 

(a)            Remedies. In the event of a breach by the Company or by a Holder of any of its obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

 

(b)            Prohibition on Other Registrations. The Company agrees (i) not to effect or initiate a registration statement for any public sale or distribution of any securities similar to those being registered pursuant to this Agreement, or any securities convertible into or exchangeable or exercisable for such securities (other than a registration solely to implement an employee benefit plan pursuant to a registration statement on Form S-8 (or successor form), a registration statement on Form S-4 (or successor form) or a transaction to which Rule 145 or any other similar rule of the Commission is applicable), during the fourteen (14) calendar days prior to, and during the sixty (60) calendar-day period beginning on, the effective date of any Registration Statement in which the Holders of Registrable Securities are participating (except as part of any such registration, if permitted).

 

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(c)            Rule 144 Requirements. For so long as the Company is subject to the reporting requirements of the Exchange Act, the Company will use its commercially reasonable efforts to timely file with the Commission such reports and information required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the Commission thereunder and as the Commission may require. The Company shall furnish to any Holder of Registrable Securities forthwith upon request a written statement as to its compliance with the reporting requirements of Rule 144 (or any successor exemptive rule), the Securities Act and the Exchange Act (at any time that it is subject to such reporting requirements); a copy of its most recent annual or quarterly report; and such other reports and documents as such Person may reasonably request in availing itself of any rule or regulation of the Commission allowing it to sell any such securities without registration.

 

(d)            Obligations of Holders and Others in a Registration. Each Holder agrees to timely furnish in writing such information regarding such Person, the securities sought to be registered and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably be required to effect the registration of such Registrable Securities (the “Requested Information”) and shall take such other action as the Company may reasonably request in connection with the registration, qualification or compliance or as otherwise provided herein. At least ten (10) Business Days prior to the first anticipated filing date of a Registration Statement, the Company shall notify each holder of the information the Company requires from such Holder if such Holder elects to have any of such Holder’s Registrable Securities included in the Registration Statement. If at least five (5) Business Days prior to the filing date, the Company has not received the Requested Information from a Holder (a “Non-Responsive Holder”), then the Company may exclude from any Registration Statement the Registrable Securities of such Non-Responsive Holder.

 

(e)            Rule 144A. The Company agrees that, upon the request of any Holder of Registrable Securities or any prospective purchaser of Registrable Securities designated by a Holder, the Company shall promptly provide (but in any case within fifteen (15) calendar days of a request) to such Holder or potential purchaser, the following information:

 

(i)            a brief statement of the nature of the business of the Company and any subsidiaries and the products and services they offer;

 

(ii)            the most recent consolidated balance sheets and profit and losses and retained earnings statements, and similar financial statements of the Company for the two (2) most recent fiscal years (such financial information shall be audited, to the extent reasonably available); and

 

(iii)            such other information about the Company, any subsidiaries, and their business, financial condition and results of operations as the requesting Holder or purchaser of such Registrable Securities shall reasonably request in order to comply with Rule 144A, as amended, and in connection therewith the anti-fraud provisions of the federal and state securities laws.

 

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The Company hereby represents and warrants to any such requesting Holder and any prospective purchaser of Registrable Securities from such Holder that the information provided by the Company pursuant to this Section 9(e) will, as of their dates, not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

 

(f)            Limitations on Subsequent Registration Rights. The Company will not enter into any agreements with any holder or prospective holder of any securities of the Company that would grant such holder or prospective holder registration rights with respect to the securities of the Company that would have priority over the Registrable Securities with respect to the inclusion of such securities in any registration. If the Company enters into an agreement that contains terms more favorable, in form or substance, to any shareholders than the terms provided to the Holders under this Agreement, then the Company will modify or revise the terms of this Agreement in order to reflect any such more favorable terms for the benefit of the Holders. Notwithstanding anything to the contrary herein, the parties acknowledge and agree that pursuant to the Morgan Agreement and the Smith Agreement, Bartow Morgan, Jr. and J. Bradford Smith shall have registration rights that are substantially the same as those provided to the Holders under this Agreement.

 

(g)            Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities pursuant to the Registration Statement and shall sell the Registrable Securities only in accordance with a method of distribution described in the Registration Statement.

 

(h)            Discontinued Disposition. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Sections 6(c)(ii)-(iv), such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company may provide appropriate stop orders to enforce the provisions of this paragraph.

 

(i)            No Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date hereof, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof.

 

(j)            Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, or waived unless the same shall be in writing and signed by the Company and Holders of a majority of the then outstanding Registrable Securities; provided that any such amendment, modification, supplement or waiver that materially, adversely and disproportionately effects the rights or obligations of any Holder vis-à-vis the other Holders shall require the prior written consent of such Holder.

 

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(k)            Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile or e-mail (provided the sender receives a machine-generated confirmation of successful facsimile transmission or e-mail notification or confirmation of receipt of an e-mail transmission) at the facsimile number or e-mail address specified in this Section 9(k) prior to 5:00 p.m., New York City time, on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section 9(k) on a day that is not a Trading Day or later than 5:00 p.m., New York City time, on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service with next day delivery specified, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as follows:

 

  If to the Company: Wingshooter Acquisition Corp.
    1776 Peachtree Street NW, Suite 100
    Atlanta, GA 30309
    Attn: Bartow Morgan, Jr.
    Tel: [***]
    Email: [***]
     
  With a copy to: Troutman Pepper Hamilton Sanders LLP
    600 Peachtree Street, NE, Suite 3000
    Atlanta, GA 30308
    Attn: James Stevens
    Tel: [***]
    Fax: [***]
    Email: [***]

 

If to any Holder, to such Holder’s address as set forth on the records of the Company.

 

(l)            Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties. Without limiting the generality of the foregoing, after the Acquisition, Georgia Banking Company, as successor by merger to the Company, shall assume and be bound by this Agreement, and references to the Company in this Agreement following the Acquisition shall be deemed to be references to Georgia Banking Company. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. The Company may not assign its rights (except by merger or in connection with another entity acquiring all or substantially all of the Company’s assets) or obligations hereunder without the prior written consent of all the Holders of the then outstanding Registrable Securities. The rights to have the Company register Registrable Securities pursuant to this Agreement shall be automatically assigned by the Purchaser to any transferee of the Shares only if: (a) the transferee or assignee (i) acquires Shares of the Purchaser’s Registrable Securities with an original value as of the Closing Date of not less than $5,000,000; (b) the Purchaser agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable period of time after such assignment; (c) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (i) the name and address of such transferee or assignee and (ii) the securities with respect to which such registration rights are being transferred or assigned; (d) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the Securities Act and applicable state securities laws; and (e) at or before the time the Company received the written notice contemplated by clause (c) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein with respect to a Holder or the Purchaser. In the event of any delay in filing or effectiveness of the Registration Statement because of such assignment by the Purchaser or its transferee, the Company shall not be liable for any damages arising from such delay.

 

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(m)            Execution and Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature were the original thereof.

 

(n)            Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Georgia applicable to contracts made and to be performed entirely within such State. Each party agrees that all proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective Affiliates, employees or agents) may be commenced on an exclusive basis in the Georgia Courts. Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of the Georgia Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of this Agreement), and hereby irrevocably waives, and agrees not to assert in any proceeding, any claim that it is not personally subject to the jurisdiction of any such Georgia Court, or that such proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(o)            Cumulative Remedies. Except as provided in Section 2(c) with respect to Liquidated Damages, the remedies provided herein are cumulative and not exclusive of any other remedies provided by law.

 

(p)            Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

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(q)            Headings. The headings in this Agreement are for convenience only and shall not limit or otherwise affect the meaning hereof.

 

(r)            Entire Agreement. This Agreement and the Purchase Agreement constitute the entire agreement among the parties hereto with respect to the subject matter hereof. There are no restrictions, promises, warranties or undertakings, other than as set forth or referred to herein and in the Purchase Agreement. This Agreement supersedes all prior agreements and understandings among the parties hereto with respect to the subject matter hereof.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized signatories, as of the date first indicated above.

 

  WINGSHOOTER ACQUISITION CORP.
   
     
  By: /s/ Bartow Morgan, Jr.
  Name: Bartow Morgan, Jr.
  Title: Chief Executive Officer

 

  PATRIOT FINANCIAL PARTNERS III, L.P.
   
     
  By: /s/ James F. Deutsch
  Name: James F. Deutsch
  Its: Managing Partner

 

[Signature Page to Registration Rights Agreement]

 

 

 

 

Exhibit 4.3

 

Execution Version

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is dated as of December 31, 2020, by and between Wingshooter Acquisition Corp., a Georgia corporation (the “Company”), and [●], a Georgia resident (the “Purchaser”).

 

WHEREAS, this Agreement is made pursuant to the Stock Purchase Agreement, dated as of December 31, 2020, by and between the Company and the Purchaser (the “Purchase Agreement”);

 

WHEREAS, the Company and Georgia Banking Company, Inc. (“Georgia Banking Company”) entered into that certain Amended and Restated Agreement and Plan of Merger, dated November 11, 2020 (the “Merger Agreement”), pursuant to which the Company will merge with and into Georgia Banking Company, with Georgia Banking Company being the surviving entity (the “Acquisition”);

 

WHEREAS, references to the Company in this Agreement following the Acquisition shall be deemed to be references to Georgia Banking Company; and WHEREAS, in order to induce the Purchaser to enter into the Purchase Agreement, the Company has agreed to grant the Purchaser the rights set forth below.

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Purchaser agree as follows:

 

1.            Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

 

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person.

 

“Agreement” shall have the meaning set forth in the Preamble.

 

“Allowable Grace Period” has the meaning set forth in Section 6.

 

“Business Day” means a day other than a Saturday or Sunday or other day on which banks located in New York City are authorized or required by law to close.

 

“Capital Stock” means, with respect to any Person at any time, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of capital stock, securities convertible into or exchangeable or exercisable for any of its shares, interests, participations or other equivalents, partnership interests (whether general or limited), limited liability company interests, or equivalent ownership interests in or issued by such Person.

 

“Closing Date” has the meaning set forth in the Purchase Agreement.

 

1

 

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Stock” means the voting common stock of the Company, par value $0.01 per share, and any securities into which such shares of voting common stock may hereinafter be reclassified including, but without limitation, the shares of Georgia Banking Company common stock, par value $0.01 per share, converted after the effective time of the Acquisition (the “Converted Shares”).

 

“Company” shall have the meaning set forth in the Preamble.

 

“Company Securities” shall mean (i) the Common Stock and (ii) all shares existing or hereafter authorized of any class of preferred stock of the Company which has the right (subject always to the rights of any class or series of preferred stock of the Company ranking senior to or pari passu with such preferred stock) to participate in the distribution of the assets and earnings of the Company, including (without duplication) any shares of capital stock into which Company Securities may be converted (as a result of recapitalization, share exchange or similar event) or are issued with respect to Company Securities, including, without limitation, with respect to any stock split or stock dividend, or a successor security.

 

“Effective Date” means the date that the Registration Statement, filed pursuant to Section 2(a), is first declared effective by the Commission.

 

“Effectiveness Deadline” means, with respect to the Initial Registration Statement or the New Registration Statement, the fifth (5th) Trading Day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not be “reviewed” or will not be subject to further review; provided that if the Effectiveness Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business, the Effectiveness Deadline shall be extended to the next Business Day on which the Commission is open for business.

 

“Effectiveness Period” shall have the meaning set forth in Section 2(b).

 

“Event” shall have the meaning set forth in Section 2(c).

 

“Event Date” shall have the meaning set forth in Section 2(c).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Filing Deadline” means, with respect to the Initial Registration Statement required to be filed pursuant to Section 2(a), the date that is the fourth (4th) anniversary of the Closing Date; provided that if the Filing Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business, the Filing Deadline shall be extended to the next Business Day on which the Commission is open for business.

 

“FINRA” shall have the meaning set forth in Section 5.

 

2

 

 

“Georgia Courts” means the courts of the State of Georgia and the United States District Courts located in the City of Atlanta.

 

“Grace Period” shall have the meaning set forth in Section 6.

 

“Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.

 

“Holders Counsel” shall have the meaning set forth in Section 6(a). “Indemnified Party” shall have the meaning set forth in Section 8(c). “Indemnifying Party” shall have the meaning set forth in Section 8(c). “Initial Registration Statement” shall have the meaning set forth in Section 2(a).

 

“Investor Rights Agreement” shall mean that certain Investor Rights Agreement by and the between the Company and the Purchaser, dated as of the date hereof.

 

“Liquidated Damages” shall have the meaning set forth in Section 2(c).

 

“Losses” shall have the meaning set forth in Section 8(a).

 

“New Registration Statement” shall have the meaning set forth in Section 2(a).

 

“New Securities” shall mean any equity (including Common Stock and preferred stock), or any securities, warrants, rights, options or debt that is convertible or exchangeable into equity or that includes an equity component (such as an “equity kicker”) (including any hybrid security) of the Company.

 

“Non-Responsive Holder” shall have the meaning set forth in Section 9(d).

 

“OTC Pink” means the marketplace for trading over-the-counter stocks provided and operated by OTC Markets Group, Inc.

 

“Other Securities” means shares of Common Stock or shares of other Capital Stock of the Company that are contractually entitled to registration rights or Capital Stock that the Company is registering pursuant to a Registration Statement.

 

“Patriot” means Patriot Financial Partners III, L.P., a Delaware limited partnership.

 

“Patriot Agreement” means that certain Stock Purchase Agreement, as may be amended from time to time, by and between the Company and Patriot.

 

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Piggyback Registration” shall have the meaning set forth in Section 3(a).

 

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“Principal Market” means the Trading Market on which the Common Stock is primarily listed on and quoted for trading.

 

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

 

“Purchase Agreement” shall have the meaning set forth in the Recitals.

 

“Purchaser” shall have the meaning set forth in the Preamble.

 

“Registrable Securities” means all of the Shares, Underlying Shares issued upon exercise of warrants, options and other rights to acquire Underlying Shares, any New Securities acquired pursuant to the Investor Rights Agreement and any Shares or Underlying Shares issued or issuable in respect of the Shares or the Underlying Shares by way of conversion, exchange, stock dividend, split or combination, recapitalization, merger, consolidation, other reorganization or otherwise, provided that the Shares or the Underlying Shares shall cease to be Registrable Securities upon the earliest to occur of the following: (A) a sale pursuant to a Registration Statement or Rule 144 under the Securities Act (in which case, only such security sold shall cease to be a Registrable Security); (B) becoming eligible for sale without time, volume or manner of sale restrictions by the Holders under Rule 144; (C) if such Shares or Underlying Shares have ceased to be outstanding; (D) the date a Registration Statement becomes effective including such Shares or Underlying Shares; or (E) if such Shares or Underlying Shares have been sold in a private transaction in which the Holder’s rights under this Agreement have not been assigned to the transferee.

 

“Registration Statements” means any one or more registration statements of the Company filed under the Securities Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement (including without limitation the Prospectus, the Initial Registration Statement, the New Registration Statement and any Remainder Registration Statements), amendments and supplements to such Registration Statements, including post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such Registration Statements.

 

“Requested Information” shall have the meaning set forth in Section 9(d).

 

“Required Registration Statement” means any Initial Registration Statement, New Registration Statement, or Remainder Registration Statement.

 

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“Remainder Registration Statement” shall have the meaning set forth in Section 2(a).

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any successor rule thereto.

 

“Rule 144A” means Rule 144A promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any successor rule thereto.

 

“Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any successor rule thereto.

 

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any successor rule thereto.

 

“SEC Guidance” means (i) any publicly available written guidance, comments, requirements or requests of the Commission staff and (ii) the Securities Act.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Shares” means the shares of Common Stock issued or issuable to the Purchaser pursuant to the Purchase Agreement and, following the Acquisition, the Converted Shares.

 

“Shelf Offering” shall have the meaning set forth in Section 4(a).

 

“[●] Agreement” means that certain Stock Purchase Agreement, as may be amended from time to time, by and between the Company and [●].

 

“Take-Down Notice” shall have the meaning set forth in Section 4(a).

 

“Trading Day” means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported in the OTC Pink; provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

 

“Trading Market” means whichever of the New York Stock Exchange, the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.

 

“Underlying Shares” means the shares of Common Stock.

 

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2.             Mandatory Registration.

 

(a)            On or prior to the Filing Deadline, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all of the Registrable Securities not already covered by an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 or, if Rule 415 is not available for offers and sales of the Registrable Securities, by such other means of distribution of Registrable Securities as the Company may reasonably determine (the “Initial Registration Statement”). Notwithstanding the registration obligations set forth in this Section 2, in the event that the Commission informs the Company that all such Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company agrees to promptly (i) inform each of the Holders thereof and, as applicable, file the Initial Registration Statement, or use its commercially reasonable efforts to file amendments to the Initial Registration Statement as required by the Commission and/or (ii) withdraw the Initial Registration Statement and file a new registration statement (a “New Registration Statement”), in either case covering the maximum number of Registrable Securities permitted to be registered by the Commission, on such form available to the Company to register for resale the Registrable Securities as a secondary offering; provided, that prior to filing such amendment or New Registration Statement, the Company shall be obligated to use its commercially reasonable efforts to advocate with the Commission for the registration of all of the Registrable Securities in accordance with the SEC Guidance, including without limitation, Securities Act Rules Compliance and Disclosure Interpretation 612.09, or any successor thereto. Notwithstanding any other provision of this Agreement, if any SEC Guidance sets forth a limitation of the number of Registrable Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used commercial reasonable efforts to reasonably advocate with the Commission for the registration of all or a greater number of Registrable Securities), the number of Registrable Securities to be registered on such Registration Statement will be reduced pro rata on the basis of the aggregate number of Registrable Securities owned by each such person, and under such circumstances, the Company will not be subject to the payment of Liquidated Damages in Section 2(c). In the event the Company amends the Initial Registration Statement or files a New Registration Statement, as the case may be, under clauses (i) or (ii) above, the Company will use its commercially reasonable efforts to file with the Commission, as promptly as allowed by the Commission or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration statements on such form available to the Company to register for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement, as amended, or the New Registration Statement (the “Remainder Registration Statements”). No Holder shall be named as an “underwriter” in any Registration Statement without such Holder’s prior written consent, which shall not be unreasonably withheld.

 

(b)            The Company shall use its commercially reasonable efforts to cause each Required Registration Statement to be declared effective by the Commission as soon as practicable, and, with respect to the Initial Registration Statement or the New Registration Statement, as applicable, no later than the Effectiveness Deadline, and shall use its commercially reasonable efforts to keep each Required Registration Statement continuously effective under the Securities Act until the earlier of (i) such time as all of the Registrable Securities covered by such Required Registration Statement have been publicly sold by the Holders or (ii) the date that all Registrable Securities covered by such Required Registration Statement may be sold by the Holders without volume or manner of sale restrictions under Rule 144, as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed and reasonably acceptable to the Company’s transfer agent (the “Effectiveness Period”); provided, however, if the Company does not meet the eligibility requirements for filing on Form S-3 (or any successor registration statement form) at the time of filing of a Required Registration Statement, the Effectiveness Period shall not exceed 180 days following the Effective Date. The Company shall request effectiveness of a Required Registration Statement as of 5:00 p.m., New York City time, on a Trading Day. The Company shall promptly notify the Holders via facsimile or electronic mail of a “.pdf” format data file of the effectiveness of a Registration Statement within one (1) Business Day of the Effective Date. The Company shall file a final Prospectus for a Required Registration Statement with the Commission, as required by Rule 424(b) as promptly as reasonably practicable following the Effective Date.

 

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(c)            If: (i) the Initial Registration Statement is not filed with the Commission on or prior to the Filing Deadline, (ii) the Initial Registration Statement or the New Registration Statement, as applicable, is not declared effective by the Commission (or otherwise does not become effective) for any reason on or prior to the Effectiveness Deadline, or (iii) after its Effective Date, (A) such Registration Statement ceases to be effective for any reason (including without limitation by reason of a stop order, or the Company’s failure to update the Registration Statement), to remain continuously effective as to all Registrable Securities for which it is required to be effective, or (B) the Purchaser is not permitted to utilize the Prospectus therein to resell such Registrable Securities (other than during an Allowable Grace Period), (iv) a Grace Period applicable to a Required Registration Statement exceeds the length of an Allowable Grace Period, or (v) after the Filing Deadline, and only in the event a Registration Statement is not effective or available to sell all Registrable Securities, the Purchaser is unable to sell Registrable Securities without restriction under Rule 144, (any such failure or breach in clauses (i) through (v) above being referred to as an “Event,” and, for purposes of clauses (i), (ii), (iii) or (v), the date on which such Event occurs, or for purposes of clause (iv) the date on which such Allowable Grace Period is exceeded, being referred to as an “Event Date”), and Patriot enforces its right to Liquidated Damages (as defined below) pursuant to that certain Registration Rights Agreement between the Company and Patriot (the “Patriot Registration Rights Agreement”), then in addition to any other rights the Purchaser may have hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to the Purchaser an amount in cash or shares of Common Stock, at the election of the Purchaser, as liquidated damages and not as a penalty (“Liquidated Damages”), equal to 1.0% of the aggregate purchase price paid by the Purchaser pursuant to the Purchase Agreement for any Registrable Securities held by the Purchaser on the Event Date. If the Purchaser elects to receive payment in Common Shares, the value of the Common Shares will be the closing market price on the Trading Market on the Event Date or if the Event Date is not a Trading Day, the next preceding Trading Day. The parties agree that notwithstanding anything to the contrary herein or in the Purchase Agreement, no Liquidated Damages shall be payable (i) with respect to the Purchaser if Patriot has not enforced its right to Liquidated Damages under the Patriot Registration Rights Agreement, (ii) if as of the relevant Event Date, the Registrable Securities may be sold by the Purchaser without volume or manner of sale restrictions under Rule 144, as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed and reasonably acceptable to the Company’s transfer agent, (iii) if any action or inaction taken by the Purchaser caused an Event, (iv) in the event the Purchaser is unable to lawfully sell any of its Registrable Securities (including, without limitation, in the event a Grace Period exceeds the length of an Allowable Grace Period) because of possession of material non-public information or (v) with respect to any period after the expiration of the Effectiveness Period (it being understood that this clause shall not relieve the Company of any Liquidated Damages accruing prior to the expiration of the Effectiveness Period). If the Company fails to pay any Liquidated Damages pursuant to this Section 2(c) in full within ten (10) Business Days after the date payable, the Company will pay interest on the amount of Liquidated Damages then owing to the Purchaser at a rate of 1.0% per month on an annualized basis (or such lesser maximum amount that is permitted to be paid by applicable law) to the Purchaser, accruing daily from the date such Liquidated Damages are due until such amounts, plus all such interest thereon, are paid in full. The Liquidated Damages pursuant to the terms hereof shall apply on a daily pro-rata basis for any portion of a month prior to the cure of an Event, except in the case of the first Event Date. With respect to the Purchaser, the Effectiveness Deadline for a Required Registration Statement shall be extended without default or Liquidated Damages hereunder in the event that the Company’s failure to obtain the effectiveness of the Registration Statement on a timely basis results from the failure of the Purchaser to timely provide the Company with information requested by the Company and necessary to complete the Registration Statement in accordance with the requirements of the Securities Act (in which case the Effectiveness Deadline would be extended with respect to Registrable Securities held by the Purchaser).

 

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3.             Piggyback Registration.

 

(a)            If the Company intends to file a Registration Statement covering a primary or secondary offering of any of its Common Stock or Other Securities, whether or not the sale is for its own account, which is not a registration solely to implement an employee benefit plan pursuant to a registration statement on Form S-8 (or successor form), a registration statement on Form S-4 (or successor form) or a transaction to which Rule 145 or any other similar rule of the Commission is applicable, the Company will promptly (and in any event at least ten (10) Business Days before the anticipated filing date) give written notice to the Holders of its intention to effect such a registration. The Company will effect the registration under the Securities Act of all Registrable Securities that the Holder(s) request(s) be included in such registration (a “Piggyback Registration”) by a written notice delivered to the Company within five (5) Business Days after the notice given by the Company in the preceding sentence. Subject to Section 3(b), securities requested to be included in a Company registration pursuant to this Section 3 shall be included by the Company on the same form of Registration Statement as has been selected by the Company for the securities the Company is registering for sale referred to above. The Holders shall be permitted to withdraw all or part of the Registrable Securities from the Piggyback Registration at any time at least two (2) Business Days prior to the effective date of the Registration Statement relating to such Piggyback Registration. If the Company elects to terminate any registration filed under this Section 3 prior to the effectiveness of such registration, the Company will have no obligation to register the securities sought to be included by the Holders in such registration under this Section 3. There shall be no limit to the number of Piggybank Registrations pursuant to this Section 3.

 

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(b)            If a Registration Statement under this Section 3 relates to an underwritten offering and the managing underwriter(s) advise(s) the Company that in its or their reasonable opinion the number of securities requested to be included in such offering exceeds the number which can be sold without adversely affecting the marketability of such offering (including an adverse effect on the per share offering price), the Company will include in such registration or Prospectus only such number of securities that in the reasonable opinion of such underwriter(s) can be sold without adversely affecting the marketability of the offering (including an adverse effect on the per share offering price), which securities will be so included in the following order of priority: (i) first, the Common Stock and other securities the Company proposes to sell, (ii) second, the Registrable Securities of the Holders who have requested inclusion of Registrable Securities pursuant to this Section 3, pro rata on the basis of the aggregate number of such securities or shares owned by each such person, or as such Holders may otherwise agree, and (iii) third, any other securities of the Company that have been requested to be so included, subject to the terms of this Agreement. The Company shall select the investment banking firm or firms to act as the lead underwriter or underwriters in connection with an underwritten offering made pursuant to this Section 3. No Holder may participate in any underwritten registration under this Section 3 unless such Holder (i) agrees to sell the Registrable Securities it desires to have covered by the underwritten offering on the basis provided in any underwriting arrangements in customary form and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

 

4.             Underwritten Shelf Offerings.

 

(a)            At any time that a shelf Registration Statement covering Registrable Securities pursuant to Section 2 or Section 3 is effective, if any Holder delivers a notice to the Company (a “Take-Down Notice”) stating that it intends to sell all or part of its Registrable Securities included by it on the shelf Registration Statement (a “Shelf Offering”), then the Company shall amend or supplement the shelf Registration Statement as may be necessary in order to enable such Registrable Securities to be distributed pursuant to the Shelf Offering (taking into account the inclusion of Registrable Securities by any other Holders pursuant to this Section 4(a)). In connection with any Shelf Offering, including any Shelf Offering that is an underwritten offering, such proposing Holder(s) shall also deliver the Take-Down Notice to all other Holders included on such shelf Registration Statement and permit each such Holder to include its Registrable Securities included on the shelf Registration Statement in the Shelf Offering if such Holder notifies the proposing Holder(s) and the Company within five (5) Business Days after delivery of the Take-Down Notice to such Holder.

 

(b)            The Company shall have no obligation to effect an underwritten offering under this Section 4 on behalf of the Holders electing to participate in such offering unless the expected gross proceeds from such offering exceed $2,000,000.

 

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(c)            If a Shelf Offering of Registrable Securities included in a Required Registration Statement is to be conducted as an underwritten offering, then the Holders of the majority of the Registrable Securities included in a Required Registration Statement shall select the investment banking firm or firms to act as the lead underwriter or underwriters in connection with such offering; provided, that such selection shall be reasonably acceptable to the Company. If, in connection with any such underwritten offering, the managing underwriter(s) advise(s) the Company that in its or their reasonable opinion the number of securities requested to be included in such offering exceeds the number which can be sold without adversely affecting the marketability of such offering (including an adverse effect on the per share offering price), the Company will include in such registration or Prospectus only such number of securities that in the reasonable opinion of such underwriter(s) can be sold without adversely affecting the marketability of the offering (including an adverse effect on the per share offering price), which securities will be so included in the following order of priority: (i) first, the Registrable Securities of the Holders who have requested registration of Registrable Securities pursuant to this Section 4, pro rata on the basis of the aggregate number of such securities or shares owned by each such person, or as the Holders may otherwise agree amongst themselves, (ii) second, the Common Stock and other securities the Company proposes to sell, and (iii) third, any other securities of the Company that have been requested to be so included, subject to the terms of this Agreement. No Holder may participate in any underwritten registration under this Section 4 unless such Holder (i) agrees to sell the Registrable Securities it desires to include in the underwritten offering on the basis provided in any underwriting arrangements in customary form and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

  

(d)            In addition to Sections (a) and (b) of this Section 4, a Shelf Offering of Registrable Securities included on a Piggyback Registration Statement initiated by Holders shall be subject to the procedures set forth in Section 3.

 

5.             Restrictions on Public Sale by Holders of Registrable Securities. Each Holder agrees, in connection with any underwritten offering of Common Stock pursuant to a Registration Statement (whether or not such Holder elected to include Registrable Securities in such Registration Statement), if requested (pursuant to a written notice) by the managing underwriter or underwriters in an underwritten offering, not to effect any public sale or distribution of any Registrable Securities (except as part of such underwritten offering), including a sale pursuant to Rule 144, or to make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any Registrable Securities, any other equity securities of the Company or any securities convertible into or exchangeable or exercisable for any equity securities of the Company, other than to an Affiliate or other Holder that has agreed to the same restriction, without the prior written consent of the Company or such underwriter, as the case may be, during the period commencing on the date of the request (which shall be no earlier than seven (7) days prior to the expected “pricing” of such offering) and continuing for not more than 180 days (with respect to an offering pursuant to the Initial Registration Statement) or 60 days after the date of the Prospectus (or Prospectus supplement if the offering is made pursuant to a “shelf” registration), or such shorter time as shall be required by the managing underwriter, pursuant to which such public offering shall be made, plus an extension period, which shall be no longer than 17 days, as may be proposed by the managing underwriter to address the regulations of the Financial Industry Regulatory Authority, Inc. (“FINRA”) regarding the publishing of research, or such lesser period as is required by the managing underwriter; provided, that, each Holder will agree to such restricted period only if all executive officers and directors of the Company enter into similar agreements, and the Company has used reasonable best efforts to cause all other holders of at least 5% of the Company’s voting securities to enter into similar agreements.

 

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6.             Registration Procedures. Subject to Section 2(c), if and whenever the Company is required to use its reasonable best efforts to effect the registration of any Registrable Securities under the Securities Act as provided in Section 2 and Section 3 hereof, the Company shall effect such registration to permit the sale of such Registrable Securities in accordance with the intended method or methods of disposition thereof, and pursuant thereto the Company shall cooperate in the sale of the securities and shall, as expeditiously as possible:

 

(a)            prepare and file with the SEC a Registration Statement or Registration Statements on such form as shall be available for the sale of the Registrable Securities by the applicable Holders thereof or by the Company in accordance with the intended method or methods of distribution thereof, and use its reasonable best efforts to cause such Registration Statement to become effective and to remain effective as provided herein (including by means of a shelf registration statement pursuant to Rule 415 under the Securities Act if so requested and if the Company is then eligible to use such registration); provided, however, that not less than three (3) Trading Days before filing a Registration Statement or Prospectus or any amendments or supplements thereto (including documents that would be incorporated or deemed to be incorporated therein by reference), the Company shall furnish or otherwise make available to the Holders and to one counsel designated by the Holders of a majority of the outstanding Registrable Securities (“Holders Counsel”), copies of all such documents proposed to be filed, which documents will be subject to the reasonable review and comment of Holders Counsel, and such other documents reasonably requested by Holders Counsel, including any comment letter(s) from the Commission, and, if requested by such counsel, provide such counsel reasonable opportunity to participate in the preparation of such Registration Statement and each Prospectus included therein and such other opportunities to conduct a reasonable investigation within the meaning of the Securities Act, including reasonable access to the Company’s books and records, officers, accountants and other advisors, in all cases subject to Section 6(p) below; provided further, however, that the Company shall not file any Registration Statement containing information to which Holders Counsel reasonably objects in good faith, unless the Company shall be advised by its counsel that the information objected to is required under the Securities Act;

 

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(b)            (i) prepare and file with the Commission such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement continuously effective as to the applicable Registrable Securities for its Effectiveness Period (except during an Allowable Grace Period) and comply in all material respects with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement; (ii) cause the related Prospectus to be supplemented by any Prospectus supplement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of the securities covered by such Registration Statement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act (except during an Allowable Grace Period); (iii) respond as promptly as reasonably practicable to any comments received from the Commission with respect to each Registration Statement or any amendment thereto and, as promptly as reasonably possible, provide the Holders Counsel true and complete copies of all correspondence from and to the Commission relating to such Registration Statement that pertains to the Holders as “Selling Shareholders”; and (iv) comply in all material respects with the applicable provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by a Registration Statement until such time as all of such Registrable Securities shall have been disposed of (subject to the terms of this Agreement) in accordance with the intended methods of disposition by the Holders thereof as set forth in such Registration Statement as so amended or in such Prospectus as so supplemented; provided, that each Holder shall be responsible for the delivery of the Prospectus to the Persons to whom such Holder sells any of the Registrable Securities (including in accordance with Rule 172 under the Securities Act), and each Holder agrees to dispose of Registrable Securities in compliance with applicable federal and state securities laws. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 6(b)) by reason of the Company filing a report on Form 10- K, Form 10-Q or Form 8- K or any analogous report under the Exchange Act, the Company shall have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the Commission as promptly as practicable.

 

(c)            notify each selling Holder, Holders Counsel and the managing underwriters, if any, promptly, and (if requested by any such Person) confirm such notice in writing, (i) when a Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to a Registration Statement or related Prospectus or for additional information, (iii) of the issuance by the Commission of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, and (v) if the Company has knowledge of the happening of any event that makes any statement made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in such Registration Statement, Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (which notice shall notify the selling Holders only of the occurrence of such an event and shall provide no additional information regarding such event to the extent such information would constitute material non-public information);

 

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(d)            use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement, or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction at the earliest date reasonably practical;

 

(e)            if requested by the managing underwriters, if any, or the Purchaser or the Holders of a majority of the then outstanding Registrable Securities being sold in connection with an underwritten offering, promptly include in a Prospectus supplement or post-effective amendment such information as the managing underwriters, if any, and the Purchaser or such Holders may reasonably request in order to permit the intended method of distribution of such securities and make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received such request; provided, however, that the Company shall not be required to take any actions under this Section 6(e) that are not, in the opinion of counsel for the Company, in compliance with applicable law;

 

(f)             furnish or make available to each selling Holder, Holders Counsel and each managing underwriter, if any, without charge, at least one conformed copy of the Registration Statement, the Prospectus and Prospectus supplement(s), if applicable, and each post-effective amendment thereto, including financial statements (but excluding schedules, all documents incorporated or deemed to be incorporated therein by reference, and all exhibits, unless requested in writing by such Holder, counsel or underwriter);

 

(g)            promptly deliver to each selling Holder, Holders Counsel, and the underwriters, if any, without charge, as many copies of the Prospectus or Prospectuses (including each form of Prospectus) and each amendment or supplement thereto as such Persons may reasonably request from time to time in connection with the distribution of the Registrable Securities; and the Company, subject to the last paragraph of this Section 6, hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any such amendment or supplement thereto;

 

(h)            prior to any public offering, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders, the underwriters, if any, and Holders Counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or “Blue Sky” laws of such jurisdictions within the United States as any seller or underwriter reasonably requests in writing and to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to take any other action that may be necessary or advisable to enable such Holders to consummate the disposition of such Registrable Securities in such jurisdiction; provided, however, that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it is not then so qualified or (ii) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject;

 

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(i)             cooperate with the selling Holders and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates (not bearing any legends) representing Registrable Securities to be sold after receiving written representations from each selling Holder that the Registrable Securities represented by the certificates so delivered by such Holder will be transferred in accordance with the Registration Statement, and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters, if any, or such Holders may request at least two (2) Business Days prior to any sale of Registrable Securities in a firm commitment public offering, but in any other such sale, within ten (10) Business Days prior to having to issue the securities;

 

(j)             upon the occurrence of, and its knowledge of, any event contemplated by Sections 6(c)(ii)-(v) above, as promptly as practicable, as applicable: (i) use its commercially reasonable efforts to prevent the issuance of any stop order or obtain its withdrawal at the earliest possible moment if the stop order has been issued, or (ii) prepare a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder, such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

 

(k)            prior to the effective date of the Registration Statement relating to the Registrable Securities, provide a CUSIP number for the Registrable Securities;

 

(l)             provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by such Registration Statement from and after a date not later than the effective date of such Registration Statement;

 

(m)           use its commercially reasonable efforts to cause all Registrable Securities to be offered (i) in connection with the Initial Registration Statement to be listed on a Trading Market (other than OTC Bulletin Board) and (ii) in connection with any other public offering, to be listed on each Trading Market on which securities of the same series or class issued by the Company are then listed, or if no such similar securities are then listed, on a Trading Market (other than the OTC Bulletin Board) selected by the Company, as the case may be, prior to the effectiveness of the relevant Registration Statement; provided, however, if the Registrable Securities that are the subject of an effective Registration Statement are not listed on a Trading Market (other than the OTC Bulletin Board) by the date that is four years and six months following the Closing Date, while continuing to use its commercially reasonable efforts to cause all such Registrable Securities to be listed on a Trading Market (other than the OTC Bulletin Board), the Company shall use commercially reasonable efforts to promptly cause all such Registrable Securities to be qualified for trading in an over-the-counter market operated by OTC Markets Group, Inc.;

 

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(n)            with respect to any sale of Registrable Securities pursuant to a firm commitment underwritten offering, enter into such agreements (including an underwriting agreement in form, scope and substance as is customary in underwritten offerings) reasonably requested by the Purchaser or the Holders of a majority of the Registrable Securities being sold in connection therewith (including those reasonably requested by the managing underwriters, if any) to expedite or facilitate the disposition of such Registrable Securities, and in such connection, (i) make such representations and warranties to the selling Holders and the underwriters, if any, with respect to the business of the Company and its subsidiaries, and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings, and, if true, confirm the same if and when requested, (ii) use its commercially reasonable efforts to furnish to the selling Holders opinions of counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if any, and Holders Counsel), addressed to each selling Holder of Registrable Securities and each of the underwriters, if any, covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such counsel and underwriters, (iii) use its commercially reasonable efforts to obtain “cold comfort” letters and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement) who have certified the financial statements included in such Registration Statement, addressed to each selling Holder of Registrable Securities (unless such accountants shall be prohibited from so addressing such letters by applicable standards of the accounting profession) and each of the underwriters, if any, such letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters in connection with underwritten offerings and (iv) deliver such documents and certificates as may be reasonably requested by the Purchaser or the Holders of a majority of the Registrable Securities being sold pursuant to such Registration Statement, Holders Counsel and the managing underwriters, if any, to evidence the continued validity of the representations and warranties made pursuant to Section 6(n)(i) above and to evidence compliance with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company. The above shall be done at each closing under such underwriting or similar agreement, or as and to the extent required thereunder;

 

(o)            make available for inspection by a representative of the selling Holder of Registrable Securities, any underwriter participating in any such disposition of Registrable Securities, if any, and any attorneys or accountants retained by such selling Holders or underwriter, at the offices where normally kept, during reasonable business hours, all financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries, and cause the officers, directors and employees of the Company and its subsidiaries to supply all information in each case reasonably requested by any such representative, underwriter, attorney or accountant in connection with such Registration Statement; provided, however, that any information that is not generally publicly available at the time of delivery of such information shall be kept confidential by such Persons unless (i) disclosure of such information is required by court or administrative order, (ii) disclosure of such information, in the opinion of counsel to such Person, is required by law or applicable legal process, or (iii) such information becomes generally available to the public other than as a result of a non-permitted disclosure or failure to safeguard by such Person. In the case of a proposed disclosure pursuant to (i) or (ii) above, such Person shall be required to give the Company written notice of the proposed disclosure prior to such disclosure (to the extent permitted by law) and, if requested by the Company, assist the Company in seeking to prevent or limit the proposed disclosure. Without limiting the foregoing, no such information shall be used by such Person as the basis for any market transactions in securities of the Company or its subsidiaries in violation of law;

 

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(p)            cause its officers to use their commercially reasonable efforts to support the marketing of the Registrable Securities covered by the Registration Statement (including, without limitation, participation in “road shows”);

 

(q)            cooperate with each seller of Registrable Securities and each underwriter or agent participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the FINRA; and

 

(r)            if the Company becomes eligible to use Form S-3 during the term of this Agreement, the Company shall use its commercially reasonable efforts to maintain eligibility for use of Form S-3 (or any successor form thereto) for the registration of the resale of the Registrable Securities.

 

Notwithstanding anything to the contrary herein, at any time after the Registration Statement has been declared effective by the Commission, the Company may delay the disclosure of material non-public information concerning the Company if the disclosure of such information at the time is not, in the good faith judgment of the Company, in the best interests of the Company (such delay, a “Grace Period”). During the Grace Period, the Company shall not be required to maintain the effectiveness of any Registration Statement filed hereunder and, in any event, Holders shall suspend sales of Registrable Securities pursuant to such Registration Statements during the pendency of the Grace Period provided, the Company shall promptly (i) notify the Purchaser in writing of the existence of material non-public information giving rise to a Grace Period or the need to file a post-effective amendment, as applicable, and the date on which such Grace Period will begin, (ii) use commercially reasonable efforts to terminate a Grace Period as promptly as practicable provided that such termination is, in the good faith judgment of the Company, in the best interest of the Company and (iii) notify the Purchaser in writing of the date on which the Grace Period ends; provided, further, that, with respect to a Required Registration Statement only, no single Grace Period shall exceed sixty (60) consecutive days, and during any three hundred sixty-five (365) day period, the aggregate of all Grace Periods shall not exceed an aggregate of one hundred twenty (120) days (each Grace Period complying with this provision being an “Allowable Grace Period”). For purposes of determining the length of a Grace Period, the Grace Period shall be deemed to begin on and include the date the Purchaser receives the notice referred to in clause (i) above and shall end on and include the later of the date the Purchaser receives the notice referred to in clause (iii) above and the date referred to in such notice; provided, that no Grace Period shall be longer than an Allowable Grace Period. Notwithstanding anything to the contrary, the Company shall use commercially reasonable efforts to cause its transfer agent to deliver unlegended Shares to a transferee of the Purchaser in accordance with the terms of the Purchase Agreement in connection with any sale of Registrable Securities with respect to which the Purchaser has entered into an irrevocable contract for sale prior to the Purchaser’s receipt of the notice of a Grace Period and for which the Purchaser has not yet settled.

 

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The Company may require each Holder of Registrable Securities as to which any registration is being effected to furnish to the Company in writing such information required in connection with such registration regarding such seller and the distribution of such Registrable Securities as the Company may, from time to time, reasonably request in writing, and the Company may exclude from such registration the Registrable Securities of any Holder who unreasonably fails to furnish such information within a reasonable time after receiving such request.

 

Each Holder of Registrable Securities covered by such Registration Statement agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Sections 6(c)(ii), 6(c)(iii), 6(c)(iv) or 6(c)(v) hereof, such Holder will forthwith discontinue disposition of such Registrable Securities covered by such Registration Statement or Prospectus until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(j) hereof, or until it is advised in writing by the Company that the use of the applicable Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus; provided, however, that the time periods under Section 2 with respect to the length of time that the effectiveness of a Registration Statement must be maintained shall automatically be extended by the amount of time the Holder is required to discontinue disposition of such securities.

 

7.             Registration Expenses. All fees and expenses incident to the Company’s performance of or compliance with its obligations under this Agreement (excluding any underwriting discounts and selling commissions, stock transfer taxes and fees of counsel for the Holders) shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence that are the Company’s responsibility shall include, without limitation, (a) all registration and filing fees (including, without limitation, fees and expenses (i) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading, (ii) with respect to compliance with applicable state securities or Blue Sky laws (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as requested by the Holders) and (iii) if not previously paid by the Company in connection with an issuer filing, with respect to any filing that may be required to be made by any broker through which a Holder intends to make sales of Registrable Securities with FINRA pursuant to FINRA Rule 5110, so long as the broker is receiving no more than a customary brokerage commission in connection with such sale), (b) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is reasonably requested by the Holders of a majority of the Registrable Securities included in the Registration Statement), (c) messenger, telephone and delivery expenses of the Company, (d) fees and disbursements of counsel for the Company, (e) Securities Act liability insurance, if the Company so desires such insurance, (f) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement, and (g) those expenses of the selling Holders actually and reasonably incurred, including without limitation, the reasonable fees of Holders Counsel up to $50,000. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder.

 

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The Company shall not be required to pay (i) fees and disbursements of any counsel retained by any Holder or by any underwriter (except as set forth in clauses 7(a)(ii) and 7(g)), or (ii) any underwriter’s fees (including discounts, commissions or fees of underwriters, selling brokers, dealer managers or similar securities industry professionals) relating to the distribution of the Registrable Securities (other than with respect to Registrable Securities sold by the Company or as otherwise set forth in this Section 7).

 

8.             Indemnification.

 

(a)            Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless, to the fullest extent permitted by law, each Holder, the officers, directors, agents, general partners, managing members, managers, Affiliates, employees and investment advisers of such Holder, each Person who controls each such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, general partners, managing members, managers, Affiliates, employees and investment advisers of each such controlling person, and each underwriter, if any, and each Person who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) such underwriter, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and reasonable attorneys’ fees and any legal or other fees or expenses incurred by such party in connection with any investigation or Proceeding), expenses, judgments, fines, penalties, charges and amounts paid in settlement (collectively, “Losses”), as incurred, arising out of or based upon (i) any untrue statement (or alleged untrue statement) of a material fact contained in any Registration Statement, any preliminary, final or summary Prospectus, contained therein or related thereto, or any amendment or supplement thereto, together with the documents incorporated by reference therein, or any free writing prospectus utilized in connection therewith, incident to any such registration, qualification, or compliance, or based on 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, or (ii) any violation or alleged violation by the Company of the Securities Act, Exchange Act, or any state securities law or any rule or regulation thereunder, and (without limitation of the other portions of this Section 8(a)) will reimburse each such Holder and each Person who controls each such Holder, each such underwriter, and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, loss, damage, liability, or action; provided that the Company will not be liable to a Holder or underwriter in any such case to the extent that any such Losses arise out of or are based on any untrue statement or omission by such Holder or underwriter, but only to the extent that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such Registration Statement, preliminary, final or summary Prospectus, contained therein or related thereto, or any amendment or supplement thereto, together with the documents incorporated by reference therein, or any free writing prospectus utilized in connection therewith in reliance upon and in conformity with written information that is furnished to the Company by such Holder or underwriter for use therein and relates to such Holder or underwriter, as applicable. It is agreed that the indemnity agreement contained in this Section 8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld).

 

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(b)            Indemnification by Holders. Each Holder shall, notwithstanding any termination of this Agreement, indemnify and hold harmless, to the fullest extent permitted by law, severally and not jointly with any other Holders, the Company, its directors, its officers who sign the Registration Statement, and each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) and all other prospective sellers, from and against all Losses arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in such Registration Statement under which such Registrable Securities were registered under the Securities Act, any preliminary, final or summary Prospectus, contained therein or related thereto, or any amendment or supplement thereto, together with the documents incorporated by reference therein, or any free writing prospectus utilized in connection therewith, incident to any such registration, qualification, or compliance, or based on 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, and will (without limitation of the other portions of this Section 8(b)) reimburse the Company, its directors, its officers who sign the Registration Statement, and each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) and all other prospective sellers for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability, or action, in each case to the extent, but only to the extent, that such untrue statement or omission is made in such Registration Statement, preliminary, final or summary Prospectus, contained therein or related thereto, or any amendment or supplement thereto, together with the documents incorporated by reference therein, or any free writing prospectus utilized in connection therewith in reliance upon and in conformity with written information that is furnished to the Company by such Holder for inclusion therein and that relates to such Holder; provided, however, that the obligations of such Holder hereunder shall not apply to amounts paid in settlement of any such claims, losses, damages, or liabilities (or actions in respect thereof) if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably withheld); and provided, further, that the liability of such Holder shall be limited to the net proceeds received by such selling Holder from the sale of Registrable Securities covered by such Registration Statement.

 

(c)            Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of one (1) counsel reasonably satisfactory to the Indemnified Party and the payment of all reasonable and documented fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such written notice within a reasonable time of commencement of any such Proceeding shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that such failure shall have materially and adversely prejudiced the Indemnifying Party in its ability to defend such Proceeding.

 

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An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel in writing that a conflict of interest exists if the same counsel were to represent such Indemnified Party and the Indemnifying Party; provided, that the Indemnifying Party shall not be liable for the fees and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld, delayed or unreasonably conditioned. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

 

Subject to the terms of this Agreement, all documented fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section 8(c)) shall be paid to the Indemnified Party, as incurred, within twenty (20) Trading Days of written notice thereof to the Indemnifying Party; provided, that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is finally judicially determined to not be entitled to indemnification hereunder.

 

(d)            Contribution. If a claim for indemnification under Section 8(a) or 8(b) is unavailable to an Indemnified Party (other than in accordance with its terms) or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party, on the one hand, and Indemnified Party, on the other hand, in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party, on the one hand, and Indemnified Party, on the other hand, shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section 8(d) was available to such party in accordance with its terms. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in this paragraph. Notwithstanding the provisions of this Section 8(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty 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.

 

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The indemnity and contribution agreements contained in this Section 8 are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties and are not in diminution or limitation of the indemnification provisions under the Purchase Agreement.

 

9.             Miscellaneous.

 

(a)            Remedies. In the event of a breach by the Company or by a Holder of any of its obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

 

(b)            Prohibition on Other Registrations. The Company agrees (i) not to effect or initiate a registration statement for any public sale or distribution of any securities similar to those being registered pursuant to this Agreement, or any securities convertible into or exchangeable or exercisable for such securities (other than a registration solely to implement an employee benefit plan pursuant to a registration statement on Form S-8 (or successor form), a registration statement on Form S-4 (or successor form) or a transaction to which Rule 145 or any other similar rule of the Commission is applicable), during the fourteen (14) calendar days prior to, and during the sixty (60) calendar-day period beginning on, the effective date of any Registration Statement in which the Holders of Registrable Securities are participating (except as part of any such registration, if permitted).

 

(c)            Rule 144 Requirements. For so long as the Company is subject to the reporting requirements of the Exchange Act, the Company will use its commercially reasonable efforts to timely file with the Commission such reports and information required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the Commission thereunder and as the Commission may require. The Company shall furnish to any Holder of Registrable Securities forthwith upon request a written statement as to its compliance with the reporting requirements of Rule 144 (or any successor exemptive rule), the Securities Act and the Exchange Act (at any time that it is subject to such reporting requirements); a copy of its most recent annual or quarterly report; and such other reports and documents as such Person may reasonably request in availing itself of any rule or regulation of the Commission allowing it to sell any such securities without registration.

 

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(d)            Obligations of Holders and Others in a Registration. Each Holder agrees to timely furnish in writing such information regarding such Person, the securities sought to be registered and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably be required to effect the registration of such Registrable Securities (the “Requested Information”) and shall take such other action as the Company may reasonably request in connection with the registration, qualification or compliance or as otherwise provided herein. At least ten (10) Business Days prior to the first anticipated filing date of a Registration Statement, the Company shall notify each holder of the information the Company requires from such Holder if such Holder elects to have any of such Holder’s Registrable Securities included in the Registration Statement. If at least five (5) Business Days prior to the filing date, the Company has not received the Requested Information from a Holder (a “Non-Responsive Holder”), then the Company may exclude from any Registration Statement the Registrable Securities of such Non-Responsive Holder.

 

(e)            Rule 144A. The Company agrees that, upon the request of any Holder of Registrable Securities or any prospective purchaser of Registrable Securities designated by a Holder, the Company shall promptly provide (but in any case within fifteen (15) calendar days of a request) to such Holder or potential purchaser, the following information:

 

(i)           a brief statement of the nature of the business of the Company and any subsidiaries and the products and services they offer;

 

(ii)          the most recent consolidated balance sheets and profit and losses and retained earnings statements, and similar financial statements of the Company for the two (2) most recent fiscal years (such financial information shall be audited, to the extent reasonably available); and

 

(iii)         such other information about the Company, any subsidiaries, and their business, financial condition and results of operations as the requesting Holder or purchaser of such Registrable Securities shall reasonably request in order to comply with Rule 144A, as amended, and in connection therewith the anti-fraud provisions of the federal and state securities laws.

 

The Company hereby represents and warrants to any such requesting Holder and any prospective purchaser of Registrable Securities from such Holder that the information provided by the Company pursuant to this Section 9(e) will, as of their dates, not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

 

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(f)            Limitations on Subsequent Registration Rights. The Company will not enter into any agreements with any holder or prospective holder of any securities of the Company that would grant such holder or prospective holder registration rights with respect to the securities of the Company that would have priority over the Registrable Securities with respect to the inclusion of such securities in any registration. If the Company enters into an agreement that contains terms more favorable, in form or substance, to any shareholders than the terms provided to the Holders under this Agreement, then the Company will modify or revise the terms of this Agreement in order to reflect any such more favorable terms for the benefit of the Holders. Notwithstanding anything to the contrary herein, the parties acknowledge and agree that pursuant to the [●] Agreement and the Patriot Agreement, [●] and Patriot shall have registration rights that are substantially the same as those provided to the Holders under this Agreement.

 

(g)            Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities pursuant to the Registration Statement and shall sell the Registrable Securities only in accordance with a method of distribution described in the Registration Statement.

 

(h)            Discontinued Disposition. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Sections 6(c)(ii)-(iv), such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company may provide appropriate stop orders to enforce the provisions of this paragraph.

 

(i)            No Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date hereof, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof.

 

(j)            Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, or waived unless the same shall be in writing and signed by the Company and Holders of a majority of the then outstanding Registrable Securities; provided that any such amendment, modification, supplement or waiver that materially, adversely and disproportionately effects the rights or obligations of any Holder vis-à-vis the other Holders shall require the prior written consent of such Holder.

 

23

 

 

(k)            Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile or e-mail (provided the sender receives a machine-generated confirmation of successful facsimile transmission or e-mail notification or confirmation of receipt of an e-mail transmission) at the facsimile number or e-mail address specified in this Section 9(k) prior to 5:00 p.m., New York City time, on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section 9(k) on a day that is not a Trading Day or later than 5:00 p.m., New York City time, on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service with next day delivery specified, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as follows:

 

  If to the Company: Wingshooter Acquisition Corp.
    1776 Peachtree Street NW, Suite 100
    Atlanta, GA 30309
    Attn: [●]

 

If to any Holder, to such Holder’s address as set forth on the records of the Company.

 

(l)            Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties. Without limiting the generality of the foregoing, after the Acquisition, Georgia Banking Company, as successor by merger to the Company, shall assume and be bound by this Agreement, and references to the Company in this Agreement following the Acquisition shall be deemed to be references to Georgia Banking Company. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. The Company may not assign its rights (except by merger or in connection with another entity acquiring all or substantially all of the Company’s assets) or obligations hereunder without the prior written consent of all the Holders of the then outstanding Registrable Securities. The rights to have the Company register Registrable Securities pursuant to this Agreement shall be automatically assigned by the Purchaser to any transferee of the Shares only if: (a) the transferee or assignee (i) acquires Shares of the Purchaser’s Registrable Securities with an original value as of the Closing Date of not less than $5,000,000; (b) the Purchaser agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable period of time after such assignment; (c) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (i) the name and address of such transferee or assignee and (ii)  the securities with respect to which such registration rights are being transferred or assigned; (d) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the Securities Act and applicable state securities laws; and (e) at or before the time the Company received the written notice contemplated by clause (c) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein with respect to a Holder or the Purchaser. In the event of any delay in filing or effectiveness of the Registration Statement because of such assignment by the Purchaser or its transferee, the Company shall not be liable for any damages arising from such delay.

 

(m)            Execution and Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature were the original thereof.

 

24

 

 

(n)            Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Georgia applicable to contracts made and to be performed entirely within such State. Each party agrees that all proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective Affiliates, employees or agents) may be commenced on an exclusive basis in the Georgia Courts. Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of the Georgia Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of this Agreement), and hereby irrevocably waives, and agrees not to assert in any proceeding, any claim that it is not personally subject to the jurisdiction of any such Georgia Court, or that such proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(o)            Cumulative Remedies. Except as provided in Section 2(c) with respect to Liquidated Damages, the remedies provided herein are cumulative and not exclusive of any other remedies provided by law.

 

(p)            Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

(q)            Headings. The headings in this Agreement are for convenience only and shall not limit or otherwise affect the meaning hereof.

 

(r)            Entire Agreement. This Agreement and the Purchase Agreement constitute the entire agreement among the parties hereto with respect to the subject matter hereof. There are no restrictions, promises, warranties or undertakings, other than as set forth or referred to herein and in the Purchase Agreement. This Agreement supersedes all prior agreements and understandings among the parties hereto with respect to the subject matter hereof.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

25

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized signatories, as of the date first indicated above.

 

  WINGSHOOTER ACQUISITION CORP.
   
  By:                     
  [●]
   
  PURCHASER
   
  [●]

 

[Signature Page to Registration Rights Agreement]

 

 

 

 

Exhibit 4.4

 

FIRST AMENDMENT TO 

REGISTRATION RIGHTS AGREEMENT

 

This First Amendment to the Registration Rights Agreement (this “Amendment”) is entered into effective as of November 20, 2024 by and among Georgia Banking Company, Inc. (as successor in interest to Wingshooter Acquisition Corp.), a Georgia corporation (the “Company”), and each of the investors listed on Schedule A hereto (each an “Investor,” and collectively, the “Investors”).

 

WHEREAS, the Company and the Investors are parties to those certain Registration Rights Agreements, each dated December 31, 2020 (the “Registration Rights Agreements”), pursuant to which the Company granted to the Investors and any subsequent Holder (as defined in the respective Registration Rights Agreements) certain rights in respect of the registration of the Company’s securities issued or issuable to each Investor; and

 

WHEREAS, the Company and the Investors have agreed to amend the Registration Rights Agreements as provided for herein;

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this Amendment, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Investors agree as follows:

 

1.              Amendment of Section 1. Section 1 of the Registration Rights Agreements, definition of Filing Deadline, is hereby amended and restated to read as follows:

 

“Filing Deadline” means, with respect to the Initial Registration Statement required to be filed pursuant to Section 2(a), the date that is the fifth (5th) anniversary of the Closing Date;1 provided that if the Filing Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business, the Filing Deadline shall be extended to the next Business Day on which the Commission is open for business.

 

2.              Limitation of Amendment. Except as expressly set forth herein, this Amendment shall not be deemed to waive, amend or modify any term or condition of the Registration Rights Agreements, each of which is hereby ratified and reaffirmed and shall remain in full force and effect, nor to serve as a consent to any matter prohibited by the terms and conditions thereof.

 

3.              Counterparts. This Amendment may be executed in any number of counterparts and any party hereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which, taken together, will be deemed but one and the same agreement.

 

4.              Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Georgia applicable to contracts made and to be performed entirely within such State.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

1 Note to Draft: Fifth anniversary of the closing date is February 17, 2026.

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized signatories, as of the date first indicated above.

 

  COMPANY:
   
  GEORGIA BANKING COMPANY, INC.
   
  By: /s/ Bartow Morgan, Jr. 
    Bartow Morgan, Jr. 
    Chief Executive Officer

 

[Signature Page to First Amendment to Registration Rights Agreements]

 

 

 

 

INVESTORS:

 

FINANCIAL HYBRID OPPORTUNITY FUND LLC,   FINANCIAL HYBRID OPPORTUNITY SPV I LLC,
a Delaware limited liability company   a Delaware limited liability company
     
  FJ CAPITAL MANAGEMENT LLC,     FJ CAPITAL MANAGEMENT LLC,
  Managing Member     Managing Member
     
By: /s/ Martin Friedman   By: /s/ Martin Friedman
Name: Martin Friedman   Name: Martin Friedman
Title: CEO   Title: CEO
     
FINANCIAL OPPORTUNITY FUND LLC,    
a Delaware limited liability company    
     
  FJ CAPITAL MANAGEMENT LLC,    
  Managing Member    
     
By: /s/ Martin Friedman    
Name: Martin Friedman    
Title: CEO    

 

[Signature Page to First Amendment to Registration Rights Agreements]

 

 

 

 

  PATRIOT FINANCIAL PARTNERS III, L.P.
   
  By: /s/ James Deutsch 
    James Deutsch, Managing Partner

 

[Signature Page to First Amendment to Registration Rights Agreements]

 

 

 

 

  /s/ Bartow Morgan, Jr. 
  Bartow Morgan, Jr.

 

[Signature Page to First Amendment to Registration Rights Agreements]

 

 

 

 

  /s/ J. Bradford Smith 
  J. Bradford Smith

 

[Signature Page to First Amendment to Registration Rights Agreements]

 

 

 

 

SCHEDULE A

 

Investors

 

Bartow Morgan, Jr. 

Financial Hybrid Opportunity Fund LLC 

Financial Hybrid Opportunity SPV I LLC, a Delaware limited liability company 

Financial Opportunity Fund LLC, a Delaware limited liability company 

J. Bradford Smith 

Patriot Financial Partners III, L.P.

 

 

 

 

Exhibit 4.5

 

SECOND AMENDMENT TO 

REGISTRATION RIGHTS AGREEMENT

 

This Second Amendment to the Registration Rights Agreement (this “Amendment”) is entered into effective as of November 24, 2025 by and among Georgia Banking Company, Inc. (as successor in interest to Wingshooter Acquisition Corp.), a Georgia corporation (the “Company”), and each of the investors listed on Schedule A hereto (each an “Investor,” and collectively, the “Investors”).

 

WHEREAS, the Company and the Investors are parties to those certain Registration Rights Agreements, each dated December 31, 2020, as amended by that certain First Amendment to Registration Rights Agreement, dated November 20, 2024 (the “Registration Rights Agreements”), pursuant to which the Company granted to the Investors and any subsequent Holder (as defined in the respective Registration Rights Agreements) certain rights in respect of the registration of the Company’s securities issued or issuable to each Investor; and

 

WHEREAS, the Company and the Investors have agreed to amend the Registration Rights Agreements as provided for herein;

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this Amendment, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Investors agree as follows:

 

1.             Amendment of Section 1. Section 1 of the Registration Rights Agreements, definition of Filing Deadline, is hereby amended and restated to read as follows:

 

“Filing Deadline” means, with respect to the Initial Registration Statement required to be filed pursuant to Section 2(a), the date that is the sixth (6th) anniversary of the Closing Date;1 provided that if the Filing Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business, the Filing Deadline shall be extended to the next Business Day on which the Commission is open for business.

 

2.             Limitation of Amendment. Except as expressly set forth herein, this Amendment shall not be deemed to waive, amend or modify any term or condition of the Registration Rights Agreements, each of which is hereby ratified and reaffirmed and shall remain in full force and effect, nor to serve as a consent to any matter prohibited by the terms and conditions thereof.

 

3.             Counterparts. This Amendment may be executed in any number of counterparts and any party hereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which, taken together, will be deemed but one and the same agreement.

 

4.             Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Georgia applicable to contracts made and to be performed entirely within such State.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

1 The sixth anniversary of the Closing Date is February 17, 2027.

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized signatories, as of the date first indicated above.

 

  COMPANY:
   
  GEORGIA BANKING COMPANY, INC.
   
  By: /s/ Bartow Morgan, Jr. 
    Bartow Morgan, Jr. 
    Chief Executive Officer

 

[Signature Page to Second Amendment to Registration Rights Agreements]

 

 

 

 

INVESTORS:

 

FINANCIAL HYBRID OPPORTUNITY FUND LLC,   FINANCIAL HYBRID OPPORTUNITY SPV I LLC,
a Delaware limited liability company   a Delaware limited liability company
     
  FJ CAPITAL MANAGEMENT LLC,     FJ CAPITAL MANAGEMENT LLC,
  Managing Member     Managing Member
     
By: /s/ Martin Friedman   By: /s/ Martin Friedman
Name: Martin Friedman   Name: Martin Friedman
Title: Managing Member   Title: Managing Member
     
FINANCIAL OPPORTUNITY FUND LLC,    
a Delaware limited liability company    
     
  FJ CAPITAL MANAGEMENT LLC,    
  Managing Member    
     
By: /s/ Martin Friedman    
Name: Martin Friedman    
Title: Managing Member    

 

[Signature Page to Second Amendment to Registration Rights Agreements]

 

 

 

 

  PATRIOT FINANCIAL PARTNERS III, L.P.
   
  By: /s/ James F Deutsch 
    James Deutsch, Managing Partner

 

[Signature Page to First Amendment to Registration Rights Agreements]

 

 

 

 

  /s/ Bartow Morgan, Jr. 
  Bartow Morgan, Jr.

 

[Signature Page to First Amendment to Registration Rights Agreements]

 

 

 

 

  /s/ J. Bradford Smith 
  J. Bradford Smith

 

[Signature Page to First Amendment to Registration Rights Agreements]

 

 

 

 

SCHEDULE A

 

Investors

 

Bartow Morgan, Jr. 

Financial Hybrid Opportunity Fund LLC 

Financial Hybrid Opportunity SPV I LLC, a Delaware limited liability company 

Financial Opportunity Fund LLC, a Delaware limited liability company 

J. Bradford Smith 

Patriot Financial Partners III, L.P.

 

 

 

 

Exhibit 4.6

 

Execution Version

 

CERTAIN CONFIDENTIAL INFORMATION (MARKED BY BRACKETS AS
“[***]”) HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH
(I) NOT MATERIAL AND (II) IS THE TYPE OF INFORMATION THAT THE
REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”) is dated as of June 17, 2026 by and between Georgia Banking Company, Inc., a Georgia corporation (the “Company”), and each of the investors identified on the signature pages hereto (individually, a “Purchaser” and collectively, the “Purchasers”).

 

WHEREAS, this Agreement is made pursuant to the Stock Purchase Agreement, dated as of June 17, 2026, by and between the Company and the Purchasers (the “Purchase Agreement”); and

 

WHEREAS, in order to induce each Purchaser to enter into the Purchase Agreement, the Company has agreed to grant each Purchaser the rights set forth below;

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:

 

1.            Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

 

“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with, such Person.

 

“Agreement” shall have the meaning set forth in the Preamble.

 

“Allowable Grace Period” has the meaning set forth in Section 6.

 

“Business Day” means a day other than a Saturday or Sunday or other day on which banks located in New York City are authorized or required by law to close.

 

“Capital Stock” means, with respect to any Person at any time, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of capital stock, securities convertible into or exchangeable or exercisable for any of its shares, interests, participations or other equivalents, partnership interests (whether general or limited), limited liability company interests, or equivalent ownership interests in or issued by such Person.

 

“Closing Date” has the meaning set forth in the Purchase Agreement.

 

“Commission” means the United States Securities and Exchange Commission.

 

 

 

 

“Common Stock” means the voting common stock of the Company, par value $0.01 per share and any securities into which such shares of voting common stock may hereinafter be reclassified.

 

“Company” shall have the meaning set forth in the Preamble.

 

“Company Securities” shall mean (i) the Common Stock and (ii) all shares existing or hereafter authorized of any class of preferred stock of the Company which has the right (subject always to the rights of any class or series of preferred stock of the Company ranking senior to or pari passu with such preferred stock) to participate in the distribution of the assets and earnings of the Company, including (without duplication) any shares of capital stock into which Company Securities may be converted (as a result of recapitalization, share exchange or similar event) or are issued with respect to Company Securities, including, without limitation, with respect to any stock split or stock dividend, or a successor security.

 

“Effective Date” means the date that the Registration Statement, filed pursuant to Section 2(a), is first declared effective by the Commission.

 

“Effectiveness Deadline” means, with respect to the Initial Registration Statement or the New Registration Statement, the fifth (5th) Trading Day after the date the Company is notified (orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not be “reviewed” or will not be subject to further review; provided that if the Effectiveness Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business, the Effectiveness Deadline shall be extended to the next Business Day on which the Commission is open for business.

 

“Effectiveness Period” shall have the meaning set forth in Section 2(b).

 

“Event” shall have the meaning set forth in Section 2(c).

 

“Event Date” shall have the meaning set forth in Section 2(c).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Existing Registration Rights Agreements” means those certain Registration Rights Agreements, by and between the Company and Patriot Financial Partners III, L.P., Bartow Morgan, Jr. and J. Bradford Smith, each dated December 31, 2020, respectively.

 

“Existing Registration Rights Holders” means Patriot Financial Partners III, L.P., Bartow Morgan, Jr. and J. Bradford Smith.

 

“Filing Deadline” means, with respect to the Initial Registration Statement required to be filed pursuant to Section 2(a), the earlier of February 17, 2027; provided that if the Filing Deadline falls on a Saturday, Sunday or other day that the Commission is closed for business, the Filing Deadline shall be extended to the next Business Day on which the Commission is open for business.

 

- 2 -

 

 

“FINRA” shall have the meaning set forth in Section 5.

 

“Fortress” means CF GBC Investors LP, a Delaware limited partnership and any of its successors and assigns that are Affiliates of CF GBC Investors LP.

 

“Georgia Courts” means the courts of the State of Georgia and the United States District Courts located in the City of Atlanta.

 

“Grace Period” shall have the meaning set forth in Section 6.

 

“Holder” or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.

 

“Holders Counsel” shall have the meaning set forth in Section 6(a).

 

“Indemnified Party” shall have the meaning set forth in Section 8(c).

 

“Indemnifying Party” shall have the meaning set forth in Section 8(c).

 

“Initial Registration Statement” shall have the meaning set forth in Section 2(a).

 

“Investor Rights Agreement” shall mean that certain Investor Rights Agreement by and the between the Company and Fortress, dated as of the date hereof.

 

“Liquidated Damages” shall have the meaning set forth in Section 2(c).

 

“Losses” shall have the meaning set forth in Section 8(a).

 

“New Registration Statement” shall have the meaning set forth in Section 2(a).

 

“New Securities” shall mean any equity (including Common Stock and preferred stock), or any securities, warrants, rights, options or debt that is convertible or exchangeable into equity or that includes an equity component (such as an “equity kicker”) (including any hybrid security) of the Company.

 

“Non-Responsive Holder” shall have the meaning set forth in Section 9(d).

 

“OTC Pink” means the marketplace for trading over-the-counter stocks provided and operated by OTC Markets Group, Inc.

 

“Other Securities” means shares of Common Stock or shares of other Capital Stock of the Company that are contractually entitled to registration rights or Capital Stock that the Company is registering pursuant to a Registration Statement.

 

“Patriot” means Patriot Financial Partners III, L.P., a Delaware limited partnership.

 

“Patriot Registration Rights Agreement” means that certain Registration Rights Agreement, as may be amended from time to time, by and between the Company and Patriot, dated as of December 31, 2020.

 

- 3 -

 

 

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Piggyback Registration” shall have the meaning set forth in Section 3(a).

 

“Principal Market” means the Trading Market on which the Common Stock is primarily listed on and quoted for trading.

 

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

“Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

 

“Purchase Agreement” shall have the meaning set forth in the Recitals.

 

“Purchaser” shall have the meaning set forth in the Preamble.

 

“Registrable Securities” means all of the Shares and any Shares issued or issuable in respect of the Shares by way of conversion, exchange, stock dividend, split or combination, recapitalization, merger, consolidation, other reorganization or otherwise, provided that the Shares shall cease to be Registrable Securities upon the earliest to occur of the following: (A) a sale pursuant to a Registration Statement or Rule 144 under the Securities Act (in which case, only such security sold shall cease to be a Registrable Security); (B) becoming eligible for sale without time, volume or manner of sale restrictions by the Holders under Rule 144; (C) if such Shares have ceased to be outstanding; (D) the date a Registration Statement becomes effective including such Shares; or (E) if such Shares have been sold in a private transaction in which the Holder’s rights under this Agreement have not been assigned to the transferee.

 

“Registration Statements” means any one or more registration statements of the Company filed under the Securities Act that covers the resale of any of the Registrable Securities pursuant to the provisions of this Agreement (including without limitation the Prospectus, the Initial Registration Statement, the New Registration Statement and any Remainder Registration Statements), amendments and supplements to such Registration Statements, including post-effective amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in such Registration Statements.

 

“Requested Information” shall have the meaning set forth in Section 9(d).

 

- 4 -

 

 

“Required Registration Statement” means any Initial Registration Statement, New Registration Statement, or Remainder Registration Statement.

 

“Remainder Registration Statement” shall have the meaning set forth in Section 2(a).

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any successor rule thereto.

 

“Rule 144A” means Rule 144A promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any successor rule thereto.

 

“Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any successor rule thereto.

 

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any successor rule thereto.

 

“SEC Guidance” means (i) any publicly available written guidance, comments, requirements or requests of the Commission staff and (ii) the Securities Act.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Shares” means the shares of Common Stock issued or issuable to the Purchasers pursuant to the Purchase Agreement.

 

“Shelf Offering” shall have the meaning set forth in Section 4(a).

 

“Take-Down Notice” shall have the meaning set forth in Section 4(a).

 

“Trading Day” means (i) a day on which the Common Stock is listed or quoted and traded on its Principal Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported in the OTC Pink; provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

 

“Trading Market” means whichever of the New York Stock Exchange, the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.

 

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2.             Mandatory Registration. Solely with respect to Fortress:

 

(a)            On or prior to the Filing Deadline, the Company shall prepare and file with the Commission a Registration Statement covering the resale of all of the Registrable Securities held by Fortress not already covered by an existing and effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 or, if Rule 415 is not available for offers and sales of the Registrable Securities held by Fortress, by such other means of distribution of Registrable Securities held by Fortress as the Company may reasonably determine (the “Initial Registration Statement”). Notwithstanding the registration obligations set forth in this Section 2, in the event that the Commission informs the Company that all such Registrable Securities held by Fortress and any registrable securities held by the Existing Registration Rights Holders cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company agrees to promptly (i) inform Fortress and, as applicable, file the Initial Registration Statement, or use its commercially reasonable efforts to file amendments to the Initial Registration Statement as required by the Commission and/or (ii) withdraw the Initial Registration Statement and file a new registration statement (a “New Registration Statement”), in either case covering the maximum number of Registrable Securities held by Fortress permitted to be registered by the Commission, on such form available to the Company to register for resale the Registrable Securities held by Fortress as a secondary offering; provided, that prior to filing such amendment or New Registration Statement, the Company shall be obligated to use its commercially reasonable efforts to advocate with the Commission for the registration of all of the Registrable Securities held by Fortress in accordance with the SEC Guidance, including without limitation, Securities Act Rules Compliance and Disclosure Interpretation 612.09, or any successor thereto. Notwithstanding any other provision of this Agreement, if any SEC Guidance sets forth a limitation of the number of Registrable Securities held by Fortress (including registrable securities held by the Existing Registration Rights Holders) permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used commercial reasonable efforts to reasonably advocate with the Commission for the registration of all or a greater number of Registrable Securities held by Fortress), the number of Registrable Securities held by Fortress to be registered on such Registration Statement will be reduced pro rata on the basis of the aggregate number of Registrable Securities held by Fortress and registrable securities held by Existing Registration Rights Holders, and under such circumstances, the Company will not be subject to the payment of Liquidated Damages in Section 2(c). In the event the Company amends the Initial Registration Statement or files a New Registration Statement, as the case may be, under clauses (i) or (ii) above, the Company will use its commercially reasonable efforts to file with the Commission, as promptly as allowed by the Commission or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration statements on such form available to the Company to register for resale those Registrable Securities held by Fortress that were not registered for resale on the Initial Registration Statement, as amended, or the New Registration Statement (the “Remainder Registration Statements”). Fortress shall not be named as an “underwriter” in any Registration Statement without Fortress’s prior written consent, which shall not be unreasonably withheld.

 

(b)            The Company shall use its commercially reasonable efforts to cause each Required Registration Statement to be declared effective by the Commission as soon as practicable, and, with respect to the Initial Registration Statement or the New Registration Statement, as applicable, no later than the Effectiveness Deadline, and shall use its commercially reasonable efforts to keep each Required Registration Statement continuously effective under the Securities Act until the earlier of (i) such time as all of the Registrable Securities held by Fortress covered by such Required Registration Statement have been publicly sold by Fortress or (ii) the date that all Registrable Securities held by Fortress covered by such Required Registration Statement may be sold by Fortress without volume or manner of sale restrictions under Rule 144, as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed and reasonably acceptable to the Company’s transfer agent (the “Effectiveness Period”); provided, however, if the Company does not meet the eligibility requirements for filing on Form S-3 (or any successor registration statement form) at the time of filing of a Required Registration Statement, the Effectiveness Period shall not exceed 180 days following the Effective Date. The Company shall request effectiveness of a Required Registration Statement as of 5:00 p.m., New York City time, on a Trading Day. The Company shall promptly notify Fortress via electronic mail of a “.pdf” format data file of the effectiveness of a Registration Statement within one (1) Business Day of the Effective Date. The Company shall file a final Prospectus for a Required Registration Statement with the Commission, as required by Rule 424(b) as promptly as reasonably practicable following the Effective Date.

 

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(c)            If: (i) the Initial Registration Statement is not filed with the Commission on or prior to the Filing Deadline, (ii) the Initial Registration Statement or the New Registration Statement, as applicable, is not declared effective by the Commission (or otherwise does not become effective) for any reason on or prior to the Effectiveness Deadline, or (iii) after its Effective Date, (A) such Registration Statement ceases to be effective for any reason (including without limitation by reason of a stop order, or the Company’s failure to update the Registration Statement), to remain continuously effective as to all Registrable Securities held by Fortress for which it is required to be effective, or (B) Fortress is not permitted to utilize the Prospectus therein to resell such Registrable Securities held by Fortress (other than during an Allowable Grace Period), (iv) a Grace Period applicable to a Required Registration Statement exceeds the length of an Allowable Grace Period, or (v) after the Filing Deadline, and only in the event a Registration Statement is not effective or available to sell all Registrable Securities held by Fortress, Fortress is unable to sell Registrable Securities held by Fortress without restriction under Rule 144, (any such failure or breach in clauses (i) through (v) above being referred to as an “Event,” and, for purposes of clauses (i), (ii), (iii) or (v), the date on which such Event occurs, or for purposes of clause (iv) the date on which such Allowable Grace Period is exceeded, being referred to as an “Event Date”), and Patriot enforces its right to Liquidated Damages (as defined below) pursuant to Patriot Registration Rights Agreement, then in addition to any other rights Fortress may have hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to Fortress an amount in cash or shares of Common Stock, at the election of Fortress, as liquidated damages and not as a penalty (“Liquidated Damages”), equal to 1.0% of the aggregate purchase price paid by Fortress pursuant to the Purchase Agreement for any Registrable Securities held by Fortress on the Event Date. If Fortress elects to receive payment in Common Stock, the value of the Common Stock will be the closing market price on the Trading Market on the Event Date or if the Event Date is not a Trading Day, the next preceding Trading Day. The parties agree that notwithstanding anything to the contrary herein or in the Purchase Agreement, no Liquidated Damages shall be payable (i) with respect to Fortress if Patriot has not enforced its right to Liquidated Damages under the Patriot Registration Rights Agreement, (ii) if as of the relevant Event Date, the Registrable Securities held by Fortress may be sold by Fortress without volume or manner of sale restrictions under Rule 144, as determined by counsel to the Company pursuant to a written opinion letter to such effect, addressed and reasonably acceptable to the Company’s transfer agent, (iii) if any action or inaction taken by Fortress caused an Event, (iv) in the event Fortress is unable to lawfully sell any of its Registrable Securities (including, without limitation, in the event a Grace Period exceeds the length of an Allowable Grace Period) because of possession of material non-public information or (v) with respect to any period after the expiration of the Effectiveness Period (it being understood that this clause shall not relieve the Company of any Liquidated Damages accruing prior to the expiration of the Effectiveness Period). If the Company fails to pay any Liquidated Damages pursuant to this Section 2(c) in full within ten (10) Business Days after the date payable, the Company will pay interest on the amount of Liquidated Damages then owing to Fortress at a rate of 1.0% per month on an annualized basis (or such lesser maximum amount that is permitted to be paid by applicable law) to Fortress, accruing daily from the date such Liquidated Damages are due until such amounts, plus all such interest thereon, are paid in full. The Liquidated Damages pursuant to the terms hereof shall apply on a daily pro-rata basis for any portion of a month prior to the cure of an Event, except in the case of the first Event Date. With respect to Fortress, the Effectiveness Deadline for a Required Registration Statement shall be extended without default or Liquidated Damages hereunder in the event that the Company’s failure to obtain the effectiveness of the Registration Statement on a timely basis results from the failure of Fortress to timely provide the Company with information requested by the Company and necessary to complete the Registration Statement in accordance with the requirements of the Securities Act (in which case the Effectiveness Deadline would be extended with respect to Registrable Securities held by Fortress).

 

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3.             Piggyback Registration.

 

(a)            If the Company intends to file a Registration Statement covering a primary or secondary offering of any of its Common Stock or Other Securities, whether or not the sale is for its own account, which is not a registration solely to implement an employee benefit plan pursuant to a registration statement on Form S-8 (or successor form), a registration statement on Form S-4 (or successor form) or a transaction to which Rule 145 or any other similar rule of the Commission is applicable, the Company will promptly (and in any event at least ten (10) Business Days before the anticipated filing date) give written notice to the Holders of its intention to effect such a registration. The Company will effect the registration under the Securities Act of all Registrable Securities that the Holder(s) request(s) be included in such registration (a “Piggyback Registration”) by a written notice delivered to the Company within five (5) Business Days after the notice given by the Company in the preceding sentence. Subject to Section 3(b), securities requested to be included in a Company registration pursuant to this Section 3 shall be included by the Company on the same form of Registration Statement as has been selected by the Company for the securities the Company is registering for sale referred to above. The Holders shall be permitted to withdraw all or part of the Registrable Securities from the Piggyback Registration at any time at least two (2) Business Days prior to the effective date of the Registration Statement relating to such Piggyback Registration. If the Company elects to terminate any registration filed under this Section 3 prior to the effectiveness of such registration, the Company will have no obligation to register the securities sought to be included by the Holders in such registration under this Section 3. There shall be no limit to the number of Piggyback Registrations pursuant to this Section 3.

 

(b)            If a Registration Statement under this Section 3 relates to an underwritten offering and the managing underwriter(s) advise(s) the Company that in its or their reasonable opinion the number of securities requested to be included in such offering exceeds the number which can be sold without adversely affecting the marketability of such offering (including an adverse effect on the per share offering price), the Company will include in such registration or Prospectus only such number of securities that in the reasonable opinion of such underwriter(s) can be sold without adversely affecting the marketability of the offering (including an adverse effect on the per share offering price), which securities will be so included in the following order of priority: (i) first, the Common Stock and other securities the Company proposes to sell, (ii) second, the Registrable Securities of the Holders who have requested inclusion of Registrable Securities pursuant to this Section 3, pro rata on the basis of the aggregate number of such Registrable Securities held by Fortress and registrable securities held by such Holders, or as such Holders may otherwise agree, and (iii) third, any other securities of the Company that have been requested to be so included, subject to the terms of this Agreement. The Company shall select the investment banking firm or firms to act as the lead underwriter or underwriters in connection with an underwritten offering made pursuant to this Section 3. No Holder may participate in any underwritten registration under this Section 3 unless such Holder (i) agrees to sell the Registrable Securities it desires to have covered by the underwritten offering on the basis provided in any underwriting arrangements in customary form and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

 

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4.             Underwritten Shelf Offerings.

 

(a)            At any time that a shelf Registration Statement covering Registrable Securities pursuant to Section 2 or Section 3 is effective, if any Holder delivers a notice to the Company (a “Take-Down Notice”) stating that it intends to sell all or part of its Registrable Securities included by it on the shelf Registration Statement (a “Shelf Offering”), then the Company shall amend or supplement the shelf Registration Statement as may be necessary in order to enable such Registrable Securities to be distributed pursuant to the Shelf Offering (taking into account the inclusion of Registrable Securities by any other Holders pursuant to this Section 4(a)). In connection with any Shelf Offering, including any Shelf Offering that is an underwritten offering, such proposing Holder(s) shall also deliver the Take-Down Notice to all other Holders included on such shelf Registration Statement and permit each such Holder to include its Registrable Securities included on the shelf Registration Statement in the Shelf Offering if such Holder notifies the proposing Holder(s) and the Company within five (5) Business Days after delivery of the Take-Down Notice to such Holder.

 

(b)            The Company shall have no obligation to effect an underwritten offering under this Section 4 on behalf of the Holders electing to participate in such offering unless the expected gross proceeds from such offering exceed $2,000,000.

 

(c)            If a Shelf Offering of Registrable Securities included in a Required Registration Statement is to be conducted as an underwritten offering, then the Holders of the majority of the Registrable Securities included in a Required Registration Statement shall select the investment banking firm or firms to act as the lead underwriter or underwriters in connection with such offering; provided, that such selection shall be reasonably acceptable to the Company. If, in connection with any such underwritten offering, the managing underwriter(s) advise(s) the Company that in its or their reasonable opinion the number of securities requested to be included in such offering exceeds the number which can be sold without adversely affecting the marketability of such offering (including an adverse effect on the per share offering price), the Company will include in such registration or Prospectus only such number of securities that in the reasonable opinion of such underwriter(s) can be sold without adversely affecting the marketability of the offering (including an adverse effect on the per share offering price), which securities will be so included in the following order of priority: (i) first, the Registrable Securities of the Holders who have requested registration of Registrable Securities pursuant to this Section 4, pro rata on the basis of the aggregate number of such Registrable Securities held by Fortress and registrable securities held by such Holders, or as the Holders may otherwise agree amongst themselves, (ii) second, the Common Stock and other securities the Company proposes to sell, and (iii) third, any other securities of the Company that have been requested to be so included, subject to the terms of this Agreement. No Holder may participate in any underwritten registration under this Section 4 unless such Holder (i) agrees to sell the Registrable Securities it desires to include in the underwritten offering on the basis provided in any underwriting arrangements in customary form and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements.

 

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(d)            In addition to Sections (a) and (b) of this Section 4, a Shelf Offering of Registrable Securities included on a Piggyback Registration Statement initiated by Holders shall be subject to the procedures set forth in Section 3.

 

5.             Restrictions on Public Sale by Holders of Registrable Securities. Each Holder agrees, in connection with any underwritten offering of Common Stock pursuant to a Registration Statement (whether or not such Holder elected to include Registrable Securities in such Registration Statement), if requested (pursuant to a written notice) by the managing underwriter or underwriters in an underwritten offering, not to effect any public sale or distribution of any Registrable Securities (except as part of such underwritten offering), including a sale pursuant to Rule 144, or to make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any Registrable Securities, any other equity securities of the Company or any securities convertible into or exchangeable or exercisable for any equity securities of the Company, other than to an Affiliate or other Holder that has agreed to the same restriction, without the prior written consent of the Company or such underwriter, as the case may be, during the period commencing on the date of the request (which shall be no earlier than seven (7) days prior to the expected “pricing” of such offering) and continuing for not more than 180 days (with respect to an offering pursuant to the Initial Registration Statement) or 60 days after the date of the Prospectus (or Prospectus supplement if the offering is made pursuant to a “shelf” registration), or such shorter time as shall be required by the managing underwriter, pursuant to which such public offering shall be made, plus an extension period, which shall be no longer than 17 days, as may be proposed by the managing underwriter to address the regulations of the Financial Industry Regulatory Authority, Inc. (“FINRA”) regarding the publishing of research, or such lesser period as is required by the managing underwriter; provided, that, each Holder will agree to such restricted period only if all executive officers and directors of the Company enter into similar agreements, and the Company has used reasonable best efforts to cause all other holders of at least 5% of the Company’s voting securities to enter into similar agreements.

 

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6.             Registration Procedures. Subject to Section 2(c), if and whenever the Company is required to use its reasonable best efforts to effect the registration of any Registrable Securities under the Securities Act as provided in Section 2 and Section 3 hereof, the Company shall effect such registration to permit the sale of such Registrable Securities in accordance with the intended method or methods of disposition thereof, and pursuant thereto the Company shall cooperate in the sale of the securities and shall, as expeditiously as possible:

 

(a)            prepare and file with the SEC a Registration Statement or Registration Statements on such form as shall be available for the sale of the Registrable Securities by the applicable Holders thereof or by the Company in accordance with the intended method or methods of distribution thereof, and use its reasonable best efforts to cause such Registration Statement to become effective and to remain effective as provided herein (including by means of a shelf registration statement pursuant to Rule 415 under the Securities Act if so requested and if the Company is then eligible to use such registration); provided, however, that not less than three (3) Trading Days before filing a Registration Statement or Prospectus or any amendments or supplements thereto (including documents that would be incorporated or deemed to be incorporated therein by reference), the Company shall furnish or otherwise make available to such Holders and to one counsel designated by such Holders of a majority of the outstanding Registrable Securities (“Holders Counsel”), copies of all such documents proposed to be filed, which documents will be subject to the reasonable review and comment of Holders Counsel, and such other documents reasonably requested by Holders Counsel, including any comment letter(s) from the Commission, and, if requested by such counsel, provide such counsel reasonable opportunity to participate in the preparation of such Registration Statement and each Prospectus included therein and such other opportunities to conduct a reasonable investigation within the meaning of the Securities Act, including reasonable access to the Company’s books and records, officers, accountants and other advisors, in all cases subject to Section 6(p) below; provided further, however, that the Company shall not file any Registration Statement containing information to which Holders Counsel reasonably objects in good faith, unless the Company shall be advised by its counsel that the information objected to is required under the Securities Act;

 

(b)            (i) prepare and file with the Commission such amendments and post-effective amendments to each Registration Statement as may be necessary to keep such Registration Statement continuously effective as to the applicable Registrable Securities for its Effectiveness Period (except during an Allowable Grace Period) and comply in all material respects with the provisions of the Securities Act with respect to the disposition of all securities covered by such Registration Statement; (ii) cause the related Prospectus to be supplemented by any Prospectus supplement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of the securities covered by such Registration Statement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act (except during an Allowable Grace Period); (iii) respond as promptly as reasonably practicable to any comments received from the Commission with respect to each Registration Statement or any amendment thereto and, as promptly as reasonably possible, provide the Holders Counsel true and complete copies of all correspondence from and to the Commission relating to such Registration Statement that pertains to the Holders as “Selling Shareholders”; and (iv) comply in all material respects with the applicable provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by a Registration Statement until such time as all of such Registrable Securities shall have been disposed of (subject to the terms of this Agreement) in accordance with the intended methods of disposition by the Holders thereof as set forth in such Registration Statement as so amended or in such Prospectus as so supplemented; provided, that each Holder shall be responsible for the delivery of the Prospectus to the Persons to whom such Holder sells any of the Registrable Securities (including in accordance with Rule 172 under the Securities Act), and each Holder agrees to dispose of Registrable Securities in compliance with applicable federal and state securities laws. In the case of amendments and supplements to a Registration Statement which are required to be filed pursuant to this Agreement (including pursuant to this Section 6(b)) by reason of the Company filing a report on Form 10- K, Form 10-Q or Form 8- K or any analogous report under the Exchange Act, the Company shall have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the Commission as promptly as practicable.

 

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(c)            notify each selling Holder, Holders Counsel and the managing underwriters, if any, promptly, and (if requested by any such Person) confirm such notice in writing, (i) when a Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the Commission or any other federal or state governmental authority for amendments or supplements to a Registration Statement or related Prospectus or for additional information, (iii) of the issuance by the Commission of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, and (v) if the Company has knowledge of the happening of any event that makes any statement made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in such Registration Statement, Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading (which notice shall notify the selling Holders only of the occurrence of such an event and shall provide no additional information regarding such event to the extent such information would constitute material non-public information);

 

(d)            use its commercially reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement, or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction at the earliest date reasonably practical;

 

(e)            if requested by the managing underwriters, if any, or the Purchasers or the Holders of a majority of the then outstanding Registrable Securities being sold in connection with an underwritten offering, promptly include in a Prospectus supplement or post-effective amendment such information as the managing underwriters, if any, and the Purchasers or such Holders may reasonably request in order to permit the intended method of distribution of such securities and make all required filings of such Prospectus supplement or such post-effective amendment as soon as practicable after the Company has received such request; provided, however, that the Company shall not be required to take any actions under this Section 6(e) that are not, in the opinion of counsel for the Company, in compliance with applicable law;

 

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(f)            furnish or make available to each selling Holder, Holders Counsel and each managing underwriter, if any, without charge, at least one conformed copy of the Registration Statement, the Prospectus and Prospectus supplement(s), if applicable, and each post-effective amendment thereto, including financial statements (but excluding schedules, all documents incorporated or deemed to be incorporated therein by reference, and all exhibits, unless requested in writing by such Holder, counsel or underwriter);

 

(g)            promptly deliver to each selling Holder, Holders Counsel, and the underwriters, if any, without charge, as many copies of the Prospectus or Prospectuses (including each form of Prospectus) and each amendment or supplement thereto as such Persons may reasonably request from time to time in connection with the distribution of the Registrable Securities; and the Company, subject to the last paragraph of this Section 6, hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders and the underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any such amendment or supplement thereto;

 

(h)            prior to any public offering, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders, the underwriters, if any, and Holders Counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Securities for offer and sale under the securities or “Blue Sky” laws of such jurisdictions within the United States as any seller or underwriter reasonably requests in writing and to keep each such registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to take any other action that may be necessary or advisable to enable such Holders to consummate the disposition of such Registrable Securities in such jurisdiction; provided, however, that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it is not then so qualified or (ii) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject;

 

(i)            cooperate with the selling Holders and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates (not bearing any legends) representing Registrable Securities to be sold after receiving written representations from each selling Holder that the Registrable Securities represented by the certificates so delivered by such Holder will be transferred in accordance with the Registration Statement, and enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters, if any, or such Holders may request at least two (2) Business Days prior to any sale of Registrable Securities in a firm commitment public offering, but in any other such sale, within ten (10) Business Days prior to having to issue the securities;

 

(j)            upon the occurrence of, and its knowledge of, any event contemplated by Sections 6(c)(ii)-(v) above, as promptly as practicable, as applicable: (i) use its commercially reasonable efforts to prevent the issuance of any stop order or obtain its withdrawal at the earliest possible moment if the stop order has been issued, or (ii) prepare a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder, such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

 

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(k)            prior to the effective date of the Registration Statement relating to the Registrable Securities, provide a CUSIP number for the Registrable Securities;

 

(l)            provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by such Registration Statement from and after a date not later than the effective date of such Registration Statement;

 

(m)            use its commercially reasonable efforts to cause all Registrable Securities to be offered (i) in connection with the Initial Registration Statement to be listed on a Trading Market (other than OTC Bulletin Board) and (ii) in connection with any other public offering, to be listed on each Trading Market on which securities of the same series or class issued by the Company are then listed, or if no such similar securities are then listed, on a Trading Market (other than the OTC Bulletin Board) selected by the Company, as the case may be, prior to the effectiveness of the relevant Registration Statement; provided, however, if the Registrable Securities that are the subject of an effective Registration Statement are not listed on a Trading Market (other than the OTC Bulletin Board) by the date that is four years and six months following the Closing Date, while continuing to use its commercially reasonable efforts to cause all such Registrable Securities to be listed on a Trading Market (other than the OTC Bulletin Board), the Company shall use commercially reasonable efforts to promptly cause all such Registrable Securities to be qualified for trading in an over-the-counter market operated by OTC Markets Group, Inc.;

 

(n)            with respect to any sale of Registrable Securities pursuant to a firm commitment underwritten offering, enter into such agreements (including an underwriting agreement in form, scope and substance as is customary in underwritten offerings) reasonably requested by the Purchasers or the Holders of a majority of the Registrable Securities being sold in connection therewith (including those reasonably requested by the managing underwriters, if any) to expedite or facilitate the disposition of such Registrable Securities, and in such connection, (i) make such representations and warranties to the selling Holders and the underwriters, if any, with respect to the business of the Company and its subsidiaries, and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, in form, substance and scope as are customarily made by issuers to underwriters in underwritten offerings, and, if true, confirm the same if and when requested, (ii) use its commercially reasonable efforts to furnish to the selling Holders opinions of counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if any, and Holders Counsel), addressed to each selling Holder of Registrable Securities and each of the underwriters, if any, covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such counsel and underwriters, (iii) use its commercially reasonable efforts to obtain “cold comfort” letters and updates thereof from the independent certified public accountants of the Company (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements and financial data are, or are required to be, included in the Registration Statement) who have certified the financial statements included in such Registration Statement, addressed to each selling Holder of Registrable Securities (unless such accountants shall be prohibited from so addressing such letters by applicable standards of the accounting profession) and each of the underwriters, if any, such letters to be in customary form and covering matters of the type customarily covered in “cold comfort” letters in connection with underwritten offerings and (v) deliver such documents and certificates as may be reasonably requested by the Purchasers or the Holders of a majority of the Registrable Securities being sold pursuant to such Registration Statement, Holders Counsel and the managing underwriters, if any, to evidence the continued validity of the representations and warranties made pursuant to Section 6(n)(i) above and to evidence compliance with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company. The above shall be done at each closing under such underwriting or similar agreement, or as and to the extent required thereunder;

 

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(o)            make available for inspection by a representative of the selling Holder of Registrable Securities, any underwriter participating in any such disposition of Registrable Securities, if any, and any attorneys or accountants retained by such selling Holders or underwriter, at the offices where normally kept, during reasonable business hours, all financial and other records, pertinent corporate documents and properties of the Company and its subsidiaries, and cause the officers, directors and employees of the Company and its subsidiaries to supply all information in each case reasonably requested by any such representative, underwriter, attorney or accountant in connection with such Registration Statement; provided, however, that any information that is not generally publicly available at the time of delivery of such information shall be kept confidential by such Persons unless (i) disclosure of such information is required by court or administrative order, (ii) disclosure of such information, in the opinion of counsel to such Person, is required by law or applicable legal process, or (iii) such information becomes generally available to the public other than as a result of a non-permitted disclosure or failure to safeguard by such Person. In the case of a proposed disclosure pursuant to (i) or (ii) above, such Person shall be required to give the Company written notice of the proposed disclosure prior to such disclosure (to the extent permitted by law) and, if requested by the Company, assist the Company in seeking to prevent or limit the proposed disclosure. Without limiting the foregoing, no such information shall be used by such Person as the basis for any market transactions in securities of the Company or its subsidiaries in violation of law;

 

(p)            cause its officers to use their commercially reasonable efforts to support the marketing of the Registrable Securities covered by the Registration Statement (including, without limitation, participation in “road shows”);

 

(q)            cooperate with each seller of Registrable Securities and each underwriter or agent participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the FINRA; and

 

(r)            if the Company becomes eligible to use Form S-3 during the term of this Agreement, the Company shall use its commercially reasonable efforts to maintain eligibility for use of Form S-3 (or any successor form thereto) for the registration of the resale of the Registrable Securities.

 

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Notwithstanding anything to the contrary herein, at any time after the Registration Statement has been declared effective by the Commission, the Company may delay the disclosure of material non-public information concerning the Company if the disclosure of such information at the time is not, in the good faith judgment of the Company, in the best interests of the Company (such delay, a “Grace Period”). During the Grace Period, the Company shall not be required to maintain the effectiveness of any Registration Statement filed hereunder and, in any event, Holders shall suspend sales of Registrable Securities pursuant to such Registration Statements during the pendency of the Grace Period provided, the Company shall promptly (i) notify the Purchasers in writing of the existence of material non-public information giving rise to a Grace Period or the need to file a post-effective amendment, as applicable, and the date on which such Grace Period will begin, (ii) use commercially reasonable efforts to terminate a Grace Period as promptly as practicable provided that such termination is, in the good faith judgment of the Company, in the best interest of the Company and (iii) notify the Purchasers in writing of the date on which the Grace Period ends; provided, further, that, with respect to a Required Registration Statement only, no single Grace Period shall exceed sixty (60) consecutive days, and during any three hundred sixty-five (365) day period, the aggregate of all Grace Periods shall not exceed an aggregate of one hundred twenty (120) days (each Grace Period complying with this provision being an “Allowable Grace Period”). For purposes of determining the length of a Grace Period, the Grace Period shall be deemed to begin on and include the date the Purchasers receive the notice referred to in clause (i) above and shall end on and include the later of the date the Purchasers receive the notice referred to in clause (iii) above and the date referred to in such notice; provided, that no Grace Period shall be longer than an Allowable Grace Period. Notwithstanding anything to the contrary, the Company shall use commercially reasonable efforts to cause its transfer agent to deliver unlegended Shares to a transferee of such Purchaser in accordance with the terms of the Purchase Agreement in connection with any sale of Registrable Securities with respect to which such Purchaser has entered into an irrevocable contract for sale prior to such Purchaser’s receipt of the notice of a Grace Period and for which such Purchaser has not yet settled.

 

The Company may require each Holder of Registrable Securities as to which any registration is being effected to furnish to the Company in writing such information required in connection with such registration regarding such seller and the distribution of such Registrable Securities as the Company may, from time to time, reasonably request in writing, and the Company may exclude from such registration the Registrable Securities of any Holder who unreasonably fails to furnish such information within a reasonable time after receiving such request.

 

Each Holder of Registrable Securities covered by such Registration Statement agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Sections 6(c)(ii), 6(c)(iii), 6(c)(iv) or 6(c)(v) hereof, such Holder will forthwith discontinue disposition of such Registrable Securities covered by such Registration Statement or Prospectus until such Holder’s receipt of the copies of the supplemented or amended Prospectus contemplated by Section 6(j) hereof, or until it is advised in writing by the Company that the use of the applicable Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus; provided, however, that the time periods under Section 2 with respect to the length of time that the effectiveness of a Registration Statement must be maintained shall automatically be extended by the amount of time Fortress is required to discontinue disposition of such securities.

 

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7.             Registration Expenses. All fees and expenses incident to the Company’s performance of or compliance with its obligations under this Agreement (excluding any underwriting discounts and selling commissions, stock transfer taxes and fees of counsel for the Holders) shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence that are the Company’s responsibility shall include, without limitation, (a) all registration and filing fees (including, without limitation, fees and expenses (i) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading, (ii) with respect to compliance with applicable state securities or Blue Sky laws (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities and determination of the eligibility of the Registrable Securities for investment under the laws of such jurisdictions as requested by the Holders) and (iii) if not previously paid by the Company in connection with an issuer filing, with respect to any filing that may be required to be made by any broker through which a Holder intends to make sales of Registrable Securities with FINRA pursuant to FINRA Rule 5110, so long as the broker is receiving no more than a customary brokerage commission in connection with such sale), (b) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities and of printing prospectuses if the printing of prospectuses is reasonably requested by the Holders of a majority of the Registrable Securities included in the Registration Statement), (c) messenger, telephone and delivery expenses of the Company, (d) fees and disbursements of counsel for the Company, (e) Securities Act liability insurance, if the Company so desires such insurance, (f) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement, and (g) those expenses of the selling Holders actually and reasonably incurred, including without limitation, the reasonable fees of Holders Counsel up to $50,000. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder.

 

The Company shall not be required to pay (i) fees and disbursements of any counsel retained by any Holder or by any underwriter (except as set forth in clauses 7(a)(ii) and 7(g)), or (ii) any underwriter’s fees (including discounts, commissions or fees of underwriters, selling brokers, dealer managers or similar securities industry professionals) relating to the distribution of the Registrable Securities (other than with respect to Registrable Securities sold by the Company or as otherwise set forth in this Section 7).

 

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8.             Indemnification.

 

(a)            Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless, to the fullest extent permitted by law, each Holder, the officers, directors, agents, general partners, managing members, managers, Affiliates, employees and investment advisers of such Holder, each Person who controls each such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, general partners, managing members, managers, Affiliates, employees and investment advisers of each such controlling person, and each underwriter, if any, and each Person who controls (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) such underwriter, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, costs of preparation and reasonable attorneys’ fees and any legal or other fees or expenses incurred by such party in connection with any investigation or Proceeding), expenses, judgments, fines, penalties, charges and amounts paid in settlement (collectively, “Losses”), as incurred, arising out of or based upon (i) any untrue statement (or alleged untrue statement) of a material fact contained in any Registration Statement, any preliminary, final or summary Prospectus, contained therein or related thereto, or any amendment or supplement thereto, together with the documents incorporated by reference therein, or any free writing prospectus utilized in connection therewith, incident to any such registration, qualification, or compliance, or based on 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, or (ii) any violation or alleged violation by the Company of the Securities Act, Exchange Act, or any state securities law or any rule or regulation thereunder, and (without limitation of the other portions of this Section 8(a)) will reimburse each such Holder and each Person who controls each such Holder, each such underwriter, and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, loss, damage, liability, or action; provided that the Company will not be liable to a Holder or underwriter in any such case to the extent that any such Losses arise out of or are based on any untrue statement or omission by such Holder or underwriter, but only to the extent that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such Registration Statement, preliminary, final or summary Prospectus, contained therein or related thereto, or any amendment or supplement thereto, together with the documents incorporated by reference therein, or any free writing prospectus utilized in connection therewith in reliance upon and in conformity with written information that is furnished to the Company by such Holder or underwriter for use therein and relates to such Holder or underwriter, as applicable. It is agreed that the indemnity agreement contained in this Section 8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld).

 

(b)            Indemnification by Holders. Each Holder shall, notwithstanding any termination of this Agreement, indemnify and hold harmless, to the fullest extent permitted by law, severally and not jointly with any other Holders, the Company, its directors, its officers who sign the Registration Statement, and each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) and all other prospective sellers, from and against all Losses arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in such Registration Statement under which such Registrable Securities were registered under the Securities Act, any preliminary, final or summary Prospectus, contained therein or related thereto, or any amendment or supplement thereto, together with the documents incorporated by reference therein, or any free writing prospectus utilized in connection therewith, incident to any such registration, qualification, or compliance, or based on 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, and will (without limitation of the other portions of this Section 8(b)) reimburse the Company, its directors, its officers who sign the Registration Statement, and each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) and all other prospective sellers for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability, or action, in each case to the extent, but only to the extent, that such untrue statement or omission is made in such Registration Statement, preliminary, final or summary Prospectus, contained therein or related thereto, or any amendment or supplement thereto, together with the documents incorporated by reference therein, or any free writing prospectus utilized in connection therewith in reliance upon and in conformity with written information that is furnished to the Company by such Holder for inclusion therein and that relates to such Holder; provided, however, that the obligations of such Holder hereunder shall not apply to amounts paid in settlement of any such claims, losses, damages, or liabilities (or actions in respect thereof) if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably withheld); and provided, further, that the liability of such Holder shall be limited to the net proceeds received by such selling Holder from the sale of Registrable Securities covered by such Registration Statement.

 

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(c)            Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of one (1) counsel reasonably satisfactory to the Indemnified Party and the payment of all reasonable and documented fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such written notice within a reasonable time of commencement of any such Proceeding shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that such failure shall have materially and adversely prejudiced the Indemnifying Party in its ability to defend such Proceeding.

 

An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and such Indemnified Party shall have been advised by counsel in writing that a conflict of interest exists if the same counsel were to represent such Indemnified Party and the Indemnifying Party; provided, that the Indemnifying Party shall not be liable for the fees and expenses of more than one separate firm of attorneys at any time for all Indemnified Parties. The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld, delayed or unreasonably conditioned. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

 

Subject to the terms of this Agreement, all documented fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section 8(c)) shall be paid to the Indemnified Party, as incurred, within twenty (20) Trading Days of written notice thereof to the Indemnifying Party; provided, that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is finally judicially determined to not be entitled to indemnification hereunder.

 

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(d)            Contribution. If a claim for indemnification under Section 8(a) or 8(b) is unavailable to an Indemnified Party (other than in accordance with its terms) or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Losses, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party, on the one hand, and Indemnified Party, on the other hand, in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party, on the one hand, and Indemnified Party, on the other hand, shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other reasonable fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section 8(d) was available to such party in accordance with its terms. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in this paragraph. Notwithstanding the provisions of this Section 8(d), no Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Holder from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty 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.

 

(e)            The indemnity and contribution agreements contained in this Section 8 are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties and are not in diminution or limitation of the indemnification provisions under the Purchase Agreement.

 

9.             Miscellaneous.

 

(a)            Remedies. In the event of a breach by the Company or by a Holder of any of its obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement. The Company and each Holder agree that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.

 

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(b)            Prohibition on Other Registrations. The Company agrees (i) not to effect or initiate a registration statement for any public sale or distribution of any securities similar to those being registered pursuant to this Agreement (other than pursuant to the Existing Registration Rights Agreements), or any securities convertible into or exchangeable or exercisable for such securities (other than a registration solely to implement an employee benefit plan pursuant to a registration statement on Form S-8 (or successor form), a registration statement on Form S-4 (or successor form) or a transaction to which Rule 145 or any other similar rule of the Commission is applicable), during the fourteen (14) calendar days prior to, and during the sixty (60) calendar-day period beginning on, the effective date of any Registration Statement in which the Holders of Registrable Securities are participating (except as part of any such registration, if permitted).

 

(c)            Rule 144 Requirements. For so long as the Company is subject to the reporting requirements of the Exchange Act, the Company will use its commercially reasonable efforts to timely file with the Commission such reports and information required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the Commission thereunder and as the Commission may require. The Company shall furnish to any Holder of Registrable Securities forthwith upon request a written statement as to its compliance with the reporting requirements of Rule 144 (or any successor exemptive rule), the Securities Act and the Exchange Act (at any time that it is subject to such reporting requirements); a copy of its most recent annual or quarterly report; and such other reports and documents as such Person may reasonably request in availing itself of any rule or regulation of the Commission allowing it to sell any such securities without registration.

 

(d)            Obligations of Holders and Others in a Registration. Each Holder agrees to timely furnish in writing such information regarding such Person, the securities sought to be registered and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably be required to effect the registration of such Registrable Securities (the “Requested Information”) and shall take such other action as the Company may reasonably request in connection with the registration, qualification or compliance or as otherwise provided herein. At least ten (10) Business Days prior to the first anticipated filing date of a Registration Statement, the Company shall notify each holder of the information the Company requires from such Holder if such Holder elects to have any of such Holder’s Registrable Securities included in the Registration Statement. If at least five (5) Business Days prior to the filing date, the Company has not received the Requested Information from a Holder (a “Non-Responsive Holder”), then the Company may exclude from any Registration Statement the Registrable Securities of such Non-Responsive Holder.

 

(e)            Rule 144A. The Company agrees that, upon the request of any Holder of Registrable Securities or any prospective purchaser of Registrable Securities designated by a Holder, the Company shall promptly provide (but in any case within fifteen (15) calendar days of a request) to such Holder or potential purchaser, the following information:

 

(i)            a brief statement of the nature of the business of the Company and any subsidiaries and the products and services they offer;

 

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(ii)           the most recent consolidated balance sheets and profit and losses and retained earnings statements, and similar financial statements of the Company for the two (2) most recent fiscal years (such financial information shall be audited, to the extent reasonably available); and

 

(iii)          such other information about the Company, any subsidiaries, and their business, financial condition and results of operations as the requesting Holder or purchaser of such Registrable Securities shall reasonably request in order to comply with Rule 144A, as amended, and in connection therewith the anti-fraud provisions of the federal and state securities laws.

 

The Company hereby represents and warrants to any such requesting Holder and any prospective purchaser of Registrable Securities from such Holder that the information provided by the Company pursuant to this Section 9(e) will, as of their dates, not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

 

(f)            Limitations on Subsequent Registration Rights. The Company will not enter into any agreements with any holder or prospective holder of any securities of the Company that would grant such holder or prospective holder registration rights with respect to the securities of the Company that would have priority over the Registrable Securities with respect to the inclusion of such securities in any registration. If the Company enters into an agreement that contains terms more favorable, in form or substance, to any shareholders than the terms provided to the Holders under this Agreement, then the Company will modify or revise the terms of this Agreement in order to reflect any such more favorable terms for the benefit of the Holders. Notwithstanding anything to the contrary herein, the parties acknowledge and agree that pursuant to the Existing Registration Rights Agreements the Existing Registration Rights Holders shall have registration rights that are substantially the same as those provided to the Holders under this Agreement.

 

(g)            Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities pursuant to the Registration Statement and shall sell the Registrable Securities only in accordance with a method of distribution described in the Registration Statement.

 

(h)            Discontinued Disposition. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Sections 6(c)(ii)-(iv), such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company may provide appropriate stop orders to enforce the provisions of this paragraph.

 

(i)            No Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date hereof, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof.

 

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(j)            Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, or waived unless the same shall be in writing and signed by the Company and Holders of a majority of the then outstanding Registrable Securities; provided that any such amendment, modification, supplement or waiver that materially, adversely and disproportionately effects the rights or obligations of any Holder vis-à-vis the other Holders shall require the prior written consent of such Holder.

 

(k)            Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via e-mail (provided the sender receives an e-mail notification or confirmation of receipt of an e-mail transmission) at the facsimile number or e-mail address specified in this Section 9(k) prior to 5:00 p.m., New York City time, on a Trading Day, (b) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service with next day delivery specified, or (c) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as follows:

 

  If to the Company: Georgia Banking Company, Inc.
    1776 Peachtree Street NW, Suite 300
    Atlanta, GA 30309
    Attn: Bartow Morgan, Jr.
    Email: [***]
     
  With a copy to: Troutman Pepper Locke LLP
    600 Peachtree Street, NE, Suite 3000
    Atlanta, GA 30308
    Attn: James Stevens
    Email: [***]

 

If to any Holder, to such Holder’s address as set forth on the records of the Company.

 

(l)            Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. The Company may not assign its rights (except by merger or in connection with another entity acquiring all or substantially all of the Company’s assets) or obligations hereunder without the prior written consent of all the Holders of the then outstanding Registrable Securities. The rights to have the Company register Registrable Securities pursuant to this Agreement shall be automatically assigned by each Purchaser to any transferee of the Shares only if: (a) the transferee or assignee (i) acquires Shares of such Purchaser’s Registrable Securities with an original value as of the Closing Date of not less than $5,000,000; (b) such Purchaser agrees in writing with the transferee or assignee to assign such rights, and a copy of such agreement is furnished to the Company within a reasonable period of time after such assignment; (c) the Company is, within a reasonable time after such transfer or assignment, furnished with written notice of (i) the name and address of such transferee or assignee and (ii) the securities with respect to which such registration rights are being transferred or assigned; (d) immediately following such transfer or assignment the further disposition of such securities by the transferee or assignee is restricted under the Securities Act and applicable state securities laws; and (e) at or before the time the Company received the written notice contemplated by clause (c) of this sentence the transferee or assignee agrees in writing with the Company to be bound by all of the provisions contained herein with respect to a Holder or the Purchaser. In the event of any delay in filing or effectiveness of the Registration Statement because of such assignment by a Purchaser or its transferee, the Company shall not be liable for any damages arising from such delay.

 

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(m)            Execution and Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same Agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such “.pdf” signature were the original thereof.

 

(n)            Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Georgia applicable to contracts made and to be performed entirely within such State. Each party agrees that all proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective Affiliates, employees or agents) may be commenced on an exclusive basis in the Georgia Courts. Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of the Georgia Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of this Agreement), and hereby irrevocably waives, and agrees not to assert in any proceeding, any claim that it is not personally subject to the jurisdiction of any such Georgia Court, or that such proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(o)            Cumulative Remedies. Except as provided in Section 2(c) with respect to Liquidated Damages, the remedies provided herein are cumulative and not exclusive of any other remedies provided by law.

 

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(p)            Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

(q)            Headings. The headings in this Agreement are for convenience only and shall not limit or otherwise affect the meaning hereof.

 

(r)            Entire Agreement. This Agreement and the Purchase Agreement constitute the entire agreement among the parties hereto with respect to the subject matter hereof. There are no restrictions, promises, warranties or undertakings, other than as set forth or referred to herein and in the Purchase Agreement. This Agreement supersedes all prior agreements and understandings among the parties hereto with respect to the subject matter hereof.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized signatories, as of the date first indicated above.

 

  GEORGIA BANKING COMPANY, INC.
     
  By:  
  Name: Bartow Morgan, Jr.
  Title: Chief Executive Officer

 

[Signature Page to Registration Rights Agreement]

 

 

 

PURCHASER:

 

   
   
     
  By:  
  Name:  
  Title:  

 

[Signature Page to Registration Rights Agreement]

 

 

 

 

Exhibit 4.7

 

WARRANT

 

BOTH THESE SECURITIES AND THE SHARES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) NOR ANY APPLICABLE STATE SECURITIES LAW (THE “STATE ACTS”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS AND UNTIL REGISTERED UNDER THE SECURITIES ACT, THE STATE ACTS AND ANY OTHER APPLICABLE SECURITIES LAWS UNLESS, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION OR IS OTHERWISE IN COMPLIANCE WITH THE SECURITIES ACT, THE STATE ACTS AND ANY OTHER APPLICABLE SECURITIES LAWS.

 

GEORGIA BANKING COMPANY, INC.

 

WARRANT

 

Warrant No. 3       Issuance Date: February 23, 2021

 

Georgia Banking Company, Inc. a Georgia corporation (the “Company”), hereby certifies that, for value received, Patriot Financial Partners III, L.P. (the “Original Holder,” and together with any assignee of this Warrant permitted in accordance with Section 10 below, the “Holder”), is entitled to purchase from the Company, at the price of $21.62 per Share, subject to adjustment as contained herein, all or any part of One Hundred Fifty Thousand Four Hundred Seventy-Eight (150,478) fully paid and non-assessable shares (“Shares”) of non-voting common stock, par value $0.01 per share, of the Company (“Company Non-Voting Stock”), upon and subject to the following terms and conditions:

 

1.            Definitions. As used in this Warrant, the following terms shall have the respective definitions set forth in this Section 1.

 

“Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such other Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “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.

 

“Appraisal Procedure” means a procedure whereby two independent appraisers, one chosen by the Company and one by the Holder (or if there is more than one Holder, a majority in interest of Holders), shall mutually agree upon the determinations then the subject of appraisal. Each party shall deliver a notice to the other appointing its appraiser within fifteen (15) days after the Appraisal Procedure is invoked. If within thirty (30) days after appointment of the two appraisers they are unable to agree upon the amount in question, a third independent appraiser shall be chosen within ten (10) days thereafter by the mutual consent of such first two appraisers or, if such first two appraisers fail to agree upon the appointment of a third appraiser, such appointment shall be made by the American Arbitration Association, or any organization successor thereto, from a panel of arbitrators having experience in the appraisal of the subject matter to be appraised. The decision of the third appraiser so appointed and chosen shall be given within thirty (30) days after the selection of such third appraiser. If three appraisers shall be appointed and the determination of one appraiser is disparate from the middle determination by more than twice the amount by which the other determination is disparate from the middle determination, then the determination of such appraiser shall be excluded, the remaining two determinations shall be averaged and such average shall be binding and conclusive on the Company and the Holder; otherwise, the average of all three determinations shall be binding and conclusive on the Company and the Holder. The costs of conducting any Appraisal Procedure shall be shared equally by the Holder and the Company; provided that (i) if such Appraisal Procedure shall result in a determination that is 5% or more greater than the Company’s initial determination, all costs of conducting such Appraisal Procedure shall be borne by the Company, (ii) if such Appraisal Procedure shall result in a determination that is 5% or more less than the Holder’s initial determination, all costs of conducting such Appraisal Procedure shall be borne by the Holder and (iii) if both (i) and (ii) apply this proviso shall be disregarded.

 

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“Board” means the Board of Directors of the Company.

 

“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 New York generally are authorized or required by law or other governmental actions to close.

 

“Company Securities” means (i) the Company Stock and the Warrant, and (ii) securities convertible into or exercisable or exchangeable for Company Stock and/or the Warrant.

 

“Company Stock” means (i) Company Non-Voting Stock and (ii) Company Voting Stock.

 

“Company Voting Stock” means voting common stock, par value $0.01 per share, of the Company.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

 

“Fundamental Transaction” means any of the following: (i) the Company effects any merger or consolidation of the Company with or into another Person; (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions; (iii) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Company Stock are permitted to tender or exchange their shares for other securities, cash or property; or (iv) the Company effects any reclassification of the Company Stock or any compulsory share exchange pursuant to which the Company Stock is effectively converted into or exchanged for other securities, cash or property.

 

“Market Price” means, with respect to a particular security, or if the particular security is a non-voting security such non-voting security’s voting counterpart, on any given day, the last reported sale price regular way or, in case no such reported sale takes place on such day, the average of the last closing bid and ask prices regular way, in either case on the principal national securities exchange on which the applicable securities are listed or admitted to trading, or if not listed or admitted to trading on the New York Stock Exchange, the Nasdaq Stock Market or any national securities exchange, (A) the closing sale price for such day reported by The Nasdaq Global Select Market or any comparable system if such security is traded over-the-counter and quoted in The Nasdaq Global Select Market or any comparable system, or (B) if such security is so traded, but not so quoted, the average of the closing reported bid and ask prices of such security as reported by The Nasdaq Global Select Market or any comparable system. If such security is not listed and traded in a manner that (i) the quotations referred to above are available for the period required hereunder, the Market Price of such security shall be deemed to be the fair value per share of such security as determined in good faith by the Board, assuming a willing buyer and a willing seller, provided that no minority or illiquidity discount or control premium shall be taken into account and no consideration shall be given to any restrictions on transfer or marketability or the existence or absence of, or any limitations on voting rights and (ii) references herein to “trading day” shall be deemed to refer to “day.” If the Holder does not accept the Board’s calculation of fair value per share and the Holder and the Company are unable to agree on fair value per share within fifteen (15) days following written notice to the Holder thereof (or such other time period as may be necessary in connection with a Fundamental Transaction or other transaction), the Appraisal Procedure shall be used to determine the fair value per share. For the avoidance of doubt, Market Price with respect to a non-voting security shall be determined based on such non-voting security’s voting counterpart in accordance with the foregoing formula.

 

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“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.

 

2.            Expiration Date. This Warrant shall expire and shall no longer be exercisable upon the date that is the tenth (10th) anniversary of the Issuance Date (the “Expiration Date”).

 

3.            Exercise Price. The initial exercise price of this Warrant shall be $21.62 per share (the “Initial Exercise Price”, and as it may be adjusted as set forth in Section 6 below, the “Exercise Price”).

 

4.            Exercise.

 

(a)            Subject to the provisions set forth in Section 4(b) below, the Holder is entitled to exercise this Warrant in whole or in part at any time or from time to time; provided that the Holder may not exercise this Warrant (or any portion of this Warrant) following the Expiration Date. This Warrant may be exercised by the Holder by the delivery of written notice of exercise to the Company in accordance with Section 13 below. Such notice of exercise shall state the number of Shares for which the Holder desires to exercise this Warrant (the “Exercised Share Number”) and shall be in the form of Annex A hereto or such other form as the Company may from time to time prescribe by notice to the Holder. Payment for Shares acquired upon the exercise of this Warrant (or any portion of this Warrant) shall be made at the time of exercise and shall be made in one of the following manners:

 

(i)            by payment to the Company in cash or by certified check or bank check or by wire transfer of immediately available funds the amount obtained by multiplying the Exercised Share Number by the Exercise Price (the “Aggregate Exercise Price”), or

 

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(ii)            by having the Company withhold Shares issuable upon exercise of this Warrant equal in value to the Aggregate Exercise Price based on the Market Price of the Company Stock on the trading day immediately prior to the date on which this Warrant and the notice of exercise is delivered to the Company.

 

(b)            Notwithstanding the foregoing or anything to the contrary herein, the Holder may be required by the Company to exercise or forfeit this Warrant in whole or in part, at any time, upon receipt by the Company of a written notification from the Company’s primary state and/or federal regulators substantially to the effect that this Warrant must be exercised or forfeited by the Holder in accordance with such written notification solely as a result of a banking institution that is owned by the Company falling below minimum capitalization requirements as determined by such state and/or federal regulators. The Company shall provide a copy of such written notification to the Holder as promptly as possible upon, and in any event within two (2) days of, receipt by the Company of such written notification. Each of the Company and the Holder agrees to work together in good faith to comply with and carry out the instructions provided in such written notification and as directed by such state and/or federal regulators.

 

(c)            This Warrant is not convertible into, is not exercisable for, is not exchangeable for, and may not otherwise become voting securities of the Company in the hands of the Original Holder or an Affiliate of the Original Holder and is only convertible into, exercisable for, exchangeable for, or may otherwise become voting securities of the Company in the hands of a transferee after a transfer:

 

(i)            in a widespread public distribution;

 

(ii)           to the Company;

 

(iii)          in which no transferee (or group of associated transferees) would receive 2 percent (2%) or more of the outstanding securities of any class of voting securities of the Company; or

 

(iv)          to a transferee that would control more than 50 percent (50%) of every class of voting securities of the Company without any transfer from the Holder.

 

5.            Delivery of Shares and Certificates. Within a reasonable time after the exercise of this Warrant and the issuance of Shares in connection therewith, the Company shall cause the Shares to be issued in book entry form, or, upon written notice from the Holder, cause to be delivered to the Holder a certificate representing such Shares, in the name of the Holder or in such other name or names as the Holder may designate. The Company agrees that the Shares so issued will be deemed to have been issued to the Holder as of the close of business on the date on which this Warrant and payment of the Exercise Price are delivered to the Company, notwithstanding that the stock transfer books of the Company may then be closed or certificates representing the Shares may not be actually delivered on such date. If this Warrant shall be exercised with respect to the purchase of less than all of the Shares subject to this Warrant, the Company shall cause to be delivered to the Holder, together with the issuance of Shares, a new warrant in substantially identical form reflecting the Shares that remain subject to exercise by the Holder. The Company will use all commercially reasonable efforts (which shall include the payment of customary listing fees and expenses) to (i) procure, at its sole expense, the listing of the Shares upon exercise of this Warrant, subject to issuance or notice of issuance, on all stock exchanges on which the Company Stock is then listed or traded and (ii) maintain the listing of such Shares after issuance. The Company will ensure that the Shares may be issued without violation of any applicable law or regulation or of any requirement of any securities exchange on which the Shares are listed or traded. Before taking any action which would cause an adjustment pursuant to Section 6 to reduce the Exercise Price below the then par value (if any) of the Company Stock, the Company shall take any and all corporate action which may be necessary in order that the Company may validly and legally issue fully paid and non-assessable shares of Company Stock at the Exercise Price as so adjusted.

 

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6.            Certain Adjustments. The Exercise Price and number of Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 6.

 

(a)         Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Company Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Company Stock; (ii) subdivides outstanding shares of Company Stock into a larger number of shares; or (iii) combines outstanding shares of Company Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Company Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Company Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this Section 6(a) shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution (if such dividend or distribution is actually made), and any adjustment pursuant to clause (ii) or (iii) of this Section 6(a) shall become effective immediately after the effective date of such subdivision or combination.

 

(b)      Fundamental Transactions.      If, at any time while this Warrant is outstanding there is a Fundamental Transaction, then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if the Holder had been, immediately prior to such Fundamental Transaction, the holder of the number of Shares then issuable upon exercise in full of this Warrant (the “Alternate Consideration”). At the Holder’s option and request, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant substantially in the form of this Warrant and consistent with the foregoing provisions and evidencing the Holder’s right to purchase the Alternate Consideration for the aggregate Exercise Price upon exercise thereof. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 6(b) and insuring that the Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

 

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(c)         Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 6, the number of Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.

 

(d)          Calculations. No adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least one percent (1%) in such price; provided that any adjustments that by reason of this sentence are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 6 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Company Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Company Stock.

 

(e)          Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 6, the Company, at its expense, will promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Company’s transfer agent.

 

(f)          Notice of Corporate Events. If the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Company Stock, including without limitation any granting of rights or warrants to subscribe for or purchase any capital stock of the Company (other than rights or warrants to subscribe for or purchase any capital stock of the Company granted to employees of the Company pursuant to equity incentive plans approved by the Board); (ii) authorizes or approves, enters into any agreement contemplating or solicits shareholder approval for any Fundamental Transaction; or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material terms and conditions of such transaction (but only to the extent such disclosure would not result in the dissemination of material, non-public information to the Holder) at least twenty (20) days prior to the applicable record or effective date on which a Person would need to hold Company Stock in order to participate in or vote with respect to such transaction, and the Company will take all steps reasonably necessary in order to insure that the Holder is given the practical opportunity to exercise this Warrant prior to such time so as to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice.

 

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(g)         Certain Events. If any change in the outstanding class and series of shares for which this Warrant is exercisable or any other event occurs as to which the other provisions of this Section 6 are not strictly applicable or if strictly applicable would not fairly protect the purchase rights of the Holder in accordance with such provisions, then the Company shall make an adjustment in the number and class of shares available under this Warrant, the Exercise Price or the application of such provisions, so as to protect the purchase rights of the Holder. The adjustment shall give the Holder of this Warrant upon exercise for the same Aggregate Exercise Price the total number, class and kind of shares as the Holder would have owned had this Warrant been exercised prior to the event and had the Holder continued to hold such shares until after the event requiring adjustment.

 

(h)         No Impairment. The Company will not, by amendment to its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by the Company hereunder, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder.

 

(i)          Adjustment Rules. Any adjustments pursuant to this Section 6 shall be made successively whenever an event referred to herein shall occur. If an adjustment in Exercise Price made hereunder would reduce the Exercise Price to an amount below par value of the Company Stock, then such adjustment in Exercise Price made hereunder shall reduce the Exercise Price to the par value of the Company Stock. If more than one subsection of this Section 6 is applicable to a single event, the subsection shall be applied that produces the largest adjustment and no single event shall cause an adjustment under more than one subsection of this Section 6 so as to result in duplication. Further, any adjustment shall be made to the extent (and only to the extent) that such adjustment would not cause or result in the Holder or any of its Affiliates being in violation of any applicable law, regulation or rule of any governmental authority or self-regulatory organization. Any adjustment (or portion thereof) prohibited pursuant to the preceding sentence shall be postponed and implemented on the first date on which such implementation would not result in the condition described in the preceding sentence.

 

7.            Reservation of Shares. The Company hereby agrees that at all times there shall be reserved for issuance and/or delivery such number of Shares (taking into account the adjustments and restrictions of Section 6) as shall be required for issuance or delivery to the Holder following the exercise hereof. The Company covenants that all Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable and free from all taxes, liens and charges (other than liens or charges created by the Holder or taxes in respect of any transfer occurring contemporaneously therewith).

 

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8.            Rights of Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or in equity, until the Holder shall have exercised this Warrant (or any portion of this Warrant) and such Shares shall have been issued by the Company and noted in the stock transfer books and records of the Company. The Company will at no time close its transfer books against transfer of this Warrant in any manner which interferes with the timely exercise of this Warrant. The rights of the Holder are limited to those expressed herein and are not enforceable against the Company except to the extent set forth herein. Nothing contained in this Warrant shall give rise to any liability of the Holder, whether such liability is asserted by the Company or its creditors.

 

9.            Charges, Taxes and Expenses. Issuance of certificates for Shares to the Holder upon the exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company.

 

10.          Assignment.

 

(a)         Subject to compliance with applicable law, without obtaining the consent of the Board to transfer or assign this Warrant, this Warrant and all rights hereunder are transferrable and assignable, in whole or in part, upon the books of the Company by the Holder hereof in person or by duly authorized attorney, and a new warrant shall be made and delivered by the Company, as promptly as reasonably practicable, of the same tenor and date as this Warrant but registered in the name of the transferee or assignee and if the Holder’s entire interest is not being transferred or assigned, in the name of the Holder, upon surrender of this Warrant, duly endorsed. All expenses (other than stock transfer taxes) and other charges payable in connection with the preparation, execution and delivery of any new warrants shall be paid by the Company.

 

(b)         An assignment as to all or any portion of the Warrant shall be in writing in a form acceptable to the Board, shall be signed by or on behalf of the assignor and shall be accompanied by satisfactory evidence of the authority of any person signing on behalf of the assignor.

 

(c)          The provisions of this Warrant shall be binding upon and inure to the benefit of the Company and its successors and permitted assigns. The Company may not assign any of its rights, or delegate any of its obligations, under this Warrant without the prior written consent of the Holder. In the event of assignment of this Warrant by the Company, references herein to “the Company” shall mean such assignee of the Company.

 

11.          Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a business day, then such action may be taken or such right may be exercised on the next succeeding day that is a business day.

 

12.          Amendments; Counterparts; Waivers. This Warrant may be amended only in writing signed by the Company and the Holder; provided, however, the Company shall not amend, modify or waive any provision of this Warrant if any such amendment, modification or waiver would have the effect of establishing rights or otherwise benefiting a Holder in a manner more favorable in any material respect than the rights and benefits established in favor of all other Holders or group of Holders or adversely affect any individual Holder, or group of Holders, in a manner which is materially different than its effect on any other Holder or group of Holders, unless, in any such case, such Holders have been offered such rights and benefits, and such written instrument shall also be executed by such individual Holder (or in the case of any group of Holders, Holders of a majority of the outstanding Warrants held by such group of Holders). This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. Failure of any party to exercise any right or remedy under this Warrant, or delay by a party in exercising such right to remedy, shall not operate as a waiver thereof. The observance of any term of this Warrant may be waived only in a writing signed by the party against whom the waiver is to be effective.

 

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13.          Notices. Any notice which the Company or the Holder may be required or permitted to give to the other shall be in writing, and may be delivered personally or by mail, postage prepaid, or overnight courier, addressed as follows: if to the Company, to Georgia Banking Company, Inc., 6190 Powers Ferry Road, Suite 150, Sandy Springs, Georgia 30339 Attn.: Chief Executive Officer, or to such other office or person as the Company may from time to time direct; and if to the Holder, at Radnor Corporate Center, Building Four, Suite 201, 100 Matsonford Road, Radnor, PA 19087, Attn: James F. Deutsch, or to such other address as the Holder may designate in writing from time to time by notice to the Company in accordance with the provisions of this Section 13. Notices shall be effective (a) upon receipt if sent by mail or delivered personally and (b) the trading day following the date of mailing, if sent by overnight courier with next day delivery specified.

 

14.       Governing Law/Proceedings.      The construction, validity, interpretation, performance and enforcement of this Warrant shall be governed by and construed and enforced in accordance with the laws of the State of Georgia applicable to contracts made and to be performed entirely within such State (except to the extent that mandatory provisions of Delaware law are applicable). Each of the Company and the Holder agrees that all legal proceedings concerning the interpretations, enforcement and defense of this Warrant and the transactions herein contemplated (“Proceedings”) (whether brought against the Company or the Holder or any of their respective Affiliates, employees or agents) shall be commenced exclusively in the state or federal courts located in the city of Atlanta, Georgia. Each of the Company and the Holder hereby irrevocably submits to the exclusive jurisdiction of the state or federal courts located in the city of Atlanta, Georgia for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any state or federal courts located in the city of Atlanta, Georgia, or that such Proceeding has been commenced in an improper or inconvenient forum. Each of the Company and the Holder hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such Person at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each of the Company and the Holder hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Warrant or the transactions contemplated hereby. In any litigation, arbitration or court proceeding between the Company and the Holder as the holder of this Warrant relating hereto, the prevailing party shall be entitled to reasonable attorneys’ fees and expenses incurred in enforcing this Warrant. If the Company fails to perform, comply with or observe any covenant or agreement to be performed, complied with or observed by it under this Warrant, the Holder may proceed to protect and enforce its rights by suit in equity or action at law, whether for specific performance of any term contained in this Warrant or for an injunction against the breach of any such term or in aid of the exercise of any power granted in this Warrant or to enforce any other legal or equitable right, or to take any one or more of such actions. The Company hereby agrees that the Holder shall not be required or otherwise obligated to, and hereby waives any right to demand that the Holder, post any performance or other bond in connection with the enforcement of its rights and remedies hereunder. None of the rights, powers or remedies conferred under this Warrant shall be mutually exclusive, and each right, power or remedy shall be cumulative and in addition to any other right, power or remedy whether conferred by this Warrant or now or hereafter available at law, in equity, by statute or otherwise.

 

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15.          Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a new Warrant to purchase Shares, in substantially the form of this Warrant (a “New Warrant”), but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity (which shall not include a surety bond), if requested. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the New Warrant.

 

16.          Fractional Shares. No fractional shares shall be issued upon exercise of this Warrant. The Company shall, in lieu of issuing any fractional share, pay the holder entitled to such fraction a sum in cash equal to such fraction multiplied by the Market Price of the Shares on the date of exercise.

 

17.          Registration of Warrant. The Company shall register this Warrant upon records to be maintained by the Company for that purpose, in the name of the Holder hereof. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof and for all other purposes, absent actual notice to the contrary.

 

18.          Prohibited Actions. The Company agrees that it will not take any action which would entitle the Holder to an adjustment of the Exercise Price if the total number of shares of Company Stock issuable after such action upon exercise of this Warrant, together with all shares of Company Stock then outstanding and all shares of Company Stock then issuable upon the exercise of all outstanding options, warrants, conversion and other rights, would exceed the total number of shares of Company Stock then authorized by its certificate of incorporation.

 

19.          Representations and Warranties of the Company. The Company hereby represents and warrants to the Holder that (a) it has the corporate power and authority to execute this Warrant and consummate the transactions contemplated by this Warrant, (b) there are no statutory or contractual shareholder preemptive rights or rights of refusal with respect to the issuance of this Warrant and (c) the execution and delivery by the Company of this Warrant and the issuance of Company Stock upon exercise of this Warrant do not and shall not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute a default under, (iii) result in the creation of any lien, security interest, charge or encumbrance upon the Company Securities or assets pursuant to, (iv) result in a violation of or (v) require any authorization, consent, approval, exemption or other action by or notice or declaration to, or filing with, any court or administrative or governmental body or agency pursuant to the Company’s articles of incorporation or bylaws or any law in effect as of the date hereof to which the Company is subject, or any agreement, instrument, order, judgment or decree to which the Company is subject as of the date hereof, except for any such authorization, consent, approval or exemption that has been obtained.

 

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20.          Rule 144 Information. For so long as the Company is not subject to the reporting requirements of the Securities Act and the Exchange Act, it will, upon the request of the Holder, make publicly available such information as may be necessary to permit sales pursuant to Rule 144 or Regulation S under the Securities Act, and it shall use commercially reasonable efforts to take such further actions as the Holder may reasonably request, in each case to the extent required from time to time to enable such Holder to sell or otherwise transfer all or any portion of this Warrant without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 or Regulation S under the Securities Act, as such rules may be amended from time to time, or any successor rule or regulation hereafter adopted by the United States Securities and Exchange Commission. Upon the written request of the Holder submitted prior to the Company becoming subject to the reporting requirements of the Securities Act and the Exchange Act, the Company will deliver to such Holder a written statement that it has complied with such requirements.

 

21.          Entire Agreement. This Warrant and the exhibits and attachments hereto contain the entire agreement between the parties with respect to the subject matter hereof and supersede all prior and contemporaneous arrangements or undertakings with respect thereto.

 

22.          Miscellaneous. The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof. In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first set forth above.

 

  GEORGIA BANKING COMPANY, INC.
     
  By: /s/ Bartow Morgan, Jr.
    Bartow Morgan, Jr.
    Chief Executive Officer

 

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ANNEX A

 

FORM OF
ELECTION TO PURCHASE

 

To Georgia Banking Company, Inc.:

 

The undersigned is the Holder of Warrant No.             the “Warrant”) issued by Georgia Banking Company, Inc., a Georgia corporation (the “Company”). Capitalized terms used herein and not otherwise defined have the respective meanings set forth in the Warrant.

 

1.The Warrant is currently exercisable to purchase a total of          Shares.

 

2.The Exercised Share Number is equal to ____.

 

3.The Original Exercise Price is equal to $___.__ per Share.

 

4.The Exercise Price is equal to $___.__ per Share.

 

5.¨ A.  The Holder shall pay the sum of $    .__ to the Company in accordance with Section 4(a)(i) of the Warrant, which amount is equal to the Aggregate Exercise Price (the Exercised Share Number multiplied by the Exercise Price).

 

OR (Holder to choose one)

 

 ¨ B.  The Company shall withhold a number of Shares issuable upon exercise of this Warrant in accordance with Section 4(a)(ii) of the Warrant equal in value to the Aggregate Exercise Price (the Exercised Share Number multiplied by the Exercise Price ) based on the Market Price of the Company Stock on the trading day immediately prior to the date on which this notice of exercise is delivered to the Company.

 

The undersigned requests that certificates for the Shares issuable upon this exercise be issued in the name of                                                  .

 

  Date:    
  Name of Holder:    
  Address of Holder:    
       

 

  Social Security or
Tax Identification Number of Holder:
   

 

  SIGNATURE OF HOLDER:    
    Name:  
    Title:  

 

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Exhibit 4.8

 

WARRANT

 

BOTH THESE SECURITIES AND THE SHARES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) NOR ANY APPLICABLE STATE SECURITIES LAW (THE “STATE ACTS”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS AND UNTIL REGISTERED UNDER THE SECURITIES ACT, THE STATE ACTS AND ANY OTHER APPLICABLE SECURITIES LAWS UNLESS, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION OR IS OTHERWISE IN COMPLIANCE WITH THE SECURITIES ACT, THE STATE ACTS AND ANY OTHER APPLICABLE SECURITIES LAWS.

 

GEORGIA BANKING COMPANY, INC.

 

WARRANT

 

Warrant No. [●] Issuance Date: February 23, 2021

 

Georgia Banking Company, Inc. a Georgia corporation (the “Company”), hereby certifies that, for value received, [●] (the “Original Holder,” and together with any assignee of this Warrant permitted in accordance with Section 10 below, the “Holder”), is entitled to purchase from the Company, at the price of $21.62 per Share, subject to adjustment as contained herein, all or any part of One Hundred Fifty Thousand Four Hundred Seventy-Eight (150,478) fully paid and non-assessable shares (“Shares”) of non-voting common stock, par value $0.01 per share, of the Company (“Company Voting Stock”), upon and subject to the following terms and conditions:

 

1.               Definitions. As used in this Warrant, the following terms shall have the respective definitions set forth in this Section 1.

 

“Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with, such other Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “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.

 

 

 

 

“Appraisal Procedure” means a procedure whereby two independent appraisers, one chosen by the Company and one by the Holder (or if there is more than one Holder, a majority in interest of Holders), shall mutually agree upon the determinations then the subject of appraisal. Each party shall deliver a notice to the other appointing its appraiser within fifteen (15) days after the Appraisal Procedure is invoked. If within thirty (30) days after appointment of the two appraisers they are unable to agree upon the amount in question, a third independent appraiser shall be chosen within ten (10) days thereafter by the mutual consent of such first two appraisers or, if such first two appraisers fail to agree upon the appointment of a third appraiser, such appointment shall be made by the American Arbitration Association, or any organization successor thereto, from a panel of arbitrators having experience in the appraisal of the subject matter to be appraised. The decision of the third appraiser so appointed and chosen shall be given within thirty (30) days after the selection of such third appraiser. If three appraisers shall be appointed and the determination of one appraiser is disparate from the middle determination by more than twice the amount by which the other determination is disparate from the middle determination, then the determination of such appraiser shall be excluded, the remaining two determinations shall be averaged and such average shall be binding and conclusive on the Company and the Holder; otherwise, the average of all three determinations shall be binding and conclusive on the Company and the Holder. The costs of conducting any Appraisal Procedure shall be shared equally by the Holder and the Company; provided that (i) if such Appraisal Procedure shall result in a determination that is 5% or more greater than the Company’s initial determination, all costs of conducting such Appraisal Procedure shall be borne by the Company, (ii) if such Appraisal Procedure shall result in a determination that is 5% or more less than the Holder’s initial determination, all costs of conducting such Appraisal Procedure shall be borne by the Holder and (iii) if both (i) and (ii) apply this proviso shall be disregarded.

 

“Board” means the Board of Directors of the Company.

 

“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 New York generally are authorized or required by law or other governmental actions to close.

 

“Company Non-Voting Stock” means non-voting common stock, par value $0.01 per share of the Company.

 

“Company Securities” means (i) the Company Stock and the Warrant, and (ii) securities convertible into or exercisable or exchangeable for Company Stock and/or the Warrant.

 

“Company Stock” means (i) Company Non-Voting Stock and (ii) Company Voting Stock.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

 

“Fundamental Transaction” means any of the following: (i) the Company effects any merger or consolidation of the Company with or into another Person; (ii) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions; (iii) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Company Stock are permitted to tender or exchange their shares for other securities, cash or property; or (iv) the Company effects any reclassification of the Company Stock or any compulsory share exchange pursuant to which the Company Stock is effectively converted into or exchanged for other securities, cash or property.

 

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“Market Price” means, with respect to a particular security on any given day, the last reported sale price regular way or, in case no such reported sale takes place on such day, the average of the last closing bid and ask prices regular way, in either case on the principal national securities exchange on which the applicable securities are listed or admitted to trading, or if not listed or admitted to trading on the New York Stock Exchange, the Nasdaq Stock Market or any national securities exchange, (A) the closing sale price for such day reported by The Nasdaq Global Select Market or any comparable system if such security is traded over-the-counter and quoted in The Nasdaq Global Select Market or any comparable system, or (B) if such security is so traded, but not so quoted, the average of the closing reported bid and ask prices of such security as reported by The Nasdaq Global Select Market or any comparable system. If such security is not listed and traded in a manner that (i) the quotations referred to above are available for the period required hereunder, the Market Price of such security shall be deemed to be the fair value per share of such security as determined in good faith by the Board, assuming a willing buyer and a willing seller, provided that no minority or illiquidity discount or control premium shall be taken into account and no consideration shall be given to any restrictions on transfer or marketability or the existence or absence of, or any limitations on voting rights and (ii) references herein to “trading day” shall be deemed to refer to “day.” If the Holder does not accept the Board’s calculation of fair value per share and the Holder and the Company are unable to agree on fair value per share within fifteen (15) days following written notice to the Holder thereof (or such other time period as may be necessary in connection with a Fundamental Transaction or other transaction), the Appraisal Procedure shall be used to determine the fair value per share.

 

“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.

 

2.              Expiration Date. This Warrant shall expire and shall no longer be exercisable upon the date that is the tenth (10th) anniversary of the Issuance Date (the “Expiration Date”).

 

3.               Exercise Price. The initial exercise price of this Warrant shall be $21.62 per share (the “Initial Exercise Price”, and as it may be adjusted as set forth in Section 6 below, the “Exercise Price”).

 

4.               Exercise.

 

 (a)             Subject to the provisions set forth in Section 4(b) below, the Holder is entitled to exercise this Warrant in whole or in part at any time or from time to time; provided that the Holder may not exercise this Warrant (or any portion of this Warrant) following the Expiration Date. This Warrant may be exercised by the Holder by the delivery of written notice of exercise to the Company in accordance with Section 13 below. Such notice of exercise shall state the number of Shares for which the Holder desires to exercise this Warrant (the “Exercised Share Number”) and shall be in the form of Annex A hereto or such other form as the Company may from time to time prescribe by notice to the Holder. Payment for Shares acquired upon the exercise of this Warrant (or any portion of this Warrant) shall be made at the time of exercise and shall be made in one of the following manners:

 

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(i)             by payment to the Company in cash or by certified check or bank check or by wire transfer of immediately available funds the amount obtained by multiplying the Exercised Share Number by the Exercise Price (the “Aggregate Exercise Price”), or

 

(ii)            by having the Company withhold Shares issuable upon exercise of this Warrant equal in value to the Aggregate Exercise Price based on the Market Price of the Company Stock on the trading day immediately prior to the date on which this Warrant and the notice of exercise is delivered to the Company.

 

(b)            Notwithstanding the foregoing or anything to the contrary herein, the Holder may be required by the Company to exercise or forfeit this Warrant in whole or in part, at any time, upon receipt by the Company of a written notification from the Company’s primary state and/or federal regulators substantially to the effect that this Warrant must be exercised or forfeited by the Holder in accordance with such written notification solely as a result of a banking institution that is owned by the Company falling below minimum capitalization requirements as determined by such state and/or federal regulators. The Company shall provide a copy of such written notification to the Holder as promptly as possible upon, and in any event within two (2) days of, receipt by the Company of such written notification. Each of the Company and the Holder agrees to work together in good faith to comply with and carry out the instructions provided in such written notification and as directed by such state and/or federal regulators.

 

5.               Delivery of Shares and Certificates. Within a reasonable time after the exercise of this Warrant and the issuance of Shares in connection therewith, the Company shall cause the Shares to be issued in book entry form, or, upon written notice from the Holder, cause to be delivered to the Holder a certificate representing such Shares, in the name of the Holder or in such other name or names as the Holder may designate. The Company agrees that the Shares so issued will be deemed to have been issued to the Holder as of the close of business on the date on which this Warrant and payment of the Exercise Price are delivered to the Company, notwithstanding that the stock transfer books of the Company may then be closed or certificates representing the Shares may not be actually delivered on such date. If this Warrant shall be exercised with respect to the purchase of less than all of the Shares subject to this Warrant, the Company shall cause to be delivered to the Holder, together with the issuance of Shares, a new warrant in substantially identical form reflecting the Shares that remain subject to exercise by the Holder. The Company will use all commercially reasonable efforts (which shall include the payment of customary listing fees and expenses) to (i) procure, at its sole expense, the listing of the Shares upon exercise of this Warrant, subject to issuance or notice of issuance, on all stock exchanges on which the Company Stock is then listed or traded and (ii) maintain the listing of such Shares after issuance. The Company will ensure that the Shares may be issued without violation of any applicable law or regulation or of any requirement of any securities exchange on which the Shares are listed or traded. Before taking any action which would cause an adjustment pursuant to Section 6 to reduce the Exercise Price below the then par value (if any) of the Company Stock, the Company shall take any and all corporate action which may be necessary in order that the Company may validly and legally issue fully paid and non-assessable shares of Company Stock at the Exercise Price as so adjusted.

 

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6.               Certain Adjustments. The Exercise Price and number of Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 6.

 

(a)             Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Company Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Company Stock; (ii) subdivides outstanding shares of Company Stock into a larger number of shares; or (iii) combines outstanding shares of Company Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Company Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Company Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this Section 6(a) shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution (if such dividend or distribution is actually made), and any adjustment pursuant to clause (ii) or (iii) of this Section 6(a) shall become effective immediately after the effective date of such subdivision or combination.

 

(b)             Fundamental Transactions. If, at any time while this Warrant is outstanding there is a Fundamental Transaction, then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if the Holder had been, immediately prior to such Fundamental Transaction, the holder of the number of Shares then issuable upon exercise in full of this Warrant (the “Alternate Consideration”). At the Holder’s option and request, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant substantially in the form of this Warrant and consistent with the foregoing provisions and evidencing the Holder’s right to purchase the Alternate Consideration for the aggregate Exercise Price upon exercise thereof. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section 6(b) and insuring that the Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

 

(c)             Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 6, the number of Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.

 

(d)             Calculations. No adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least one percent (1%) in such price; provided that any adjustments that by reason of this sentence are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 6 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable. The number of shares of Company Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Company Stock.

 

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(e)            Notice of Adjustments. Upon the occurrence of each adjustment pursuant to this Section 6, the Company, at its expense, will promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based. Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Company’s transfer agent.

 

(f)             Notice of Corporate Events. If the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Company Stock, including without limitation any granting of rights or warrants to subscribe for or purchase any capital stock of the Company (other than rights or warrants to subscribe for or purchase any capital stock of the Company granted to employees of the Company pursuant to equity incentive plans approved by the Board); (ii) authorizes or approves, enters into any agreement contemplating or solicits shareholder approval for any Fundamental Transaction; or (iii) authorizes the voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material terms and conditions of such transaction (but only to the extent such disclosure would not result in the dissemination of material, non-public information to the Holder) at least twenty (20) days prior to the applicable record or effective date on which a Person would need to hold Company Stock in order to participate in or vote with respect to such transaction, and the Company will take all steps reasonably necessary in order to insure that the Holder is given the practical opportunity to exercise this Warrant prior to such time so as to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice.

 

(g)            Certain Events. If any change in the outstanding class and series of shares for which this Warrant is exercisable or any other event occurs as to which the other provisions of this Section 6 are not strictly applicable or if strictly applicable would not fairly protect the purchase rights of the Holder in accordance with such provisions, then the Company shall make an adjustment in the number and class of shares available under this Warrant, the Exercise Price or the application of such provisions, so as to protect the purchase rights of the Holder. The adjustment shall give the Holder of this Warrant upon exercise for the same Aggregate Exercise Price the total number, class and kind of shares as the Holder would have owned had this Warrant been exercised prior to the event and had the Holder continued to hold such shares until after the event requiring adjustment.

 

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(h)            No Impairment. The Company will not, by amendment to its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by the Company hereunder, but will at all times in good faith assist in the carrying out of all the provisions of this Warrant and in taking of all such action as may be necessary or appropriate in order to protect the rights of the Holder.

 

(i)             Adjustment Rules. Any adjustments pursuant to this Section 6 shall be made successively whenever an event referred to herein shall occur. If an adjustment in Exercise Price made hereunder would reduce the Exercise Price to an amount below par value of the Company Stock, then such adjustment in Exercise Price made hereunder shall reduce the Exercise Price to the par value of the Company Stock. If more than one subsection of this Section 6 is applicable to a single event, the subsection shall be applied that produces the largest adjustment and no single event shall cause an adjustment under more than one subsection of this Section 6 so as to result in duplication. Further, any adjustment shall be made to the extent (and only to the extent) that such adjustment would not cause or result in the Holder or any of its Affiliates being in violation of any applicable law, regulation or rule of any governmental authority or self-regulatory organization. Any adjustment (or portion thereof) prohibited pursuant to the preceding sentence shall be postponed and implemented on the first date on which such implementation would not result in the condition described in the preceding sentence.

 

7.               Reservation of Shares. The Company hereby agrees that at all times there shall be reserved for issuance and/or delivery such number of Shares (taking into account the adjustments and restrictions of Section 6) as shall be required for issuance or delivery to the Holder following the exercise hereof. The Company covenants that all Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable and free from all taxes, liens and charges (other than liens or charges created by the Holder or taxes in respect of any transfer occurring contemporaneously therewith).

 

8.               Rights of Holder. The Holder shall not, by virtue hereof, be entitled to any rights of a shareholder in the Company, either at law or in equity, until the Holder shall have exercised this Warrant (or any portion of this Warrant) and such Shares shall have been issued by the Company and noted in the stock transfer books and records of the Company. The Company will at no time close its transfer books against transfer of this Warrant in any manner which interferes with the timely exercise of this Warrant. The rights of the Holder are limited to those expressed herein and are not enforceable against the Company except to the extent set forth herein. Nothing contained in this Warrant shall give rise to any liability of the Holder, whether such liability is asserted by the Company or its creditors.

 

9.               Charges, Taxes and Expenses. Issuance of certificates for Shares to the Holder upon the exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company.

 

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10.             Assignment.

 

(a)             Subject to compliance with applicable law, without obtaining the consent of the Board to transfer or assign this Warrant, this Warrant and all rights hereunder are transferrable and assignable, in whole or in part, upon the books of the Company by the Holder hereof in person or by duly authorized attorney, and a new warrant shall be made and delivered by the Company, as promptly as reasonably practicable, of the same tenor and date as this Warrant but registered in the name of the transferee or assignee and if the Holder’s entire interest is not being transferred or assigned, in the name of the Holder, upon surrender of this Warrant, duly endorsed. All expenses (other than stock transfer taxes) and other charges payable in connection with the preparation, execution and delivery of any new warrants shall be paid by the Company.

 

(b)             An assignment as to all or any portion of the Warrant shall be in writing in a form acceptable to the Board, shall be signed by or on behalf of the assignor and shall be accompanied by satisfactory evidence of the authority of any person signing on behalf of the assignor.

 

(c)             The provisions of this Warrant shall be binding upon and inure to the benefit of the Company and its successors and permitted assigns. The Company may not assign any of its rights, or delegate any of its obligations, under this Warrant without the prior written consent of the Holder. In the event of assignment of this Warrant by the Company, references herein to “the Company” shall mean such assignee of the Company.

 

11.            Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a business day, then such action may be taken or such right may be exercised on the next succeeding day that is a business day.

 

12.           Amendments; Counterparts; Waivers. This Warrant may be amended only in writing signed by the Company and the Holder; provided, however, the Company shall not amend, modify or waive any provision of this Warrant if any such amendment, modification or waiver would have the effect of establishing rights or otherwise benefiting a Holder in a manner more favorable in any material respect than the rights and benefits established in favor of all other Holders or group of Holders or adversely affect any individual Holder, or group of Holders, in a manner which is materially different than its effect on any other Holder or group of Holders, unless, in any such case, such Holders have been offered such rights and benefits, and such written instrument shall also be executed by such individual Holder (or in the case of any group of Holders, Holders of a majority of the outstanding Warrants held by such group of Holders). This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. Failure of any party to exercise any right or remedy under this Warrant, or delay by a party in exercising such right to remedy, shall not operate as a waiver thereof. The observance of any term of this Warrant may be waived only in a writing signed by the party against whom the waiver is to be effective.

 

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13.             Notices. Any notice which the Company or the Holder may be required or permitted to give to the other shall be in writing, and may be delivered personally or by mail, postage prepaid, or overnight courier, addressed as follows: if to the Company, to Georgia Banking Company, Inc., 6190 Powers Ferry Road, Suite 150, Sandy Springs, Georgia 30339 Attn.: Chief Executive Officer, or to such other office or person as the Company may from time to time direct; and if to the Holder, at [●], or to such other address as the Holder may designate in writing from time to time by notice to the Company in accordance with the provisions of this Section 13. Notices shall be effective (a) upon receipt if sent by mail or delivered personally and (b) the trading day following the date of mailing, if sent by overnight courier with next day delivery specified.

 

14.             Governing Law/Proceedings. The construction, validity, interpretation, performance and enforcement of this Warrant shall be governed by and construed and enforced in accordance with the laws of the State of Georgia applicable to contracts made and to be performed entirely within such State (except to the extent that mandatory provisions of Delaware law are applicable). Each of the Company and the Holder agrees that all legal proceedings concerning the interpretations, enforcement and defense of this Warrant and the transactions herein contemplated (“Proceedings”) (whether brought against the Company or the Holder or any of their respective Affiliates, employees or agents) shall be commenced exclusively in the state or federal courts located in the city of Atlanta, Georgia. Each of the Company and the Holder hereby irrevocably submits to the exclusive jurisdiction of the state or federal courts located in the city of Atlanta, Georgia for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any state or federal courts located in the city of Atlanta, Georgia, or that such Proceeding has been commenced in an improper or inconvenient forum. Each of the Company and the Holder hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such Person at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each of the Company and the Holder hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Warrant or the transactions contemplated hereby.

 

In any litigation, arbitration or court proceeding between the Company and the Holder as the holder of this Warrant relating hereto, the prevailing party shall be entitled to reasonable attorneys’ fees and expenses incurred in enforcing this Warrant. If the Company fails to perform, comply with or observe any covenant or agreement to be performed, complied with or observed by it under this Warrant, the Holder may proceed to protect and enforce its rights by suit in equity or action at law, whether for specific performance of any term contained in this Warrant or for an injunction against the breach of any such term or in aid of the exercise of any power granted in this Warrant or to enforce any other legal or equitable right, or to take any one or more of such actions. The Company hereby agrees that the Holder shall not be required or otherwise obligated to, and hereby waives any right to demand that the Holder, post any performance or other bond in connection with the enforcement of its rights and remedies hereunder. None of the rights, powers or remedies conferred under this Warrant shall be mutually exclusive, and each right, power or remedy shall be cumulative and in addition to any other right, power or remedy whether conferred by this Warrant or now or hereafter available at law, in equity, by statute or otherwise.

 

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15.             Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a new Warrant to purchase Shares, in substantially the form of this Warrant (a “New Warrant”), but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity (which shall not include a surety bond), if requested. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures. If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the New Warrant.

 

16.             Fractional Shares. No fractional shares shall be issued upon exercise of this Warrant. The Company shall, in lieu of issuing any fractional share, pay the holder entitled to such fraction a sum in cash equal to such fraction multiplied by the Market Price of the Shares on the date of exercise.

 

17.             Registration of Warrant. The Company shall register this Warrant upon records to be maintained by the Company for that purpose, in the name of the Holder hereof. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof and for all other purposes, absent actual notice to the contrary.

 

18.             Prohibited Actions. The Company agrees that it will not take any action which would entitle the Holder to an adjustment of the Exercise Price if the total number of shares of Company Stock issuable after such action upon exercise of this Warrant, together with all shares of Company Stock then outstanding and all shares of Company Stock then issuable upon the exercise of all outstanding options, warrants, conversion and other rights, would exceed the total number of shares of Company Stock then authorized by its certificate of incorporation.

 

19.             Representations and Warranties of the Company. The Company hereby represents and warrants to the Holder that (a) it has the corporate power and authority to execute this Warrant and consummate the transactions contemplated by this Warrant, (b) there are no statutory or contractual shareholder preemptive rights or rights of refusal with respect to the issuance of this Warrant and (c) the execution and delivery by the Company of this Warrant and the issuance of Company Stock upon exercise of this Warrant do not and shall not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute a default under, (iii) result in the creation of any lien, security interest, charge or encumbrance upon the Company Securities or assets pursuant to, (iv) result in a violation of or (v) require any authorization, consent, approval, exemption or other action by or notice or declaration to, or filing with, any court or administrative or governmental body or agency pursuant to the Company’s articles of incorporation or bylaws or any law in effect as of the date hereof to which the Company is subject, or any agreement, instrument, order, judgment or decree to which the Company is subject as of the date hereof, except for any such authorization, consent, approval or exemption that has been obtained.

 

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20.             Rule 144 Information. For so long as the Company is not subject to the reporting requirements of the Securities Act and the Exchange Act, it will, upon the request of the Holder, make publicly available such information as may be necessary to permit sales pursuant to Rule 144 or Regulation S under the Securities Act, and it shall use commercially reasonable efforts to take such further actions as the Holder may reasonably request, in each case to the extent required from time to time to enable such Holder to sell or otherwise transfer all or any portion of this Warrant without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 or Regulation S under the Securities Act, as such rules may be amended from time to time, or any successor rule or regulation hereafter adopted by the United States Securities and Exchange Commission. Upon the written request of the Holder submitted prior to the Company becoming subject to the reporting requirements of the Securities Act and the Exchange Act, the Company will deliver to such Holder a written statement that it has complied with such requirements.

 

21.             Entire Agreement. This Warrant and the exhibits and attachments hereto contain the entire agreement between the parties with respect to the subject matter hereof and supersede all prior and contemporaneous arrangements or undertakings with respect thereto.

 

22.             Miscellaneous. The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof. In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first set forth above.

 

GEORGIA BANKING COMPANY, INC.
   
   
By:  
  Bartow Morgan, Jr.
  Chief Executive Officer

 

 

 

 

ANNEX A

 

FORM OF
ELECTION TO PURCHASE

 

To Georgia Banking Company, Inc.:

 

The undersigned is the Holder of Warrant No.                         (the “Warrant”) issued by Georgia Banking Company, Inc., a Georgia corporation (the “Company”). Capitalized terms used herein and not otherwise defined have the respective meanings set forth in the Warrant.

 

1.               The Warrant is currently exercisable to purchase a total of Shares.

 

2.               The Exercised Share Number is equal to                                .

 

3.               The Original Exercise Price is equal to $___.__ per Share.

 

4.               The Exercise Price is equal to $___.__ per Share.

 

5.¨ A. The Holder shall pay the sum of $                           to the Company in accordance with Section 4(a)(i) of the Warrant, which amount is equal to the Aggregate Exercise Price (the Exercised Share Number multiplied by the Exercise Price).

 

OR (Holder to choose one)

 

    ¨ B. The Company shall withhold a number of Shares issuable upon exercise of this Warrant in accordance with Section 4(a)(ii) of the Warrant equal in value to the Aggregate Exercise Price (the Exercised Share Number multiplied by the Exercise Price ) based on the Market Price of the Company Stock on the trading day immediately prior to the date on which this notice of exercise is delivered to the Company.

 

The undersigned requests that certificates for the Shares issuable upon this exercise be issued in the name of                                                                .

 

 Date:   
     
 Name of Holder:   
     
 Address of Holder:   
     
     

 

Social Security or Tax Identification Number of Holder:                                                               

 

  SIGNATURE OF HOLDER:                                                                       

  Name:  
  Title:  

 

 

 

 

Exhibit 4.9

 

BOTH THE WARRANT AND THE SHARES INTO WHICH THE WARRANT IS EXERCISABLE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) NOR ANY APPLICABLE STATE SECURITIES LAW (THE “STATE ACTS”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS AND UNTIL REGISTERED UNDER THE SECURITIES ACT, THE STATE ACTS AND ANY OTHER APPLICABLE SECURITIES LAWS UNLESS, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, SUCH OFFER, SALE, TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM REGISTRATION OR IS OTHERWISE IN COMPLIANCE WITH THE SECURITIES ACT, THE STATE ACTS AND ANY OTHER APPLICABLE SECURITIES LAWS.

 

WARRANT AGREEMENT

 

THIS WARRANT AGREEMENT (this “Agreement”) is made and entered into as of June 1, 2026 (the “Assumption Date”), by Georgia Banking Company, Inc., a bank holding company organized and existing under the laws of the State of Georgia (the “Company”), in favor of [________________________] (the “Warrant Holder”).

 

WHEREAS, the Company and Tandem Bancorp, Inc. (“Tandem”) entered into that certain Agreement and Plan of Merger, dated February 24, 2026, by and between the Company and Tandem (the “Merger Agreement”), pursuant to which Tandem merged with and into the Company, with the Company as the surviving corporation (the “Merger”);

 

WHEREAS, prior to the Merger, Tandem granted to Warrant Holder a warrant to purchase [_________] shares of Tandem’s common stock (the “Tandem Warrant”) with an original issue date of [__________] (the “Original Issue Date”), subject the Warrant Agreement dated as of [______________] (the “Tandem Agreement”); and

 

WHEREAS, in connection with the Merger and pursuant to the Merger Agreement, Warrant Holder elected to convert his outstanding and unexercised Tandem Warrant into a warrant to purchase shares of the Company’s common stock (the “Warrant”) equal to the number (rounded down to the nearest whole number) of (x) the number of shares of Tandem’s common stock subject to the Tandem Warrant immediately prior to the Effective Time (as defined in the Merger Agreement) times (y) 0.4800 (the “Exchange Ratio”), at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of Tandem’s common stock under the Tandem Warrant immediately prior to the Effective Time divided by (B) the Exchange Ratio;

 

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

  

1.             Grant of Warrant. Subject to the terms, restrictions, limitations and conditions stated herein, the Company hereby grants to the Warrant Holder the right (the “Warrant”) to purchase all or any part of an aggregate of [______________] shares of the common stock of the Company, par value $0.01 per share (“Common Stock”), subject to adjustment in accordance with Sections 6 and 7 hereof (such shares, as adjusted, the “Warrant Shares”). The Warrant shall be fully vested as of the Assumption Date. Warrant Holder agrees and understands that the Tandem Warrant has been cancelled as of the Effective Time (and is no longer exercisable) and converted into this Warrant to acquire Warrant Shares pursuant to the terms of this Agreement. Warrant Holder releases all rights to the Tandem Warrant under the Tandem Agreement, as set forth in the Warrant Holder Release Agreement.

 

 

 

  

2.             Term.

 

(a)            The term for the exercise of the Warrant begins at 9:00 a.m., Eastern Time, on the Original Issue Date and ends at 5:00 p.m., Eastern Time, on the 10th anniversary of the Original Issue Date (the “Expiration Time”).

 

(b)            Notwithstanding any other provision of this Agreement, the Warrant shall expire on any earlier date than that provided in Section 2(a) hereof in the event either the primary federal or state regulator of the Company (the “Regulators”) may require the Warrant Holder to exercise or forfeit the Warrant due to the capital of the Company falling below the minimum requirements as determined by the Regulators.

 

3.             Purchase Price. The adjusted price per share to be paid by the Warrant Holder for the Warrant Shares shall be $20.83 subject to adjustment as set forth in Section 7 hereof (such price, as adjusted, the “Purchase Price”).

 

4.             Exercise of Warrant. The Warrant may thereafter be exercised by the Warrant Holder, in whole or in part, at any time or from time to time prior to the Expiration Time, by delivery to the Company of the following:

 

(a)            A completed and signed notice of exercise (including Form W-9, which forms a part thereof) (the “Notice of Exercise”), as attached hereto as Schedule A;

 

(b)            A check payable to the Company for the full amount of the aggregate Purchase Price for the number of Warrant Shares as to which the Warrant is being exercised; and

 

(c)            A copy of this Agreement.

 

5.             Issuance of Warrant Shares. Upon receipt of the items set forth in Section 4 hereof, and subject to the terms hereof, the Company shall cause the number of Warrant Shares specified in the Notice of Exercise to be registered in book-entry form under the name of the Warrant Holder. Notwithstanding the foregoing, the Company shall not be required to issue or register the Warrant Shares in book-entry form or any portion thereof prior to the fulfillment of the following conditions:

 

(a)            The completion of any registration or other qualification of such shares which the Company shall deem necessary or advisable under any federal or state law or under the rulings or regulations of the Securities and Exchange Commission or any other governmental regulatory body, unless the availability of an exemption from such registration or qualification shall be established to the satisfaction of counsel for the Company;

 

(b)            The obtaining of any approval or other clearance from any federal or state governmental agency or body, which the Company shall determine to be necessary or advisable; or

 

(c)            The lapse of such reasonable period of time following the exercise of the Warrant, or any portion thereof, as the Company from time to time may establish for reasons of administrative convenience.

 

If the Warrant shall have been exercised only in part, the Company shall, at the time of registration in book-entry form of said Warrant Shares, deliver to the Warrant Holder a new statement evidencing the right of the Warrant Holder to purchase the remaining Warrant Shares covered by this Agreement. The Company shall pay all expenses and stock transfer taxes and other charges payable in connection with the book entry registration and delivery of such statement(s).

 

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6.               Antidilution, Etc.

 

(a)            If, at any time, the Company shall:

 

(i)            establish a record date for the determination of holders of record of its outstanding shares of Common Stock for the purpose of entitling them to receive a dividend payable in, or other distributions of, additional shares of its Common Stock;

 

(ii)           subdivide its outstanding shares of Common Stock into a larger number of shares of Common Stock; or

 

(iii)          combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock;

 

then (A) the number of Warrant Shares for which the Warrant Holder’s Warrant is exercisable immediately after the occurrence of any such event shall be adjusted to equal the number of shares of Company Common Stock which a record holder of the same number of shares of Common Stock for which Warrant Shares is exercisable immediately prior to the occurrence of such event would own or be entitled to receive after the happening of such event, and (B) the Purchase Price shall be adjusted to equal (x) the Purchase Price multiplied by the Warrant Shares for which the Warrant Holder’s Warrant is exercisable immediately prior to the adjustment divided by (y) the Warrant Shares for which Holder’s Warrant is exercisable immediately after such adjustment.

 

(b)            The following provisions shall be applicable to adjustments made pursuant to Section 6(a) hereof:

 

(i)            The adjustments required by Section 6(a) hereof shall be made whenever and as often as any event requiring an adjustment shall occur. For the purpose of any such adjustment, any event shall be deemed to have occurred at the close of business on the date of its occurrence.

 

(ii)            In computing adjustments under this Section 6(b), fractional interests in the Common Stock shall be taken into account to the nearest 1/10th of a share. In no event, however, shall fractional shares or a scrip representing fractional shares be issued upon the exercise of the Warrant. In lieu thereof, a cash payment shall be made to the Warrant Holder in an amount equal to such fraction multiplied by the Purchase Price.

 

(iii)          If the Company shall establish a record date for the determination of the holders of record of the Common Stock for the purpose of entitling such holders to receive a dividend payable in Company Common Stock and shall, thereafter and before the distribution to shareholders thereof, legally abandon its plan to pay or deliver such dividend, then no adjustment shall be required by reason of the establishment of such record date and any such adjustment previously made in respect thereof shall be rescinded and annulled.

 

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7.             Reorganization, Reclassification, Consolidation or Merger.

 

(a)            If, prior to the Expiration Time, there shall be any reorganization or reclassification of the Common Stock (other than a subdivision or combination of shares provided for in Section 6 hereof), or any consolidation or merger of the Company with another entity, the Warrant Holder shall thereafter be entitled to receive, during the term hereof and upon payment of the Purchase Price, the number of shares of stock or other securities or property of the Company or of the successor entity (or its parent Company) resulting from such consolidation or merger, as the case may be, to which a holder of the Common Stock, deliverable upon the exercise of the Warrant, would have been entitled upon such reorganization, reclassification, consolidation or merger; and in any case, appropriate adjustment (as determined by the Board of Directors of the Company in its sole discretion) shall be made in the application of the provisions herein set forth with respect to the rights and interest thereafter of the Warrant Holder to the end that the provisions set forth herein (including the adjustment of the Purchase Price and the Warrant Shares) shall thereafter be applicable, as near as may reasonably be practicable, in relation to any shares or other property thereafter deliverable upon the exercise hereof.

 

(b)            If any such reorganization, reclassification, consolidation, merger or share exchange results in a cash distribution in excess of the Purchase Price provided by this Warrant, the Warrant Holder may, at the Warrant Holder’s option, exercise this Warrant without making payment of the Purchase Price, and in such case the Company or its successors and assigns shall, upon distribution to such Warrant Holder, consider the Purchase Price to have been paid in full, and in making settlement to such Warrant Holder, shall deduct an amount equal to the Purchase Price from the amount payable to such Warrant Holder. Notwithstanding anything herein to the contrary, the Company will not effect any such reorganization, reclassification, merger, consolidation or share exchange unless prior to the consummation thereof, the corporation that may be required to deliver any stock, securities or other assets upon the exercise of the Warrant issuable pursuant to this Agreement shall agree by an instrument in writing to deliver such stock, cash, securities or other assets to the Warrant Holder. A sale, transfer or lease of all or substantially all of the assets of the Company to another person shall be deemed a reorganization, reclassification, consolidation, merger or share exchange for the foregoing purposes.

 

8.             Notice of Adjustments. Upon any adjustment provided for in Section 6 or Section 7 hereof, the Company, within 30 days thereafter, shall give written notice thereof to the Warrant Holder, which notice shall state the Purchase Price as adjusted and the increased or decreased number of Warrant Shares, setting, forth in reasonable detail the method of calculation of each.

 

9.             Miscellaneous.

 

(a)            Any notice hereunder by the Warrant Holder shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the Chief Financial Officer of the Company. Any notice hereunder by the Company shall be given to the Warrant Holder in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Warrant Holder may have on file with the Company.

 

(b)            The Company covenants that it has reserved and will keep available, solely for the purpose of issue upon the exercise of the Warrant, a sufficient number of shares of the Common Stock to permit the exercise of the Warrant in full.

 

(c)            No holder of the Warrant, as such, shall be entitled to vote or receive dividends with respect to the Warrant Shares subject thereto or be deemed to be a shareholder of the Company for any purpose until the Common Stock has been issued.

 

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(d)            This Agreement may be amended only by an instrument in writing executed by the party against whom enforcement of amendment is sought.

 

(e)            This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Georgia.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.

 

  Georgia banking Company, iNc.      
   
  By:           
    Bartow Morgan, Jr.
    Chief Executive Officer

 

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SCHEDULE A

 

NOTICE OF EXERCISE 

OF WARRANT TO PURCHASE COMMON STOCK OF 

GEORGIA BANKING COMPANY, INC.

 

The undersigned, the registered owner of the right to purchase shares of Common Stock (the “Common Stock”) of Georgia Banking Company, Inc. (the “Company”), hereby irrevocably elects to exercise such right to purchase thereunder ________ shares of the Common Stock of the Company and herewith makes payment of $________ therefor, and requests that such shares be issued in the name of, registered and a statement of share ownership be delivered to:

 

  Name:      
       
  Address:      
       
       

 

  Social Security or
Tax I.D. Number:
   

 

and if such shares shall not be all of the shares purchasable hereunder, that a new statement warrant ownership of like tenor for the balance of the shares purchasable hereunder be delivered to the undersigned.

 

Date:      

 

    WARRANT HOLDER         
     
   
    Name:              

 

THIS NOTICE OF EXERCISE SHALL NOT BE GIVEN EFFECT 

BY THE COMPANY UNLESS THE HOLDER OF THE UNDERLYING 

WARRANT HAS PROPERLY COMPLETED AND SIGNED BOTH 

THIS NOTICE OF EXERCISE FORM AND A CURRENT FORM W-9.

 

 

 

 

 

Exhibit 5.1

 

Troutman Pepper Locke LLP

Bank of America Plaza, 600 Peachtree Street NE, Suite 3000

Atlanta, GA 30308

troutman.com

 

 

October 2, 2026

 

Georgia Banking Company, Inc.

1776 Peachtree Street NW, Suite 300

Atlanta, GA 30309

 

Re:Georgia Banking Company, Inc. – Registration Statement on Form S-1

 

Ladies and Gentlemen:

 

We are acting as counsel to Georgia Banking Company, Inc., a Georgia corporation (the “Company”), in connection with the preparation and filing by the Company of the Registration Statement on Form S-1, as amended through the date hereof (the “Registration Statement”), with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”), relating to the registration of the offer and sale from time to time, in each case, by the selling shareholders named in the Registration Statement (the “Selling Shareholders”) of 7,040,514 shares (the “Shares”) of the Company’s voting common stock, par value $0.01 per share. The Shares may be sold by the Selling Shareholders, as described in the prospectus forming a part of the Registration Statement (the “Prospectus”).

 

This opinion is being furnished in accordance with the requirements of Item 16 of Form S-1 and Item 601(b)(5)(i) of Regulation S-K promulgated under the Securities Act.

 

We have reviewed the corporate proceedings taken by the Company in connection with the authorization and issuance of the Shares and the registration of their offer and sale, the Registration Statement and the Prospectus. We have also examined and relied upon originals or copies of such corporate records, documents, agreements or other instruments of the Company, and such certificates and records of public officials, and such other papers, as we have deemed necessary or appropriate in connection herewith, including, but not limited to, the Company’s Articles of Incorporation, as amended, the Company’s Amended and Restated Bylaws, and the resolutions of the Board of Directors. We have also made such investigations of law as we have deemed necessary or appropriate as a basis for such opinion. As to all matters of fact (including, without limitation, factual conclusions and characterizations and descriptions of purpose, intention or other state of mind), we have relied entirely upon certificates of officers of the Company and certificates of public officials, and have assumed, without independent inquiry, the accuracy of those certificates.

 

In rendering this opinion, we have assumed the genuineness and authenticity of all signatures on original documents; the legal capacity of all natural persons; the authenticity of all documents submitted to us as originals; the conformity to originals of all documents submitted to us as certified or photocopies; the accuracy and completeness of all documents and records reviewed by us; the accuracy, completeness and authenticity of certificates issued by any governmental official, office or agency and the absence of change in the information contained therein from the effective date of any such certificate; and the due authorization, execution and delivery of all documents where authorization, execution and delivery are prerequisites to the effectiveness of such documents, except we make no such assumption as to the Company.

 

We have also assumed that (i) the Registration Statement, and any amendments thereto (including post-effective amendments), will have become effective and will not have been terminated or rescinded, (ii) a prospectus supplement, if necessary, will have been prepared and filed with the Commission describing any Shares offered thereby, (iii) all Shares will be sold in compliance with applicable federal and state securities laws and in the manner specified in the Registration Statement and any applicable prospectus supplement, and (iv) the Company has complied with all applicable notice requirements regarding uncertificated shares provided in the Georgia Business Corporation Code (the “GBCC”).

 

Our opinion is expressed only with respect to the GBCC. We are not opining as to the applicability thereto, or the effect thereon, of the laws of any other jurisdiction or, in the case of Georgia, any other laws, or as to matters of municipal law or the laws of any local agencies within any states (including “blue sky” or other state securities laws).

 

Based upon the foregoing, and subject to the further assumptions, qualifications and limitations set forth herein, we are of the opinion that the Shares have been duly authorized and validly issued and are fully paid and non-assessable.

 

This opinion is limited to the matters stated herein, and no opinion is implied or may be inferred beyond the matters expressly stated herein.

 

We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any facts or circumstances that may change the opinions expressed herein after the date hereof.

 

We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement and any amendments thereto and to the reference of our firm under the caption “Legal Matters” in the Prospectus. In giving such consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission. This opinion letter is for your benefit in connection with the Registration Statement and may be relied upon by you and by persons entitled to rely upon it pursuant to the applicable provisions of the Securities Act.

 

  Sincerely,
   
  /s/ Troutman Pepper Locke LLP
       Troutman Pepper Locke LLP

 

 

 

Exhibit 10.1

 

Execution Version

 

CERTAIN CONFIDENTIAL INFORMATION (MARKED BY BRACKETS AS “[***]”) HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

INVESTOR RIGHTS AGREEMENT

 

This INVESTOR RIGHTS AGREEMENT (this “Agreement”), dated as of December 31, 2020, is made by and between Wingshooter Acquisition Corp., a Georgia corporation (the “Company”) and Patriot Financial Partners III, L.P., a Delaware limited partnership (the “Investor”). The Company and the Investor shall sometimes be referred to herein collectively, as the “Parties” and individually, as a “Party.”

 

RECITALS

 

WHEREAS, the Company and Georgia Banking Company, Inc. (“Georgia Banking Company”) entered into that certain Amended and Restated Agreement and Plan of Merger, dated November 11, 2020 (the “Merger Agreement”), pursuant to which the Company will merge with and into Georgia Banking Company, with Georgia Banking Company being the surviving entity (the “Acquisition”);

 

WHEREAS, references to the Company in this Agreement following the Acquisition shall be deemed to be references to Georgia Banking Company;

 

WHEREAS, Georgia Banking Company is a bank holding company, registered as such under the Bank Holding Company Act of 1956, as amended, and is the record and beneficial owner of 100% of the issued and outstanding capital stock of Georgia Banking Company, a Georgia state chartered bank (the “Bank”);

 

WHEREAS, concurrently herewith, the Investor has entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with the Company, pursuant to which the Investor will purchase from the Company that certain number of shares (the “Shares”) of common stock, par value $0.01 per share, of the Company (the “Common Stock”) equal to the lesser of (a) $30,000,000 divided by the Purchase Price per Share or (b) 24.9% of the issued and outstanding shares of Georgia Banking Company common stock, par value $0.01(“GBC Common Stock”), immediately following the Acquisition on a fully diluted as-converted basis;

 

WHEREAS, references to the Common Stock in this Agreement following the Acquisition shall be deemed to be references to GBC Common Stock;

 

WHEREAS, capitalized terms used herein without definition shall have the respective meanings ascribed to them in the Stock Purchase Agreement; and

 

WHEREAS, in order to induce the Investor to enter into the Stock Purchase Agreement, the Company has agreed to grant the Investor the rights set forth below.

 

 

 

 

AGREEMENT

 

NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, the Parties hereby agree as follows:

 

1.             Board/Observer Rights.

 

(a)            Following the Closing, the Company will promptly cause one representative of the Investor (the “Board Representative”) to be elected or appointed to the board of directors of the Company (for the avoidance of doubt, in this instance referring to the board of directors of Wingshooter Acquisition Corp.). Following the Acquisition, the Company will promptly cause the Board Representative to be elected or appointed to the board of directors of the Company (for the avoidance of doubt, in this instance referring to the board of directors of Georgia Banking Company) (the “Board of Directors”), and the board of directors of the Bank (the “Bank Board”), subject to all legal and regulatory requirements regarding service and election or appointment as a director of the Company and the Bank (the “Qualification Requirements”), in each case, so long as the Investor, together with its Affiliates, beneficially owns in the aggregate at least the lesser of either 50% of the total Shares or Converted Shares, as applicable, purchased by the Investor pursuant to the Stock Purchase Agreement or 4.9% of the Common Stock then outstanding (the “Minimum Ownership Interest”). So long as the Investor, together with its Affiliates, satisfies the Minimum Ownership Interest, the Company will, subject to applicable law, recommend to its shareholders the election of the Board Representative to the Board of Directors at any special meeting or annual meeting of the Company’s shareholders called for the purpose of the election of directors, as applicable, subject to satisfaction of the Qualification Requirements. So long as the Investor, together with its Affiliates, satisfies the Minimum Ownership Interest, the Company will, subject to applicable law, elect or appoint the Board Representative to the Bank Board at any special meeting or annual meeting of the Bank’s shareholders called for the purpose of the election of directors, as applicable, subject to satisfaction of the Qualification Requirements. If the Investor no longer satisfies the Minimum Ownership Interest, the Investor will have no further rights under Sections 1(a) through 1(e) and, at the written request of the Board of Directors, shall cause its Board Representative to resign from the Board of Directors and the Bank Board as promptly as possible thereafter.

 

(b)            The Board Representative shall, subject to the Qualification Requirements, be one of the Company’s nominees to serve on the Board of Directors. The Company shall use its commercially reasonable efforts to have the Board Representative elected as a director of the Company by the shareholders of the Company, and the Company shall solicit proxies for the Board Representative to the same extent as it does for any of its other Company nominees to the Board of Directors. The Investor covenants and agrees to hold any Information (as defined below) obtained from its Board Representative in confidence as set forth in Section 8 below. Notwithstanding anything to the contrary contained herein, at all times when the Investor satisfies the Minimum Ownership Interest, it shall comply in all respects with the Federal Reserve’s rule for Control and Divestiture Proceedings as codified in the Federal Reserve’s Regulation Y and any other guidance promulgated in connection with the matters addressed therein.

 

 

 

 

(c)            Subject to Section 1(a), upon the death, resignation, retirement, disqualification, or removal from office as a member of the Board of Directors or the Bank Board of its Board Representative, the Investor shall have the right to designate the replacement for such Board Representative, which replacement must be reasonably acceptable to the Company and must also satisfy the Qualification Requirements. The Board of Directors and the Bank Board shall use their respective commercially reasonable efforts to take all action required to fill the vacancy resulting therefrom with such person, use commercially reasonable efforts to have such person elected as director of the Company by the shareholders of the Company and solicit proxies for such person to the same extent as it does for any of its other nominees to the Board of Directors, as the case may be. If a Board Representative is nominated by the Company for election to the Board of Directors or the Bank Board, but fails to be elected, then subject to the proviso set forth in this Section 1(c) below, the Company or the Bank shall, as soon as practicable thereafter, subject to applicable law, increase the size of such board of directors and, following the procedures set forth above in this Section 1, appoint an individual designated in writing by the Investor who is reasonably acceptable to the Company and meets the Qualification Requirements to be the Board Representative (such individual to be different from the individual who was not elected) to the Board of Directors of the Company and/or the Bank Board (as the case may be).

 

(d)            The Company hereby agrees that, from and after the Closing Date, for so long as the Investor and its Affiliates in the aggregate satisfy the Minimum Ownership Interest, in the event that the Investor does not have a Board Representative serving on the Board of Directors or the Bank Board, as applicable, or such Board Representative is not present at any meeting of the Board of Directors or the Bank Board (including any meetings of committees thereof on which the Board Representative is permitted to attend), the Company shall invite a person designated by the Investor (the “Observer”) to attend in a nonvoting, nonparticipating observer capacity (i) all meetings of the Board of Directors and the Bank Board (including any meetings of committees thereof on which the Board Representative would have been permitted to attend), as applicable, and (ii) any meetings of the Board of Directors and the Bank Board (including any meetings of committees thereof on which the Board Representative is permitted to attend). The Observer shall not have any right to make motions or vote on any matter presented to the Board of Directors or the Bank Board or any committee thereof. The Company shall give the Observer written notice of each meeting of the Board of Directors and the Bank Board at the same time and in the same manner as given to the members of the Board of Directors or the Bank Board (as the case may be), shall provide the Observer with all written materials and other information given to members of the Board of Directors or the Bank Board (as the case may be) at the same time such materials and information are given to such members and shall permit the Observer to attend as an observer at all meetings thereof, and in the event the Company proposes to take any action by written consent in lieu of a meeting, the Company shall give written notice thereof to the Observer prior to the effective date of such consent along with the proposed text of such written consents; provided, however, that the Observer (i) shall enter into a confidentiality agreement in favor of the Company in the form of Exhibit A hereto prior to the Observer being provided the foregoing notices, materials or information relating to, or attending any meeting of, the Board of Directors or the Bank Board or any committee thereof, (ii) shall not be provided any confidential supervisory information without the prior necessary regulatory approval, and (iii) may be excluded by the Board of Directors or the Bank Board or any committee thereof from attending any executive session of such body and from participating in any attorney-client privileged discussion of such body.

 

 

 

 

(e)            The Board Representative shall be entitled to compensation and indemnification and insurance coverage in connection with his or her role as a director of the Company and the Bank to the same extent as the other directors on the Board of Directors or the Bank Board, as applicable, and shall be entitled to reimbursement for reasonable and documented out-of-pocket expenses incurred in attending meetings of the Board of Directors and the Bank Board and any committee thereof, in accordance with the Company’s and the Bank’s policies. The Observer shall not be entitled to compensation, reimbursement of expenses or indemnification from the Company or the Bank with respect to such role, provided however, that the Observer shall be entitled to reimbursement of reasonable and documented out-of-pocket expenses related to attendance at any meeting of the Board of Directors or the Bank Board or any committee thereof at which the Board Representative is not in attendance, whether by telephone or in person, in the same manner as provided for the Board Representative.

 

(f)            The Company acknowledges that the Board Representative may have certain rights to indemnification, advancement of expenses and/or insurance provided by the Investor and/or its Affiliates (collectively, the “Investor Indemnitors”). The Company hereby agrees on behalf of itself and the Bank that with respect to a claim by the Board Representative for indemnification arising out of his or her service as a director of the Company and/or the Bank (1) that the Company and the Bank are the indemnitors of first resort (i.e., the Company and the Bank’s obligations to the Board Representative with respect to indemnification, advancement of expenses and/or insurance (which obligations shall be the same as, but in no event greater than, any such obligations to all other members of the Board of Directors or the Bank Board, as applicable) are primary and any obligation of the Investor Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by such Board Representative are secondary), and (2) the Investor Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Board Representative against the Company.

 

2.             Registration Rights. The Company and the Investor shall execute and deliver effective as of the date hereof the Registration Rights Agreement, the form of which is attached hereto as Exhibit B.

 

3.             Information Rights.

 

(a)            From the date of this Agreement, as long as the Investor and its Affiliates in the aggregate satisfy the Minimum Ownership Amount, the Company shall make available to the Investor all materials delivered to the Company’s Board of Directors, the Bank Board, and the committees thereof; provided, however, that the Company shall not be required to deliver such materials to the extent that such delivery would (i) reasonably be expected to constitute a waiver of the attorney-client privilege, (ii) reasonably be expected to result in a breach of any contractual confidentiality obligation of the Company or the Bank or (iii) violate applicable law or regulatory requirements.

 

(b)            The Investor shall also be provided with access, information, and other rights as provided in the Investor VCOC Letter Agreement, a form of which is attached hereto as Exhibit C and will be entered into by the Company and the Investor as of the date of this Agreement.

 

 

 

 

(c)            The Investor hereby acknowledges that it is aware of the restrictions under the federal securities laws imposed on a person in possession of material nonpublic information concerning an issuer, including with respect to purchasing or selling securities of such issuer and the communication of such information to other persons. The Investor agrees that neither it nor its representatives nor any of their respective Affiliates will use any data or information in contravention of such securities laws or any rules or regulations promulgated thereunder.

 

(d)            The information rights set forth in this Sections 3(a)-(b) shall terminate and be of no further force or effect as of the date that the Investor and its Affiliates in the aggregate no longer satisfy the Minimum Ownership Interest.

 

4.             Bank Holding Company Act. The Company will not knowingly take any action which would reasonably be expected to pose a substantial risk that the Investor or any of its Affiliates will become a “bank holding company” under the Bank Holding Company Act of 1956, as amended (the “BHC Act”), and the rules and regulations promulgated thereunder, including, without limitation, undertaking any redemption, recapitalization or repurchase of Common Stock, of securities or rights, options, or warrants to purchase Common Stock, or securities of any type whatsoever that are, or may become, convertible into or exchangeable into or exercisable for Common Stock, in each case, where the Investor is not given the right to participate in such redemption, recapitalization or repurchase to the extent of the Investor’s pro-rata proportion; provided, however, that the Company shall not be deemed to have violated this Section 4 if it has given the Investor the opportunity to participate in such redemption, recapitalization or repurchase to the extent of the Investor’s pro-rata proportion and the Investor fails to so participate. In the event the Company breaches its obligations under this Section 4 or believes that it is reasonably likely to breach such an obligation, it shall promptly notify the Investor hereto and shall cooperate in good faith with the Investor to modify ownership or, to the extent commercially reasonable, make other arrangements or take any other action, in each case, as is necessary to cure or avoid such breach.

 

5.             Gross-Up Rights.

 

(a)            Sale of New Securities. For so long as the Investor, together with its Affiliates, satisfies the Minimum Ownership Interest, if at any time after the date hereof the Company makes any public or nonpublic offering or sale of any equity (including Common Stock and preferred stock), or any securities, warrants, rights, options or debt that is convertible or exchangeable into equity or that includes an equity component (such as, an “equity kicker”) (including any hybrid security) (any such security, a “New Security”) (other than (i) any issuance of equity (including Common Stock and preferred stock), or any securities, warrants, rights, options or debt that is convertible or exchangeable into equity or that includes an equity component by the Company to be issued as of the date hereof, as agreed or contemplated (and disclosed to the Investor in writing); (ii) pursuant to the granting or exercise of employee stock options, restricted stock or other stock incentives pursuant to the Company’s stock incentive plans approved by the Board of Directors or the issuance of stock pursuant to the Company’s employee stock purchase plan approved by the Board of Directors or similar plan where stock is being issued or offered to a trust, other entity or otherwise, for the benefit of any employees, officers or directors of the Company, in each case in the ordinary course of providing incentive compensation; (iii) issuances of capital stock as full or partial consideration for a merger, acquisition, joint venture, strategic alliance, license agreement or other similar nonfinancing transaction; (iv) pursuant to an in-kind dividend or similar distribution; (v) pursuant to an initial public offering of Common Stock; (vi) any issuance of any Common Stock, preferred stock or other equity interests of the Company or securities convertible into shares of Common Stock and/or preferred stock or other equity interests of the Company upon the exercise, conversion or exchange of options, warrants or other convertible securities or (vii) within thirty (30) days following completion of this offering, issuances of Common Stock in connection with the Other Private Placements); then in each such instance, the Investor shall be afforded the opportunity to acquire from the Company for the same price (net of any underwriting discounts or sales commissions) and on the same terms as such securities are proposed to be offered to others, up to the amount of New Securities in the aggregate required to enable it to maintain its proportionate Common Stock-equivalent interest in the Company immediately prior to any such issuance of New Securities. The amount of New Securities that the Investor shall be entitled to purchase in the aggregate shall be determined by multiplying (x) the total number or principal amount of such offered New Securities by (y) a fraction, the numerator of which is the total number of shares of Common Stock then held by the Investor (counting for such purposes all shares of Common Stock into or for which any securities owned by the Investor are directly or indirectly convertible or exercisable), if any, and the denominator of which is the total number of shares of Common Stock then outstanding (counting for such purposes all shares of Common Stock into or for which any securities owned by the Investor are directly or indirectly convertible or exercisable).

 

 

 

 

(b)            Limitation on Voting Securities. The purchase of any New Securities by the Investor shall not (i) cause the Investor or any of its Affiliates to violate any banking regulation, (ii) require the 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 (iii) cause the Investor, together with any other person whose Company securities would be aggregated with the 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 24.9% of any class of securities that entitle the holder thereof the right to vote in the election of directors or any other matters with respect to the Company (“Voting Securities”) outstanding at such time. For purposes of this Section 5(b), the term “Affiliate” shall have the meaning under the BHC Act and the Federal Reserve’s Regulation Y. Notwithstanding anything in this Section 5 to the contrary, upon the request of the Investor that the Investor not be issued New Securities that are Voting Securities in whole or in part upon the exercise of its rights to purchase New Securities, the Company shall cooperate with the Investor to modify the proposed issuance of New Securities to the Investor to provide for the issuance of nonvoting securities in lieu of Voting Securities with the same economic rights as such Voting Securities.

 

(c)            Notice. So long as the Investor and its Affiliates in the aggregate satisfy the Minimum Ownership Interest, in the event the Company proposes to offer or sell New Securities (the “Offering”), it shall give the Investor written notice of its intention, describing the price (or range of prices), anticipated amount of New Securities, timing, and other terms upon which the Company proposes to offer the same (including, in the case of a registered public offering and to the extent possible, a copy of the prospectus included in the registration statement filed with respect to such offering), no later than fifteen (15) Business Days, as the case may be, after the initial filing of a registration statement with the Commission with respect to an underwritten public Offering or after the commencement of marketing with respect to a Rule 144A Offering or an Offering pursuant to Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder. If the information contained in the notice constitutes material non-public information (as defined under the applicable securities laws), the Company shall deliver such notice only to the individuals identified (with respect to the Investor) in Section 9(a) hereof, and shall not communicate the information to anyone else acting on behalf of the Investor without the consent of one of the designated individuals. The Investor shall have twenty (20) Business Days from the date of receipt of such a notice to notify the Company in writing that it intends to exercise its rights provided in this Section 5 and as to the amount of New Securities the Investor desires to purchase, up to the maximum amount permitted pursuant to the last sentence of Section 5(a). Such notice shall constitute a nonbinding indication of interest of the Investor to purchase the amount of New Securities so specified at the price and other terms set forth in the Company’s notice to it. The failure of the Investor to respond within such twenty (20) Business Day period shall be deemed a waiver of the Investor’s rights under this Section 5 only with respect to the Offering described in the applicable notice.

 

 

 

 

(d)            Purchase Mechanism. If the Investor exercises its rights provided in this Section 5, the closing of the purchase of the New Securities in connection with the closing of the Offering with respect to which such right has been exercised shall take place within thirty (30) calendar days after the giving of notice of such exercise, which period of time shall be extended for a maximum of one hundred-eighty (180) days in order to comply with applicable laws and regulations (including receipt of any applicable regulatory or shareholder approvals). Investor must execute all customary transaction documentation in connection with such Offering on the same terms as any other participant in the Offering. Notwithstanding anything to the contrary herein, the closing of the purchase of the New Securities by the Investor will occur no earlier than the closing of the Offering triggering the right being exercised by the Investor. Each of the Company and the Investor agree to use its commercially reasonable efforts to secure any regulatory or shareholder approvals or other consents, and to comply with any law or regulation necessary in connection with the offer, sale and purchase of, such New Securities.

 

(e)            Failure of Purchase. In the event the Investor fails to exercise its rights provided in this Section 5 within the twenty (20) Business Day period outlined in Section 5(c) or, if so exercised, the Investor is unable to consummate such purchase within the time period specified in Section 5(d) above because of its failure to obtain any required regulatory or shareholder consent or approval, the Company shall thereafter be entitled (during the period of ninety (90) days following the conclusion of the applicable period) to sell or enter into an agreement (pursuant to which the sale of the New Securities covered thereby shall be consummated, if at all, within ninety (90) days from the date of such agreement) to sell the New Securities not elected to be purchased pursuant to this Section 5 by the Investor or which the Investor is unable to purchase because of such failure to obtain any such consent or approval, at a price and upon terms no more favorable in the aggregate to the purchasers of such New Securities than were specified in the Company’s notice to the Investor. Notwithstanding the foregoing, if such sale is subject to the receipt of any regulatory or shareholder approval or consent or the expiration of any waiting period, the time period during which such sale may be consummated shall be extended until the expiration of five (5) Business Days after all such approvals or consents have been obtained or waiting periods expired, but in no event shall such time period exceed one hundred-eighty (180) days from the date of the applicable agreement with respect to such sale. In the event the Company has not sold the New Securities or entered into an agreement to sell the New Securities within such ninety (90)-day period (or sold and issued New Securities in accordance with the foregoing within ninety (90) days from the date of such agreement (as such period may be extended in the manner described above for a period not to exceed one hundred-eighty (180) days from the date of such agreement)), the Company shall not thereafter offer, issue or sell such New Securities without first offering such New Securities to the Investor in the manner provided above.

 

 

 

 

(f)            Non-Cash Consideration. In the case of the offering of New Securities for a consideration in whole or in part other than cash, including securities acquired in exchange therefor (other than securities by their terms so exchangeable), the consideration other than cash shall be deemed to be the fair value thereof as determined by the Board of Directors; provided, however, that such fair value as determined by the Board of Directors shall not exceed the aggregate market price of the securities being offered as of the date the Board of Directors authorizes the offering of such securities.

 

(g)            Cooperation. The Company and the Investor shall cooperate in good faith to facilitate the exercise of the Investor’s rights under this Section 5, including to secure any required approvals or consents.

 

(h)            Termination. The Investor’s rights under this Section 5 shall terminate upon the earlier of (i) the completion of an initial public offering of the Company’s Common Stock and (ii) the date when the Investor and its Affiliates, in the aggregate, fail to satisfy the Minimum Ownership Interest.

 

6.             Warrant.

 

(a)            Upon the closing of the Acquisition, the Company will grant Investor a warrant to purchase shares (the “Warrant”) of non-voting common stock of the Company, par value $0.01 per share (the “Warrant Shares”) in an amount equal to two and a half percent (2.5%) of the outstanding shares of Common Stock after the offering of the Shares and the Acquisition (after giving effect to the conversion of the Shares into Converted Shares), by and between the Company and Investor, in the form attached to hereto as Exhibit D.

 

(b)            Reservation for Issuance. At all times after issuance of the Warrant, the Company shall reserve that number of Warrant Shares sufficient for issuance upon exercise of the Warrant granted to Investor pursuant to this Section 6.

 

7.             Most Favored Nation. For so long as the Investor and its Affiliates, in the aggregate, satisfy the Minimum Ownership Interest, the Company shall not enter into any additional, or modify any existing, agreements, arrangements or understandings with any existing or future investors in the Company that have the effect of establishing rights or otherwise benefiting such investor in a manner more favorable in any material respect to such investor than the rights and benefits established in favor of the Investor by this Agreement, unless, in any such case, the Investor has been provided with such rights and benefits. Notwithstanding anything to the contrary herein, the parties acknowledge and agree that pursuant to the Morgan Agreement and the Smith Agreement, Bartow Morgan, Jr. and J. Bradford Smith shall have rights and benefits that are substantially the same as those provided to the Investor pursuant to this Agreement.

 

 

 

 

8.             Confidentiality. Each Party to this Agreement will hold, and will use commercially reasonable efforts to cause its respective subsidiaries and their directors, officers, employees, agents, consultants and advisors to hold, in strict confidence, unless disclosure to a Governmental Entity is reasonably necessary or appropriate in connection with any necessary regulatory approval, or request for information or similar process, or unless compelled to disclose by judicial or administrative process or, based on the advice of its counsel, by another requirement of law or the applicable requirements of any Governmental Entity (in which case, the Party permitted to disclose such information shall, to the extent legally permissible and reasonably practicable, provide the other Party with prior written notice of such permitted disclosure so that such other Party may seek confidential treatment of such information from the applicable Governmental Entity), all nonpublic records, books, contracts, instruments, computer data and other data and information (collectively, “Information”) concerning the other Party hereto furnished to it by such other Party or its representatives pursuant to this Agreement (except to the extent that such information can be shown to have been (1) previously known by such Party on a nonconfidential basis, (2) in the public domain through no fault of such Party, (3) later lawfully acquired from other sources by the Party to which it was furnished or (4) independently developed or conceived by such Party without use of such Information), and neither Party hereto shall release or disclose such Information to any other person, except its Affiliates, partners, auditors, attorneys, financial advisors, other consultants and advisors with the express understanding that such parties will maintain the confidentiality of the Information and, to the extent permitted above, to Governmental Entities; provided, however, that (i) the Investor is permitted to disclose Information to auditors and bank and securities regulatory authorities without prior written notice to the Company in connection with any audit or examination that does not explicitly reference the Company or this Agreement and (ii) the Investor may identify the Company and the number and value of the Investor’s security holdings in the Company in accordance with applicable investment reporting and disclosure regulations or internal policies without prior notice to or consent from the Company.

 

9.             Miscellaneous.

 

(a)            Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile or e-mail (provided the sender receives a machine-generated confirmation of successful facsimile transmission or e-mail notification or confirmation of receipt of an e-mail transmission) at the facsimile number or e-mail address specified in this Section 9(a) prior to 5:00 p.m., New York City time, on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 5:00 p.m., New York City time, on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service with next day delivery specified, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as follows

 

 

 

 

If to the Company:

 

Wingshooter Acquisition Corp.
1776 Peachtree Street NW, Suite 100
Atlanta, GA 30309
Attn: Bartow Morgan, Jr.
Tel:
[***]
Email: [***]

 

With a copy to:

 

Troutman Pepper Hamilton Sanders LLP
600 Peachtree Street, NE, Suite 3000
Atlanta, GA 30308
Attn: James Stevens
Tel:
[***]
Fax: [***]
Email: [***]

 

If to the Investor:

 

Patriot Financial Partners III, L.P.
Radnor Corporate Center
Building Four, Suite 201
100 Matsonford Road
Radnor, PA 19087
Attention: James F. Deutsch
Tel:
[***]
Fax: [***]
Email: [***]

 

With a copy to:

 

Squire Patton Boggs (US) LLP
201 E. Fourth St., Suite 1900
Cincinnati, OH 45202
Attn: James J. Barresi
Tel:
[***]
Fax: [***]
Email: [***]

 

or such other address as may be designated in writing hereafter, in the same manner, by such Person.

 

(b)            The provisions of this Agreement may not be assigned by the Investor without the prior written consent of the Company, which consent may be withheld by the Company in its sole discretion, and any purported assignment shall be null and void in the absence of such consent. Subject to the foregoing restriction on assignment, this Agreement will be binding upon, and will inure to the benefit of and be enforceable by, the Parties hereto and their respective successors and permitted assigns. Without limiting the generality of the foregoing, after the Acquisition, Georgia Banking Company, as successor by merger to the Company, shall assume and be bound by this Agreement, and references to the Company in this Agreement following the Acquisition shall be deemed to be references to Georgia Banking Company. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

 

 

 

(c)            This Agreement, the Registration Rights Agreement, the Warrant and the VCOC Letter Agreement embodies the entire agreement and understanding between the Parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than as set forth or referred to herein. This Agreement supersedes all prior agreements and understandings among the parties hereto with respect to the subject matter hereof.

 

(d)            This Agreement will be governed by and construed in accordance with the laws of the State of Georgia applicable to contracts made and to be performed entirely within such State. Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective Affiliates, employees or agents) may be commenced on an exclusive basis in the Georgia Courts. Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of the Georgia Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such Georgia Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(e)            If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

(f)            Any Party hereto may (i) extend the time for the performance of any of the obligations or other acts of the other Party hereto and (ii) waive compliance by the other Party with any of such other Party’s obligations or covenants contained herein; provided, however, that any such extension or waiver shall be valid only if set forth in an instrument in writing signed by each of the Parties to be bound thereby, but no such extension or waiver and no failure to insist on strict compliance by the other Party hereto with an obligation or covenant hereunder shall operate as a waiver of, or estoppel with respect to, any subsequent failure to comply with the same obligation or covenant or any failure to comply therewith by the Party whose performance was waived.

 

 

 

 

(g)            This Agreement may be executed in two (2) or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, or by e-mail delivery of a “.pdf’ format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

 

[Signature(s) Page Follows]

 

 

 

 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed, where applicable by their duly authorized representatives, as of the date first above written.

 

  WINGSHOOTER ACQUISITION CORP.
     
  By: /s/ Bartow Morgan, Jr.
  Name: Bartow Morgan, Jr.
  Title: Chief Executive Officer
     
  PATRIOT FINANCIAL PARTNERS III, L.P.
     
  By: /s/ James F. Deutsch
  Name: James F. Deutsch
  Its: Managing Partner

  

 

 

 

Exhibit A

 

FORM OF
CONFIDENTIALITY AGREEMENT

 

[***]

 

 

 

 

Exhibit B

 

Registration Rights Agreement

(attached)

 

[***]

 

 

 

 

Exhibit C

 

VCOC Letter

 

(attached)

 

[***]

 

 

 

 

Exhibit D

 

Warrant 

(attached)

 

[***]

 

 

 

Exhibit 10.2

 

Execution Version

 

CERTAIN CONFIDENTIAL INFORMATION (MARKED BY BRACKETS AS “[***]”) HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

INVESTOR RIGHTS AGREEMENT

 

This INVESTOR RIGHTS AGREEMENT (this “Agreement”), dated as of December 31, 2020, is made by and between Wingshooter Acquisition Corp., a Georgia corporation (the “Company”) and Bartow Morgan, Jr., a Georgia resident (the “Investor”). The Company and the Investor shall sometimes be referred to herein collectively, as the “Parties” and individually, as a “Party.”

 

RECITALS

 

WHEREAS, the Company and Georgia Banking Company, Inc. (“Georgia Banking Company”) entered into that certain Amended and Restated Agreement and Plan of Merger, dated November 11, 2020 (the “Merger Agreement”), pursuant to which the Company will merge with and into Georgia Banking Company, with Georgia Banking Company being the surviving entity (the “Acquisition”);

 

WHEREAS, references to the Company in this Agreement following the Acquisition shall be deemed to be references to Georgia Banking Company;

 

WHEREAS, Georgia Banking Company is a bank holding company, registered as such under the Bank Holding Company Act of 1956, as amended, and is the record and beneficial owner of 100% of the issued and outstanding capital stock of Georgia Banking Company, a Georgia state chartered bank (the “Bank”);

 

WHEREAS, concurrently herewith, the Investor has entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with the Company, pursuant to which the Investor will purchase from the Company up to that certain number of shares (the “Shares”) of common stock, par value $0.01 per share, of the Company (the “Common Stock”) indicated on the Investor’s signature page to the Stock Purchase Agreement;

 

WHEREAS, references to the Common Stock in this Agreement following the Acquisition shall be deemed to be references to shares of common stock of Georgia Banking Company, par value $0.01 per share (“GBC Common Stock”);

 

WHEREAS, capitalized terms used herein without definition shall have the respective meanings ascribed to them in the Stock Purchase Agreement; and

 

WHEREAS, in order to induce the Investor to enter into the Stock Purchase Agreement, the Company has agreed to grant the Investor the rights set forth below.

 

 

 

AGREEMENT

 

NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, the Parties hereby agree as follows:

 

1.              Board/Observer Rights.

 

(a)            Following the Closing, the Company will promptly cause one representative of the Investor (the “Board Representative”) to be elected or appointed to the board of directors of the Company (for the avoidance of doubt, in this instance referring to the board of directors of Wingshooter Acquisition Corp.). Following the Acquisition, the Company will promptly cause the Board Representative to be elected or appointed to the board of directors of the Company (for the avoidance of doubt, in this instance referring to the board of directors of Georgia Banking Company) (the “Board of Directors”), and the board of directors of the Bank (the “Bank Board”), subject to all legal and regulatory requirements regarding service and election or appointment as a director of the Company and the Bank (the “Qualification Requirements”), in each case, so long as the Investor, together with its affiliates, beneficially owns in the aggregate at least the lesser of either 50% of the total Shares or Converted Shares, as applicable, purchased by the Investor pursuant to the Stock Purchase Agreement or 4.9% of the Common Stock then outstanding (the “Minimum Ownership Interest”). So long as the Investor, together with its affiliates, satisfies the Minimum Ownership Interest, the Company will, subject to applicable law, recommend to its shareholders the election of the Board Representative to the Board of Directors at any special meeting or annual meeting of the Company’s shareholders called for the purpose of the election of directors, as applicable, subject to satisfaction of the Qualification Requirements. So long as the Investor, together with its affiliates, satisfies the Minimum Ownership Interest, the Company will, subject to applicable law, elect or appoint the Board Representative to the Bank Board at any special meeting or annual meeting of the Bank’s shareholders called for the purpose of the election of directors, as applicable, subject to satisfaction of the Qualification Requirements. If the Investor no longer satisfies the Minimum Ownership Interest, the Investor will have no further rights under Sections 1(a) through 1(e) and, at the written request of the Board of Directors, shall cause its Board Representative to resign from the Board of Directors and the Bank Board as promptly as possible thereafter.

 

(b)            The Board Representative shall, subject to the Qualification Requirements, be one of the Company’s nominees to serve on the Board of Directors. The Company shall use its commercially reasonable efforts to have the Board Representative elected as a director of the Company by the shareholders of the Company, and the Company shall solicit proxies for the Board Representative to the same extent as it does for any of its other Company nominees to the Board of Directors. The Investor covenants and agrees to hold any Information (as defined below) obtained from its Board Representative in confidence as set forth in Section 7 below. Notwithstanding anything to the contrary contained herein, at all times when the Investor satisfies the Minimum Ownership Interest, it shall comply in all respects with the Federal Reserve’s rule for Control and Divestiture Proceedings as codified in the Federal Reserve’s Regulation Y and any other guidance promulgated in connection with the matters addressed therein.

 

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(c)            Subject to Section 1(a), upon the death, resignation, retirement, disqualification, or removal from office as a member of the Board of Directors or the Bank Board of its Board Representative, the Investor shall have the right to designate the replacement for such Board Representative, which replacement must be reasonably acceptable to the Company and must also satisfy the Qualification Requirements. The Board of Directors and the Bank Board shall use their respective commercially reasonable efforts to take all action required to fill the vacancy resulting therefrom with such person, use commercially reasonable efforts to have such person elected as director of the Company by the shareholders of the Company and solicit proxies for such person to the same extent as it does for any of its other nominees to the Board of Directors, as the case may be. If a Board Representative is nominated by the Company for election to the Board of Directors or the Bank Board, but fails to be elected, then subject to the proviso set forth in this Section 1(c) below, the Company or the Bank shall, as soon as practicable thereafter, subject to applicable law, increase the size of such board of directors and, following the procedures set forth above in this Section 1, appoint an individual designated in writing by the Investor who is reasonably acceptable to the Company and meets the Qualification Requirements to be the Board Representative (such individual to be different from the individual who was not elected) to the Board of Directors of the Company and/or the Bank Board (as the case may be).

 

(d)            The Company hereby agrees that, from and after the Closing Date, for so long as the Investor and its affiliates in the aggregate satisfy the Minimum Ownership Interest, in the event that the Investor does not have a Board Representative serving on the Board of Directors or the Bank Board, as applicable, or such Board Representative is not present at any meeting of the Board of Directors or the Bank Board (including any meetings of committees thereof on which the Board Representative is permitted to attend), the Company shall invite a person designated by the Investor (the “Observer”) to attend in a nonvoting, nonparticipating observer capacity (i) all meetings of the Board of Directors and the Bank Board (including any meetings of committees thereof on which the Board Representative would have been permitted to attend), as applicable, and (ii) any meetings of the Board of Directors and the Bank Board (including any meetings of committees thereof on which the Board Representative is permitted to attend). The Observer shall not have any right to make motions or vote on any matter presented to the Board of Directors or the Bank Board or any committee thereof. The Company shall give the Observer written notice of each meeting of the Board of Directors and the Bank Board at the same time and in the same manner as given to the members of the Board of Directors or the Bank Board (as the case may be), shall provide the Observer with all written materials and other information given to members of the Board of Directors or the Bank Board (as the case may be) at the same time such materials and information are given to such members and shall permit the Observer to attend as an observer at all meetings thereof, and in the event the Company proposes to take any action by written consent in lieu of a meeting, the Company shall give written notice thereof to the Observer prior to the effective date of such consent along with the proposed text of such written consents; provided, however, that the Observer (i) shall enter into a confidentiality agreement in favor of the Company in the form of Exhibit A hereto prior to the Observer being provided the foregoing notices, materials or information relating to, or attending any meeting of, the Board of Directors or the Bank Board or any committee thereof, (ii) shall not be provided any confidential supervisory information without the prior necessary regulatory approval, and (iii) may be excluded by the Board of Directors or the Bank Board or any committee thereof from attending any executive session of such body and from participating in any attorney-client privileged discussion of such body.

 

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(e)            The Board Representative shall be entitled to compensation and indemnification and insurance coverage in connection with his or her role as a director of the Company and the Bank to the same extent as the other directors on the Board of Directors or the Bank Board, as applicable, and shall be entitled to reimbursement for reasonable and documented out-of-pocket expenses incurred in attending meetings of the Board of Directors and the Bank Board and any committee thereof, in accordance with the Company’s and the Bank’s policies. The Observer shall not be entitled to compensation, reimbursement of expenses or indemnification from the Company or the Bank with respect to such role, provided however, that the Observer shall be entitled to reimbursement of reasonable and documented out-of-pocket expenses related to attendance at any meeting of the Board of Directors or the Bank Board or any committee thereof at which the Board Representative is not in attendance, whether by telephone or in person, in the same manner as provided for the Board Representative.

 

(f)            The Company acknowledges that the Board Representative may have certain rights to indemnification, advancement of expenses and/or insurance provided by the Investor and/or its affiliates (collectively, the “Investor Indemnitors”). The Company hereby agrees on behalf of itself and the Bank that with respect to a claim by the Board Representative for indemnification arising out of his or her service as a director of the Company and/or the Bank (1) that the Company and the Bank are the indemnitors of first resort (i.e., the Company and the Bank’s obligations to the Board Representative with respect to indemnification, advancement of expenses and/or insurance (which obligations shall be the same as, but in no event greater than, any such obligations to all other members of the Board of Directors or the Bank Board, as applicable) are primary and any obligation of the Investor Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by such Board Representative are secondary), and (2) the Investor Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Board Representative against the Company.

 

2.              Registration Rights. The Company and the Investor shall execute and deliver effective as of the date hereof the Registration Rights Agreement, the form of which is attached hereto as Exhibit B.

 

3.              Information Rights.

 

(a)            From the date of this Agreement, as long as the Investor and its affiliates in the aggregate satisfy the Minimum Ownership Amount, the Company shall make available to the Investor all materials delivered to the Company’s Board of Directors, the Bank Board, and the committees thereof; provided, however, that the Company shall not be required to deliver such materials to the extent that such delivery would (i) reasonably be expected to constitute a waiver of the attorney-client privilege, (ii) reasonably be expected to result in a breach of any contractual confidentiality obligation of the Company or the Bank or (iii) violate applicable law or regulatory requirements.

 

(b)            The Investor shall also be provided with access, information, and other rights as provided in the Investor Letter Agreement, a form of which is attached hereto as Exhibit C and will be entered into by the Company and the Investor as of the date of this Agreement.

 

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(c)            The Investor hereby acknowledges that it is aware of the restrictions under the federal securities laws imposed on a person in possession of material nonpublic information concerning an issuer, including with respect to purchasing or selling securities of such issuer and the communication of such information to other persons. The Investor agrees that neither it nor its representatives nor any of their respective affiliates will use any data or information in contravention of such securities laws or any rules or regulations promulgated thereunder.

 

(d)            The information rights set forth in this Sections 3(a)-(b) shall terminate and be of no further force or effect as of the date that the Investor and its affiliates in the aggregate no longer satisfy the Minimum Ownership Interest.

 

4.              Gross-Up Rights.

 

(a)            Sale of New Securities. For so long as the Investor, together with its affiliates, satisfies the Minimum Ownership Interest, if at any time after the date hereof the Company makes any public or nonpublic offering or sale of any equity (including Common Stock and preferred stock), or any securities, warrants, rights, options or debt that is convertible or exchangeable into equity or that includes an equity component (such as, an “equity kicker”) (including any hybrid security) (any such security, a “New Security”) (other than (i) any issuance of equity (including Common Stock and preferred stock), or any securities, warrants, rights, options or debt that is convertible or exchangeable into equity or that includes an equity component by the Company to be issued as of the date hereof, as agreed or contemplated (and disclosed to the Investor in writing); (ii) pursuant to the granting or exercise of employee stock options, restricted stock or other stock incentives pursuant to the Company’s stock incentive plans approved by the Board of Directors or the issuance of stock pursuant to the Company’s employee stock purchase plan approved by the Board of Directors or similar plan where stock is being issued or offered to a trust, other entity or otherwise, for the benefit of any employees, officers or directors of the Company, in each case in the ordinary course of providing incentive compensation; (iii) issuances of capital stock as full or partial consideration for a merger, acquisition, joint venture, strategic alliance, license agreement or other similar nonfinancing transaction; (iv) pursuant to an in-kind dividend or similar distribution; (v) pursuant to an initial public offering of Common Stock; (vi) any issuance of any Common Stock, preferred stock or other equity interests of the Company or securities convertible into shares of Common Stock and/or preferred stock or other equity interests of the Company upon the exercise, conversion or exchange of options, warrants or other convertible securities or (vii) within thirty (30) days following completion of this offering, issuances of Common Stock in connection with the Other Private Placements); then in each such instance, the Investor shall be afforded the opportunity to acquire from the Company for the same price (net of any underwriting discounts or sales commissions) and on the same terms as such securities are proposed to be offered to others, up to the amount of New Securities in the aggregate required to enable it to maintain its proportionate Common Stock-equivalent interest in the Company immediately prior to any such issuance of New Securities. The amount of New Securities that the Investor shall be entitled to purchase in the aggregate shall be determined by multiplying (x) the total number or principal amount of such offered New Securities by (y) a fraction, the numerator of which is the total number of shares of Common Stock then held by the Investor (counting for such purposes all shares of Common Stock into or for which any securities owned by the Investor are directly or indirectly convertible or exercisable), if any, and the denominator of which is the total number of shares of Common Stock then outstanding (counting for such purposes all shares of Common Stock into or for which any securities owned by the Investor are directly or indirectly convertible or exercisable).

 

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(b)            Limitation on Voting Securities. The purchase of any New Securities by the Investor shall not (i) cause the Investor or any of its Affiliates to violate any banking regulation, (ii) require the 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 (iii) cause the Investor, together with any other person whose Company securities would be aggregated with the 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 24.9% of any class of securities that entitle the holder thereof the right to vote in the election of directors or any other matters with respect to the Company (“Voting Securities”) outstanding at such time. For purposes of this Section 4(b), the term “Affiliate” shall have the meaning under the BHC Act and the Federal Reserve’s Regulation Y. Notwithstanding anything in this Section 4 to the contrary, upon the request of the Investor that the Investor not be issued New Securities that are Voting Securities in whole or in part upon the exercise of its rights to purchase New Securities, the Company shall cooperate with the Investor to modify the proposed issuance of New Securities to the Investor to provide for the issuance of nonvoting securities in lieu of Voting Securities with the same economic rights as such Voting Securities.

 

(c)            Notice. So long as the Investor and its affiliates in the aggregate satisfy the Minimum Ownership Interest, in the event the Company proposes to offer or sell New Securities (the “Offering”), it shall give the Investor written notice of its intention, describing the price (or range of prices), anticipated amount of New Securities, timing, and other terms upon which the Company proposes to offer the same (including, in the case of a registered public offering and to the extent possible, a copy of the prospectus included in the registration statement filed with respect to such offering), no later than fifteen (15) Business Days, as the case may be, after the initial filing of a registration statement with the Commission with respect to an underwritten public Offering or after the commencement of marketing with respect to a Rule 144A Offering or an Offering pursuant to Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder. If the information contained in the notice constitutes material non-public information (as defined under the applicable securities laws), the Company shall deliver such notice only to the individuals identified (with respect to the Investor) in Section 8(a) hereof, and shall not communicate the information to anyone else acting on behalf of the Investor without the consent of one of the designated individuals. The Investor shall have twenty (20) Business Days from the date of receipt of such a notice to notify the Company in writing that it intends to exercise its rights provided in this Section 4 and as to the amount of New Securities the Investor desires to purchase, up to the maximum amount permitted pursuant to the last sentence of Section 4(a). Such notice shall constitute a nonbinding indication of interest of the Investor to purchase the amount of New Securities so specified at the price and other terms set forth in the Company’s notice to it. The failure of the Investor to respond within such twenty (20) Business Day period shall be deemed a waiver of the Investor’s rights under this Section 4 only with respect to the Offering described in the applicable notice.

 

- 6 -

 

 

(d)            Purchase Mechanism. If the Investor exercises its rights provided in this Section 4, the closing of the purchase of the New Securities in connection with the closing of the Offering with respect to which such right has been exercised shall take place within thirty (30) calendar days after the giving of notice of such exercise, which period of time shall be extended for a maximum of one hundred-eighty (180) days in order to comply with applicable laws and regulations (including receipt of any applicable regulatory or shareholder approvals). Investor must execute all customary transaction documentation in connection with such Offering on the same terms as any other participant in the Offering. Notwithstanding anything to the contrary herein, the closing of the purchase of the New Securities by the Investor will occur no earlier than the closing of the Offering triggering the right being exercised by the Investor. Each of the Company and the Investor agree to use its commercially reasonable efforts to secure any regulatory or shareholder approvals or other consents, and to comply with any law or regulation necessary in connection with the offer, sale and purchase of, such New Securities.

 

(e)            Failure of Purchase. In the event the Investor fails to exercise its rights provided in this Section 4 within the twenty (20) Business Day period outlined in Section 4(c) or, if so exercised, the Investor is unable to consummate such purchase within the time period specified in Section 4(d) above because of its failure to obtain any required regulatory or shareholder consent or approval, the Company shall thereafter be entitled (during the period of ninety (90) days following the conclusion of the applicable period) to sell or enter into an agreement (pursuant to which the sale of the New Securities covered thereby shall be consummated, if at all, within ninety (90) days from the date of such agreement) to sell the New Securities not elected to be purchased pursuant to this Section 4 by the Investor or which the Investor is unable to purchase because of such failure to obtain any such consent or approval, at a price and upon terms no more favorable in the aggregate to the purchasers of such New Securities than were specified in the Company’s notice to the Investor. Notwithstanding the foregoing, if such sale is subject to the receipt of any regulatory or shareholder approval or consent or the expiration of any waiting period, the time period during which such sale may be consummated shall be extended until the expiration of five (5) Business Days after all such approvals or consents have been obtained or waiting periods expired, but in no event shall such time period exceed one hundred-eighty (180) days from the date of the applicable agreement with respect to such sale. In the event the Company has not sold the New Securities or entered into an agreement to sell the New Securities within such ninety (90)-day period (or sold and issued New Securities in accordance with the foregoing within ninety (90) days from the date of such agreement (as such period may be extended in the manner described above for a period not to exceed one hundred-eighty (180) days from the date of such agreement)), the Company shall not thereafter offer, issue or sell such New Securities without first offering such New Securities to the Investor in the manner provided above.

 

(f)            Non-Cash Consideration. In the case of the offering of New Securities for a consideration in whole or in part other than cash, including securities acquired in exchange therefor (other than securities by their terms so exchangeable), the consideration other than cash shall be deemed to be the fair value thereof as determined by the Board of Directors; provided, however, that such fair value as determined by the Board of Directors shall not exceed the aggregate market price of the securities being offered as of the date the Board of Directors authorizes the offering of such securities.

 

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(g)            Cooperation. The Company and the Investor shall cooperate in good faith to facilitate the exercise of the Investor’s rights under this Section 4, including to secure any required approvals or consents.

 

(h)            Termination. The Investor’s rights under this Section 4 shall terminate upon the earlier of (i) the completion of an initial public offering of the Company’s Common Stock and (ii) the date when the Investor and its affiliates, in the aggregate, fail to satisfy the Minimum Ownership Interest.

 

5.            Warrant.

 

(a)            Upon the closing of the Acquisition, the Company will grant Investor a warrant to purchase shares (the “Warrant”) of GBC Common Stock (the “Warrant Shares”) in an amount equal to two and a half percent (2.5%) of the outstanding shares of Common Stock after the offering of the Shares and the Acquisition (after giving effect to the conversion of the Shares into Converted Shares), by and between the Company and the Investor, in the form attached hereto as Exhibit D.

 

(b)            Reservation for Issuance. At all times after issuance of the Warrant, the Company shall reserve that number of Warrant Shares sufficient for issuance upon exercise of the Warrant granted to Investor pursuant to this Section 5.

 

6.              Most Favored Nation. For so long as the Investor and its affiliates, in the aggregate, satisfy the Minimum Ownership Interest, the Company shall not enter into any additional, or modify any existing, agreements, arrangements or understandings with any existing or future investors in the Company that have the effect of establishing rights or otherwise benefiting such investor in a manner more favorable in any material respect to such investor than the rights and benefits established in favor of the Investor by this Agreement, unless, in any such case, the Investor has been provided with such rights and benefits. Notwithstanding anything to the contrary herein, the Parties acknowledge and agree that pursuant to the Smith Agreement and the Patriot Agreement, J. Bradford Smith and Patriot Financial Partners III, L.P. shall have rights and benefits that are substantially the same as those provided to the Investor pursuant to this Agreement.

 

7.              Confidentiality. Each Party to this Agreement will hold, and will use commercially reasonable efforts to cause its respective subsidiaries and their directors, officers, employees, agents, consultants and advisors to hold, in strict confidence, unless disclosure to a Governmental Entity is reasonably necessary or appropriate in connection with any necessary regulatory approval, or request for information or similar process, or unless compelled to disclose by judicial or administrative process or, based on the advice of its counsel, by another requirement of law or the applicable requirements of any Governmental Entity (in which case, the Party permitted to disclose such information shall, to the extent legally permissible and reasonably practicable, provide the other Party with prior written notice of such permitted disclosure so that such other Party may seek confidential treatment of such information from the applicable Governmental Entity), all nonpublic records, books, contracts, instruments, computer data and other data and information (collectively, “Information”) concerning the other Party hereto furnished to it by such other Party or its representatives pursuant to this Agreement (except to the extent that such information can be shown to have been (1) previously known by such Party on a nonconfidential basis, (2) in the public domain through no fault of such Party, (3) later lawfully acquired from other sources by the Party to which it was furnished or (4) independently developed or conceived by such Party without use of such Information), and neither Party hereto shall release or disclose such Information to any other person, except its Affiliates, partners, auditors, attorneys, financial advisors, other consultants and advisors with the express understanding that such parties will maintain the confidentiality of the Information and, to the extent permitted above, to Governmental Entities; provided, however, that (i) the Investor is permitted to disclose Information to auditors and bank and securities regulatory authorities without prior written notice to the Company in connection with any audit or examination that does not explicitly reference the Company or this Agreement and (ii) the Investor may identify the Company and the number and value of the Investor’s security holdings in the Company in accordance with applicable investment reporting and disclosure regulations or internal policies without prior notice to or consent from the Company.

 

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8.              Miscellaneous.

 

(a)            Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile or e-mail (provided the sender receives a machine-generated confirmation of successful facsimile transmission or e-mail notification or confirmation of receipt of an e-mail transmission) at the facsimile number or e-mail address specified in this Section 8(a) prior to 5:00 p.m., New York City time, on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 5:00 p.m., New York City time, on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service with next day delivery specified, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as follows

 

If to the Company:

 

Wingshooter Acquisition Corp.
1776 Peachtree Street NW, Suite 100
Atlanta, GA 30309
Attn: Chairman

 

If to the Investor:

 

Bartow Morgan, Jr.

[***]

 

or such other address as may be designated in writing hereafter, in the same manner, by such Person.

 

(b)            The provisions of this Agreement may not be assigned by the Investor without the prior written consent of the Company, which consent may be withheld by the Company in its sole discretion, and any purported assignment shall be null and void in the absence of such consent. Subject to the foregoing restriction on assignment, this Agreement will be binding upon, and will inure to the benefit of and be enforceable by, the Parties hereto and their respective successors and permitted assigns. Without limiting the generality of the foregoing, after the Acquisition, Georgia Banking Company, as successor by merger to the Company, shall assume and be bound by this Agreement, and references to the Company in this Agreement following the Acquisition shall be deemed to be references to Georgia Banking Company. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

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(c)            This Agreement, the Registration Rights Agreement, the Warrant and the Letter Agreement embodies the entire agreement and understanding between the Parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than as set forth or referred to herein. This Agreement supersedes all prior agreements and understandings among the Parties hereto with respect to the subject matter hereof.

 

(d)            This Agreement will be governed by and construed in accordance with the laws of the State of Georgia applicable to contracts made and to be performed entirely within such State. Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, employees or agents) may be commenced on an exclusive basis in the Georgia Courts. Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of the Georgia Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such Georgia Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(e)            If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

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(f)            Any Party hereto may (i) extend the time for the performance of any of the obligations or other acts of the other Party hereto and (ii) waive compliance by the other Party with any of such other Party’s obligations or covenants contained herein; provided, however, that any such extension or waiver shall be valid only if set forth in an instrument in writing signed by each of the Parties to be bound thereby, but no such extension or waiver and no failure to insist on strict compliance by the other Party hereto with an obligation or covenant hereunder shall operate as a waiver of, or estoppel with respect to, any subsequent failure to comply with the same obligation or covenant or any failure to comply therewith by the Party whose performance was waived.

 

(g)            This Agreement may be executed in two (2) or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each Party and delivered to the other Party, it being understood that the Parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, or by e-mail delivery of a “.pdf’ format data file, such signature shall create a valid and binding obligation of the Party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

 

[Signature(s) Page Follows]

 

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed, where applicable by their duly authorized representatives, as of the date first above written.

 

  WINGSHOOTER ACQUISITION CORP.
   
  By: /s/ J. Bradford Smith
    J. Bradford Smith, Management Officer
   
  INVESTOR
   
  /s/ Bartow Morgan, Jr.
  Bartow Morgan, Jr.

 

[Signature page to Investor Rights Agreement]

 

 

Exhibit A

 

FORM OF
CONFIDENTIALITY AGREEMENT

 

[***]

 

 

 

Exhibit B

 

Registration Rights Agreement

(attached)

 

[***]

 

 

 

Exhibit C

 

Letter Agreement

(attached)

 

[***]

 

 

 

Exhibit D

 

Warrant

(attached)

 

[***]

 

 

Exhibit 10.3

 

Execution Version

 

CERTAIN CONFIDENTIAL INFORMATION (MARKED BY BRACKETS AS “[***]”) HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

INVESTOR RIGHTS AGREEMENT

 

This INVESTOR RIGHTS AGREEMENT (this “Agreement”), dated as of December 31, 2020, is made by and between Wingshooter Acquisition Corp., a Georgia corporation (the “Company”) and J. Bradford Smith, a Georgia resident (the “Investor”). The Company and the Investor shall sometimes be referred to herein collectively, as the “Parties” and individually, as a “Party.”

 

RECITALS

 

WHEREAS, the Company and Georgia Banking Company, Inc. (“Georgia Banking Company”) entered into that certain Amended and Restated Agreement and Plan of Merger, dated November 11, 2020 (the “Merger Agreement”), pursuant to which the Company will merge with and into Georgia Banking Company, with Georgia Banking Company being the surviving entity (the “Acquisition”);

 

WHEREAS, references to the Company in this Agreement following the Acquisition shall be deemed to be references to Georgia Banking Company;

 

WHEREAS, Georgia Banking Company is a bank holding company, registered as such under the Bank Holding Company Act of 1956, as amended, and is the record and beneficial owner of 100% of the issued and outstanding capital stock of Georgia Banking Company, a Georgia state chartered bank (the “Bank”);

 

WHEREAS, concurrently herewith, the Investor has entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with the Company, pursuant to which the Investor will purchase from the Company up to that certain number of shares (the “Shares”) of common stock, par value $0.01 per share, of the Company (the “Common Stock”) indicated on the Investor’s signature page to the Stock Purchase Agreement;

 

WHEREAS, references to the Common Stock in this Agreement following the Acquisition shall be deemed to be references to shares of common stock of Georgia Banking Company, par value $0.01 per share (“GBC Common Stock”);

 

WHEREAS, capitalized terms used herein without definition shall have the respective meanings ascribed to them in the Stock Purchase Agreement; and

 

WHEREAS, in order to induce the Investor to enter into the Stock Purchase Agreement, the Company has agreed to grant the Investor the rights set forth below.

 

 

 

 

AGREEMENT

 

NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, the Parties hereby agree as follows:

 

1.              Registration Rights. The Company and the Investor shall execute and deliver effective as of the date hereof the Registration Rights Agreement, the form of which is attached hereto as Exhibit A.

 

2.              Information Rights.

 

(a)            From the date of this Agreement, as long as the Investor and its affiliates in the aggregate satisfy the Minimum Ownership Amount, the Company shall make available to the Investor all materials delivered to the Company’s Board of Directors, the Bank Board, and the committees thereof; provided, however, that the Company shall not be required to deliver such materials to the extent that such delivery would (i) reasonably be expected to constitute a waiver of the attorney-client privilege, (ii) reasonably be expected to result in a breach of any contractual confidentiality obligation of the Company or the Bank or (iii) violate applicable law or regulatory requirements.

 

(b)            The Investor shall also be provided with access, information, and other rights as provided in the Investor Letter Agreement, a form of which is attached hereto as Exhibit B and will be entered into by the Company and the Investor as of the date of this Agreement.

 

(c)            The Investor hereby acknowledges that it is aware of the restrictions under the federal securities laws imposed on a person in possession of material nonpublic information concerning an issuer, including with respect to purchasing or selling securities of such issuer and the communication of such information to other persons. The Investor agrees that neither it nor its representatives nor any of their respective affiliates will use any data or information in contravention of such securities laws or any rules or regulations promulgated thereunder.

 

(d)           The information rights set forth in this Sections 2(a)-(b) shall terminate and be of no further force or effect as of the date that the Investor and its affiliates in the aggregate no longer satisfy the Minimum Ownership Interest.

 

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3.              Gross-Up Rights.

 

(a)            Sale of New Securities. For so long as the Investor, together with its affiliates, satisfies the Minimum Ownership Interest, if at any time after the date hereof the Company makes any public or nonpublic offering or sale of any equity (including Common Stock and preferred stock), or any securities, warrants, rights, options or debt that is convertible or exchangeable into equity or that includes an equity component (such as, an “equity kicker”) (including any hybrid security) (any such security, a “New Security”) (other than (i) any issuance of equity (including Common Stock and preferred stock), or any securities, warrants, rights, options or debt that is convertible or exchangeable into equity or that includes an equity component by the Company to be issued as of the date hereof, as agreed or contemplated (and disclosed to the Investor in writing); (ii) pursuant to the granting or exercise of employee stock options, restricted stock or other stock incentives pursuant to the Company’s stock incentive plans approved by the Board of Directors or the issuance of stock pursuant to the Company’s employee stock purchase plan approved by the Board of Directors or similar plan where stock is being issued or offered to a trust, other entity or otherwise, for the benefit of any employees, officers or directors of the Company, in each case in the ordinary course of providing incentive compensation; (iii) issuances of capital stock as full or partial consideration for a merger, acquisition, joint venture, strategic alliance, license agreement or other similar nonfinancing transaction; (iv) pursuant to an in-kind dividend or similar distribution; (v) pursuant to an initial public offering of Common Stock; (vi) any issuance of any Common Stock, preferred stock or other equity interests of the Company or securities convertible into shares of Common Stock and/or preferred stock or other equity interests of the Company upon the exercise, conversion or exchange of options, warrants or other convertible securities or (vii) within thirty (30) days following completion of this offering, issuances of Common Stock in connection with the Other Private Placements); then in each such instance, the Investor shall be afforded the opportunity to acquire from the Company for the same price (net of any underwriting discounts or sales commissions) and on the same terms as such securities are proposed to be offered to others, up to the amount of New Securities in the aggregate required to enable it to maintain its proportionate Common Stock-equivalent interest in the Company immediately prior to any such issuance of New Securities. The amount of New Securities that the Investor shall be entitled to purchase in the aggregate shall be determined by multiplying (x) the total number or principal amount of such offered New Securities by (y) a fraction, the numerator of which is the total number of shares of Common Stock then held by the Investor (counting for such purposes all shares of Common Stock into or for which any securities owned by the Investor are directly or indirectly convertible or exercisable), if any, and the denominator of which is the total number of shares of Common Stock then outstanding (counting for such purposes all shares of Common Stock into or for which any securities owned by the Investor are directly or indirectly convertible or exercisable).

 

(b)            Limitation on Voting Securities. The purchase of any New Securities by the Investor shall not (i) cause the Investor or any of its Affiliates to violate any banking regulation, (ii) require the 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 (iii) cause the Investor, together with any other person whose Company securities would be aggregated with the 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 24.9% of any class of securities that entitle the holder thereof the right to vote in the election of directors or any other matters with respect to the Company (“Voting Securities”) outstanding at such time. For purposes of this Section 3(b), the term “Affiliate” shall have the meaning under the BHC Act and the Federal Reserve’s Regulation Y. Notwithstanding anything in this Section 3 to the contrary, upon the request of the Investor that the Investor not be issued New Securities that are Voting Securities in whole or in part upon the exercise of its rights to purchase New Securities, the Company shall cooperate with the Investor to modify the proposed issuance of New Securities to the Investor to provide for the issuance of nonvoting securities in lieu of Voting Securities with the same economic rights as such Voting Securities.

 

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(c)            Notice. So long as the Investor and its affiliates in the aggregate satisfy the Minimum Ownership Interest, in the event the Company proposes to offer or sell New Securities (the “Offering”), it shall give the Investor written notice of its intention, describing the price (or range of prices), anticipated amount of New Securities, timing, and other terms upon which the Company proposes to offer the same (including, in the case of a registered public offering and to the extent possible, a copy of the prospectus included in the registration statement filed with respect to such offering), no later than fifteen (15) Business Days, as the case may be, after the initial filing of a registration statement with the Commission with respect to an underwritten public Offering or after the commencement of marketing with respect to a Rule 144A Offering or an Offering pursuant to Section 4(a)(2) of the Securities Act or Regulation D promulgated thereunder. If the information contained in the notice constitutes material non-public information (as defined under the applicable securities laws), the Company shall deliver such notice only to the individuals identified (with respect to the Investor) in Section 7(a) hereof, and shall not communicate the information to anyone else acting on behalf of the Investor without the consent of one of the designated individuals. The Investor shall have twenty (20) Business Days from the date of receipt of such a notice to notify the Company in writing that it intends to exercise its rights provided in this Section 3 and as to the amount of New Securities the Investor desires to purchase, up to the maximum amount permitted pursuant to the last sentence of Section 3(a). Such notice shall constitute a nonbinding indication of interest of the Investor to purchase the amount of New Securities so specified at the price and other terms set forth in the Company’s notice to it. The failure of the Investor to respond within such twenty (20) Business Day period shall be deemed a waiver of the Investor’s rights under this Section 3 only with respect to the Offering described in the applicable notice.

 

(d)            Purchase Mechanism. If the Investor exercises its rights provided in this Section 3, the closing of the purchase of the New Securities in connection with the closing of the Offering with respect to which such right has been exercised shall take place within thirty (30) calendar days after the giving of notice of such exercise, which period of time shall be extended for a maximum of one hundred-eighty (180) days in order to comply with applicable laws and regulations (including receipt of any applicable regulatory or shareholder approvals). Investor must execute all customary transaction documentation in connection with such Offering on the same terms as any other participant in the Offering. Notwithstanding anything to the contrary herein, the closing of the purchase of the New Securities by the Investor will occur no earlier than the closing of the Offering triggering the right being exercised by the Investor. Each of the Company and the Investor agree to use its commercially reasonable efforts to secure any regulatory or shareholder approvals or other consents, and to comply with any law or regulation necessary in connection with the offer, sale and purchase of, such New Securities.

 

(e)            Failure of Purchase. In the event the Investor fails to exercise its rights provided in this Section 3 within the twenty (20) Business Day period outlined in Section 3(c) or, if so exercised, the Investor is unable to consummate such purchase within the time period specified in Section 3(d) above because of its failure to obtain any required regulatory or shareholder consent or approval, the Company shall thereafter be entitled (during the period of ninety (90) days following the conclusion of the applicable period) to sell or enter into an agreement (pursuant to which the sale of the New Securities covered thereby shall be consummated, if at all, within ninety (90) days from the date of such agreement) to sell the New Securities not elected to be purchased pursuant to this Section 3 by the Investor or which the Investor is unable to purchase because of such failure to obtain any such consent or approval, at a price and upon terms no more favorable in the aggregate to the purchasers of such New Securities than were specified in the Company’s notice to the Investor. Notwithstanding the foregoing, if such sale is subject to the receipt of any regulatory or shareholder approval or consent or the expiration of any waiting period, the time period during which such sale may be consummated shall be extended until the expiration of five (5) Business Days after all such approvals or consents have been obtained or waiting periods expired, but in no event shall such time period exceed one hundred-eighty (180) days from the date of the applicable agreement with respect to such sale. In the event the Company has not sold the New Securities or entered into an agreement to sell the New Securities within such ninety (90)-day period (or sold and issued New Securities in accordance with the foregoing within ninety (90) days from the date of such agreement (as such period may be extended in the manner described above for a period not to exceed one hundred-eighty (180) days from the date of such agreement)), the Company shall not thereafter offer, issue or sell such New Securities without first offering such New Securities to the Investor in the manner provided above.

 

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(f)            Non-Cash Consideration. In the case of the offering of New Securities for a consideration in whole or in part other than cash, including securities acquired in exchange therefor (other than securities by their terms so exchangeable), the consideration other than cash shall be deemed to be the fair value thereof as determined by the Board of Directors; provided, however, that such fair value as determined by the Board of Directors shall not exceed the aggregate market price of the securities being offered as of the date the Board of Directors authorizes the offering of such securities.

 

(g)            Cooperation. The Company and the Investor shall cooperate in good faith to facilitate the exercise of the Investor’s rights under this Section 3, including to secure any required approvals or consents.

 

(h)            Termination. The Investor’s rights under this Section 3 shall terminate upon the earlier of (i) the completion of an initial public offering of the Company’s Common Stock and (ii) the date when the Investor and its affiliates, in the aggregate, fail to satisfy the Minimum Ownership Interest.

 

4.              Warrant.

 

(a)             Upon the closing of the Acquisition, the Company will grant Investor a warrant to purchase shares (the “Warrant”) of GBC Common Stock (the “Warrant Shares”) in an amount equal to two and a half percent (2.5%) of the outstanding shares of Common Stock after the offering of the Shares and the Acquisition (after giving effect to the conversion of the Shares into Converted Shares), by and between the Company and the Investor, in the form attached hereto as Exhibit C.

 

(b)            Reservation for Issuance. At all times after issuance of the Warrant, the Company shall reserve that number of Warrant Shares sufficient for issuance upon exercise of the Warrant granted to Investor pursuant to this Section 4.

 

5.              Most Favored Nation. For so long as the Investor and its affiliates, in the aggregate, satisfy the Minimum Ownership Interest, the Company shall not enter into any additional, or modify any existing, agreements, arrangements or understandings with any existing or future investors in the Company that have the effect of establishing rights or otherwise benefiting such investor in a manner more favorable in any material respect to such investor than the rights and benefits established in favor of the Investor by this Agreement, unless, in any such case, the Investor has been provided with such rights and benefits. Notwithstanding anything to the contrary herein, the Parties acknowledge and agree that pursuant to the Morgan Agreement and the Patriot Agreement, Bartow Morgan, Jr. and Patriot Financial Partners III, L.P. shall have rights and benefits that are substantially the same as those provided to the Investor pursuant to this Agreement.

 

- 5 - 

 

 

6.              Confidentiality. Each Party to this Agreement will hold, and will use commercially reasonable efforts to cause its respective subsidiaries and their directors, officers, employees, agents, consultants and advisors to hold, in strict confidence, unless disclosure to a Governmental Entity is reasonably necessary or appropriate in connection with any necessary regulatory approval, or request for information or similar process, or unless compelled to disclose by judicial or administrative process or, based on the advice of its counsel, by another requirement of law or the applicable requirements of any Governmental Entity (in which case, the Party permitted to disclose such information shall, to the extent legally permissible and reasonably practicable, provide the other Party with prior written notice of such permitted disclosure so that such other Party may seek confidential treatment of such information from the applicable Governmental Entity), all nonpublic records, books, contracts, instruments, computer data and other data and information (collectively, “Information”) concerning the other Party hereto furnished to it by such other Party or its representatives pursuant to this Agreement (except to the extent that such information can be shown to have been (1) previously known by such Party on a nonconfidential basis, (2) in the public domain through no fault of such Party, (3) later lawfully acquired from other sources by the Party to which it was furnished or (4) independently developed or conceived by such Party without use of such Information), and neither Party hereto shall release or disclose such Information to any other person, except its Affiliates, partners, auditors, attorneys, financial advisors, other consultants and advisors with the express understanding that such parties will maintain the confidentiality of the Information and, to the extent permitted above, to Governmental Entities; provided, however, that (i) the Investor is permitted to disclose Information to auditors and bank and securities regulatory authorities without prior written notice to the Company in connection with any audit or examination that does not explicitly reference the Company or this Agreement and (ii) the Investor may identify the Company and the number and value of the Investor’s security holdings in the Company in accordance with applicable investment reporting and disclosure regulations or internal policies without prior notice to or consent from the Company.

 

7.              Miscellaneous.

 

(a)             Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile or e-mail (provided the sender receives a machine-generated confirmation of successful facsimile transmission or e-mail notification or confirmation of receipt of an e-mail transmission) at the facsimile number or e-mail address specified in this Section 7(a) prior to 5:00 p.m., New York City time, on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Trading Day or later than 5:00 p.m., New York City time, on any Trading Day, (c) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service with next day delivery specified, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as follows

 

- 6 - 

 

 

If to the Company:

 

Wingshooter Acquisition Corp.
1776 Peachtree Street NW, Suite 100
Atlanta, GA 30309
Attn: Bartow Morgan, Jr.

 

If to the Investor:

 

J. Bradford Smith
[***]

 

or such other address as may be designated in writing hereafter, in the same manner, by such Person.

 

(b)            The provisions of this Agreement may not be assigned by the Investor without the prior written consent of the Company, which consent may be withheld by the Company in its sole discretion, and any purported assignment shall be null and void in the absence of such consent. Subject to the foregoing restriction on assignment, this Agreement will be binding upon, and will inure to the benefit of and be enforceable by, the Parties hereto and their respective successors and permitted assigns. Without limiting the generality of the foregoing, after the Acquisition, Georgia Banking Company, as successor by merger to the Company, shall assume and be bound by this Agreement, and references to the Company in this Agreement following the Acquisition shall be deemed to be references to Georgia Banking Company. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

(c)            This Agreement, the Registration Rights Agreement, the Warrant and the Letter Agreement embodies the entire agreement and understanding between the Parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than as set forth or referred to herein. This Agreement supersedes all prior agreements and understandings among the Parties hereto with respect to the subject matter hereof.

 

(d)            This Agreement will be governed by and construed in accordance with the laws of the State of Georgia applicable to contracts made and to be performed entirely within such State. Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, employees or agents) may be commenced on an exclusive basis in the Georgia Courts. Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of the Georgia Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such Georgia Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

- 7 - 

 

 

(e)            If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

(f)             Any Party hereto may (i) extend the time for the performance of any of the obligations or other acts of the other Party hereto and (ii) waive compliance by the other Party with any of such other Party’s obligations or covenants contained herein; provided, however, that any such extension or waiver shall be valid only if set forth in an instrument in writing signed by each of the Parties to be bound thereby, but no such extension or waiver and no failure to insist on strict compliance by the other Party hereto with an obligation or covenant hereunder shall operate as a waiver of, or estoppel with respect to, any subsequent failure to comply with the same obligation or covenant or any failure to comply therewith by the Party whose performance was waived.

 

(g)            This Agreement may be executed in two (2) or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each Party and delivered to the other Party, it being understood that the Parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, or by e-mail delivery of a “.pdf’ format data file, such signature shall create a valid and binding obligation of the Party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

 

[Signature(s) Page Follows]

 

- 8 - 

 

 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed, where applicable by their duly authorized representatives, as of the date first above written.

 

  WINGSHOOTER ACQUISITION CORP.
   
  By: /s/ Bartow Morgan, Jr.
  Name: Bartow Morgan, Jr.
  Title: Chief Executive Officer
   
  INVESTOR
   
  /s/ J. Bradford Smith
  J. Bradford Smith

 

[Signature page to Investor Rights Agreement]

 

 

 

 

Exhibit A

 

Registration Rights Agreement 

(attached)

 

[***]

 

A-1 

 

 

Exhibit B

 

Letter Agreement 

(attached)

 

[***]

 

B-1 

 

 

Exhibit C

 

Warrant 

(attached)

 

[***]

 

C-1 

 

 

Exhibit 10.4

 

AMENDMENT TO 

INVESTOR RIGHTS AGREEMENT

 

This Amendment to the Investor Rights Agreement (this “Amendment”) is entered into effective as of June 17, 2026 by and among Georgia Banking Company, Inc., a Georgia corporation (the “Company”), and each of the investors identified on the signature pages hereto (each an “Investor,” and collectively, the “Investors”).

 

WHEREAS, the Company and the Investors are parties to those certain Investor Rights Agreements, each dated December 31, 2020 (the “Investor Rights Agreements”), pursuant to which the Company granted to the Investors certain rights with respect to board representation; and

 

WHEREAS, the Company and the Investors have agreed to amend the Investor Rights Agreements as provided for herein;

 

NOW, THEREFORE, in consideration of the mutual covenants contained in this Amendment, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Investors agree as follows:

  

1.            Amendments.

 

(a)            Section 1(a) of the Investor Rights Agreements is hereby amended and restated to read as follows:

 

“Following the Closing, the Company will promptly cause one representative of the Investor (the “Board Representative”) to be elected or appointed to the board of directors of the Company (for the avoidance of doubt, in this instance referring to the board of directors of Wingshooter Acquisition Corp.). Following the Acquisition, the Company will promptly cause the Board Representative to be elected or appointed to the board of directors of the Company (for the avoidance of doubt, in this instance referring to the board of directors of Georgia Banking Company) (the “Board of Directors”), and the board of directors of the Bank (the “Bank Board”), subject to all legal and regulatory requirements regarding service and election or appointment as a director of the Company and the Bank (the “Qualification Requirements”), in each case, so long as the Investor, together with its Affiliates, beneficially owns in the aggregate at least the lesser of either 50% of the total Shares or Converted Shares, as applicable, purchased by the Investor pursuant to the Stock Purchase Agreement or 4.9% of the Common Stock then outstanding (the “Minimum Ownership Interest”). So long as the Investor, together with its Affiliates, satisfies the Minimum Ownership Interest, the Company will, subject to applicable law, recommend to its shareholders the election of the Board Representative to the Board of Directors at any special meeting or annual meeting of the Company’s shareholders called for the purpose of the election of directors, as applicable, subject to satisfaction of the Qualification Requirements. So long as the Investor, together with its Affiliates, satisfies the Minimum Ownership Interest, the Company will, subject to applicable law, elect or appoint the Board Representative to the Bank Board at any special meeting or annual meeting of the Bank’s shareholders called for the purpose of the election of directors, as applicable, subject to satisfaction of the Qualification Requirements. If the Investor no longer satisfies the Minimum Ownership Interest, the Investor will have no further rights under Sections 1(a) through 1(e) and, at the written request of the Board of Directors, use its commercially reasonable efforts to cause its Board Representative to resign from the Board of Directors and the Bank Board as promptly as possible thereafter.”

 

 

 

 

(b)            Section 1(c) of the Investor Rights Agreements is hereby amended and restated to read as follows:

 

“Subject to Section 1(a), upon the death, resignation, retirement, disqualification, or removal from office as a member of the Board of Directors or the Bank Board of its Board Representative, the Investor shall have the right to designate the replacement for such Board Representative, which replacement must satisfy the Qualification Requirements. The Board of Directors and the Bank Board shall use their respective commercially reasonable efforts to take all action required to fill the vacancy resulting therefrom with such person, use commercially reasonable efforts to have such person elected as director of the Company by the shareholders of the Company and solicit proxies for such person to the same extent as it does for any of its other nominees to the Board of Directors, as the case may be. If a Board Representative is nominated by the Company for election to the Board of Directors or the Bank Board, but fails to be elected, then subject to the proviso set forth in this Section 1(c) below, the Company or the Bank shall, as soon as practicable thereafter, subject to applicable law, increase the size of such board of directors and, following the procedures set forth above in this Section 1, appoint an individual designated in writing by the Investor who meets the Qualification Requirements to be the Board Representative (such individual to be different from the individual who was not elected) to the Board of Directors of the Company and/or the Bank Board (as the case may be).”

 

2.            Limitation of Amendment. Except as expressly set forth herein, this Amendment shall not be deemed to waive, amend or modify any term or condition of the Investor Rights Agreements, each of which is hereby ratified and reaffirmed and shall remain in full force and effect, nor to serve as a consent to any matter prohibited by the terms and conditions thereof.

 

3.            Counterparts. This Amendment may be executed in any number of counterparts and any party hereto may execute any counterpart, each of which when executed and delivered will be deemed to be an original and all of which, taken together, will be deemed but one and the same agreement.

 

4.            Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of Georgia applicable to contracts made and to be performed entirely within such State.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

- 2 -

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized signatories, as of the date first indicated above.

 

  COMPANY:
   
  GEORGIA BANKING COMPANY, INC.
   
  By: /s/ Bartow Morgan, Jr.
    Bartow Morgan, Jr.
    Chief Executive Officer

 

[Signature Page to Amendment to Investor Rights Agreements]

 

 

 

 

  INVESTORS:
   
  PATRIOT FINANCIAL PARTNERS III, L.P.
   
  By: /s/ James Deutsch
    James Deutsch, Managing Partner

 

[Signature Page to Amendment to Investor Rights Agreements]

 

 

 

 

  /s/ Bartow Morgan, Jr. 
  Bartow Morgan, Jr.

 

[Signature Page to Amendment to Investor Rights Agreements]

 

 

 

 

 

Exhibit 10.5

 

Execution Version

 

CERTAIN CONFIDENTIAL INFORMATION (MARKED BY BRACKETS AS “[***]”)
HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT
MATERIAL AND (II) IS THE TYPE OF INFORMATION THAT THE REGISTRANT
TREATS AS PRIVATE OR CONFIDENTIAL.

 

INVESTOR RIGHTS AGREEMENT

 

This INVESTOR RIGHTS AGREEMENT (this “Agreement”), dated as of June 17, 2026, is made by and between Georgia Banking Company, Inc., a Georgia corporation (the “Company”) and CF GBC Investors LP, a Delaware limited partnership (the “Investor”). The Company and the Investor shall sometimes be referred to herein collectively, as the “Parties” and individually, as a “Party.”

 

RECITALS

 

WHEREAS, concurrently herewith, the Investor has entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with the Company, pursuant to which the Investor will purchase from the Company the number of shares of voting common stock, par value $0.01 per share, of the Company (the “Voting Common Stock”) and the number of shares of non-voting common stock, par value $0.01 per share, of the Company (the “Non-Voting Common Stock”, together with the Voting Common Stock, the “Common Stock”) listed on the Investor’s signature page of the Stock Purchase Agreement;

 

WHEREAS, capitalized terms used herein without definition shall have the respective meanings ascribed to them in the Stock Purchase Agreement; and

 

WHEREAS, in order to induce the Investor to enter into the Stock Purchase Agreement, the Company has agreed to grant the Investor the rights set forth below.

 

AGREEMENT

 

NOW THEREFORE, in consideration of the foregoing and the mutual covenants herein contained, the Parties hereby agree as follows:

 

1.              Board Rights.

 

(a)            Following the Closing, the Company will promptly cause one representative of the Investor (the “Board Representative”) to be elected or appointed to the board of directors of the Company (the “Board of Directors”), subject to all legal and regulatory requirements regarding service and election or appointment as a director of the Company (the “Qualification Requirements”). So long as the Investor, together with its Affiliates, continues to beneficially own in the aggregate at least the lesser of (i) 4.9% of the outstanding shares of Voting Common Stock and (ii) 50% of the Common Stock that Investor beneficially owns immediately following the Closing (the “Minimum Ownership Interest”), the Company will, subject to applicable law, recommend to its shareholders the election of the Board Representative to the Board of Directors at any special meeting or annual meeting of the Company’s shareholders called for the purpose of the election of directors, as applicable, subject to satisfaction of the Qualification Requirements. If the Investor no longer satisfies the Minimum Ownership Interest, the Investor will have no further rights under Sections 1(a) through 1(d) and, at the written request of the Board of Directors, use its commercially reasonable efforts to cause its Board Representative to resign from the Board of Directors as promptly as possible thereafter.

 

 

 

 

(b)            The Board Representative shall, subject to the Qualification Requirements, be one of the Company’s nominees to serve on the Board of Directors. The Company shall use its commercially reasonable efforts to have the Board Representative elected as a director of the Company by the shareholders of the Company, and the Company shall solicit proxies for the Board Representative to the same extent as it does for any of its other Company nominees to the Board of Directors. The Investor covenants and agrees to hold any Information (as defined below) obtained from its Board Representative in confidence as set forth in Section 6 below.

 

(c)            Subject to Section 1(a), upon the death, resignation, retirement, disqualification, or removal from office as a member of the Board of Directors of its Board Representative, the Investor shall have the right to designate the replacement for such Board Representative, which replacement must satisfy the Qualification Requirements. The Board of Directors shall use its commercially reasonable efforts to take all action required to fill the vacancy resulting therefrom with such person, use commercially reasonable efforts to have such person elected as director of the Company by the shareholders of the Company and solicit proxies for such person to the same extent as it does for any of its other nominees to the Board of Directors, as the case may be. If a Board Representative is nominated by the Company for election to the Board of Directors, but fails to be elected, then subject to the proviso set forth in this Section 1(c) below, the Company shall, as soon as practicable thereafter, subject to applicable law, increase the size of such board of directors and, following the procedures set forth above in this Section 1, appoint an individual designated in writing by the Investor who meets the Qualification Requirements to be the Board Representative (such individual to be different from the individual who was not elected) to the Board of Directors of the Company.

 

(d)            The Board Representative shall be entitled to compensation (which may be paid to the Investor in lieu of to the Board Representative, at the option of the Investor) and indemnification and insurance coverage in connection with his or her role as a director of the Company to the same extent as the other directors on the Board of Directors and shall be entitled to reimbursement (which may be paid to the Investor in lieu of to the Board Representative, at the option of the Investor) for reasonable and documented out-of-pocket expenses incurred in attending meetings of the Board of Directors and any committee thereof, in accordance with the Company’s policies.

 

(e)            The Company acknowledges that the Board Representative may have certain rights to indemnification, advancement of expenses and/or insurance provided by the Investor and/or its Affiliates (collectively, the “Investor Indemnitors”). The Company hereby agrees on behalf of itself that with respect to a claim by the Board Representative for indemnification arising out of his or her service as a director of the Company (1) that the Company is the indemnitor of first resort (i.e., the Company’s obligations to the Board Representative with respect to indemnification, advancement of expenses and/or insurance (which obligations shall be the same as, but in no event greater than, any such obligations to all other members of the Board of Directors) are primary and any obligation of the Investor Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by such Board Representative are secondary), and (2) the Investor Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Board Representative against the Company.

 

2

 

 

(f)            The Investor hereby acknowledges that it is aware of the restrictions under the federal securities laws imposed on a person in possession of material nonpublic information concerning an issuer, including with respect to purchasing or selling securities of such issuer and the communication of such information to other persons. The Investor agrees that neither it nor its representatives nor any of their respective Affiliates will use any data or information in contravention of such securities laws or any rules or regulations promulgated thereunder.

 

(g)            Following the Closing, as long as the Investor and its affiliates in the aggregate hold the Minimum Ownership Interest, the Company shall make available to the Investor all materials delivered to the Board and the committees thereof and to the board of directors of the Bank and the committees thereof; provided, that the Company shall not be required to deliver such materials to the extent that such delivery would reasonably be expected to constitute a waiver of the attorney-client privilege or violate applicable law or regulatory requirements.

 

2.              Registration Rights. The Company and the Investor shall execute and deliver effective as of the date hereof the Registration Rights Agreement.

 

3.              Bank Holding Company Act. The Company will not knowingly take any action which would reasonably be expected to pose a risk that the Investor or any of its Affiliates will (a) become a “bank holding company” under the Bank Holding Company Act of 1956, as amended (the “BHC Act”), and the rules and regulations promulgated thereunder or (b) own, directly or indirectly, five percent or more of the Voting Common Stock or any other class of voting securities of the Company, including, without limitation, undertaking any redemption, recapitalization or repurchase of Voting Common Stock, of securities or rights, options, or warrants to purchase Voting Common Stock, or securities of any type whatsoever that are, or may become, convertible into or exchangeable into or exercisable for Voting Common Stock, in each case, where the Investor is not given the right to participate in such redemption, recapitalization or repurchase to the extent of the Investor’s pro-rata proportion; provided, however, that the Company shall not be deemed to have violated this Section 3 if it has given the Investor the opportunity to participate in such redemption, recapitalization or repurchase to the extent of the Investor’s pro-rata proportion and the Investor fails to so participate. In the event the Company breaches its obligations under this Section 3 or believes that it is reasonably likely to breach such an obligation, it shall promptly notify the Investor hereto and shall cooperate in good faith with the Investor to modify ownership or, to the extent commercially reasonable, make other arrangements or take any other action, in each case, as is necessary to cure or avoid such breach; provided, that any modification, amendment or waiver of these Investor Rights Agreements shall be subject to this Section 4.

 

4.              Most Favored Nation. For so long as the Investor and its Affiliates, in the aggregate, satisfy the Minimum Ownership Interest, the Company shall not enter into any additional, or modify any existing, agreements, arrangements or understandings with any existing or future investors in the Company that have the effect of establishing rights or otherwise benefiting such investor in a manner more favorable in any material respect to such investor than the rights and benefits established in favor of the Investor by this Agreement, unless, in any such case, the Investor has been provided with such rights and benefits. Notwithstanding anything to the contrary herein, the parties acknowledge and agree that pursuant to the Investor Rights Agreements, Patriot Financial Partners III, LLP, Bartow Morgan, Jr. and J. Bradford Smith have rights and benefits that are more favorable than those provided to the Investor pursuant to this Agreement.

 

3

 

 

5.              Confidentiality. Each Party to this Agreement will hold, and will use commercially reasonable efforts to cause its respective Affiliates, and its and their respective subsidiaries and their directors, officers, employees, members, managers, investors, potential investors, agents, consultants and advisors to hold, in strict confidence, unless disclosure to a Governmental Entity is reasonably necessary or appropriate in connection with any necessary regulatory approval, or request for information or similar process, or unless compelled to disclose by judicial or administrative process or, based on the advice of its counsel, by another requirement of law or the applicable requirements of any Governmental Entity (in which case, the Party permitted to disclose such information shall, to the extent legally permissible and reasonably practicable, provide the other Party with prior written notice of such permitted disclosure so that such other Party may seek confidential treatment of such information from the applicable Governmental Entity), all nonpublic records, books, contracts, instruments, computer data and other data and information (collectively, “Information”) concerning the other Party hereto furnished to it by such other Party or its representatives pursuant to this Agreement (except to the extent that such information can be shown to have been (1) previously known by such Party on a nonconfidential basis, (2) in the public domain through no fault of such Party, (3) later lawfully acquired from other sources by the Party to which it was furnished or (4) independently developed or conceived by such Party without use of such Information), and neither Party hereto shall release or disclose such Information to any other person, except its Affiliates, and its and their respective directors, officers, employees, members, managers, investors, potential investors, partners, auditors, attorneys, financial advisors, other consultants and advisors with the express understanding that such parties will maintain the confidentiality of the Information and, to the extent permitted above, to Governmental Entities; provided, however, that (i) the Investor is permitted to disclose Information to auditors and bank and securities regulatory authorities without prior written notice to the Company in connection with any audit or examination that does not explicitly reference the Company or this Agreement and (ii) the Investor may identify the Company and the number and value of the Investor’s security holdings in the Company in accordance with applicable investment reporting and disclosure regulations or internal policies without prior notice to or consent from the Company.

 

4

 

 

6.              Miscellaneous.

 

(a)            Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via e-mail (provided the sender receives an e-mail notification or confirmation of receipt of an e-mail transmission) at e-mail address specified in this Section 6(a) prior to 5:00 p.m., New York City time, on a Trading Day, (b) the Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service with next day delivery specified, or (c) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as follows

 

If to the Company:

 

Georgia Banking Company, Inc.
1776 Peachtree Street NW, Suite 300
Atlanta, GA 30309
Attn: Bartow Morgan, Jr.
Email:
[***]

 

With a copy to:

 

Troutman Pepper Locke LLP
600 Peachtree Street, NE, Suite 3000
Atlanta, GA 30308
Attn: James Stevens
Email: [***]

 

If to the Investor:

 

CF GBC Investors LP 

c/o Fortress Investment Group LLC 

1345 Avenue of the Americas, 46th Fl. 

New York, NY 10105 

Attn: General Counsel / Credit Operations / Henchy Enden 

E-mail: [***], [***], [***]

 

With a copy to:

 

Skadden, Arps, Slate, Meagher & Flom LLP 

One Manhattan West 

New York, New York 10001
Attn: Michael J. Schwartz; Michael P. Reed
Email: [***]; [***]

 

or such other address as may be designated in writing hereafter, in the same manner, by such Person.

 

(b)            The provisions of this Agreement may not be assigned by the Investor without the prior written consent of the Company, which consent may be withheld by the Company in its sole discretion; provided, however, that the Investor may assign this Agreement or any of its rights hereunder to any of its Affiliates without the prior written consent of the Company, and any purported assignment shall be null and void in the absence of such consent. Subject to the foregoing restriction on assignment, this Agreement will be binding upon, and will inure to the benefit of and be enforceable by, the Parties hereto and their respective successors and permitted assigns. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

5

 

 

(c)            This Agreement and the Registration Rights Agreement embody the entire agreement and understanding between the Parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than as set forth or referred to herein. This Agreement supersedes all prior agreements and understandings among the parties hereto with respect to the subject matter hereof.

  

(d)            This Agreement will be governed by and construed in accordance with the laws of the State of Georgia applicable to contracts made and to be performed entirely within such State. Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective Affiliates, employees or agents) may be commenced on an exclusive basis in the Georgia Courts. Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of the Georgia Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such Georgia Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(e)            If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

(f)            Any Party hereto may (i) extend the time for the performance of any of the obligations or other acts of the other Party hereto and (ii) waive compliance by the other Party with any of such other Party’s obligations or covenants contained herein; provided, however, that any such extension or waiver shall be valid only if set forth in an instrument in writing signed by each of the Parties to be bound thereby, but no such extension or waiver and no failure to insist on strict compliance by the other Party hereto with an obligation or covenant hereunder shall operate as a waiver of, or estoppel with respect to, any subsequent failure to comply with the same obligation or covenant or any failure to comply therewith by the Party whose performance was waived.

 

6

 

 

 

(g)            This Agreement may be executed in two (2) or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

  

[Signature(s) Page Follows]


7

 

 

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed, where applicable by their duly authorized representatives, as of the date first above written.

 

  GEORGIA BANKING COMPANY, INC.
   
  By: /s/ Bartow Morgan, Jr.
  Name: Bartow Morgan, Jr.
  Title: Chief Executive Officer
   
  CF GBC INVESTORS LP
  By: CF GBC GP LLC, its general partner
   
  By: /s/ William A. Covino
  Name: William A. Covino
  Title: Chief Financial Officer

 

[Signature page to Investor Rights Agreement]

 

 

 

Exhibit 10.6

 

Execution Version

 

VCOC LETTER AGREEMENT

 

Wingshooter Acquisition Corp.

 

1776 Peachtree Street NW, Suite 100

 

Atlanta, GA 30309

 

December 31, 2020

 

Patriot Financial Partners III, L.P. 

Radnor Corporate Center 

Building Four, Suite 201 

100 Matsonford Road 

Radnor, PA 19087

 

Dear Sir/Madam:

 

Reference is made to the Stock Purchase Agreement, dated as of December 31, 2020 (the “Agreement”), by and between Wingshooter Acquisition Corp., a Georgia corporation (the “Company”), and Patriot Financial Partners III, L.P., a Delaware limited partnership (the “VCOC Investor”). The Company and Georgia Banking Company, Inc. (“Georgia Banking Company”) entered into that certain Amended and Restated Agreement and Plan of Merger, dated November 11, 2020 (the “Merger Agreement”), pursuant to which the Company will merge with and into Georgia Banking Company, with Georgia Banking Company being the surviving entity (the “Acquisition”). References to the Company in this letter following the Acquisition shall be deemed to be references to Georgia Banking Company. Pursuant to the Agreement, the VCOC Investor has agreed to purchase from the Company that certain number of shares (the “Shares”) of common stock, par value $0.01 per share, of the Company (the “Common Stock”) equal to the lesser of (a) $30,000,000 divided by the Purchase Price per Share or (b) 24.9% of the issued and outstanding shares of Common Stock of Georgia Banking Company, par value $0.01 per share, immediately following the Acquisition on a fully diluted as-converted basis. As an inducement for the VCOC Investor to enter into the Agreement, the Company granted the VCOC Investor the rights set forth in the Investor Rights Agreement, dated as of December 31, 2020 (the “Investor Rights Agreement”), by and between the Company and the VCOC Investor, and the Registration Rights Agreement, dated as of December 31, 2020 (the “Registration Rights Agreement”), by and between the Company and the VCOC Investor. Capitalized terms used herein without definition shall have the respective meanings in the Agreement.

 

For good and valuable consideration acknowledged to have been received, the Company hereby agrees that for so long as the VCOC Investor, directly or through one or more Affiliates, continues to hold any shares of equity in the Company, the Company shall:

 

1.Provide the VCOC Investor or an individual designated by the VCOC Investor with the governance rights set forth in the Investor Rights Agreement;

 

 

 

 

2.Without limitation or prejudice of any of the rights provided to the VCOC Investor under the Agreement, the Investor Rights Agreement, the Registration Rights Agreement, or any other agreement or otherwise, provide the VCOC Investor or an individual designated by the VCOC Investor with:

 

a.the right to visit and inspect any of the offices and properties of the Company and its subsidiaries and examine and inspect the books and records of the Company and its subsidiaries, at such times as the VCOC Investor shall reasonably request upon three (3) business days’ notice but not more frequently than once per calendar year, provided, however, that such rights shall not extend to confidential bank supervisory communications, customer financial records or other “exempt records” as defined by 12 C.F.R. Part 309, or reports of examination of any national or state chartered insured bank, which information may only be disclosed by the Company or its subsidiaries in accordance with the provisions and subject to the limitations of applicable law or regulation;

 

b.consolidated balance sheets and statements of income and cash flows of the Company and its subsidiaries prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis (i) as of the end of each quarter of each fiscal year as soon as practicable after preparation thereof but in no event later than ninety (90) days after the end of such quarter, and (ii) with respect to each fiscal year end statement, as soon as practicable after preparation thereof but in no event later than one hundred twenty (120) days after the end of such fiscal year and together with an auditor’s report thereon of a firm of established national reputation; and

 

c.to the extent the Company or any of its subsidiaries is required by law or pursuant to the terms of any outstanding indebtedness of the Company or any of its subsidiaries to prepare such reports, any annual reports, quarterly reports and other periodic reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 or otherwise, actually prepared by the Company or its subsidiaries as soon as available; provided that, in each case, if the Company makes the information described in clauses (b) and (c) of this Section 2 available through public filings on the EDGAR system or any successor or replacement system of the U.S. Securities and Exchange Commission, the delivery of the information shall be deemed satisfied by such public filings.

 

3.Make appropriate officers and directors of the Company and its subsidiaries available periodically and at such times as reasonably requested by the VCOC Investor for consultation with, and advisement by, the VCOC Investor or its designated representative, but not more frequently than once per calendar year, with respect to matters relating to the business and affairs of the Company and its subsidiaries;

 

4.To the extent consistent with applicable law and so long as the VCOC Investor does not have a representative or observer on the Company’s board of directors, inform the VCOC Investor or its designated representative in advance with respect to any significant corporate actions, including, without limitation, extraordinary dividends, mergers, acquisitions or dispositions of assets, issuances of significant amounts of debt or equity and material amendments to the articles of incorporation, bylaws and other organization documents of the Company or its subsidiaries, and to provide the VCOC Investor or its designated representative with the right to consult with the Company and its subsidiaries with respect to such actions; provided that such consultation rights shall be limited to once per calendar quarter; provided further that the VCOC Investor is aware that it may receive material nonpublic information about the Company, and the VCOC Investor agrees that it is aware of and shall comply with the federal and state securities laws that restrict any Person who has material, non-public information about a company from purchasing or selling securities of the company or from communicating such information to any other Person under circumstances in which it is reasonably foreseeable that such Person is likely to purchase or sell such securities; and provide the VCOC Investor or its designated representative with such other rights of consultation which the VCOC Investor’s counsel may determine to be reasonably necessary under applicable legal authorities promulgated after the date hereof to qualify its investment in the Company as a “venture capital investment” as such term is defined in the United States Department of Labor Regulation published at 29 C.F.R. Section 2510.3-101 (the “Plan Asset Regulation”), and cooperate in good faith with the VCOC Investor to amend this letter agreement to reflect such other rights that are mutually satisfactory to the Company and the VCOC Investor and consistent with the Federal Reserve’s rule for Control and Divestiture Proceedings as codified in the Federal Reserve’s Regulation Y, provided that such consultation rights shall be limited to once per calendar quarter.

 

- 2 -

 

 

The Company agrees to consider, and to cause its subsidiaries to consider, in good faith, the recommendations of the VCOC Investor or its designated representative in connection with the matters on which it is consulted as described above, recognizing that the ultimate discretion with respect to all such matters shall be retained by the Company and its subsidiaries, as applicable.

 

The VCOC Investor agrees, and will require each designated representative of the VCOC Investor to agree, to hold in confidence and not use or disclose to any third party (other than its legal counsel and accountants) any confidential information provided to or learned by such party in connection with the VCOC Investor’s rights under this letter agreement except as may otherwise be required by law or legal, judicial or regulatory process, provided that the VCOC Investor takes commercially reasonable steps to minimize the extent of any such required disclosure.

 

In the event the VCOC Investor transfers all or any portion of its investment in the Company to an affiliated entity (or to a direct or indirect wholly-owned conduit subsidiary of any such affiliated entity) that is intended to qualify as a venture capital operating company under the Plan Asset Regulation, such affiliated entity shall be afforded the same rights that the Company has afforded to the VCOC Investor hereunder and shall be treated, for such purposes, as a third party beneficiary hereunder.

 

The rights of the VCOC Investor under this letter agreement are unique to the VCOC Investor and shall not be assignable or transferrable other than to an affiliated entity that is intended to qualify as a venture capital operating company under the Plan Asset Regulation.

 

The VCOC Investor acknowledges that the Company has made no representation that it qualifies, or in the future will qualify, as a “venture capital operating company” or that an investment in the Company qualifies as a “venture capital investment” as those terms are defined in the Plan Asset Regulation and disclaims any responsibility therefor.

 

- 3 -

 

 

The letter agreement will expire when the VCOC Investor, directly or through one or more Affiliates, no longer holds any shares of equity of the Company.

 

This letter agreement and the rights and the duties of the parties hereto shall be governed by, and construed in accordance with, the laws of the state of Georgia and may be executed in counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same instrument.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

- 4 -

 

 

  Wingshooter Acquisition Corp.
   
  By: /s/ Bartow Morgan, Jr. 
  Name: Bartow Morgan, Jr.
  Title: Chief Executive Officer

 

- 5 -

 

 

Agreed and acknowledged as of the date first above written:

 

  Patriot Financial Partners III, L.P.
   
  By: /s/ James F. Deutsch 
  Name: James F. Deutsch
  Title: Managing Partner

 

- 6 -

 

 

Exhibit 10.7

 

Execution Version

 

LETTER AGREEMENT

 

Wingshooter Acquisition Corp.

 

1776 Peachtree Street NW, Suite 100

 

Atlanta, GA 30309

 

December 31, 2020

 

[●]

 

Dear [●]:

 

Reference is made to the Stock Purchase Agreement, dated as of December 31, 2020 (the “Agreement”), by and between Wingshooter Acquisition Corp., a Georgia corporation (the “Company”), and [●], a Georgia resident (the “Investor”). The Company and Georgia Banking Company, Inc. (“Georgia Banking Company”) entered into that certain Amended and Restated Agreement and Plan of Merger, dated November 11, 2020 (the “Merger Agreement”), pursuant to which the Company will merge with and into Georgia Banking Company, with Georgia Banking Company being the surviving entity (the “Acquisition”). References to the Company in this letter following the Acquisition shall be deemed to be references to Georgia Banking Company. Pursuant to the Agreement, the Investor has agreed to purchase from the Company up to that certain number of shares (the “Shares”) of common stock, par value $0.01 per share, of the Company (the “Common Stock”) indicated on the Investor’s signature page to the Agreement. As an inducement for the Investor to enter into the Agreement, the Company granted the Investor the rights set forth in the Investor Rights Agreement, dated as of December 31, 2020 (the “Investor Rights Agreement”), by and between the Company and the Investor, and the Registration Rights Agreement, dated as of December 31, 2020 (the “Registration Rights Agreement”), by and between the Company and the Investor. Capitalized terms used herein without definition shall have the respective meanings in the Agreement.

 

For good and valuable consideration acknowledged to have been received, the Company hereby agrees that for so long as the Investor, directly or through one or more Affiliates, continues to hold any shares of equity in the Company, the Company shall:

 

1.[Provide the Investor or an individual designated by the Investor with the governance rights set forth in the Investor Rights Agreement;]

 

1

 

 

2.Without limitation or prejudice of any of the rights provided to the Investor under the Agreement, the Investor Rights Agreement, the Registration Rights Agreement, or any other agreement or otherwise, provide the Investor or an individual designated by the Investor with:

 

a.the right to visit and inspect any of the offices and properties of the Company and its subsidiaries and examine and inspect the books and records of the Company and its subsidiaries, at such times as the Investor shall reasonably request upon three (3) business days’ notice but not more frequently than once per calendar year, provided, however, that such rights shall not extend to confidential bank supervisory communications, customer financial records or other “exempt records” as defined by 12 C.F.R. Part 309, or reports of examination of any national or state chartered insured bank, which information may only be disclosed by the Company or its subsidiaries in accordance with the provisions and subject to the limitations of applicable law or regulation;

 

b.consolidated balance sheets and statements of income and cash flows of the Company and its subsidiaries prepared in conformity with generally accepted accounting principles in the United States applied on a consistent basis (i) as of the end of each quarter of each fiscal year as soon as practicable after preparation thereof but in no event later than ninety (90) days after the end of such quarter, and (ii) with respect to each fiscal year end statement, as soon as practicable after preparation thereof but in no event later than one hundred twenty (120) days after the end of such fiscal year and together with an auditor’s report thereon of a firm of established national reputation; and

 

c.to the extent the Company or any of its subsidiaries is required by law or pursuant to the terms of any outstanding indebtedness of the Company or any of its subsidiaries to prepare such reports, any annual reports, quarterly reports and other periodic reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 or otherwise, actually prepared by the Company or its subsidiaries as soon as available; provided that, in each case, if the Company makes the information described in clauses (b) and (c) of this Section 2 available through public filings on the EDGAR system or any successor or replacement system of the U.S. Securities and Exchange Commission, the delivery of the information shall be deemed satisfied by such public filings.

 

3.Make appropriate officers and directors of the Company and its subsidiaries available periodically and at such times as reasonably requested by the Investor for consultation with, and advisement by, the Investor or its designated representative, but not more frequently than once per calendar year, with respect to matters relating to the business and affairs of the Company and its subsidiaries;

 

2

 

 

4.To the extent consistent with applicable law [and so long as the Investor does not have a representative or observer on the Company’s board of directors], inform the Investor or its designated representative in advance with respect to any significant corporate actions, including, without limitation, extraordinary dividends, mergers, acquisitions or dispositions of assets, issuances of significant amounts of debt or equity and material amendments to the articles of incorporation, bylaws and other organization documents of the Company or its subsidiaries, and to provide the Investor or its designated representative with the right to consult with the Company and its subsidiaries with respect to such actions; provided that such consultation rights shall be limited to once per calendar quarter; provided further that the Investor is aware that it may receive material nonpublic information about the Company, and the Investor agrees that it is aware of and shall comply with the federal and state securities laws that restrict any Person who has material, non-public information about a company from purchasing or selling securities of the company or from communicating such information to any other Person under circumstances in which it is reasonably foreseeable that such Person is likely to purchase or sell such securities; and cooperate in good faith with the Investor to amend this letter agreement to reflect such other rights that are mutually satisfactory to the Company and the Investor and consistent with the Federal Reserve’s rule for Control and Divestiture Proceedings as codified in the Federal Reserve’s Regulation Y, provided that such consultation rights shall be limited to once per calendar quarter.

 

The Company agrees to consider, and to cause its subsidiaries to consider, in good faith, the recommendations of the Investor or its designated representative in connection with the matters on which it is consulted as described above, recognizing that the ultimate discretion with respect to all such matters shall be retained by the Company and its subsidiaries, as applicable.

 

The Investor agrees, and will require each designated representative of the Investor to agree, to hold in confidence and not use or disclose to any third party (other than its legal counsel and accountants) any confidential information provided to or learned by such party in connection with the Investor’s rights under this letter agreement except as may otherwise be required by law or legal, judicial or regulatory process, provided that the Investor takes commercially reasonable steps to minimize the extent of any such required disclosure.

 

In the event the Investor transfers all or any portion of its investment in the Company to an entity owned or controlled by the Investor, such entity shall be afforded the same rights that the Company has afforded to the Investor hereunder and shall be treated, for such purposes, as a third party beneficiary hereunder.

 

The rights of the Investor under this letter agreement are unique to the Investor and shall not be assignable or transferrable other than to an entity owned or controlled by the Investor.

 

The letter agreement will expire when the Investor, directly or through one or more Affiliates, no longer holds any shares of equity of the Company.

 

This letter agreement and the rights and the duties of the parties hereto shall be governed by, and construed in accordance with, the laws of the state of Georgia and may be executed in counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same instrument.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

3

 

 

  Wingshooter Acquisition Corp.
   
   
  By:  
     
  Name: [●]
  Title: [●]

 

4

 

 

Agreed and acknowledged as of the date first above written:

 

   
  [●]

 

5

 

 

Exhibit 10.8

 

April 14, 2023

 

Commerce Street Financial Partners II, LP
1445 Ross Avenue, Suite 2700
Dallas, Texas 75202

 

Re:Stock Subscription Agreement (the “Agreement”), by and between Georgia Banking Company, Inc. and Commerce Street Financial Partners II, L.P

 

Gentlemen:

 

Reference is hereby made to the subject Agreement. Capitalized terms not otherwise defined herein shall have the respective meanings set forth in the Agreement.

 

This letter agreement will memorialize and confirm the mutual understanding of the Company and Purchaser as to the following:

 

1.            Notwithstanding Section 2.1(a) of Annex A to the Agreement, the subscription amount of the Purchaser may not be revised by the Company, Placement Agent or any other person without Purchaser’s prior written consent.

 

2.            Section 3.1 of Annex A to the Agreement shall be amended to add the following additional representation of the Company to the Purchaser:

 

“The consolidated financial statements of the Company and its subsidiaries as of December 31, 2021 and for the periods then ended (copies of which have been made available to Purchaser by the Company) are prepared in accordance with generally accepted accounting principles and fairly present in all material respects the financial condition and results of operations for the dates and periods presented.”

 

3.            So long as the Purchaser beneficially owns at least 4.9% of the then outstanding shares of Common Stock, the Company shall cause one designee of the Purchaser (who shall be a principal of CS Financial Partners II GP, LLC) to attend ail meetings of the Board in a nonvoting, nonparticipating, observer capacity and to receive the informational materials furnished to members of the Board (provided that the designee shall not be entitled to receive or be provided with any confidential supervisory information). If any such designee should resign or otherwise be unable to serve, the Purchaser will entitled to designate such person’s successor as observer so long as the Purchaser beneficially owns at least 4.9% of the then outstanding shares of Common Stock.

 

 

 

 

4.            The Company and the Purchaser agree to fulfill their respective obligations under the Agreement, including the Purchaser’s delivery of the Aggregate Purchase Price pursuant to Section 2.2(b)(ii) of Annex A to the Agreement, and consummate the transactions contemplated by the Agreement on or before April 28, 2023.

 

5.            Except as modified hereby, the remaining terms of the Agreement shall continue in full force and effect.

 

Please confirm our mutual understanding by your countersignature in the space provided below.

 

  Very truly yours,
   
  Georgia Banking Company, Inc.
   
  By: /s/ Bartow Morgan, Jr.

 

Accepted and agreed:

Commerce Street Financial Partners II, LP

CS Financial Partners II GP, LLC

 

By: /s/ Carla J. Brooks  

 

2

 

 

Exhibit 10.9

 

Execution Version

 

 

 

LOAN AND SECURITY AGREEMENT

 

By and Between

 

GEORGIA BANKING COMPANY, INC.

 

and

 

SERVISFIRST BANK

 


June 10, 2025

 

 

 

 

 

Execution Version

 

LOAN AND SECURITY AGREEMENT

 

THIS LOAN AND SECURITY AGREEMENT (this “Agreement”) is made and entered into as of June 10, 2025, by and between GEORGIA BANKING COMPANY, INC., a corporation organized under the laws of the State of Georgia (“Borrower”), and SERVISFIRST BANK, an Alabama banking corporation (“Lender”).

 

WITNESSETH:

 

Borrower has requested that Lender extend to the Borrower a revolving line of credit in the maximum principal amount of up to $10,000,000 (the “Loan”), and Lender is willing to make the Loan upon the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the promises herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties, each intending to be legally bound hereby, agree as follows:

 

ARTICLE 1. DEFINITIONS

 

Section 1.01. Defined Terms. As used herein:

 

“Advance” means each loan of money or credit made to Borrower by Lender under the Commitment.

 

“Affiliate” or “Affiliates” shall mean any Person (i) which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, Borrower, or (ii) ten percent (10%) or more of the equity interest of which is held beneficially or of record by Borrower. The term “control” means the possession, directly or indirectly, of the power to cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Agreement” means this Loan and Security Agreement, as amended or supplemented from time to time.

 

“Capital” means, with respect to the Subsidiary Bank, the “tier 1 capital” of the Subsidiary Bank, as reported on Schedule RC-R of the Subsidiary Bank’s most recent quarterly call report.

 

“Change in Control” means either (i) the acquisition by any Person or any group of Persons (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) of beneficial ownership, directly or indirectly, of 25% or more of the outstanding shares of voting stock of Borrower or (ii) Borrower ceases to own 100% of the outstanding shares of voting stock of the Subsidiary Bank.

 

“Collateral” is defined in Section 4.01 of this Agreement.

 

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Execution Version

 

“Collateral Documents” means the documents specified in Section 3.01(B) - (D).

 

“Commitment” means Lender’s commitment to lend to Borrower up to the sum of $10,000,000 in principal amount outstanding from time to time pursuant to, and subject to, the terms of this Agreement.

 

“Default” means any event described in Section 7.01.

 

“Doc Processing Fee” means the fee payable by Borrower to Lender in an amount equal to $950.

 

“ERISA” means the Employee Retirement Security Act of 1974, as amended.

 

“Generally Accepted Accounting Principles” or “GAAP” means generally accepted principles of accounting in the United States in effect from time to time applied in a manner consistent with those used in preparing such financial statements as have theretofore been furnished to Lender by Borrower.

 

“Governmental Authority” means any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, which has or asserts jurisdiction over Lender, Borrower or any of its Subsidiaries, or over the property of any of them.

 

“Indebtedness” means all items of indebtedness, obligation or liability, whether matured or unmatured, liquidated or unliquidated, direct or contingent, joint or several, including, but without limitation:

 

(A)            All indebtedness guaranteed, directly or indirectly, in any manner, or endorsed (other than for collection or deposit in the ordinary course of business) or discounted with recourse;

 

(B)            All indebtedness in effect guaranteed, directly or indirectly, through agreements, contingent or otherwise:

 

(1)            to purchase such indebtedness; or

 

(2)            to purchase, sell or lease (as lessee or lessor) property, products, materials or supplies or to purchase or sell services primarily for the purpose of enabling the debtor to make payment of such indebtedness or to assure the owner of the indebtedness against loss; or

 

(3)            to supply funds to or in any other manner invest in the debtor.

 

(C)            All indebtedness secured by (or for which the holder of such indebtedness has a right, contingent or otherwise, to be secured by) any mortgage, deed of trust, pledge, lien, security interest or other charge or encumbrance upon property owned or acquired subject thereto, whether or not the liabilities secured thereby have been assumed; and

 

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(D)            All indebtedness incurred as the lessee of goods or services under leases that, in accordance with Generally Accepted Accounting Principles, should not be reflected on the lessee’s balance sheet.

 

“Interest Rate” is defined in Section 2.05(A)(1) of this Agreement.

 

“Laws” means all ordinances, statutes, rules, regulations, orders, injunctions, writs or decrees of any governmental or political subdivision or agency thereof, or any court or similar entity established by any thereof.

 

“Loan” has the meaning set forth in the recitals of this Agreement.

 

“Maturity Date” means the earlier of June 10, 2027, or the date the maturity of the Note is accelerated pursuant to Section 7.02 of this Agreement.

 

“Non-Performing Assets” means, with respect to the Subsidiary Bank, the sum of (a) the Subsidiary Bank’s loans and leases which are on nonaccrual status, (b) the Subsidiary Bank’s loans and leases which are at least ninety (90) days past due, (c) all other non-performing loans and leases of the Subsidiary Bank, (d) the other real estate owned by the Subsidiary Bank, and (e) all other non-performing assets of the Subsidiary Bank.

 

“Non-Performing Assets Ratio” means, with respect to the Subsidiary Bank, the ratio of the Subsidiary Bank’s Non-Performing Assets to the Subsidiary Bank’s Capital plus Reserves.

 

“Non-Use Fee” has the meaning set forth in Section 2.08 of this Agreement.

 

“Note” means the Revolving Note of even date herewith, in the principal amount of $10,000,000, made by Borrower to evidence Borrower’s obligation to repay the Loan and the interest thereon and includes any amendment to such Note and any promissory note given in extension or renewal of, or in substitution for, such Note evidencing Borrower’s obligation to repay the Loan.

 

“Obligations” means all of the following.

 

(A)            The Obligation of Borrower to pay the principal of and interest on the Note in accordance with the terms thereof, and to satisfy all of its other liabilities to Lender, whether hereunder or otherwise (including, without limitation, under any swap or other hedging agreement made by Borrower with or in favor of Lender), whether now existing or hereafter incurred, matured or unmatured, direct or contingent, joint or several, including any extensions, modifications, renewals thereof and substitutions therefor.

 

(B)            The Obligation of Borrower to repay to Lender all amounts advanced by Lender hereunder or otherwise on behalf of Borrower, including, but without limitation, advances for principal or interest payments to prior secured parties, mortgagees, or lienors, or for taxes, levies, insurance, rent, repairs to or maintenance or storage of any of the Collateral.

 

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The Obligation of Borrower to reimburse Lender, on demand, for all of Lender’s expenses and costs, including the reasonable fees and expenses of its counsel, in connection with the preparation, administration, amendment, modifications, or enforcement of this Agreement and the documents required hereunder, including, without limitation, any proceeding brought or threatened to enforce payment of any of the obligations referred to in the foregoing paragraphs (A) and (B).

 

(C)            The Obligation of Borrower to comply with the terms of this Agreement, the Note and the Collateral Documents.

 

“Origination Fee” means the fee payable by Borrower to Lender in an amount equal to $10,000.

 

“Person” means any individual, corporation, partnership, limited liability company, association, joint-stock company, trust, unincorporated organization, joint venture, court, or government or political subdivision or agency thereof.

 

“Pledge Agreement” means that certain Pledge Agreement of even date herewith pursuant to which Lender is granted a security interest in the Pledged Stock.

 

“Pledged Stock” means one hundred percent (100%) of the capital stock of the Subsidiary Bank.

 

“Potential Default” means an event of default which but for the lapse of time or the giving of notice, or both, would constitute a Default.

 

“Prime Rate” means the rate designated as such in the “Money Rates” section of The Wall Street Journal (or any generally recognized successor) on any particular day. The Prime Rate is not necessarily the lowest interest rate charged by Lender.

 

“Records” means instruments, agreements, correspondence, memoranda, tapes, discs, papers, books and other documents, or transcribed information of any type, whether expressed in ordinary or machine language, and all filing cabinets and other containers in which the foregoing is stored or maintained.

 

“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System as now or from time to time hereafter in effect and shall include any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by banks for the purpose of purchasing or carrying margin stocks applicable to member banks of the Federal Reserve System.

 

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“Reserves” means, with respect to the Subsidiary Bank, the “allowance for loan and lease losses” of the Subsidiary Bank as reported on Schedule RC of the Subsidiary Bank’s most recent quarterly call report.

 

“Return on Assets Ratio” means, with respect to the Subsidiary Bank, the ratio of (a) year-to-date “net income” of the Subsidiary Bank for the current calendar year, as reported on Schedule RI of the Subsidiary Bank’s most recent quarterly call report, annualized over the current calendar year, to (b) average “total assets” as reported on Schedule RC-K of the Subsidiary Bank’s most recent quarterly call report. “Subsidiary” means any corporation, including but not limited to the Subsidiary Bank, of which more than fifty-one percent (51%) of the outstanding voting securities shall, at the time of determination, be owned directly, or indirectly through one or more intermediaries, by Borrower.

 

“Subsidiary Bank” means Georgia Banking Company, a banking corporation organized under the laws of the State of Georgia, which is a wholly-owned Subsidiary of Borrower.

 

“Tier 1 Leverage Ratio” means, with respect to the Subsidiary Bank, the tier 1 leverage ratio as defined by the capital maintenance regulations of the primary federal bank regulatory agency of the Subsidiary Bank and reported on Schedule RC-R of the Subsidiary Bank’s most recent quarterly call report.

 

Section 1.02 Construction. All accounting terms used herein shall have their customary meanings under, and shall be construed in accordance with, GAAP.

 

Section 1.03 UCC Definitions. All other capitalized terms contained in this Agreement shall, unless otherwise defined herein or unless the context otherwise indicates, have their respective meanings under the Uniform Commercial Code of Alabama.

 

ARTICLE 2. THE LOAN

 

Section 2.01. General Terms.

 

(A)            Subject to the terms and conditions of this Agreement, Lender will lend to Borrower the principal sum of up to $10,000,000 on a revolving basis. Lender shall make Advances under such Loan from time to time until the Maturity Date.

 

(B)            Subject to the terms hereof, Borrower may borrow, repay without penalty or premium, and reborrow under the Loan, from the date of this Agreement until the Maturity Date. If at any time the unpaid principal balance of the Loan exceeds the Commitment, Borrower shall immediately and without demand pay such sums to Lender as are necessary to reduce the principal balance of the Loan to not more than the Commitment.

 

Section 2.02. The Note. On the date hereof, Borrower will execute and deliver the Note to Lender to evidence Borrower’s Obligations to repay the Loan and the interest thereon.

 

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Section 2.03. Use of Proceeds; Disbursement of the Loan. Borrower will use the proceeds of the Loan solely (a) for growth capital and general corporate purposes, (b) to reimburse Lender for any expenses incurred by Lender in connection with making the Loan, and (c) to otherwise pay Lender sums due to Lender under this Agreement or the other instruments, agreements and documents related to this Agreement.

 

Section 2.04. Payments of Principal. If not earlier demanded pursuant to Section 7.02 hereof, the outstanding principal balance of each Advance made under the Loan shall be due and payable to Lender on the Maturity Date.

 

Section 2.05. Interest Rate and Payments of Interest.

 

(A)            Interest shall be calculated and paid as follows:

 

(1)            Interest on the principal balance of the Loan from time to time outstanding will be payable at a per annum rate (the “Interest Rate”) equal to the greater of (i) the Prime Rate in effect from time to time minus 0.25% (25 bps); or (ii) a floor rate of five percent (5.00%).

 

(2)            Each time a change to the Prime Rate occurs, the Interest Rate shall change concurrently with such change in the Prime Rate.

 

(3)            Interest shall be calculated on the basis of a 360-day year, by multiplying the product of the principal amount outstanding and the applicable rate by the actual number of days elapsed, and dividing by 360, and shall be payable quarterly in arrears, on the 15t day of each and every calendar quarter (that is, on January 1, April 1, July 1, and October 1) commencing with the first calendar quarter following the first Advance and continuing on the 1st day of each calendar quarter thereafter until the outstanding principal balance of all Advances have been repaid in full, with the final payment of accrued and unpaid interest due and payable on the Maturity Date.

 

(B)            If, at any time, the Interest Rate shall be deemed by any competent Governmental Authority to exceed the maximum rate of interest permitted by any applicable Laws, then, for such time as the Interest Rate would be deemed excessive, its application shall be suspended and there shall be charged instead the maximum rate of interest permissible under such Laws.

 

Section 2.06. Payment to Lender. All sums payable to Lender under the Loan shall be paid directly to Lender in United States Dollars and immediately available funds. If Lender shall send to Borrower statements of amounts due hereunder, such statements shall be considered correct and conclusively binding on Borrower unless Borrower notifies Lender to the contrary within thirty (30) days of its receipt of any statement which it deems to be incorrect. Alternatively, at its sole discretion, Lender may charge against any deposit account of Borrower all or any part of any amount due hereunder.

 

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Section 2.07. Late Fee/Default Rate of Interest. Borrower promises to pay to Lender a late fee equal to three percent (3.00%) of the amount of each installment of principal and/or installment of interest which is received more than ten (10) days after the due date thereof; provided, however, that such late fee shall not be less than $20.00 nor more than the maximum amount (if any) permitted by law. The principal balance of the Loan outstanding after maturity (whether by acceleration or otherwise) shall bear interest at a per annum rate of interest equal to two percent (2.00%) plus the otherwise applicable Interest Rate and shall be calculated pursuant to Section 2.05 hereof. This section does not extend any payment due date expressly stated in this Agreement or any Collateral Document and does not in any way prevent or estop Lender from requiring that payments be made by Borrower strictly when due. Unless accepted by Lender, and unless accompanied by all other amounts then due to Lender, the tender of such payment by Borrower shall not cure the Default arising from the payment default upon which such late charge was assessed.

 

Section 2.08. Non-Use Fee. Borrower shall pay on an annual basis in arrears to Lender a non-use fee equal to .20% (20 bps) multiplied by the average unused principal amount of the Commitment for the applicable 12-month period (the “Non-Use Fee”), which amount shall be payable no later than 15 days following the anniversary date of this Agreement after such applicable 12-month period. The Non-Use Fee shall be waived if (i) as of the date of calculation, no Default or Potential Default shall have occurred and be continuing and (ii) the average outstanding balance under the Loan is $4,000,000 or greater during the applicable twelve-month period.

 

Section 2.09. Origination Fee. On the date hereof, Borrower shall pay to the Lender the Origination Fee.

 

Section 2.10. Doc Processing Fee. On the date hereof, Borrower shall pay to the Lender the Doc Processing Fee.

 

ARTICLE 3. CONDITIONS PRECEDENT

 

The obligation of Lender to make the Loan hereunder is subject to the following conditions precedent:

 

Section 3.01 Conditions to the Loan. Prior to the initial disbursement of the Loan, Borrower shall have delivered to Lender the following:

 

(A)the duly executed Note;

 

(B)the duly executed Pledge Agreement;

 

(C)original certificate representing the Pledged Stock, accompanied by a stock power endorsed in blank;

 

(D)if requested by Lender, the financing statements described in Section 4.05;

 

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(E)copies, certified as of the date of this Agreement by Borrower’s corporate secretary, of resolutions of Borrower’s board of directors authorizing the execution, delivery and performance of this Agreement, the Note, the Collateral Documents, and each other document to be delivered pursuant hereto;

 

(F)copies, certified as of the date of this Agreement by their respective corporate secretaries, of the articles of incorporation of Borrower and the Subsidiary Bank, together with a certificate (dated the date of this Agreement) of their respective corporate secretaries to the effect that such articles of incorporation have not been amended except as provided in such articles;

 

(G)copies, certified as of the date of this Agreement by their respective corporate secretaries, of the bylaws of Borrower and the Subsidiary Bank, together with a certificate (dated the date of this Agreement) of their respective corporate secretaries to the effect that such bylaws have not been amended except as provided in such bylaws;

 

(H)a certificate (dated the date of this Agreement) of Borrower’s corporate secretary as to the incumbency and signatures of the officers of Borrower signing this Agreement, the Note, the Collateral Documents, and each other document to be delivered pursuant hereto;

 

(I)certificates, as of the most recent dates practicable, of the secretary of state and/or department of commerce, respectively of the state of incorporation of Borrower-and the Subsidiary Bank as to the existence and good standing of Borrower and the Subsidiary Bank;

 

(J)an opinion of counsel to Borrower that Borrower has all necessary authority to enter into this Agreement and perform its obligations hereunder and this Agreement is a valid obligation of Borrower enforceable and binding in accordance with its terms subject to customary qualifications;

 

(K)receipt by Lender of such financial information, projections, budgets, business plans, cash flows and such other information as Lender may reasonably request, and Lender must be reasonably satisfied that such information fairly presents the business and financial condition of Borrower and does not contain material misstatements or omissions of material facts;

 

(L)evidence acceptable to Lender that Borrower and the Subsidiary Bank have received all necessary regulatory approvals (or that no regulatory approvals are necessary), including receiving an approval letter or non-objection letter from Borrower’s or Subsidiary Bank’s primary regulator, for (i) Borrower to obtain the Loan, (ii) Borrower and the Subsidiary Bank to enter into and perform their Obligations under this Agreement and the Collateral Documents, and (iii) payment by the Subsidiary Bank of dividends to Borrower in amounts sufficient to comply with the repayment terms of the Loan; and

 

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(M)such other documentation as Lender shall require regarding Borrower or the Subsidiary Bank, including, without limitation, opinions and certificates of Borrower’s independent certified public accountants, appraisals, reports of other independent consultants selected by Lender, and certificates of Borrower’s officers.

 

Section 3.02 Conditions to Each Advance. Without limiting the foregoing, at the time of each Advance under the Loan, Borrower shall have furnished such information to Lender as Lender shall reasonably request to evidence that (a) the proceeds of such Advance will be used for the purposes permitted hereunder, and (b) the use of the proceeds in such manner will not cause or bring about a Default or Potential Default hereunder.

 

Section 3.03 Certain Events.      Without limiting the foregoing, at the time of the disbursement of each Advance:

 

(A)No Default or Potential Default shall have occurred and be continuing;

 

(B)The Collateral Documents shall be in full force and effect;

 

(C)            The Subsidiary Bank’s call report for the most recently-ended calendar quarter, filed by the Subsidiary Bank with any applicable regulatory authority, shall have been delivered to Lender;

 

(D)            All representations and warranties set forth in Article 5 shall be true and correct in all material respects (or, in the case of any such representation or warranty already qualified by materiality, in all respects) as of the time of such disbursement (or, in the case of any such representation or warranty expressly stated to have been made as of a specific date, as of such specific date); and

 

(E)            There shall have been no material adverse change in the consolidated financial condition or business of Borrower or the Subsidiary Bank (measured against the most current financial statements of Borrower and the Subsidiary Bank delivered to or otherwise reviewed by Lender prior to the date of this Agreement).

 

Section 3.04 Legal Matters, At the time of the disbursement of each Advance, all legal matters necessary to preserve and perfect Lender’s security interest in the Collateral and Borrower’s obligation to repay the Loan shall be satisfactory to Lender and its counsel.

 

ARTICLE 4. COLLATERAL SECURITY

 

Section 4.01 Composition of the Collateral. The property in which a security interest is granted pursuant to the provisions of Section 4.03 is herein collectively called the “Collateral.” The Collateral, together with all of Borrower’s other property of any kind held by Lender, shall stand as one general, continuing collateral security for all Obligations and may be retained by Lender until all Obligations have been satisfied in full.

 

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Section 4.02 [Reserved]

 

Section 4.03 Security Interest in the Pledged Stock. As further security for the prompt satisfaction of all Obligations, Borrower hereby assigns and transfers to Lender all of its rights, title and interest in and to, and grants Lender a lien upon and security interest in, all of the Pledged Stock, whether now owned or hereafter acquired, together with all replacements therefor and all proceeds thereof, and all Records pertaining to any of the Collateral.

 

Section 4.04 Priority of Liens. The foregoing liens as set forth in Sections 4.01 and 4.03 shall be first and prior liens on the Pledged Stock and other Collateral.

 

Section 4.05 Financing Statements.

 

(A)            Borrower:

 

(1)            Hereby authorizes the filing of such financing statements (including amendments thereto and continuation statements thereof) in form satisfactory to Lender as Lender may hereafter specify in order to perfect Lender’s lien on and security interest in the Collateral;

 

(2)            Will pay or reimburse Lender for all costs and taxes of filing or recording such financing statements (including amendments thereto and continuation statements thereof) in form satisfactory to Lender as Lender may hereafter specify, provided such financing statements are consistent with the provisions of this Agreement; and

 

(3)            Will take such other commercially reasonable steps as Lender may direct to perfect Lender’s interest in the Collateral.

 

(B)            In addition to the foregoing, and not in limitation thereof:

 

(1)            A carbon, photographic, or other reproduction of this Agreement shall be sufficient as a financing statement and may be filed in any appropriate public office in lieu thereof; and

 

(2)            To the extent lawful, Borrower hereby appoints Lender as its attorney-in-fact (without requiring Lender to act as such) for the sole purpose of filing any financing statement and any amendment thereto in the name of Borrower, and to perform all other acts that Lender reasonably deems appropriate to perfect and continue its security interest in, and to protect and preserve, the Collateral.

 

ARTICLE 5. REPRESENTATIONS AND WARRANTIES

 

Section 5.01 Original. To induce Lender to enter into this Agreement, Borrower represents and warrants to Lender as follows:

 

(A)            Borrower owns 100% of the outstanding capital stock of the Subsidiary Bank;

 

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(B)            Borrower is a corporation duly organized, validly existing and in good standing under the Laws of the state of its formation; the Subsidiary Bank is a corporation duly organized, validly existing and in good standing under the Laws of the state of its formation; Borrower and the Subsidiary Bank have the lawful power to own their properties and to engage in the business they conduct, and are duly qualified and in good standing as foreign corporations in the jurisdictions wherein the nature of the business transacted by them or property owned by them make such qualification necessary; the states in which Borrower and the Subsidiary Bank are qualified to do business are set forth in Exhibit B; the addresses of Borrower’s and the Subsidiary Bank’s respective principal places of business are set forth in Exhibit B; and as of the date of this Agreement, neither Borrower nor the Subsidiary Bank has changed its name, been the surviving corporation in a merger, acquired any business, within three (3) years and one (1) month prior to the date hereof;

 

(C)            Neither Borrower nor the Subsidiary Bank is in material default with respect to any of its existing Indebtedness, or under any material lease, contract or commitment of any kind, and, to Borrower’s knowledge, all parties (including Borrower and the Subsidiary Bank) to all such material leases, contracts and other commitments to which Borrower or the Subsidiary Bank is a party (expressly excluding any lease, contract or commitment made with a customer of Subsidiary Bank in the ordinary course of Subsidiary Bank’s business) are in material compliance with the provisions of such leases, contracts and other commitments;(D)       The making and performance of this Agreement, the Note, and the Collateral Documents will not (immediately, or with the passage of time, or with the giving of notice):

 

(1)            Violate any provision of the articles of incorporation or bylaws of Borrower or the Subsidiary Bank, or violate any Laws or result in a default under any contract, agreement, or instrument to which Borrower or the Subsidiary Bank is a party or by which Borrower or the Subsidiary Bank or any of their respective properties are bound; or

 

(2)            Result in the creation or imposition of any security interest in, or lien or encumbrance upon, any of the assets of Borrower or the Subsidiary Bank, except in favor of Lender;

 

(E)            Borrower has the power and authority to enter into and perform this Agreement, the Note, and the Collateral Documents, and to incur the Obligations herein and therein provided for, and has taken all corporate action necessary to authorize the execution, delivery, and performance of this Agreement, the Note, and the Collateral Documents;

 

(F)            This Agreement and the Collateral Documents are, and the Note when delivered will be, valid, binding, and enforceable in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws, and judicial decisions affecting the rights of creditors generally and by general principles of equity;

 

(G)            Except to the extent disclosed to Lender in writing, there is no pending or, to Borrower’s knowledge, threatened order, notice, claim, litigation, proceeding or investigation against or affecting Borrower or the Subsidiary Bank, whether or not covered by insurance, that would reasonably be expected to involve the payment by Borrower or Subsidiary Bank of $500,000.00 or more;

 

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(H)            Borrower has good and marketable title to all of the Collateral, subject to no security interest, encumbrance or lien, or claim of any third person;

 

(I)            Borrower’s and the Subsidiary Bank’s financial statements (including call reports, in the case of the Subsidiary Bank) furnished to Lender, including any schedules and notes pertaining thereto, have been prepared in accordance with Generally Accepted Accounting Principles consistently applied, and fully and fairly present the financial condition of Borrower at the dates thereof and the results of operations for the periods covered thereby, and there have been no material adverse changes in the consolidated financial condition or business of Borrower from the date of the latest financial statements provided to Lender to the date hereof, or the Subsidiary Bank from its most recently filed call report to the date hereof;

 

(J)            As at the date of this Agreement, neither Borrower nor the Subsidiary Bank has any material Indebtedness of any nature, including, but without limitation, liabilities for taxes and any interest or penalties relating thereto, except to the extent reflected (in a footnote or otherwise) and reserved against in the financial statements of Borrower most recently delivered to Lender or the most recent call report of the Subsidiary Bank, or as disclosed in or permitted by this Agreement, as applicable; Borrower does not know and has no reasonable ground to know of any basis for the assertion against it or the Subsidiary Bank of any material Indebtedness of any nature not fully reflected and reserved against in the above referenced respective financial statements or call reports, as applicable;

 

(K)            Except as otherwise permitted herein, Borrower and the Subsidiary Bank have filed all federal, state and local tax returns and other reports they are required by Law to file prior to the date hereof and which are material to the conduct of their business, have paid or caused to be paid all taxes, assessments and other governmental charges that are due and payable prior to the date hereof, and have made adequate provision for the payment of such taxes, assessments or other charges accruing but not yet payable; Borrower has no knowledge of any deficiency or additional assessment in a materially important amount in connection with any taxes, assessments or charges not provided for on its books or the books of the Subsidiary Bank;

 

(L)            Neither Borrower nor the Subsidiary Bank is in material violation of any applicable Laws;

 

(M)            No representation or warranty by Borrower or the Subsidiary Bank contained herein or in any certificate or other document furnished by Borrower or the Subsidiary Bank pursuant hereto contains any untrue statement of material fact or omits to state a material fact necessary to make such representation or warranty not misleading in light of the circumstances under which it was made;

 

(N)            Each consent, approval or authorization of, or filing, registration or qualification with, any Person that is required to be obtained or effected by Borrower or the Subsidiary Bank in connection with the execution and delivery of this Agreement, the Note, and the Collateral Documents, or the undertaking or performance of any obligation hereunder or thereunder, has been duly obtained or effected;

 

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(O)            The Pledged Stock constitutes all of the issued and outstanding capital stock of the Subsidiary Bank. There are no outstanding warrants, options, rights or other commitments (including, but without limitation, convertible notes or securities) entitling any Person to purchase or otherwise acquire any shares of capital stock of Borrower or the Subsidiary Bank. The Pledged Stock does not constitute “Margin Stock” as defined in Federal Reserve Board Regulation U (12 C.F.R. §§ 221.1 et seq.);

 

(P)            Borrower has not made any agreement or taken any action which may cause anyone to become entitled to a commission or finder’s fee as a result of the making of the Loan; and

 

(Q)            Borrower does not maintain any “Defined Benefit Pension Plans”, as defined in ERISA.

 

Section 5.02 Survival. All of the representations and warranties set forth in Section 5.01 shall survive and shall remain true and correct until all Obligations are satisfied in full (except, if applicable, to the extent that any such representation or warranty expressly relates solely to an earlier date or period of time).

 

ARTICLE 6. THE BORROWER’S COVENANTS

 

Borrower hereby covenants and agrees with Lender that, so long as any of the Obligations remain unsatisfied, it will comply with the following covenants:

 

Section 6.01 Affirmative Covenants.

 

Unless Lender shall otherwise agree in writing, Borrower shall abide by and perform the following covenants:

 

(A)            Subsidiary Bank shall maintain one or more deposit accounts with Lender, including such account holding the interest reserve referred to in Section 6.01(R). Subsidiary Bank will allow Lender to bid on additional mutually beneficial correspondent services and propose Lender’s Service Charge Settlement program.

 

(B)            Borrower will use the proceeds of the Loan solely for the purposes described in Section 2.03 of this Agreement. Borrower will furnish Lender such evidence as it may reasonably require with respect to such use.

 

(C)            Borrower will furnish Lender all of the following:

 

(1)            with respect to Borrower only, quarterly, within sixty (60) days after the close of each calendar quarter, and at such other times as Lender may request:

 

(a)            a statement of stockholders’ equity and a statement of cash flows of such entity as of and for such quarter;

 

(b)            an income statement of such entity for such quarter; and

 

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(c)            a balance sheet (consolidated, in the case of an entity that has one or more Subsidiaries) of such entity as of the end of such period;

 

all in reasonable detail, subject to year-end audit adjustments and certified by Borrower’s president or principal financial officer to have been prepared in accordance with Generally Accepted Accounting Principles consistently applied, except for any inconsistencies explained in such certificate.

 

(2)            with respect to each of Borrower and the Subsidiary Bank, annually, within one hundred twenty (120) days after December 31 of each year:

 

(a)            a statement of stockholders’ equity and the consolidated statement of cash flows of the Borrower and its affiliates of and for such fiscal year;

 

(b)            an income statement of such entity for such fiscal year; and

 

(c)            a balance sheet (in the case of an entity that has one or more Subsidiaries, such balance sheet shall be delivered on a consolidated basis and, if requested by Lender, also on a parent-only basis) of such entity as of the end of such fiscal year;

 

all in reasonable detail, including all supporting schedules and comments, audited by an independent public accountant selected by Borrower and reasonably acceptable to Lender, and certified by such accountant to have been prepared in accordance with Generally Accepted Accounting Principles consistently applied, except for any inconsistencies explained in such certificate. In addition, if requested by Lender, Borrower will obtain from such independent certified public accountants and deliver to Lender, within one hundred twenty (120) days after the close of each fiscal year, the independent certified public accountants’ written statement that in making the examination necessary to their certification they have obtained no knowledge of any Default or Potential Default by Borrower or the Subsidiary Bank, or disclosed all Defaults or Potential Defaults of which they have obtained knowledge; provided, however, that in making their examination such accountants shall not be required to go beyond the bounds of generally accepted auditing procedures for the purpose of certifying financial statements. Lender shall have the right, from time to time, to discuss Borrower’s and the Subsidiary Bank’s affairs directly with Borrower’s and the Subsidiary Bank’s independent public accountants after notice to Borrower and the Subsidiary Bank and upon opportunity for Borrower and the Subsidiary Bank to be present at any such discussions.

 

(3)            Contemporaneously with each quarterly and year-end financial report required by the foregoing paragraphs (1) and (2), a certificate of the president or principal financial officer of Borrower and the Subsidiary Bank, in the form of Exhibit A, stating that he or she has individually reviewed the provisions of this Agreement and that a review of the activities of Borrower and the Subsidiary Bank during such year or quarterly period, as the case may be, has been made by or under the supervision of the signer of such certificate with a view to determining whether Borrower and the Subsidiary Bank have kept, observed, performed and fulfilled all their obligations under this Agreement, and that, to the best of his or her knowledge, Borrower and the Subsidiary Bank have observed and performed each and every undertaking contained in this Agreement and are not at the time in default in the observance or performance of any of the terms and conditions hereof or, if Borrower or the Subsidiary Bank shall be so in default, specifying all such defaults and events of which he or she may have knowledge.

 

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(4)            Promptly after receipt thereof, copies of all material reports and documents submitted to Borrower or the Subsidiary Bank by any applicable regulatory authority (other than those which Borrower and the Subsidiary Bank are prohibited from disclosing under applicable Laws), and, simultaneously with the filing thereof, but in any event within forty-five (45) days of the end of each calendar quarter, copies of all financial reports, including but not limited to quarterly call reports, filed by the Borrower and/or the Subsidiary Bank with any applicable regulatory authority.

 

(5)            Promptly after sending or making available or filing of the same, but in any event within fifteen (15) days after issuance, copies of all reports, proxy statements and financial statements that Borrower or the Subsidiary Bank sends or makes available to the stockholders and all registration statements and reports, including, if applicable, but not limited to 8-Ks and 10-Qs that Borrower or the Subsidiary Bank files with the Securities and Exchange Commission or any successor Person.

 

(6)            Immediately upon the occurrence thereof, notice of (i) any material change in Borrower’s or the Subsidiary Bank’s financial condition or executive management, or (ii) any other change internally or externally that could materially affect the capital, earnings or financial condition of Borrower or the Subsidiary Bank.

 

(7)            Such other reports, financial information, projections, budgets, capital plans and other information as Lender may reasonably require.

 

Documents required to be delivered pursuant to Section 6.01(A), (B), (C)(1), (C)(2), (C)(4), and (C)(5) (to the extent any such documents are included in materials otherwise filed with the Securities and Exchange Commission, Federal Reserve, or Federal Deposit Insurance Corporation) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date on which such documents are posted on the website of the Securities and Exchange Commission at http://www.sec.gov or otherwise on Borrower’s behalf on an internet or intranet website, if any, to which Lender has access.

 

(D)            Borrower will pay or cause to be paid when due all taxes, assessments and charges or levies imposed upon it or the Subsidiary Bank or on any of its property or the Subsidiary Bank’s property or which it or the Subsidiary Bank is required to withhold and pay over, except where contested in good faith by appropriate proceedings with adequate reserve therefor having been set aside on Borrower’s or the Subsidiary Bank’s books, but Borrower shall pay or cause to be paid all such taxes, assessments, charges or levies forthwith whenever foreclosure on any lien that has attached (or any security therefor) appears imminent.

 

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(E)            Borrower will, when requested so to do and unless prohibited by any federal, state and/or local Laws, make available for inspection by duly authorized representatives of Lender any of its or the Subsidiary Bank’s Records, and will furnish Lender any information regarding its or the Subsidiary Bank’s business affairs and financial condition within a reasonable time after written request therefor.

 

(F)            Borrower will maintain, and will cause the Subsidiary Bank to maintain, liability insurance, property insurance (including, without limitation, fire and extended coverage insurance on all assets owned by Borrower or the Subsidiary Bank, as applicable), and other types of insurance (including, without limitation, insurance coverage on the directors and officers of Borrower and the Subsidiary Bank), all in such form and amounts as are consistent with industry practices and with such insurers as may be satisfactory to Lender. Borrower will furnish to Lender such evidence of insurance as Lender may require. Borrower hereby agrees that, in the event it fails to pay or cause to be paid the premium on any such insurance, Lender may do so and shall be reimbursed by Borrower therefor, along with interest on the amount so paid at the Interest Rate (or default rate, if applicable).

 

(G)            Borrower will take all necessary steps to preserve its and the Subsidiary Bank’s corporate existence and comply with all present and future Laws applicable to it or the Subsidiary Bank in the operation of its or the Subsidiary Bank’s business, and all material leases, contracts and commitments of any kind to which it or the Subsidiary Bank is subject. Borrower will cause the Subsidiary Bank to comply in all material respects with their respective obligations.

 

(H)            Borrower will give immediate notice to Lender of:

 

(1)            any litigation or proceeding in which it or the Subsidiary Bank is a party if it would reasonably be expected to require it or the Subsidiary Bank to pay more than $500,000.00 or deliver assets the value of which exceeds such sum (whether or not the claim is considered to be covered by insurance); and

 

(2)            the institution of any other suit or proceeding involving Borrower or the Subsidiary Bank that might materially and adversely affect Borrower’s or the Subsidiary Bank’s operations, financial condition, property or business.

 

(I)            Within ten (10) days of Lender’s request therefor, Borrower will furnish Lender with copies of federal income tax returns filed by Borrower or the Subsidiary Bank.

 

Borrower will cause the Subsidiary Bank at all times to maintain (in accordance with Generally Accepted Accounting Principles):

 

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(1)            a “well-capitalized” status in accordance with the regulations of the primary federal bank regulatory agency of the Subsidiary Bank;

 

(2)            a Tier 1 Leverage Ratio greater than seven percent (7.0%);

 

(3)            a Non-Performing Assets Ratio less than twenty-five percent (25%); and

 

(4)            a Return on Assets Ratio greater than six tenths of one percent (0.60%).

 

(K)            Borrower will notify Lender immediately if it becomes aware of the occurrence of any Default or Potential Default, or the failure of Borrower to observe any of its undertakings hereunder.

 

(L)            Borrower shall (a) ensure that no Person which owns a controlling interest in or controls Borrower is or shall be listed on the Specially Designated Nationals and Blocked Person List or other similar lists maintained by the Office of Foreign Assets Control (“OFAC”), the Department of the Treasury or included in any Executive Orders, (b) not use or permit the use of any proceeds of the Loan to violate any of the foreign asset control regulations of OFAC or any enabling statute or Executive Order relating thereto, (c) comply with all applicable Bank Secrecy Act laws and regulations, as amended, and (d) provide all information necessary for Lender to comply with the USA Patriot Act, as amended from time to time.

 

(M)            Borrower will maintain direct ownership of one hundred percent (100%) of the issued and outstanding capital stock of the Subsidiary Bank.

 

(N)            Borrower will pay, or cause the Subsidiary Bank to pay, when due (or within applicable grace periods) all Indebtedness due third Persons, except when the amount therefor is being contested in good faith by appropriate proceedings and with adequate reserves therefor being set aside on the books of Borrower or the Subsidiary Bank. If default be made by Borrower or the Subsidiary Bank in the payment of any principal (or installment thereof) of, or interest on, any such Indebtedness, Lender shall have the right, in its discretion, to pay such interest or principal for the account of Borrower or the Subsidiary Bank and be reimbursed by Borrower therefor, along with interest on the amount so paid at the Interest Rate (or default rate, if applicable).

 

(O)            Borrower shall cause the Subsidiary Bank to pay dividends to Borrower in an amount sufficient to fulfill its Obligations to repay the Loan. Borrower shall immediately notify Lender within two (2) business days of any regulatory prohibition relative to the payment of dividends to Borrower.

 

(P)            Borrower shall promptly notify Lender in the event of the departure or removal of the current Chief Executive Officer of either Borrower or the Subsidiary Bank, and Lender may accelerate the Loan in accordance with Section 7.02 at any time after 90 days but no longer than 120 days following any such departure or removal.

 

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(Q)            In the event Borrower fails to maintain a Tier 1 Leverage Ratio greater than seven percent (7.0%) in accordance with Section 6.01(J)(2), Borrower shall have a period to cure the failure for thirty (30) days. In the event Borrower fails to maintain a Non-Performing Assets Ratio of less than twenty-five percent (25%) in accordance with Section 6.01(.1)(3) or a Return on Assets Ratio greater than six tenths of one percent (0.60%) in accordance with Section 6.01(J)(4), Borrower shall have a period to cure the failure for three (3) months. The Tier 1 Leverage Ratio and the Non-Performing Assets Ratio shall first be tested at the end of the third quarter of 2025 and each quarter thereafter for the life of the Loan. The Return on Assets Ratio shall be tested beginning at the end of the fourth quarter of 2025 based on the trailing six-month financial statements. Thereafter, the Return on Assets Ratio shall be tested quarterly based on the year-to-date financial statements.

 

(R)            Borrower shall place with Lender an interest reserve of at least $1,400,000 at all times during the term of the Loan, it being understood that such funds may be commingled with other funds of Borrower.

 

(S)            Borrower will notify Lender immediately in the event either Borrower or Subsidiary Bank is changing its name.

 

Section 6.02 Negative Covenants.

 

Unless Lender shall otherwise consent in writing, which consent shall not unreasonably be withheld, Borrower shall abide by the following covenants:

 

(A)           Neither Borrower nor the Subsidiary Bank will enter into any merger, consolidation, or reorganization, reclassify its capital stock, or liquidate or dissolve, except pursuant to a transaction in which Borrower or the Subsidiary Bank, as appropriate, is the acquirer and no Change in Control has occurred.

 

(B)          Neither Borrower nor the Subsidiary Bank will (1) sell, transfer, lease or otherwise dispose of all or any material part of its assets, nor sell any item of Collateral, including but without limitation with respect to Borrower, any of the capital stock of the Subsidiary Bank, or (2) purchase any material part of the assets of another Person; in each case, except pursuant to a transaction by the Subsidiary Bank in the ordinary course of business or a transaction in which Borrower or the Subsidiary Bank, as appropriate, is the acquiror and no Change in Control has occurred.

 

(C)            Borrower will not mortgage, pledge, grant or permit to exist a security interest in or lien upon any item of Collateral, including, but without limitation any of the capital stock of the Subsidiary Bank, now owned or hereafter acquired.

 

(D)            Neither Borrower nor the Subsidiary Bank will become liable, directly or indirectly, as guarantor or otherwise for any obligation of any Person, except for the Subsidiary Bank’s endorsement of commercial paper for deposit or collection in the ordinary course of business, and the Subsidiary Bank’s issuance of letters of credit in the ordinary course of business.

 

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(E)            Neither Borrower nor the Subsidiary Bank (whether acting in its individual capacity or as a joint venture partner) will incur, create, assume, or permit to exist any Indebtedness except:

 

(1)            the Loan;

 

(2)            Indebtedness described in the financial statements of Borrower most recently delivered to Lender, or the most recent call reports of the Subsidiary Bank, as applicable;

 

(3)            trade indebtedness incurred in the ordinary course of business;

 

(4)            Indebtedness less than or equal to $5,000,000 in the aggregate;

 

(5)            Indebtedness greater than $5,000,000 and approved in writing by Lender; and

 

(6)            contingent Indebtedness permitted by Section 6.02(D).

 

Without limiting the foregoing, the Subsidiary Bank shall not issue commercial paper, subordinated debt or any similar debt instrument, and the Subsidiary Bank shall not obtain any non-traditional funding, without Lender’s prior written consent.

 

(F)            [Reserved].

 

(G)            Borrower will not declare or pay any dividends, or make any other payment or distribution on account of its capital stock, if a Default or Potential Default shall have occurred and be continuing. Borrower will not furnish Lender any certificate or other document that will knowingly contain any untrue statement of material fact or that will knowingly omit to state a material fact necessary to make it not materially misleading in light of the circumstances under which it was furnished.

 

(H)            Borrower will not directly or indirectly apply any part of the proceeds of the Loan to the purchasing or carrying of any “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System, or any regulations, interpretations or rulings thereunder.

 

(I)            Borrower will not enter into any transaction with any Affiliate including, without limitation, the purchase, sale or exchange of property or the rendering of any service, except in the ordinary course of business and pursuant to the reasonable requirements of Borrower’s business and upon terms found by its board of directors to be fair and reasonable and no less favorable to Borrower than would obtain in a comparable arm’s-length transaction with a Person not an Affiliate.

 

ARTICLE 7. DEFAULT

 

Section 7.01 Events of Default. The occurrence of any one or more of the following events shall constitute a Default hereunder:

 

(A)            Borrower shall fail to pay when due any installment of principal or interest or fee payable hereunder or under the Note, or any of Borrower’s other Obligations to Lender. For the purposes of this paragraph, there shall be a ten (10) day grace period in the event of a late payment.

 

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(B)            Borrower shall fail to observe or perform any other obligation to be observed or performed by it hereunder or under the Note or any of the Collateral Documents. In the event of a failure to meet an obligation under this paragraph, Lender shall give Borrower notice of the failure. From the date notice is received, Borrower shall have a thirty (30) day period in which to cure such failure unless otherwise provided in this Agreement.

 

(C)            Borrower or the Subsidiary Bank shall fail to pay any Indebtedness in excess of $1,000,000.00 due any third Persons after demand therefor and such failure shall continue beyond any applicable grace period, unless any such failure is being contested in good faith by appropriate proceedings with adequate reserve therefor being set aside on Borrower’s or the Subsidiary Bank’s books. For the purposes of this paragraph, there shall be a ten (10) day grace period to cure such failure.

 

(D)            Any financial statement, call report, representation, warranty or certificate made or furnished by Borrower or the Subsidiary Bank to Lender under or in connection with this Agreement, or as an inducement to Lender to enter into this Agreement, or in any separate statement or document to be delivered hereunder to Lender, shall be materially false, incorrect, or incomplete when made.

 

(E)            Borrower shall admit its inability to pay its debts as they mature, or shall make an assignment for the benefit of its or any of its creditors.

 

(F)            Proceedings in bankruptcy, or for reorganization of Borrower or the Subsidiary Bank or for the readjustment of any of its debts, under the Bankruptcy Code, as amended, or any part thereof, or under any other Laws, whether state or federal, for the relief of debtors, now or hereafter existing, (i) shall be commenced against Borrower or the Subsidiary Bank and shall not be discharged within sixty (60) days after their commencement, or (ii) shall be commenced by Borrower or the Subsidiary Bank.

 

(G)            Any proceedings shall be instituted for the appointment of a receiver or trustee for Borrower or the Subsidiary Bank or for any substantial part of their respective assets, or any proceedings shall be instituted for the dissolution of or the full or partial liquidation of Borrower or the Subsidiary Bank, or Borrower or the Subsidiary Bank shall discontinue its business or materially change the nature of its business.

 

(H)            Borrower or the Subsidiary Bank shall suffer final judgments for payment of money aggregating in excess of $1,000,000.00 and shall not discharge the same within a period of thirty (30) days unless, pending further proceedings, execution has been effectively stayed.

 

(I)            A judgment creditor of Borrower shall obtain possession of any of the Collateral by any means, including, but without limitation, levy, distraint, replevin or self-help.

 

(J)            The validity or enforceability of this Agreement, the Note or the Collateral Documents shall be contested by Borrower, the Subsidiary Bank, or any shareholder of Borrower, or the Borrower shall deny that it has any or further liability or Obligation hereunder or thereunder.

 

(K)            Borrower or the Subsidiary Bank shall fail to maintain all material regulatory licenses and permits necessary to the conduct of their respective business.

 

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(L)            If any of Borrower’s or the Subsidiary Bank’s banking regulators (i) enter into or issue a cease and desist order, consent order, written agreement or similar agreement with or against Borrower or the Subsidiary Bank, (ii) require Borrower or the Subsidiary Bank to enter into a memorandum of understanding, letter agreement or other similar written undertaking, or (iii) take such other action that explicitly states that Borrower or the Subsidiary Bank has acted in an unsafe or unsound manner.

 

(M)            Borrower ceases to own one hundred percent (100%) of the issued and outstanding capital stock of the Subsidiary Bank.

 

(N)            There is a Change in Control with respect to Borrower or the Subsidiary Bank.

 

(O)            The occurrence of any regulatory action that would prevent the payment of dividends from Subsidiary Bank to Borrower.

 

Section 7.02 Acceleration. If a Default shall have occurred and be continuing beyond any applicable grace or cure periods, or if a departure of executive management occurs under Section 6.01(P) and Lender elects to accelerate the Loan during the period set forth in such Section 6.01(P), then, at the option of Lender (which option shall be deemed to have been exercised, even if no notice is given, immediately upon the occurrence of a Default specified in Sections 7,01(E), (F) or (G)), Lender may terminate all commitments to lend hereunder and may declare, by written notice to Borrower, that all Obligations, whether hereunder or otherwise, are immediately due and payable.

 

Section 7.03 Remedies. If a Default shall have occurred and be continuing beyond any applicable notice and grace periods, then whether or not acceleration occurs under Section 7.02, Lender shall have, in addition to the rights and remedies given it by this Agreement and the Collateral Documents, all those allowed by all applicable Laws, including, but without limitation, the Uniform Commercial Code as enacted in any jurisdiction in which any Collateral may be located. After deducting from the proceeds of sale or other disposition of the Collateral all expenses (including all reasonable expenses for legal services), Lender shall apply such proceeds toward the satisfaction of the Obligations. Borrower shall be liable for any deficiency, and any remainder of the proceeds after satisfaction in full of the Obligations shall be distributed as required by applicable Laws. Notice of any sale or other disposition shall be given to Borrower (and/or to the Subsidiary Bank, if required under applicable Laws) at least five (5) days before the time of any intended public sale or of the time after which any intended private sale or other disposition of the Collateral is to be made, which Borrower hereby agrees shall be reasonable notice of such sale or other disposition. Borrower agrees to assemble, or to cause to be assembled, at its own expense, the Collateral at such place or places as Lender shall designate. At any such sale or other disposition, Lender may, to the extent permissible under applicable Laws, purchase the whole or any part of the Collateral, free from any right of redemption on the part of Borrower or the Subsidiary Bank, which right is hereby waived and released. Without limiting the generality of any of the rights and remedies conferred upon Lender under this section, Lender may, to the full extent permitted by applicable Laws, at Lender’s option, use, operate, manage and control the Collateral in any lawful manner.

 

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ARTICLE 8. MISCELLANEOUS

 

Section 8.01 Construction. The provisions of this Agreement shall be in addition to those of any guaranty, pledge or security agreement, note or other evidence of liability held by Lender, all of which shall be construed as complementary to each other. Nothing herein contained shall prevent Lender from enforcing any or all other notes, guaranty agreements, pledge agreements, or security agreements in accordance with their respective terms.

 

Section 8.02 Further Assurance. From time to time, Borrower will, or will cause the Subsidiary Bank to, execute and deliver to Lender such additional documents and will provide such additional information as Lender may reasonably require to carry out the terms of this Agreement and be informed of Borrower’s and/or the Subsidiary Bank’s status and affairs.

 

Section 8.03 Enforcement and Waiver by Lender. Lender shall have the right at all times to enforce the provisions of this Agreement and the Collateral Documents in strict accordance with the terms hereof and thereof, notwithstanding any conduct or custom on the part of Lender in refraining from so doing at any time or times. The failure of Lender at any time or times to enforce its rights under such provisions, strictly in accordance with the same, shall not be construed as having created a custom in any way or manner contrary to specific provisions of this Agreement or as having in any way or manner modified or waived the same. All rights and remedies of Lender are cumulative and concurrent and the exercise of one right or remedy shall not be deemed a waiver or release of any other right or remedy.

 

Section 8.04 Expenses of Lender. Borrower will, on demand, reimburse Lender for any and all expenses, fees, taxes, or other costs (including, without limitation, (a) expenses for lien searches and other due diligence searches, (b) any recordation tax, indebtedness tax, documentary stamp tax, intangible tax, or similar tax due in connection with the Loan or any security instrument related to the Loan, (c) any recording fees or other costs due in connection with any security instrument related to the Loan, and (d) the reasonable and documented out-of-pocket fees and expenses of legal counsel for Lender) incurred in connection with the enforcement of this Agreement and the Collateral Documents and the collection or attempted collection of the Note and the other Obligations.

 

Section 8.05 Notices. Any notice or other communication required or permitted to be given by this Agreement, the Note, the Collateral Documents or any related document, or by applicable Laws, shall be in writing and shall be deemed received (a) on the date delivered, if sent by hand delivery (to the person or department if one is specified below) with receipt acknowledged by the recipient thereof, (b) three (3) business days following the date deposited in U.S. mail, certified or registered, with return receipt requested, or (c) one (1) business day following the date deposited with Federal Express or other national overnight carrier, and in each case addressed as follows:

 

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(A)         If to Borrower:

 

Georgia Banking Company, Inc. c/o Georgia Banking Company
1776 Peachtree St NW, Suite 300
Atlanta, GA 30309
Attention:         Mr. Bartow Morgan, Jr., CEO
                             Mr. Jeffrey A. Kraus, CFO

 

(B)          If to Lender:

 

ServisFirst Bank
2500 Woodcrest Place
Birmingham, Alabama 35209
Attention:         Murray Bibb
                              Senior Vice President, Correspondent Banking

 

Section 8.06 Waiver; Release and Indemnity by Borrower. To the maximum extent permitted by applicable Laws, Borrower:

 

(A)            Waives (1) protest with respect to all Indebtedness at any time held by Lender on which Borrower is in any way liable; and (2) notice and opportunity to be heard before exercise by Lender of the remedies of set-off or other summary procedures permitted by any applicable Laws or by any agreement with Borrower, and except where required hereby or by any applicable Laws, notice of any other action taken by Lender; and
Releases Lender and its officers, directors, agents, attorneys and employees from all claims for loss or damage caused by any act or omission on the part of any of them except gross negligence or willful misconduct; and

 

(B)            Indemnifies Lender and its officers, directors, agents, attorneys and employees against, and agrees to hold Lender and all of such other persons harmless from, any claims, demands, liabilities, costs, damages, and judgments (including, without limitation, costs of defense and attorneys’ fees) arising directly or indirectly out of or in connection with any matter involving the Loan, this Agreement, the Note, the Collateral Documents, any related documents, or any of the other matters and transactions contemplated herein or therein, except where such claims, demands, liabilities, costs, damages and judgments arise out of the gross negligence or willful misconduct of Lender. This agreement of indemnity shall be a continuing agreement and shall survive payment of the Loan, the Note and termination of this Agreement.

 

Section 8.07 Participation. Notwithstanding any other provision in this Agreement, Borrower understands and agrees that Lender may enter into participation agreements with participating banks whereby Lender will allocate to them certain percentages of Lender’s interest in the Loan. Borrower acknowledges that, for the convenience of all parties, this Agreement is being entered into with Lender only and that its obligations under this Agreement are undertaken for the benefit of, and as an inducement to each of any such participating banks as well as Lender, and Borrower hereby grants to each such participating bank, to the extent of its participation in the Loan, the right to set off deposit accounts maintained by Borrower with such bank.

 

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Section 8.08 Applicable Law: Jurisdiction and Venue. The substantive Laws of the United States and the State of Alabama shall govern the construction of this Agreement and the documents executed and delivered pursuant hereto, and the rights and remedies of the parties hereto and thereto. Borrower hereby consents to the jurisdiction of the State of Alabama; and agrees that venue for any dispute relating to or arising out of the transaction contemplated by this Agreement shall lie exclusively in an appropriate state or federal court located in Jefferson County, Alabama.

 

Section 8.09 Binding Effect, Assignment and Entire Agreement. This Agreement shall inure to the benefit of, and shall be binding upon, the respective successors and permitted assigns of the parties hereto. Borrower has no right to assign any of its rights or obligations hereunder without the prior written consent of Lender. Lender may freely assign the Loan, in whole or in part. This Agreement and the documents executed and delivered pursuant hereto, constitute the entire agreement between the parties, and may be amended only by a writing signed on behalf of each party.

 

Section 8.10 Severability. If any provision of this Agreement shall be held invalid under any applicable Laws, such invalidity shall not affect any other provision of this Agreement that can be given effect without the invalid provision, and, to this end, the provisions hereof are severable.

 

Section 8.11 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument.

 

Section 8.12 Extension and Renewal. The Loan may, in the sole and absolute discretion of Lender, be renewed or extended beyond the Maturity Date only upon the express written agreement of Borrower and Lender. Any renewal or extension shall be upon the terms and subject to the conditions stated in such written agreement. In the absence of such extension or renewal, the obligations of Lender hereunder with respect to the Loan shall terminate on the Maturity Date.

 

Section 8.13 Seal. This Agreement is intended to take effect as an instrument under seal.

 

Section 8.14 No Third Party Beneficiaries, Etc. Monitoring, inspections and review of financial information by Lender may not be relied upon by Borrower or any other Person and shall be for the sole benefit of Lender. Further, there are no third party beneficiaries of this Agreement or any documents related hereto, and no person or entity other than Lender and Borrower shall be entitled to rely hereon or thereon or benefit herefrom or therefrom.

 

Section 8.15 Waiver of Trial by Jury. EACH OF THE BORROWER AND THE LENDER HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO TRIAL BY JURY ON ANY CLAIM, COUNTERCLAIM, SETOFF, DEMAND, ACTION OR CAUSE OF ACTION (a) ARISING OUT OF OR IN ANY WAY PERTAINING OR RELATING TO THIS AGREEMENT, THE NOTE, THE COLLATERAL DOCUMENTS, OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION WITH THIS AGREEMENT OR (b) IN ANY WAY CONNECTED WITH OR PERTAINING OR RELATED TO OR INCIDENTAL TO ANY DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS AGREEMENT, THE NOTE, THE COLLATERAL DOCUMENTS, OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION THEREWITH OR IN CONNECTION WITH THE TRANSACTIONS RELATED THERETO OR CONTEMPLATED THEREUNDER, IN ALL OF THE FOREGOING CASES WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE. THE BORROWER AND THE LENDER AGREE THAT EITHER OR BOTH OF THEM MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED AGREEMENT BETWEEN THE PARTIES IRREVOCABLY TO WAIVE TRIAL BY JURY, AND THAT ANY DISPUTE OR CONTROVERSY WHATSOEVER BETWEEN THEM SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.

 

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Section 8.16 Confidential Supervisory Information.      Notwithstanding any other provision of this Agreement, no disclosure, representation or warranty shall be made (or other action taken) pursuant to this Agreement that would involve the disclosure of confidential supervisory information (including confidential supervisory information as defined in 12 C.F.R. § 261.2(c) and as identified in 12 C.F.R. § 309.5(g)(8)) of a Governmental Authority by any party to this Agreement to the extent prohibited by applicable law. To the extent legally permissible, appropriate substitute disclosures or actions shall be made or taken under circumstances in which the limitations of the preceding sentence apply.

 

[Signature Page Follows]

 

26

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

 

  BORROWER:
   
    GEORGIA BANKING COMPANY, INC.
   
  By /s/ Bartow Morgan, Jr.
  Name Bartow Morgan, Jr.
  Its Chief Executive Officer
   
  LENDER:
   
    SERVISFIRST BANK
   
  By /s/ Murray Bibb
  Name Murray Bibb
  Its Senior Vice President

 

Signature Page for Loan and Security Agreement

 

 

 

 

EXHIBIT A TO
LOAN AND SECURITY AGREEMENT

 

BORROWER’S COMPLIANCE CERTIFICATE

 

ServisFirst Bank
2500 Woodcrest Place
Birmingham, Alabama 35209
Attention: Murray Bibb, Senior Vice President, Correspondent Banking

 

Re: Loan and Security Agreement dated June 10, 2025

 

Gentlemen:

 

In connection with the foregoing, the officer executing this certificate on behalf of Borrower and the Subsidiary Bank certifies as follows:

 

a)         I am familiar with the terms and conditions of the Loan and Security Agreement (the “Loan Agreement”) dated                      , 20          , between Borrower and Lender. I have individually reviewed the provisions of the Loan Agreement, and a review of the activities of Borrower and the Subsidiary Bank from                  , 20           , until               , 20            , has been made under my supervision with the view of determining whether Borrower and the Subsidiary Bank have kept, observed, performed and fulfilled all their obligations under the Loan Agreement.

 

b)         The financial covenants for the Subsidiary Bank set forth in Section 6.01(J) of the Agreement are set forth below, together with the status or calculation thereof for the above-referenced period:

 

        Required   As of Reporting Date
             
(1)   Status   “well capitalized    
(2)   Tier 1 Leverage Ratio greater than   7.0%    
(3)   Non-Performing Assets Ratio less than   25%    
(4)   Return on Assets Ratio greater than   0.60%    

 

c)          Borrower and the Subsidiary Bank have observed and performed each and every undertaking contained in the Loan Agreement and are not at this time in default in the observance or performance of any of the terms and conditions thereof except as provided for on the attached schedule. I hereby certify that no Default or Potential Default exists as of the date hereof.

 

[Signature Page Follows]

 

 

 

 

IN WITNESS WHEREOF, the undersigned have caused this certificate to be executed by their duly authorized representatives on the dates set forth below.

 

  GEORGIA BANKING COMPANY, INC.
   
  By  
  Name  
  Its  
   
  Date:  

 

  GEORGIA BANKING COMPANY
   
  By  
  Name  
  Its  
   
  Date:  

 

 

 

 

COMPLIANCE CERTIFICATE SCHEDULE OF DEFAULTS

 

A.    Nature of Default(s) or Potential Default(s):

 

B.     Steps Borrower proposes to cure Default(s) or Potential Default(s):

 

 

 

 

EXHIBIT B TO
LOAN AND SECURITY AGREEMENT

 

STATES QUALIFIED, PRINCIPAL PLACES OF BUSINESS

 

Entity  State(s) Qualified  Principal Place of Business
Georgia Banking Company, Inc.  Georgia  1776 Peachtree St NW, Suite 300 Atlanta, GA 30309
Georgia Banking Company  Georgia  1776 Peachtree St NW, Suite 300 Atlanta, GA 30309

 

 

 

 

Exhibit 10.10

 

CERTAIN CONFIDENTIAL INFORMATION (MARKED BY BRACKETS AS “[***]”) HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) IS THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR CONFIDENTIAL.

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is effective as of the 30th day of September, 2026 (the “Effective Date”), by and among Georgia Banking Company, Inc. (the “Company”), a bank holding company organized and existing under the laws of the State of Georgia, Georgia Banking Company (the “Bank”), a bank organized under the laws of the State of Georgia and a wholly-owned subsidiary of the Company (collectively, with the Company, the “Employer”), and Bartow Morgan, Jr., a resident of the State of Georgia (the “Executive”).

 

WHEREAS, the Company, the Bank and the Executive entered into that certain Employment Agreement, dated as of April 27, 2021 (the “Original Agreement”);

 

WHEREAS, the Executive is currently engaged as the Chief Executive Officer of the Company and the Bank; and

 

WHEREAS, the Company, the Bank and the Executive desire to amend and restate the Original Agreement with this Agreement;

 

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements hereinafter set forth and intending to be legally bound, the Company, the Bank and the Executive agree as follows:

 

1.            Duties.

 

1.1          Positions. The Executive shall be employed as the Chief Executive Officer of the Company and of the Bank and, subject to the direction of the respective Board of Directors, shall perform and discharge faithfully the duties and responsibilities of the Chief Executive Officer as provided in the bylaws of the Company and the Bank and, to the extent customarily associated with the Executive’s position, which may be assigned to the Executive from time to time in connection with the conduct of the businesses. The duties and responsibilities of the Executive shall be commensurate with the position of chief executive officer of a community bank and the position of chief executive officer of a bank holding company. The Executive shall report to the Boards of Directors of the Company and the Bank. During the Term, at appropriate intervals, the Company through its Board of Directors shall nominate the Executive as a candidate for election or re-election to its Board of Directors and vote, and recommend others vote, for the Executive for election to the Company’s Board of Directors.

 

1.2          Full-Time Status. In addition to the duties and responsibilities specifically assigned to the Executive pursuant to Section 1.1 hereof, the Executive shall:

 

(a)            subject to Section 1.3, devote substantially all of the Executive’s professional time, energy and skill during regular business hours to the performance of the duties of the Executive’s employment (reasonable vacations and reasonable absences due to illness excepted) and faithfully and industriously perform such duties;

 

 

 

 

(b)           diligently follow and assist in the implementation of all reasonable and lawful management policies and decisions communicated to the Executive by the Board of Directors; and

 

(c)            timely prepare (or supervise the preparation of) and forward to the Board of Directors all reports and accountings as may be reasonably requested of the Executive.

 

1.3          Permitted Activities. The Executive shall not during the Term be engaged professionally (whether or not during normal business hours) in any other significant business or professional activity, whether or not such activity is pursued for gain, profit or other pecuniary advantage, but as long as the following activities do not interfere in any material respect with the Executive’s obligations to the Employer, nothing in this Agreement shall be construed as preventing the Executive from:

 

(a)            investing the Executive’s personal assets in any manner which will not require any material services on the part of the Executive in the operation or affairs of the entity and in which the Executive’s participation is primarily that of an investor; provided that such investment activity following the Effective Date shall not result in his owning beneficially at any time five percent (5%) or more of the equity securities of any Competing Business; or

 

(b)            participating in civic and professional affairs and organizations and conferences, preparing or publishing papers or books, teaching or serving on the board of directors of an entity, so long as any such participation does not interfere in any material respect with the ability of the Executive to effectively discharge his duties hereunder or result, or be likely to result, in any material breach by the Executive of the restrictive covenants set forth in Sections 5, 6, 7 or 8 of this Agreement.

 

1.4          No Other Agreement. The Executive shall have no employment contract or other written or oral agreement concerning employment with any Person other than the Employer during the Term.

 

2.             Term.     This Agreement shall remain in effect for the Term, subject to earlier termination in connection with the termination of the Executive’s employment pursuant to Section 4 hereof. If the Agreement is in effect at the end of the Initial Term, the Term shall be renewed automatically for successive twelve-month periods unless and until one party gives written notice to the other of its or his intent not to extend this Agreement with such written notice to be given not less than ninety (90) days prior to the end of the Initial Term or any such twelve (12)-month renewal period. In the event such notice of non-extension is properly given, this Agreement shall terminate at the end of the remaining Term then in effect, subject to earlier termination in connection with the termination of the Executive’s employment pursuant to Section 4 hereof. In the event that either party provides timely notice of non-renewal of this Agreement, but the Executive continues to provide services to the Employer as an employee, such post-expiration employment shall be deemed to be performed on an “at-will” basis and either party may thereafter terminate such employment with or without notice and for any or no reason and without any obligations determined by reference to this Agreement.

 

3.            Compensation. The Employer shall pay the Executive the following during the Term, except as otherwise provided below:

 

3.1            Annual Base Salary. The Employer shall pay the Executive an annual base salary of $500,000 (as in effect as of the Effective Date or as subsequently increased thereafter, the “Annual Base Salary”). The Executive’s Annual Base Salary shall be reviewed by the Board of Directors no less frequently than annually based on its evaluation of the Executive’s performance and may be increased (but not decreased) at the discretion of the Board of Directors. The Executive’s Annual Base Salary shall be payable in accordance with the Employer’s normal payroll practices (no less frequently than monthly).

 

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3.2           Annual Incentive Compensation. The Executive shall be eligible to receive annual bonus compensation, if any, as may be determined by, and based on performance measures established by, the Board of Directors of the Company upon the recommendation of the Compensation Committee of the Board of Directors of the Company (the “Committee”) consistent with the Employer’s strategic planning process, pursuant to any incentive compensation program as may be adopted from time to time by the Board of Directors of the Company, based on recommendations by the Committee (an “Annual Bonus”). The Executive’s minimum target Annual Bonus opportunity for any annual period shall be no less than fifty percent (50%) of the Executive’s Annual Base Salary. The performance measures for any given year shall be set by the Company Board of Directors, after consultation with the Executive, within the first ninety (90) days of the year to which the Annual Bonus opportunity relates.  Any Annual Bonus earned shall be payable in cash or pursuant to a deferred compensation plan contribution no later than March 15th of the year following the year to which the Annual Bonus relates in accordance with the Employer’s normal practices for the payment of short-term incentives. To be entitled to any payment of incentive compensation from the Employer, except as provided otherwise herein, the Executive must be employed by the Employer on the last day of the applicable year to which the Annual Bonus relates. The Company shall afford the Executive the opportunity to elect to receive payment of the Annual Bonus or any incentive compensation or any portion thereof that otherwise becomes payable in cash, in shares of Company common stock or any combination of cash and shares of Company common stock. In the event that the Executive elects to receive any incentive compensation in the form of Company common stock, the number of shares of Company common stock to be delivered to the Executive in lieu of such cash payment shall be the number of shares of the Company’s common stock having an aggregate fair market value equal to the cash that otherwise would be paid, as determined using the Market Value per Share as most recently determined by the Board of Directors in accordance with the Company’s stock incentive plan then in effect. The payment of any Annual Bonus shall be subject to any approvals or non-objections required by any regulator of the Employer.

 

3.3           Equity Compensation. The Executive will be eligible to participate in any stock option plan, restricted stock and long-term equity incentive plans offered by the Company to senior executives on the same basis as such other similarly situated senior executives of the Employer and terms consistent with the Executive’s position with the Employer.

 

3.4           Health and Life Insurance Benefits. During the Term, the Executive and the Executive’s dependents shall be eligible for participation in and shall receive all benefits under any health and welfare benefit plans, practices, policies and programs provided by the Employer, to the same extent applicable to similarly situated executives of the Employer and their eligible dependents, including treatment provided to the Executive by the “Executive Health” program, and subject to the terms, conditions and eligibility requirements (including any required premium payments or other costs) therefore as may be prescribed by the Employer and set forth in the terms of such plans, practices, policies and programs from time to time. In addition, during the Term, the Executive shall be eligible to maintain life insurance arrangements providing death benefits and/or premium payment assistance benefits to the Executive to the same extent applicable to similarly situated executives of the Employer and their eligible dependents, subject to any changes required to be made under applicable law in effect from time to time.

 

3.5          Business and Professional Education Expenses; Memberships. The Employer specifically agrees to reimburse the Executive, in accordance with the reimbursement policies from time to time adopted by the Board of Directors of the Employer, for reasonable and necessary business expenses incurred by the Executive in the performance of his duties hereunder; provided, however, that the Executive shall, as a condition of any such reimbursement, submit verification of the nature and amount of such expenses in accordance with such reimbursement policies and in sufficient detail to comply with rules and regulations promulgated by the United States Treasury Department. In addition, the Employer shall reimburse the Executive for educational expenses related to the Executive’s professional development and for membership in professional and civic organizations to the extent such activities are consistent with the Employer’s strategic objectives, subject in each instance to advance approval by the Board of Directors of the Bank for amounts in excess of $1,000. The Executive acknowledges that the Employer makes no representation with respect to the taxability or non-taxability of the benefits provided under this Section 3.5.

 

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3.6           Paid Leave. The Executive shall be entitled to no less than four (4) weeks of paid leave per calendar year, prorated for partial calendar years. The provisions of this Section 3.6 shall apply notwithstanding any less generous paid leave policy then maintained by the Employer, but the use of the Executive’s paid leave shall otherwise be determined in accordance with the Bank’s paid leave policy as in effect from time to time.

 

3.7          Benefits. In addition to the benefits specifically described in this Agreement, the Executive shall be entitled to such benefits as may be available from time to time to similarly situated senior executives of the Employer. All such benefits shall be awarded and administered in accordance with the Employer’s standard policies and practices.

 

3.8          Withholding. The Employer may deduct from each payment of compensation hereunder all amounts required to be deducted and withheld in accordance with applicable federal and state income, FICA and other withholding requirements.

 

3.9          Apportionment of Obligations. Except as the provisions of this Agreement expressly provide otherwise, the obligations for the payment of the amounts otherwise payable pursuant to this Section 3 and in Section 4 shall be apportioned between the Company and the Bank as they may agree from time to time in their sole discretion and in proportion to services actually rendered by the Executive for such entity; provided, however, that they must satisfy in full all such obligations in a timely manner as set forth in this Agreement regardless of any agreed-upon apportionment. The Executive’s receipt of satisfaction in full of any such obligation from the Company or the Bank shall extinguish the obligations of the other with respect to such obligation. In addition, the satisfaction of the obligations in this Section 3 and Section 4 shall be subject to any approvals or non-objections from, and any conditions or restrictions imposed by, any regulator of the Employer.

 

3.10        Reimbursement of Expenses; In-Kind Benefits. All expenses eligible for reimbursements described in this Agreement must be incurred by the Executive during the Term of this Agreement to be eligible for reimbursement. All in-kind benefits described in this Section 3 must be provided by the Employer during the Term of this Agreement. The amount of reimbursable expenses incurred, and the amount of in-kind benefits provided, in one taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits provided, in any other taxable year. Each category of reimbursement shall be paid as soon as administratively practicable, but in no event shall any such reimbursement be paid after the last day of the calendar year following the calendar year in which the expense was incurred. Neither rights to reimbursement nor in-kind benefits are subject to liquidation or exchanges for other benefits.

 

3.11        Clawback of Incentive Compensation. The Executive agrees to repay the gross amount (before any withholdings) of any payment of compensation previously paid or otherwise made available to the Executive under this Agreement, and rescind any vesting of equity awards awarded in connection with the such compensation or the portion thereof and return the shares or the value thereof resulting from that vesting, that are subject to recovery under any applicable law (including any rule of any exchange or service through which the securities of the Company are then traded), or any compensation recoupment policy the Company or its Affiliates may adopt form time to time, including, but not limited to, the following circumstances:

 

(a)           where such compensation was in excess of what should have been paid or made available because the determination of the amount due was based, in whole or in part, on materially inaccurate financial information of the Employer;

 

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(b)           where such compensation constitutes “excessive compensation” within the meaning of 12 C.F.R. Part 30, Appendix A;

 

(c)           where the Executive has committed, is substantially responsible for, or has violated, the respective acts, omissions, conditions, or offenses outlined under 12 C.F.R. Section 359.4(a)(4); and

 

(d)           if the Bank becomes, and for so long as the Bank remains, subject to the provisions of 12 U.S.C. Section 1831(f), where such compensation exceeds the restrictions imposed on the senior executive officers of such an institution.

 

The Executive agrees to return within sixty (60) days, or within any earlier timeframe required by applicable law or by any of the Employer’s recoupment policies, any such compensation payments and/or rescind any such vesting of equity awards and return the shares or the value thereof resulting from that vesting, that the Employer identifies by written notice provided pursuant to Section 13. If the Executive fails to return such compensation or shares or value thereof promptly, the Executive agrees that the amount of such compensation and/or the value of such shares may be deducted from any and all other compensation owed to the Executive by the Employer. If the Executive is then employed by the Employer, the Executive acknowledges that the Employer may take appropriate disciplinary action (up to, and including, Termination of Employment) if the Executive fails to return such compensation and/or the value of such shares. The Executive acknowledges the Employer’s rights to engage in any legal or equitable action or proceeding in order to enforce the provisions of this Section 3.11. The provisions of this Section 3.11 shall be modified to the extent, and remain in effect for the period, required by applicable law.

 

4.            Termination; Suspension or Reduction of Benefits.

 

4.1          Termination of Employment. During the Term, the Executive’s Termination of Employment under this Agreement may only occur as follows:

 

(a)            By the Employer:

 

(1)            for Cause;

 

(2)            without Cause (other than pursuant to Section 4.1(a)(3) below) at any time, provided that the Board of Directors of either the Company or the Bank shall give the Executive thirty (30) days prior written notice of its intent to effect his Termination of Employment; or

 

(3)            in the event that a regulator for the Employer requires the Executive’s removal from service as the Chief Executive Officer of the Bank and/or the Company.

 

A Termination of Employment of the Executive pursuant to Subsection (a)(1) or (a)(2) above shall require the affirmative vote of not less than a majority of the entire membership of the Board of Directors of the Company at a meeting of the Board of Directors called and held for such purpose (after reasonable prior notice to the Executive and an opportunity of the Executive to be heard by the Board of Directors or its designee(s)), finding, with respect to a Termination of Employment to be effected pursuant to Subsection (a)(1) that, in the good faith opinion of the Board of Directors, the Executive is guilty of conduct constituting Cause and specifying the particulars thereof in detail.

 

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(b)           By the Executive:

 

(1)            for any reason (other than pursuant to Section 4.1(b)(2)), provided that the Executive shall give the Employer thirty (30) days’ prior written notice of the Executive’s intent to effect his Termination of Employment; or

 

(2)            for Good Reason, provided that the Executive shall give the Employer the prior written notice described in Section 25(n).

 

(c)           Upon the Executive becoming subject to a Disability.

 

(d)           At any time upon mutual, written agreement of the parties.

 

(e)           Upon expiration, including non-renewal, of the Term.

 

(f)            Notwithstanding anything in this Agreement to the contrary, the Term shall end automatically upon the Executive’s death.

 

Upon Termination of Employment for any reason, the Executive shall be entitled to receive (A) the Executive’s annual base salary through Executive’s termination of employment which remains unpaid, (B) the amount, if any, of any incentive or bonus compensation earned for any completed fiscal year of the Company which has vested and not yet been paid (but only in case of (B), so long as the Executive was not terminated by the Employer for Cause), (C) any reimbursements for reasonable expenses incurred but not yet paid, and (D) any benefits or other amounts, including both cash and stock components, which pursuant to the terms of any plans, policies or programs subject to ERISA that have become earned, vested and payable, but which have not yet been paid or delivered to the Executive, including payment for any unused paid time-off (but not including amounts that previously had been deferred at the Executive’s request, which amounts will be paid in accordance with the Executive’s existing deferral directions). These obligations will be paid to the Executive in a lump sum as soon as administratively practicable and within sixty (60) days following the Executive’s termination of employment, except that any incentive or bonus compensation described in (B) above shall be paid at the same time such annual bonus would otherwise have been paid.

 

4.2            Severance. If, during the Term, the Executive experiences a Termination of Employment, either (a) by the Employer without Cause pursuant to Section 4.1(a)(2); or (b) by the Executive for Good Reason pursuant to Section 4.1(b)(2), then, upon his Termination of Employment, the Employer will pay severance (“Severance”) to the Executive, or in the event of his subsequent death, to his designated beneficiary or beneficiaries, or, in the event the Executive has not designated any beneficiaries, to his estate, as the case may be:

 

(a)            an amount equal to the greater of (x) the amount of the Annual Base Salary to be paid for the remainder of the Term of this Agreement, payable in equal installments for the remainder of the Term (no less frequently than monthly); or (y) the amount of the Annual Base Salary at the highest rate in effect in the twelve-month period immediately preceding the Termination of Employment (at the rate in effect before any election by the Executive to defer the receipt of any such annual base salary), payable in equal installments over 12 months (no less frequently than monthly), in each case commencing immediately after Termination of Employment;

 

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(b)            an amount equal to the average annual bonus paid to the Executive with respect to the three (3) calendar-year period immediately preceding the Termination of Employment (including the amount of any such annual bonus that would have been paid with respect to such period but for Executive’s election to defer the receipt of such bonus), annualized for any partial year, payable in lump sum as soon as administratively practicable and within sixty (60) days after the Executive’s Termination of Employment;

 

(c)            payment of an amount equal to the Executive’s actual earned full-year Annual Bonus for the year in which the termination of Executive’s employment occurs, prorated based on the number of days the Executive was employed for the year, payable at the time the Executive’s Annual Bonus for the year otherwise would be paid had the Executive continued employment; and

 

(d)            vesting of that number of the Executive’s outstanding unvested options, restricted stock and other equity-based awards that would have vested based solely on the continued employment of the Executive through the greater of the remainder of the Term or twelve (12) months immediately following the date of termination of employment (with all performance-based awards converted first to service-based awards at target). Additionally, all of Executive’s outstanding stock options shall remain outstanding until the earlier of (i) one year after the date of termination of the Executive’s employment or (ii) the original expiration date of the options (disregarding any earlier expiration date provided for in any other agreement, including without limitation any related grant agreement, based solely on the termination of the Executive’s employment).

 

4.3          Change in Control. If during the Term and during the period beginning six (6) months prior to and ending twelve (12) months after the closing of a Change in Control, the Executive (a) experiences an involuntary Termination of Employment without Cause (and other than on account of the Executive’s death or Disability); or (b) voluntarily resigns effecting a Termination of Employment for Good Reason, in either such case, then, in addition to any Severance payable pursuant to Section 4.2, the Employer will pay to the Executive, or in the event of his subsequent death, to his designated beneficiary or beneficiaries, or, in the event the Executive has not designated any beneficiaries, to his estate, as the case may be, in cash in a lump sum, net of applicable tax withholdings, and subject to Section 4.5(b) and Section 22 below, as soon as administratively practicable and no later than sixty (60) days following the later of the date of the Executive’s Termination of Employment or the Change in Control:

 

(a)            an amount equal to the product of (x) three (3) multiplied by (y) one (1) times his Annual Base Salary at the highest rate in effect in the twelve (12)-month period immediately preceding the Termination of Employment, less the amount of severance payable under Section 4.2(a) above; and

 

(b)            an amount equal to the product of (x) three (3) multiplied by (y) one (1) times the average annual bonus paid to the Executive with respect to the three (3) calendar-year period immediately preceding the Termination of Employment, annualized for any partial year, less the amount of severance payable under Section 4.2(b) above.

 

In addition to the foregoing payments, all of the Executive’s outstanding unvested options, restricted stock and other equity-based awards that would have vested based solely on the continued employment of the Executive shall become vested in full (with all outstanding performance-based awards converted first to service-based awards at target), as of the date of the release described in Section 4.5(b) below becomes effective and non-revocable.

 

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4.4          Section 280G.

 

(a)           Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Employer to or for the benefit of Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (a “Payment”) would be subject to the excise tax (the “Excise Tax”) imposed by Section 4999 of the Code (a “Parachute Payment”), then, prior to the making of any Payment to Executive, a calculation shall be made comparing (i) the net after-tax benefit to Executive of the Payment after payment of the Excise Tax to (ii) the net after-tax benefit to Executive if the Payment had been limited to the extent necessary to avoid being subject to the Excise Tax. If the amount calculated under (i) above is less than the amount calculated under (ii) above, then the Payment shall be limited to the extent necessary to avoid being subject to the Excise Tax (the “Reduced Amount”). In that event, cash payments shall be modified or reduced first pro rata (first with respect to any cash payments that are not subject to Section 409A of the Code and then with respect to cash payments that are subject to Section 409A of the Code) and then any other benefits (in the same order as with respect to the cash benefits). The determination of whether an Excise Tax would be imposed, the amount of such Excise Tax, and the calculation of the amounts referred to in clauses (i) and (ii) of the foregoing sentence shall be made by an independent accounting firm selected by Employer and reasonably acceptable to the Executive, at the Employer’s expense (the “Accountants”), and the Accountants shall provide detailed supporting calculations. Any determination by the Accountants shall be binding upon the Employer and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accountants hereunder, it is possible that Payments which Executive was entitled to, but did not receive pursuant to this Section 4.4, could have been made without the imposition of the Excise Tax (“Underpayment”) or that Payments which the Executive did receive pursuant to this Section 4.4 should not have been so paid (“Overpayment”). If the Employer determines that an Overpayment has been made, any such Overpayment must be treated for all purposes as a loan, to the extent permitted by applicable law, which the Executive must repay to the Company together with interest at the applicable federal rate under Code Section 7872(f)(2). If the Company determines that an Underpayment has occurred, the Accountants shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Employer to or for the benefit of the Executive no later than the end of the Executive’s taxable year next following the Executive’s taxable year in which the determination is made that the Underpayment has occurred.

 

(b)           Section 6 of this Agreement contains covenants of the Executive regarding him refraining from certain activities deemed harmful to the Company for a set period of time in exchange for the promises contained herein. If the Executive is deemed eligible to receive Covered Payments under this Agreement that could be subject to the Excise Tax, the Employer shall seek a valuation from the Accountants to determine the value of the covenant contained in Section 6 of this Agreement and such amount of the Payments shall be allocated to such arrangement and be excluded from treatment as a Parachute Payment. For the avoidance of doubt, it is the intention of this Agreement that the value assigned to the covenants contained in Section 6 of this Agreement by the Accountants not be considered a Parachute Payment for purposes of this Section 4.4.

 

(c)           In addition, if any portion of the Parachute Payments would be subject to the Excise Tax imposed by Section 4999 of the Code, after allocation of Payments to the Executive’s covenants in Section 6 as described above, then to the extent reasonably practicable and permitted by applicable law, upon the written request of the Executive, the Employer shall: (i) use all commercially reasonable efforts to obtain stockholder approval in accordance with Section 280G of the Code with respect to any Payments or benefits that the Executive elects to waive and subject the Executive’s right to receive to approval by the stockholders of the Company; and (ii) to the extent such approval is not obtained or is not requested, consult with the Executive prior to reducing any particular Parachute Payments in order to afford the Executive the opportunity to waive other Parachute Payments, to the extent permitted by Section 409A of the Code.

 

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(d)           Any determination required under this Section 4.4 shall be made in writing in good faith by the Accountants. The Employer and the Executive shall provide the Accountants with such information and documents as the Accountants may reasonably request in order to make a determination under this Section 4.4. For purposes of making the calculations and determinations required by this Section 4.4, the Accountants may rely on reasonable, good faith assumptions and approximations concerning the application of Section 280G and Section 4999 of the Code. The Accountants’ determinations shall be final and binding on the Employer and the Executive. The Company shall be responsible for all fees and expenses incurred by the Accountants in connection with the calculations required by this Section 4.4.

 

(e)           The Executive and the Company shall reasonably cooperate with each other in connection with any administrative or judicial proceedings concerning the existence or amount of liability for the Excise Tax.

 

4.5          Effect of Termination of Employment.

 

(a)           Upon the Executive’s Termination of Employment hereunder for any reason, the Employer shall have no further obligations to the Executive or the Executive’s estate with respect to this Agreement, except for the payment of any amount earned and owing under this Agreement and any payment set forth in Section 4.2 or 4.3, if applicable.

 

(b)           Notwithstanding any other provision of this Agreement to the contrary, as a condition to receipt of any amount in connection with the Executive’s Termination of Employment, the Executive must execute on or after the Executive’s Termination of Employment (and not timely revoke during any revocation period provided pursuant to such release), prior to the sixtieth (60th) day following the date of the Executive’s Termination of Employment, a release and non-disparagement agreement in the form provided by the Employer. No payments set forth in Section 4.2 or 4.3 shall be made unless and until such release and non-disparagement agreement becomes effective and non-revocable; all such payments scheduled to be made prior to that time shall be held and accumulated and paid as soon as administratively practicable and no later than the first payroll period after such release and non-disparagement agreement becomes effective and non-revocable. Notwithstanding the foregoing, if the period for considering and revoking such release spans more than one calendar year, no payments set forth in Section 4.2 or 4.3 shall be made until the subsequent calendar year to the extent necessary to comply with Section 409A of the Code.

 

(c)           Notwithstanding any provision in the Agreement to the contrary, to the extent necessary to avoid the imposition of tax on the Executive under Code Section 409A, any payments that are otherwise payable to the Executive within the first six (6) months following the effective date of Termination of Employment, shall be suspended and paid as soon as practicable following the end of the six-month period following such effective date or, if earlier, the Executive’s death, if the Executive is determined to be a “specified employee” (within the meaning of Code Section 409A(a)(2)(B)(i)) of the Employer (or any related “service recipient” within the meaning of Code Section 409A and the regulations thereunder). Any payments suspended by operation of the foregoing sentence shall be paid as a lump sum within thirty (30) days following the end of such six-month period or, if earlier, the Executive’s death.

 

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(d)           Any actual or constructive termination of the Executive’s employment which does not rise to the level of a Termination of Employment shall not entitle the Executive to any of the payments or benefits described in Section 4.

 

(e)           If the Executive is a member of the Board of Directors of either the Company or the Bank or holds any other office with the Employer or related entities, and the Executive’s employment terminates for any reason whatsoever, the Executive shall immediately resign from his position(s) on the Board(s) of Directors, effective as of the date his employment is terminated.

 

(f)            Notwithstanding anything contained in this Agreement to the contrary, no payments shall be made pursuant to Section 4 or any other provision herein in contravention of the requirements of Section 18(k) of the Federal Deposit Insurance Act (“FDIA”) (12 U.S.C. 1828(k)).

 

4.6           Regulatory Action.

 

(a)            If the Executive is removed and/or permanently prohibited from participating in the conduct of the Employer’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the FDIA (12 U.S.C. 1818(e)(4) and (g)(1)), all obligations of the Employer under this Agreement shall terminate, as of the effective date of such order, except for the payment of Annual Base Salary due and owing under Section 3.1 on the effective date of said order, and reimbursement under Section 3.5 of reasonable expenses incurred prior to the effective date of termination that are reimbursable under the Employer’s applicable expense reimbursement policy.

 

(b)            If the Executive is suspended and/or temporarily prohibited from participating in the conduct of the Employer’s affairs by a notice served under Section 8(e)(3) or 8(g)(1) of the FDIA (12 U.S.C. 1818(e)(3) and (g)(1)), all obligations of the Employer under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Employer shall reinstate any of its obligations which were suspended to the extent permitted by applicable law.

 

(c)            If the Employer is in default (as defined in Section 3(x)(1) of the FDIA), all obligations under this Agreement shall terminate as of the date of default, but the vested rights of the parties shall not be affected.

 

(d)            If the FDIC is appointed receiver or conservator under Section 11(c) of the FDIA (12 U.S.C. 1821(c)) of the Employer or any depository institution controlled by the Employer, the Employer shall have the right to terminate all obligations of the Employer under this Agreement as of the date of such receivership or conservatorship, other than any rights of the Executive that vested prior to such appointment. To the extent the Employer is or encompasses a depository institution, any vested rights of the Executive may be subject to such modifications that are consistent with the authority of the FDIC.

 

(e)            If the FDIC provides open bank assistance under Section 13(c) of the FDIA (12 U.S.C. 1823(c)) to the Employer or any depository institution controlled by the Employer, but excluding any such assistance provided to the industry generally, the Employer shall have the right to terminate all obligations of the Employer under this Agreement as of the date of such assistance, other than any rights of the Executive that vested prior to the FDIC action. To the extent the Employer is or encompasses a depository institution, any vested rights of the Executive may be subject to such modifications that are consistent with the authority of the FDIC.

 

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(f)            If the FDIC requires a transaction under Section 13(f) or 13(k) of the FDIA (12 U.S.C. 1823(f) and (k)) by the Employer or any depository institution controlled by the Employer, the Employer shall have the right to terminate all obligations of the Employer under this Agreement as of the date of such transaction, other than any rights of the Executive that vested prior to the transaction. To the extent the Employer is or encompasses a depository institution, any vested rights of the Executive may be subject to such modifications that are consistent with the authority of the FDIC.

 

(g)            Notwithstanding the timing for the payment or delivery of any severance amounts described in Sections 4.2 and 4.3, no such payments shall be paid or become effective, as applicable, that require the concurrence or consent of the appropriate federal banking agency of the Employer pursuant to 12 C.F.R. Section 359 prior to the receipt of such concurrence or consent. The Employer shall have the obligation to submit an application to pay or deliver such payment to the appropriate federal banking agency within fifteen (15) business days of the Executive’s right to such payment arising and shall provide a copy of such application to the Executive. Any payments suspended by operation of this Section 4.6(g) shall be paid as a lump sum within thirty (30) days following receipt of the concurrence or consent of the appropriate federal banking agency of the Employer or as otherwise directed by such federal banking agency.

 

(h)            All obligations under this Agreement are further subject to such conditions, restrictions, limitations and forfeiture provisions as may separately apply pursuant to any applicable state banking laws and are intended to be applied in a manner that complies with Section 409A of the Code.

 

4.7           Additional Benefits Upon a Change in Control. Upon a Change in Control, the Employer will provide additional benefits or additional equity compensation, payable in a lump sum payment, and/or the vesting of equity compensation, in an aggregated amount equal to $2.6 million, subject to such performance or other metrics as may be determined by the Board of Directors of the Company, which shall be payable as soon as administratively practicable and within sixty (60) days following a Change in Control.

 

5.            Employer Information.

 

5.1          Ownership of Employer Information. All Employer Information received or developed by the Executive or by the Employer while the Executive is employed by the Employer will remain the sole and exclusive property of the Employer.

 

5.2          Obligations of the Executive. The Executive agrees:

 

(a)            to hold Employer Information in strictest confidence;

 

(b)           not to use, duplicate, reproduce, distribute, disclose or otherwise disseminate Employer Information or any physical embodiments of Employer Information to any unauthorized recipient; and

 

(c)            in any event, not to take any action causing, or fail to take any action necessary in order to prevent, any Employer Information from losing its character or ceasing to qualify as Confidential Information or a Trade Secret;

 

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notwithstanding anything in this Agreement to the contrary, (A) nothing in this Agreement, including but not limited to the release, or other agreement prohibits the Executive from reporting possible violations of law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress and any agency Inspector General (the “Government Agencies”), or communicating with Government Agencies or otherwise participating in any investigation or proceedings that may be conducted by Government Agencies, including providing documents or other information; (B) the Executive does not need the prior authorization of the Employer to take any action described in (A), and the Executive is not required to notify the Employer that he has taken any action described in (A); and (C) neither this Agreement nor the release limits the Executive’s right to receive an award for providing information relating to a possible securities law violation to the Securities and Exchange Commission. Further, notwithstanding the foregoing, the Executive will not be held criminally or civilly liable under any federal, state or local trade secret law for the disclosure of a trade secret that (x) is made (i) in confidence to a federal, state or local official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (y) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Additionally, if the Executive is suing the Employer for retaliation based on the reporting of a suspected violation of law, he may disclose a trade secret to his attorney and use the trade secret information in the court proceeding, so long as any document containing the trade secret is filed under seal and the Executive does not disclose the trade secret except pursuant to court order. This Section 5 shall survive for a period of two (2) years following termination of this Agreement for any reason with respect to Confidential Information, and shall survive termination of this Agreement for any reason for so long as is permitted by applicable law, with respect to Trade Secrets.

 

5.3          Delivery upon Request or Termination. Upon request by the Employer, and in any event upon the Executive’s Termination of Employment with the Employer, the Executive will promptly deliver to the Employer all property belonging to the Employer and its Affiliates, including, without limitation, all Employer Information then in the Executive’s possession or control.

 

6.            Non-Competition. The Executive agrees that during the Executive’s employment by the Employer hereunder, and in the event of the Executive’s Termination of Employment, regardless of the reason, for a period of twenty-four (24) months thereafter, the Executive covenants and agrees that the Executive shall not (except on behalf of or with the prior written consent of the Employer), within the Area, either directly or indirectly, on the Executive’s own behalf or in the service or on behalf of others, perform for any Competing Business any services which are the same as or essentially the same as the services the Executive provided for the Employer. The Executive acknowledges that the Employer conducts its business within the Area, that the Executive will perform services for and on behalf of the Employer within the Area, and that this Section 6 (and the definition of the Area) is a reasonable limitation on the Executive’s ability to compete with the Employer.

 

7.            Non-Solicitation of Customers. The Executive agrees that during the Executive’s employment by the Employer hereunder, and in the event of the Executive’s Termination of Employment, regardless of the reason, for a period of twenty-four (24) months thereafter, the Executive covenants and agrees that the Executive will not (except on behalf of or with the prior written consent of the Employer) on the Executive’s own behalf or in the service or on behalf of others, solicit, divert or appropriate or attempt to solicit, divert or appropriate, any business from any of the Employer’s customers, correspondents or other sources of or purchasers of loans of the Employer, including prospective customers or prospects actively sought by the Employer, with whom the Executive has or had material contact during the last two (2) years of the Executive’s employment with Employer, for purposes of providing products or services that are competitive with those provided by the Employer.

 

8.            Non-Solicitation of Employees. The Executive agrees that during the Executive’s employment by the Employer hereunder, and in the event of the Executive’s Termination of Employment, regardless of the reason, for a period of twenty-four (24) months thereafter, the Executive covenants and agrees that the Executive will not (except on behalf of or with the prior written consent of the Employer) on the Executive’s own behalf or in the service or on behalf of others, solicit, recruit or hire away or attempt to solicit, recruit or hire away, any employee of the Employer with whom the Executive had material contact during the last two (2) years of the Executive’s employment, whether or not such employee is a full-time employee or a temporary employee of the Employer, such employment is pursuant to written agreement, for a determined period, or at will.

 

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9.            Mutual Non-Disparagement. The Employer agrees that during the Term and for a period of twenty-four (24) months thereafter, Employer will not issue any statement (written or oral) that could reasonably be perceived as disparaging to the Executive. The Executive agrees that during the Term and for a period of two years thereafter, he will not make any statement (written or oral) that could reasonably be perceived as disparaging to the Employer or any person or entity that he reasonably should know is an affiliate of the Employer.

 

10.          Remedies. The Executive agrees that the covenants contained in Sections 5 through 9 of this Agreement are of the essence of this Agreement; that each of the covenants is reasonable and necessary to protect the business, interests and properties of the Employer, and that irreparable loss and damage will be suffered by the Employer should the Executive breach any of the covenants. Therefore, the Executive agrees and consents that, in addition to all the remedies provided by law or in equity, the Employer shall be entitled to a temporary restraining order and temporary and permanent injunctions to prevent a breach or contemplated breach of any of the covenants. Furthermore, in addition to any other remedies, the Executive agrees that any violation of the covenants in Sections 5 through 9 will result in the immediate forfeiture of any remaining payment that otherwise is or may become due under Section 4.2 or 4.3, if applicable. The Executive further agrees that should he breach any of the covenants contained in Sections 5 through 9 of this Agreement, no further amounts will be paid to the Executive pursuant to Section 4 and the Executive shall repay to the Employer the gross amounts (before withholdings) of any amounts previously received by the Executive pursuant to Section 4 that are attributable to that portion of the payments paid for the period during which the Executive was in breach of any of the covenants contained in Sections 5 through 9 of this Agreement. The Employer and the Executive agree that all remedies available to the Employer or the Executive, as applicable, shall be cumulative.

 

11.          Severability. The parties agree that each of the provisions included in this Agreement is separate, distinct and severable from the other provisions of this Agreement and that the invalidity or unenforceability of any Agreement provision shall not affect the validity or enforceability of any other provision of this Agreement. Further, if any provision of this Agreement is ruled invalid or unenforceable by a court of competent jurisdiction because of a conflict between the provision and any applicable law or public policy, the provision shall be redrawn to make the provision consistent with, and valid and enforceable under, the law or public policy.

 

12.          No Set-Off by the Executive. The existence of any claim, demand, action or cause of action by the Executive against the Employer whether predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement by the Employer of any of its rights hereunder.

 

13.          Notice. All notices, requests, waivers and other communications required or permitted hereunder shall be in writing and shall be either personally delivered, sent by reputable overnight courier service or mailed by first class mail, return receipt requested, to the recipient at the address below indicated:

 

If to the Employer: Georgia Banking Company, Inc.
  Attn: Chairman
  1776 Peachtree Street NW, Suite 300
  Atlanta, Georgia 30309

 

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If to the Executive: Bartow Morgan, Jr.
  [***]
  [***]

 

or such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party. All such notices, requests, waivers and other communications shall be deemed to have been effectively given: (a) when personally delivered to the party to be notified; (b) when sent by confirmed facsimile to the party to be notified; (c) five (5) business days after deposit in the United States Mail postage prepaid by certified or registered mail with return receipt requested at any time other than during a general discontinuance of postal service due to strike, lockout, or otherwise (in which case such notice, request, waiver or other communication shall be effectively given upon receipt) and addressed to the party to be notified as set forth above; or (d) two (2) business days after deposit with a national overnight delivery service, postage prepaid, addressed to the party to be notified as set forth above with next-business-day delivery guaranteed. A party may change its or his notice address given above by giving the other party ten (10) days’ written notice of the new address in the manner set forth above.

 

14.          Assignment. The rights and obligations of the Employer under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Employer, as applicable, including without limitation, a purchaser of all or substantially all the assets of the Employer. If the Agreement is assigned pursuant to the foregoing sentence, the assignment shall be by novation and the Employer shall have no further liability hereunder, and the successor or assign, as applicable, shall become the “Employer” hereunder, but the Executive will not be deemed to have experienced a Termination of Employment by virtue of such assignment. The Agreement is a personal contract and the rights and interest of the Executive may not be assigned by the Executive. This Agreement shall inure to the benefit of and be enforceable by the Executive and the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

 

15.          Waiver. A waiver by one party to this Agreement of any breach of this Agreement by any other party to this Agreement shall not be effective unless in writing, and no waiver shall operate or be construed as a waiver of the same or another breach on a subsequent occasion.

 

16.          Mediation. Except with respect to Sections 5, 6, 7, 8, 9, and 10 above, and as provided in Section 17 hereof, if any dispute arises out of or relates to this Agreement, or a breach thereof, and if the dispute cannot be settled through direct discussions between the parties, the parties agree to first endeavor to settle the dispute in an amicable manner by mediation under the Commercial Mediation Rules of the American Arbitration Association before resorting to any other process for resolving the dispute.

 

17.          Applicable Law and Choice of Forum. This Agreement shall be construed and enforced under and in accordance with the laws of the State of Georgia, except to the extent governed by the laws of the United States of America in which case federal laws shall govern. The parties agree that any appropriate state court located in Fulton County, Georgia or federal court for the Northern District of Georgia shall have exclusive jurisdiction of any case or controversy arising under or in connection with this Agreement shall be a proper forum in which to adjudicate such case or controversy. The parties consent and waive any objection to the jurisdiction or venue of such courts.

 

18.          Mitigation. The Executive shall not be required to mitigate the amount of any payment the Employer becomes obligated to make to the Executive in connection with this Agreement, by seeking other employment or otherwise. Except as specifically provided above with respect to the health care continuation benefit, the amount of any payment provided for in this Agreement shall not be reduced, offset or subject to recovery by the Employer by reason of any compensation earned by the Executive as the result of employment by another employer after any Termination of Employment, or otherwise.

 

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19.          Interpretation. Words importing any gender include all genders. Words importing the singular form shall include the plural and vice versa. The terms “herein,” “hereunder,” “hereby,” “hereto,” “hereof” and any similar terms refer to this Agreement. Any captions, titles or headings preceding the text of any article, section or subsection herein are solely for convenience of reference and shall not constitute part of this Agreement or affect its meaning, construction or effect.

 

20.          Entire Agreement. Except with respect to Section 3.3(b) of the Original Agreement, which will remain in full force and effect, this Agreement embodies the entire and final agreement of the parties on the subject matter stated in this Agreement and amends and replaces the Original Agreement. No amendment or modification of this Agreement shall be valid or binding upon the Employer or the Executive unless made in writing and signed by all parties. All prior understandings and agreements relating to the subject matter of this Agreement are hereby expressly terminated.

 

21.          Rights of Third Parties. Nothing herein expressed is intended to or shall be construed to confer upon or give to any person, firm or other entity, other than the parties hereto and their permitted assigns, any rights or remedies under or by reason of this Agreement.

 

22.          Survival. The obligations of the parties pursuant to Sections 3.11, 4.2, 4.3, 5 through 10, 16, and 17, as applicable, shall survive the Executive’s Termination of Employment hereunder for the period designated under each of those respective sections.

 

23.          Representation Regarding Restrictive Covenants. The Executive represents that the Executive is not and will not become a party to any non-competition or non-solicitation agreement or any other agreement which would prohibit the Executive from entering into this Agreement or providing the services for the Employer contemplated by this Agreement on or after the Effective Date. In the event the Executive is subject to any such agreement, this Agreement shall be rendered null and void and the Employer shall have no obligations to the Executive under this Agreement.

 

24.          Indemnification. To the fullest extent permitted by law, the Company shall indemnify the Executive with respect to any actions, proceedings, investigations, or inquiries (collectively, “Actions”) commenced against or relating to the Executive in his capacity as an officer, director, executive, agent or fiduciary or former officer, director, executive, agent or fiduciary of the Company, or any affiliate thereof, for which the Executive may render service in such capacity, whether by or on behalf of the Company, its shareholders or third parties, including, without limitation, any governmental agent or entity, and the Company shall advance to the Executive on a timely basis an amount equal to the reasonable fees and expenses incurred in defending such Actions, after receipt of an itemized request for such advance, and an undertaking from the Executive to repay the amount of such advance, with interest at a reasonable rate from the date of the request, as determined by the Company, if it shall ultimately be determined that Executive is not entitled (as a matter of law or by judicial determination) to be indemnified against such expenses. This indemnity shall survive any termination of employment under this Agreement and is in addition to and not in limitation of any other right to indemnification or exoneration to which the Executive is entitled at law, or under the governing organizational documents and/or policies of the Company. The Company agrees to use its best efforts to secure and maintain officers’ and directors’ liability insurance, including coverage for the Executive.

 

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25.          Definitions. Whenever used in this Agreement, the following terms and their variant forms shall have the meanings set forth below:

 

(a)            “Affiliate” shall mean any entity which controls, is controlled by, or is under common control with another entity. For this purpose, “control” means ownership of more than fifty percent (50%) of the ordinary voting power or value of the outstanding equity securities of an entity.

 

(b)            “Agreement” shall mean this Agreement and any exhibits incorporated herein together with any amendments hereto made in the manner described in this Agreement.

 

(c)            “Area” shall mean the greater of the State of Georgia or a radius of twenty (20) miles from each office maintained by the Employer as of the Effective Date. It is the express intent of the parties that the Area as defined herein is the area where the Executive performs services on behalf of the Employer under this Agreement. In the event that the Employer expands the geographic reach of its business, the definition of Area shall expand to include the additional territory.

 

(d)            “Board of Directors” shall mean the board of directors of the Bank or the Company or both, as the context indicates, and, where appropriate, includes any committee thereof or other designee.

 

(e)            “Business of the Employer” shall mean the business conducted by the Employer, which is the business of commercial and consumer banking.

 

(f)            “Cause” shall mean:

 

(1)            a material breach of the terms of this Agreement by the Executive not cured by the Executive within twenty (20) business days after his receipt of Employer’s written notice thereof, including, without limitation, a material failure by the Executive to perform the Executive’s duties and responsibilities in the manner and to the extent required under this Agreement which the Board of Directors believes does or is likely to result in material harm to the Employer or any of its Affiliates;

 

(2)            any act by the Executive of fraud against, material misappropriation from, or material dishonesty to either the Company or the Bank which the Board of Directors believes does or is likely to result in material harm to the Employer or any of its Affiliates;

 

(3)            conviction of the Executive of a crime involving breach of trust or moral turpitude or any felony;

 

(4)            conduct by the Executive that amounts to willful misconduct, gross and willful insubordination, gross neglect or inattention to or any intentional material failure to perform the Executive’s duties and responsibilities hereunder, including prolonged absences without the written consent of the Board of Directors; provided that the nature of such conduct shall be set forth with reasonable particularity in a written notice to the Executive who shall have ten (10) days following delivery of such notice to cure such alleged conduct, provided that such conduct is, in the reasonable discretion of the Board of Directors, susceptible to a cure;

 

(5)            the exhibition of a standard of behavior within the scope of or related to his employment that is materially disruptive to the orderly conduct of the Employer’s business operations (including, without limitation, substance abuse, sexual harassment or sexual misconduct);

 

(6)            receipt of any form of notice, written or otherwise, that any regulatory agency having jurisdiction over the Employer intends to institute any form of formal or informal regulatory action against the Executive; or

 

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(7)            the Executive’s removal and/or permanent prohibition from participating in the conduct of the Employer’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(4) and (g)(1)).

 

(g)            “Change in Control” shall mean if, at any time after the Effective Date, any of the following events shall have occurred:

 

(1)            Any person becomes a beneficial owner (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of more than fifty percent (50%) of the total voting power of the outstanding voting securities of the Company; provided, however, that the event described in this Subsection (g)(1) will not be deemed a Change in Control by virtue of any holdings or acquisitions: (i) by the Company or any of its subsidiaries, (ii) by any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries; provided that such holdings or acquisitions by any such plan (other than any plan maintained under Section 401(k) of the Code) or related trust do not exceed fifty percent (50%) of the total voting power of the then outstanding voting securities of the Company, (iii) by any underwriter temporarily holding securities of the Company pursuant to an offering of such securities or (iv) pursuant to a Non-Qualifying Transaction (as defined below);

 

(2)            The consummation of a merger, consolidation, statutory share exchange or similar transaction that requires adoption by the Company’s shareholders (a “Business Combination”), unless immediately following such Business Combination: (x) more than fifty percent (50%) of the total voting power of the outstanding voting securities of the corporation resulting from such Business Combination (the “Surviving Corporation”), or, if applicable, the ultimate parent corporation that, directly or indirectly, has beneficial ownership (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), of one hundred percent (100%) of the total voting power of the outstanding voting securities eligible to elect directors of the Surviving Corporation (the “Parent Corporation”), is represented by securities that were outstanding immediately before such Business Combination (or, if applicable, is represented by shares into which such voting securities were converted pursuant to such Business Combination), and (y) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) following the consummation of the Business Combination are Incumbent Directors (as defined below) at the time the Board of Directors approved the execution of the agreement providing for such Business Combination (any Business Combination which satisfies all of the criteria specified in (x) and (y) above will be deemed a “Non-Qualifying Transaction”);

 

(3)            Consummation of a plan of liquidation or dissolution of the Company or a sale of all or substantially all of the Company’s assets, in either event other than a Non-Qualifying Transaction; or

 

(4)            During any twelve (12)-month period, Incumbent Directors cease to constitute a majority of the members of the Board of Directors.

  

For purposes of this Section 25(g), the term “Incumbent Director” means, as of any date of determination, an individual who is either (a) a member of the Board of Directors as of the effective date of the adoption of this Agreement or (b) a member who becomes a member of the Board of Directors subsequent to the date of the adoption of this Agreement whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least sixty percent (60%) of the then Incumbent Board (either by a specific vote or by approval of the proxy statement of the Company in which that person is named as a nominee for director, without objection to that nomination), but excluding, for that purpose, any individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Exchange Act) 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 of Directors.

 

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Notwithstanding the foregoing, none of the foregoing events will constitute a “Change in Control” unless the event qualifies as a change in the ownership or effective control of the Company, or in a substantial portion of the assets of the Company, within the meaning of Section 409A of the Code.

 

(h)            “Code” shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

 

(i)            “Competing Business” shall mean any entity (other than the Employer and its Affiliates) that is conducting business that is the same or substantially the same as the Business of the Employer.

 

(j)            “Confidential Information” means data and information relating to the business of the Employer and its Affiliates (which does not rise to the status of a Trade Secret) which is or has been disclosed to the Executive or of which the Executive became aware as a consequence of or through the Executive’s relationship to the Employer and its Affiliates and which has value to the Employer and its Affiliates and is not generally known to its competitors. Confidential Information shall not include any data or information that has been voluntarily disclosed to the public by the Employer or its Affiliates, provided that such public disclosure shall not be deemed to be voluntary when made without authorization by the Executive or any other employee of Employer, or that has been independently developed and disclosed by others, or that otherwise enters the public domain through lawful means.

 

(k)            “Disability” shall mean that the Executive suffers from a physical or mental disability or infirmity that qualifies him for disability benefits under any accident and health plan maintained by the Employer that provides income replacement benefits due to disability or, if the Employer does not maintain such a plan, the Executive’s inability to perform the essential functions of the Executive’s job for a period of ninety (90) or more days, with or without reasonable accommodation, as a result of a physical or mental disability or infirmity, as reasonably determined by the Employer.

 

(l)            “Employer Information” means Confidential Information and Trade Secrets.

 

(m)            “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, as such law, rules and regulations may be amended from time to time.

 

(n)            “Good Reason” shall mean any of the following which occurs on or after the Effective Date:

 

(1)            a material reduction of the Executive’s Annual Base Salary or Annual Bonus opportunity from its then current rate without the Executive’s consent, other than a reduction that also is applied to substantially all other executive officers of the Employer and the Executive’s reduction is substantially proportionate to, or no greater than, the reduction applied to substantially all other executive officers; or

 

(2)            a material diminution in the authority, responsibilities or duties of the Executive as in effect immediately after the Effective Date, or the assignment to the Executive of duties that are materially inconsistent with Executive’s authority, duties or responsibilities as in effect immediately after the Effective Date, in either case without the Executive’s consent;

 

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(3)            the relocation of the Executive to any principal place of employment other than Atlanta, Georgia, or any requirement that Executive relocate his residence other than to the Atlanta, Georgia metropolitan area, without the Executive’s express written consent to either such relocation; or

 

(4)            any material failure by the Company or the Bank to comply with the terms of this Agreement;

 

provided, however, that in each case of the above, the Executive must provide written notice to the Company of the occurrence of such action within sixty (60) days after the action first occurs, and the Executive shall only have Good Reason to terminate his employment if the Employer fails to correct such action within thirty (30) days following receipt of such notice. If the Employer does so fail to correct such action, the Executive must give the Employer at least twenty (20) business days advance written notice of the Executive’s effective date of resignation due to such Good Reason, and Executive must terminate employment within ninety (90) days after the Employer fails to correct such action.

 

(o)            “Initial Term” shall mean that period of time commencing on the Effective Date and running until the earlier of (1) December 31, 2029, or (2) any earlier termination of employment of the Executive under this Agreement as provided for in Section 4.

 

(p)            “Person” shall mean any individual, corporation, bank, credit union, general or limited partnership, limited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature.

 

(q)            “Term” shall mean the Initial Term and all subsequent extension periods.

 

(r)            “Termination of Employment” shall mean a termination of the Executive’s employment where either (1) the Executive has ceased to perform any services for the Employer and all affiliated companies that, together with the Employer, constitute the “service recipient” within the meaning of Code Section 409A and the regulations thereunder (collectively, the “Service Recipient”) or (2) the level of bona fide services the Executive performs for the Service Recipient after a given date (whether as an employee or as an independent contractor) permanently decreases (excluding a decrease as a result of military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the Executive retains a right to reemployment with the Service Recipient under an applicable statute or by contract) to no more than twenty percent (20%) of the average level of bona fide services performed for the Service Recipient (whether as an employee or an independent contractor) over the immediately preceding thirty-six (36)-month period (or the full period of service if the Executive has been providing services to the Service Recipient for less than thirty-six (36) months). Termination of Employment shall be construed consistent with the definition of a “separation from service” within the meaning of Section 409A of the Code.

 

(s)            “Trade Secrets” means Employer or Affiliate information including, but not limited to, technical or nontechnical data, formulas, patterns, compilations, programs, devices, methods, techniques, drawings, processes, financial data, financial plans, product plans or lists of actual or potential customers or suppliers which:

 

(1)            derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and

 

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(2)            is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

 

(t)            “Wingshooter” shall mean Wingshooter Acquisition Corp, a Georgia corporation.

 

26.            Deferred Compensation. It is intended that any payment or benefit which is provided pursuant to or in connection with this Agreement which is considered to be deferred compensation subject to Section 409A of the Code shall be paid and provided in a manner, and at such time and form, as complies with the applicable requirements of Section 409A of the Code to avoid the unfavorable tax consequences provided therein for non-compliance.  Accordingly, notwithstanding any other provision of this Agreement, the Employer is authorized to amend this Agreement to amend or void any election made by the Executive under this Agreement and/or to accelerate or delay the payment of any monies and/or provision of any benefits in such manner as may be determined by it to be reasonably necessary or appropriate to comply, or to evidence or further evidence required compliance, with Section 409A of the Code.  Neither the Employer nor the Executive shall take any action to accelerate or delay the payment of any monies and/or provision of any benefits in any manner which would not be in compliance with Section 409A of the Code.  For purposes of this Agreement, (i) all rights to payments and benefits hereunder shall be treated as rights to receive a series of separate payments and benefits to the fullest extent allowed by Section 409A of the Code, and (ii) termination of employment shall mean a “separation from service” within the meaning of Section 409A of the Code.  In addition, any payments made under Sections 3 and 4 of this Agreement which are paid on or before the last day of the applicable period for the short-term deferral exclusion under Treasury Regulation § 1.409A-1(b)(4) are intended to be excluded under such short-term deferral exclusion. Any remaining payments under Sections 3 and 4 are intended to qualify for the exclusion for separation pay plans under Treasury Regulation § 1.409A-1(b)(9) to the maximum extent applicable. Nevertheless, if the Executive is deemed on the date of separation from service with the Employer to be a “specified employee”, within the meaning of that term under Code Section 409A(a)(2)(B) and using the identification methodology selected by the Employer from time to time, or if none, the default methodology, then with regard to any payment or benefit that is required to be delayed for six (6) months in compliance with Section 409A(a)(2)(B) of the Code, such payment or benefit shall be paid on the earlier of (i) the first day of the seventh (7th) month measured from the date of Executive’s separation from service or (ii) the date of Executive’s death. In the case of benefits required to be delayed under Section 409A of the Code, Executive may pay the cost of benefit coverage, and thereby obtain benefits, during such six (6) month delay period and then be reimbursed by the Company thereafter on the first day of the seventh (7th) month following the date of Executive’s separation from service or, if earlier, on the date of Executive’s death. Additionally, notwithstanding anything in this Agreement to the contrary, if any payment or benefit that constitutes nonqualified deferred compensation subject to Section 409A is conditioned upon the Executive’s execution, delivery, and non-revocation of a release of claims or separation agreement, and the period during which Executive may consider, execute, or revoke such release or separation agreement begins in one taxable year and ends in the following taxable year, then such payment or benefit shall be made or commence in the second taxable year, regardless of the year in which Executive actually executes and delivers the release or separation agreement. In all events, payment shall not be made or commence until the release or separation agreement has become effective and irrevocable. To the extent any reimbursement, in-kind benefit, or similar payment under this Agreement constitutes nonqualified deferred compensation subject to Section 409A: (i) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any taxable year shall not affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; (ii) reimbursement shall be made no later than the last day of the Executive’s taxable year following the taxable year in which the expense was incurred; and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit. Notwithstanding any other provision of this Agreement, neither the Employer nor its subsidiaries or affiliates shall be liable to the Executive or any other person if any payment or benefit which is to be provided pursuant to this Agreement and which is considered deferred compensation subject to Section 409A of the Code fails to comply with, or be exempt from, the requirements of Section 409A of the Code.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, each of the Company and the Bank has caused this Agreement to be signed by its duly authorized officer and the Executive has affixed Executive’s signature hereto as of the date first shown above.

 

  Georgia Banking Company, Inc.:
   
  By: /s/ Sarah Borders
    Sarah Borders
    Chair
   
  Georgia Banking Company:
   
  By: /s/ Sarah Borders
    Sarah Borders
    Chair
   
  Executive:
   
  /s/ Bartow Morgan, Jr.
  Bartow Morgan, Jr.

 

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Exhibit 10.11

 

AMENDED AND RESTATED

CHANGE IN CONTROL AGREEMENT

 

THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT (this “Agreement”) is made and entered into as of [●], 2026 (the “Effective Date”), by and among Georgia Banking Company, Inc., a bank holding company organized and existing under the laws of the State of Georgia (the “Company”), Georgia Banking Company, a bank organized under the laws of the State of Georgia and a wholly-owned subsidiary of the Company (the “Bank”, and together with the Company, the “Employer”), and [_______________] (the “Executive”). The Employer and the Executive are sometimes hereinafter referred to, collectively, as the “Parties” and, individually, as a “Party.”

 

WHEREAS, the Employer employs the Executive as a key employee of the Employer;

 

WHEREAS, the Employer desires to assure itself and the Executive of continuity of management and objective judgment in the event of a Change in Control of the Employer, and to induce the Executive to remain employed with the Employer;

 

WHEREAS, the Employer desires to provide certain compensation and benefits to the Executive in the event of the Executive’s Termination of Employment under certain circumstances in connection with a Change in Control; and

 

WHEREAS, the Employer and the Executive previously entered into a Change in Control Agreement dated as of ________, 202[●] (the “Prior Agreement”), which provided for certain compensation and benefits to the Executive in the event of the Executive’s Termination of Employment under certain circumstances in connection with a Change in Control, and this Agreement is intended to supersede the Prior Agreement, which will be null and void upon the Effective Date;

 

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements hereinafter set forth and intending to be legally bound, the Company, the Bank and the Executive agree as follows:

 

1.            Term. This Agreement shall become effective as of the Effective Date and shall remain in effect until the first to occur of the following (the “Term”):

 

(a)            the Executive’s Termination of Employment under circumstances where Change in Control Benefits (as defined below) do not become payable;

 

(b)            the expiration of the Change in Control Protection Period in the absence of a Qualifying Termination of Employment (as defined below) therein; or

 

(c)            the time all Change in Control Benefits that may be payable to the Executive pursuant to Section 2 below have been paid in connection with a Qualifying Termination of Employment.

 

Except as otherwise provided herein, this Agreement shall terminate and have no further force or effect upon the occurrence of an event described in Section 1(a), (b), or (c), whichever is the first to occur.

 

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2.            Change in Control Benefits upon Termination of Employment.

 

2.1            Change in Control Benefits. If the Executive (i) experiences an involuntary Termination of Employment without Cause (and other than on account of the Executive’s death or Incapacity); or (ii) voluntarily resigns effecting a Termination of Employment for Good Reason, in either such case, during the Change in Control Protection Period (as defined in Section 24) (each, a “Qualifying Termination of Employment”), the Employer will pay to the Executive, or in the event of his subsequent death, to his designated beneficiary or beneficiaries, or, in the event the Executive has not designated any beneficiaries, to his estate, as the case may be, in cash in a lump sum, net of applicable tax withholdings, and subject to Section 2.2 and Section 25 below, as soon as administratively practicable and no later than sixty (60) days following the later of the date of the Executive’s Termination of Employment or the Change in Control:

 

(a)            an amount equal to the product of (x) _____ (__) multiplied by (y) the Executive’s annual base salary at the highest rate in effect in the twelve (12)-month period immediately preceding the Termination of Employment (at the rate in effect before any election by the Executive to defer the receipt of any such annual base salary); and

 

(b)            an amount equal to the product of (x) _____ (__) multiplied by (y) the average annual bonus paid to the Executive (including the amount of any such annual bonus that would have been paid with respect to such period but for Executive’s election to defer the receipt of such bonus) with respect to the three (3) calendar-year period immediately preceding the Termination of Employment, annualized for any partial year.

 

In addition to the foregoing payments, all of the Executive’s outstanding unvested options, restricted stock and other equity-based awards that would have vested based solely on the continued employment of the Executive shall become vested in full (with all outstanding performance-based awards converted first to service-based awards at target), as of the date the release described in Section 2.2 below becomes effective and non-revocable.

 

The payments and benefits in this Section 2.1, collectively, are referred to as the “Change in Control Benefits”.

 

2.2            Release Condition. Notwithstanding any other provision of this Agreement to the contrary, as a condition to receipt of the Change in Control Benefits, the Executive must execute a release agreement (the “Release”) in favor of the Employer and its Affiliates and their respective officers, directors, employees, agents, insurers, assigns and successors in interest (collectively, the “Releasees”), in such form as is supplied by and acceptable to the Employer, from any and all claims of the Executive arising or relating to the Executive’s employment with the Employer and/or the termination of that employment, and not timely revoke the Release during any revocation period provided pursuant to the terms of the Release, all within the sixty (60) days following the later of the Executive’s Termination of Employment or the Change in Control. The Employer shall provide the Release to the Executive immediately following the effective date of the later of the Executive’s Termination of Employment or the Change in Control. Notwithstanding the foregoing, should the sixty (60)-day period for executing the Release and not timely revoking the Release span more than one (1) calendar year, no Change in Control Benefits shall be paid or commence any sooner than the first day of the subsequent calendar year.

 

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2.3            Section 280G Parachute Payments.

 

(a)            Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Employer to or for the benefit of the Executive (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (a “Payment”) would be subject to the excise tax (the “Excise Tax”) imposed by Section 4999 of the Code, or any successor provision thereto, (a “Parachute Payment”), then, prior to the making of any Payment to the Executive, a calculation shall be made comparing (i) the net after-tax benefit to the Executive of the Payment after payment of the Excise Tax to (ii) the net after-tax benefit to the Executive if the Payment had been limited to the extent necessary to avoid being subject to the Excise Tax. If the amount calculated under (i) above is less than the amount calculated under (ii) above, then the Payment shall be limited to the extent necessary to avoid being subject to the Excise Tax (the “Reduced Amount”). In that event, cash payments shall be modified or reduced first pro rata (first with respect to any cash payments that are not subject to Section 409A of the Code and then with respect to cash payments that are subject to Section 409A of the Code) and then any other benefits (in the same order as with respect to the cash benefits). The determination of whether an Excise Tax would be imposed, the amount of such Excise Tax, and the calculation of the amounts referred to in clauses (i) and (ii) of the foregoing sentence shall be made by an independent accounting firm selected by the Employer, at the Employer’s expense, (the “Accountants”), and the Accountants shall provide detailed supporting calculations. Any determination by the Accountants shall be binding upon the Employer and the Executive. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accountants hereunder, it is possible that Payments which the Executive was entitled to, but did not receive pursuant to this Section 2.3, could have been made without the imposition of the Excise Tax (“Underpayment”) or that Payments which the Executive did receive pursuant to Section 2.3 should not have been so paid (“Overpayment”). If the Employer determines that an Overpayment has been made, any such Overpayment must be treated for all purposes as a loan, to the extent permitted by applicable law, which the Executive must repay to the Company together with interest at the applicable federal rate under Code Section 7872(f)(2). If the Company determines that an Underpayment has occurred, the Accountants shall determine the amount of the Underpayment that has occurred and any such Underpayment shall be promptly paid by the Employer to or for the benefit of the Executive no later than the end of the Executive’s taxable year next following the Executive’s taxable year in which the determination is made that the Underpayment has occurred.

 

(b)            Sections 4 through 8 of this Agreement contain restrictive covenants of the Executive to refrain from certain activities deemed harmful to the Company for a set period of time in exchange for the promises contained herein. If the Executive is deemed eligible to receive Payments under this Agreement that could be subject to the Excise Tax, the Employer shall seek a valuation from the Accountants to determine the value of the covenant contained in Sections 4 through 8 of this Agreement and such amount shall be allocated to such arrangement and be excluded from treatment as a Parachute Payment. For the avoidance of doubt, it is the intention of this Agreement that the value assigned to the covenants contained in Sections 4 through 8 of this Agreement by the Accountants not be considered a Parachute Payment for purposes of this Section 2.3.

 

(c)            In addition, if any portion of the Parachute Payments would be subject to the Excise Tax imposed by Section 4999 of the Code, after allocation of Payments to the Executive’s covenants contained in Sections 4 through 8 as described below, then to the extent reasonably practicable and permitted by applicable law, upon the written request of the Executive, the Employer shall (i) use all commercially reasonable efforts to obtain stockholder approval in accordance with Section 280G of the Code with respect to any Payments or benefits that the Executive elects to waive and subject the Executive’s right to receive to approval by the stockholders of the Company; and (ii) to the extent such approval is not obtained or is not requested, consult with the Executive prior to reducing any particular Parachute Payments in order to afford the Executive the opportunity to waive other Parachute Payments, to the extent permitted by Section 409A of the Code.

 

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(d)            Any determination required under this Section 2.3 shall be made in writing in good faith by the Accountants. The Employer and the Executive shall provide the Accountants with such information and documents as the Accountants may reasonably request in order to make a determination under this Section 2.3. For purposes of making the calculations and determinations required by this Section 2.3, the Accountants may rely on reasonable, good faith assumptions and approximations concerning the application of Section 280G and Section 4999 of the Code. The Accountants’ determinations shall be final and binding on the Employer and the Executive. The Company shall be responsible for all fees and expenses incurred by the Accountants in connection with the calculations required by this Section 2.3.

 

(e)            The Executive and the Company shall reasonably cooperate with each other in connection with any administrative or judicial proceedings concerning the existence or amount of liability for the Excise Tax.

 

2.4            Clawback. The Executive agrees to repay the gross amount (before any withholdings) of any payment of the Change in Control Benefits or the portion thereof previously paid or otherwise made available to the Executive under this Agreement, and rescind any vesting of equity awards awarded in connection with the Change in Control Benefits or the portion thereof and return the shares or the value thereof resulting from that vesting, that are subject to recovery under any applicable law (including any rule of any exchange or service through which the securities of the Employer are then traded) or any compensation recoupment policy the Company or its Affiliates may adopt from time to time, including, but not limited to, the following circumstances:

 

(a)            where such compensation was in excess of what should have been paid or made available because the determination of the amount due was based, in whole or in part, on materially inaccurate financial information of the Employer;

 

(b)            where such compensation constitutes “excessive compensation” within the meaning of 12 C.F.R. Part 30, Appendix A;

 

(c)            where the Executive has committed, is substantially responsible for, or has violated, the respective acts, omissions, conditions, or offenses outlined under 12 C.F.R. Section 359.4(a)(4); and

 

(d)            if the Bank becomes, and for so long as the Bank remains, subject to the provisions of 12 U.S.C. Section 1831(f), where such compensation exceeds the restrictions imposed on the senior executive officers of such an institution.

 

The Executive agrees to return within sixty (60) days, or within any earlier timeframe required by applicable law or by any of the Employer’s recoupment policies, any such compensation payments and/or rescind any such vesting of equity awards and return the shares or the value thereof resulting from that vesting, that the Employer identifies by written notice provided pursuant to Section 12. If the Executive fails to return such compensation or shares or value thereof within the applicable time period, the Executive agrees that the amount of such compensation and/or the value of such shares may be deducted from any and all other compensation owed to the Executive by the Employer. If the Executive is then employed by the Employer, the Executive acknowledges that the Employer may take appropriate disciplinary action (up to, and including, Termination of Employment) if the Executive fails to return such compensation and/or the value of such shares. The Executive acknowledges the Employer’s rights to engage in any legal or equitable action or proceeding in order to enforce the provisions of this Section 2.4. The provisions of this Section 2.4 shall be modified to the extent, and remain in effect for the period, required by applicable law.

 

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2.5          Regulatory Limitations.

 

(a)            If the Executive is removed and/or permanently prohibited from participating in the conduct of the Employer’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act (the “FDIA”) (12 U.S.C. 1818(e)(4) and (g)(1)), all obligations of the Employer under this Agreement shall terminate, as of the effective date of such order, except for the payment of annual base salary due and owing on the effective date of said order, and reimbursement of reasonable expenses incurred prior to the effective date of termination that are reimbursable under the Employer’s applicable expense reimbursement policy.

 

(b)            If the Executive is suspended and/or temporarily prohibited from participating in the conduct of the Employer’s affairs by a notice served under Section 8(e)(3) or 8(g)(1) of the FDIA (12 U.S.C. 1818(e)(3) and (g)(1)), all obligations of the Employer under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Employer shall reinstate any of its obligations which were suspended to the extent permitted by applicable law.

 

(c)            If the Employer is in default (as defined in Section 3(x)(1) of the FDIA), all obligations under this Agreement shall terminate as of the date of default, but the vested rights of the Parties shall not be affected.

 

(d)            If the Federal Deposit Insurance Corporation (the “FDIC”) is appointed receiver or conservator under Section 11(c) of the FDIA (12 U.S.C. 1821(c)) of the Employer or any depository institution controlled by the Employer, the Employer shall have the right to terminate all obligations of the Employer under this Agreement as of the date of such receivership or conservatorship, other than any rights of the Executive that vested prior to such appointment. To the extent the Employer is or encompasses a depository institution, any vested rights of the Executive may be subject to such modifications that are consistent with the authority of the FDIC.

 

(e)            If the FDIC provides open bank assistance under Section 13(c) of the FDIA (12 U.S.C. 1823(c)) to the Employer or any depository institution controlled by the Employer, excluding any such assistance provided to the industry generally, the Employer shall have the right to terminate all obligations of the Employer under this Agreement as of the date of such assistance, other than any rights of the Executive that vested prior to the FDIC action. To the extent the Employer is or encompasses a depository institution, any vested rights of the Executive may be subject to such modifications that are consistent with the authority of the FDIC.

 

(f)            If the FDIC requires a transaction under Section 13(f) or 13(k) of the FDIA (12 U.S.C. 1823(f) and (k)) by the Employer or any depository institution controlled by the Employer, the Employer shall have the right to terminate all obligations of the Employer under this Agreement as of the date of such transaction, other than any rights of the Executive that vested prior to the transaction. To the extent the Employer is or encompasses a depository institution, any vested rights of the Executive may be subject to such modifications that are consistent with the authority of the FDIC.

 

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(g)            Notwithstanding the timing for the payment or delivery of any Change in Control Benefits described in this Agreement, no such Change in Control Benefits shall be paid or become effective, as applicable, that require the concurrence or consent of the appropriate federal banking agency of the Employer pursuant to 12 C.F.R. Section 359 prior to the receipt of such concurrence or consent. The Employer shall have the obligation to submit an application to pay or deliver such Change in Control Benefits to the appropriate federal banking agency within fifteen (15) business days of the Executive’s right to such payment arising and shall provide a copy of such application to the Executive. Any payments suspended by operation of this Section 2.5(g) shall be paid as a lump sum within thirty (30) days following receipt of the concurrence or consent of the appropriate federal banking agency of the Employer or as otherwise directed by such federal banking agency.

 

(h)            All obligations under this Agreement are further subject to such conditions, restrictions, limitations and forfeiture provisions as may separately apply pursuant to any applicable state banking laws and are intended to be applied in a manner that complies with Section 409A of the Code.

 

2.6            Accrued Obligations. Notwithstanding any other provision of this Agreement, upon the Executive’s Termination of Employment, regardless of the reason, the Executive shall be entitled to receive the following accrued obligations: (i) the Executive’s base salary through the Executive’s Termination of Employment which remains unpaid; (ii) the amount, if any, of any annual bonus or incentive compensation with respect to any completed fiscal year of the Employer which has vested and not yet been paid; (iii) reimbursement of reasonable expenses incurred before the Executive’s Termination of Employment which remain unpaid; (iv) any vested benefits or amounts which pursuant to the terms of any plans, policies or programs subject to ERISA that have become earned, vested and payable but which have not yet been paid or delivered; and (v) payment of any accrued but unused vacation and sick leave and other accrued benefits that are payable to the Executive pursuant to the terms of such plans. Those accrued obligations will be paid in a lump sum no later than thirty (30) days following the Executive’s Termination of Employment, except for the vested benefits and amounts in clauses (iv) and (v) above, which shall be paid in accordance with the terms of such plans, policies or programs.

 

3.            Tax Withholding. The Employer shall be entitled to withhold appropriate employment and income taxes, if required by applicable law, from the Change in Control Benefits that may become payable or deliverable under this Agreement.

 

4.            Employer Information.

 

4.1            Ownership of Employer Information. All Employer Information received or developed by the Executive or by the Employer while the Executive is employed by the Employer will remain the sole and exclusive property of the Employer.

 

4.2            Obligations of the Executive. The Executive agrees:

 

(a)            to hold Employer Information in strictest confidence;

 

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(b)            not to use, duplicate, reproduce, distribute, disclose or otherwise disseminate Employer Information or any physical embodiments of Employer Information to any unauthorized recipient; and

 

(c)            in any event, not to take any action causing, or fail to take any action necessary in order to prevent, any Employer Information from losing its character or ceasing to qualify as Confidential Information or a Trade Secret.

 

This Section 4.2 shall survive for a period of one (1) year following termination of this Agreement for any reason with respect to Confidential Information, and shall survive termination of this Agreement for any reason for so long as is permitted by applicable law, with respect to Trade Secrets.

 

4.3           Permitted Disclosures. Notwithstanding anything in this Agreement to the contrary, (i) nothing in this Agreement, including, but not limited to, the Release or other agreement, prohibits the Executive from reporting possible violations of law or regulation to any governmental agency or entity, including, but not limited to, the Department of Justice, the Securities and Exchange Commission, the Congress and any agency Inspector General (the “Government Agencies”), or communicating with Government Agencies or otherwise participating in any investigations or proceedings that may be conducted by Government Agencies, including providing documents or other information; (ii) the Executive does not need the prior authorization of the Employer to take any action described in (i), and the Executive is not required to notify the Employer that he has taken any action described in (i); and (iii) neither this Agreement nor the Release limits the Executive’s right to receive an award for providing information relating to a possible securities law violation to the Securities and Exchange Commission. Further, notwithstanding the foregoing, the Executive will not be held criminally or civilly liable under any federal, state or local trade secret law for the disclosure of a Trade Secret that (A) is made (I) in confidence to a federal, state or local official, either directly or indirectly, or to an attorney; and (II) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Additionally, if the Executive is suing the Employer for retaliation based on the reporting of a suspected violation of law, he may disclose a Trade Secret to his attorney and use the Trade Secret information in the court proceeding, so long as any document containing the Trade Secret is filed under seal and the Executive does not disclose the Trade Secret except pursuant to court order. This Section 4.3 shall survive for a period of one (1) year following termination of this Agreement for any reason with respect to Confidential Information, and shall survive termination of this Agreement for any reason for so long as is permitted by applicable law, with respect to Trade Secrets.

 

4.4           Delivery upon Request or Termination. Upon request by the Employer, and/or in the event of the Executive’s Termination of Employment with the Employer, regardless of the reason, the Executive will promptly deliver to the Employer all property belonging to the Employer and its Affiliates, including, without limitation, all Employer Information then in the Executive’s possession or control.

 

5.            Non-Competition. The Executive agrees that during the Executive’s employment by the Employer, and in the event of the Executive’s Termination of Employment, regardless of the reason, for a period of twelve (12) months thereafter, the Executive covenants and agrees that the Executive shall not (except on behalf of or with the prior written consent of the Employer), within the Area, either directly or indirectly, on the Executive’s own behalf or in the service or on behalf of others, perform for any Competing Business any services which are the same as or essentially the same as the services the Executive provided for the Employer. The Executive acknowledges that the Employer conducts its business within the Area, that the Executive will perform services for and on behalf of the Employer within the Area, and that this Section 5 (and the definition of the Area) is a reasonable limitation on the Executive’s ability to compete with the Employer.

 

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6.            Non-Solicitation of Customers. The Executive agrees that during the Executive’s employment by the Employer, and in the event of the Executive’s Termination of Employment, regardless of the reason, for a period of twelve (12) months thereafter, the Executive covenants and agrees that the Executive will not (except on behalf of or with the prior written consent of the Employer) on the Executive’s own behalf or in the service or on behalf of others, solicit, divert or appropriate or attempt to solicit, divert or appropriate, any business from any of the Employer’s customers, correspondents or other sources of or purchasers of loans of the Employer, including prospective customers or prospects actively sought by the Employer, with whom the Executive has or had material contact during the last two (2) years of the Executive’s employment with the Employer, for purposes of providing products or services that are competitive with those provided by the Employer.

 

7.            Non-Solicitation of Employees. The Executive agrees that during the Executive’s employment by the Employer, and in the event of the Executive’s Termination of Employment, regardless of the reason, for a period of twelve (12) months thereafter, the Executive covenants and agrees that the Executive will not (except on behalf of or with the prior written consent of the Employer) on the Executive’s own behalf or in the service or on behalf of others, solicit, recruit or hire away or attempt to solicit, recruit or hire away, any employee of the Employer with whom the Executive had material contact during the last two (2) years of the Executive’s employment, whether or not such employee is a full-time employee or a temporary employee of the Employer, such employment is pursuant to written agreement, for a determined period, or at will.

 

8.            Mutual Non-Disparagement. The Employer agrees that during the Term and for a period of twelve (12) months thereafter, the Employer will not issue any statement (written or oral) that could reasonably be perceived as disparaging to the Executive. The Executive agrees that during the Term and for a period of twelve (12) months thereafter, he will not make any statement (written or oral) that could reasonably be perceived as disparaging to the Employer or any Person that he reasonably should know is an Affiliate of the Employer.

 

9.            Remedies. The Executive agrees that the covenants contained in Sections 4 through 8 of this Agreement are of the essence of this Agreement; that each of the covenants is reasonable and necessary to protect the business, interests and properties of the Employer, and that irreparable loss and damage will be suffered by the Employer should the Executive breach any of the covenants. Therefore, the Executive agrees and consents that, in addition to all the remedies provided by law or in equity, the Employer shall be entitled to a temporary restraining order and temporary and permanent injunctions to prevent a breach or contemplated breach of any of the covenants. Furthermore, in addition to any other remedies, the Executive agrees that any violation of the covenants in Sections 4 through 8 will result in the immediate forfeiture of any remaining payment that otherwise is or may become due under this Agreement, if applicable. The Executive further agrees that should he breach any of the covenants contained in Sections 4 through 8 of this Agreement, no further amounts will be paid to the Executive pursuant to this Agreement and the Executive shall repay to the Employer the gross amounts (before withholdings) of any amounts previously received by the Executive pursuant to this Agreement that are attributable to that portion of the payments paid for the period during which the Executive was in breach of any of the covenants contained in Sections 4 through 8 of this Agreement. The Employer and the Executive agree that all remedies available to the Employer or the Executive, as applicable, shall be cumulative.

 

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10.          Severability. The Parties agree that each of the provisions included in this Agreement is separate, distinct and severable from the other provisions of this Agreement and that the invalidity or unenforceability of any provision shall not affect the validity or enforceability of any other provision of this Agreement. Further, if any provision of this Agreement is ruled invalid or unenforceable by a court of competent jurisdiction because of a conflict between the provision and any applicable law or public policy, the provision shall be redrawn to make the provision consistent with, and valid and enforceable under, the law or public policy.

 

11.          No Set-Off by the Executive. The existence of any claim, demand, action or cause of action by the Executive against the Employer whether predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement by the Employer of any of its rights hereunder.

 

12.          Notice. All notices, requests, waivers and other communications required or permitted hereunder shall be in writing and shall be either personally delivered, sent by reputable overnight courier service or mailed by first class mail, return receipt requested, to the recipient at the address below indicated:

 

If to the Employer:  Georgia Banking Company, Inc.
  Attn: Chief Executive Officer
  1776 Peachtree Street NW, Suite 300
  Atlanta, Georgia 30309

 

If to the Executive: ____________
  ____________
  ____________

 

or such other address or to the attention of such other Persons as the recipient Party shall have specified by prior written notice to the sending Party. All such notices, requests, waivers and other communications shall be deemed to have been effectively given: (i) when personally delivered to the Party to be notified; (ii) when sent by confirmed facsimile to the Party to be notified; (iii) five (5) business days after deposit in the United States Mail postage prepaid by certified or registered mail with return receipt requested at any time other than during a general discontinuance of postal service due to strike, lockout or otherwise (in which case such notice, request, waiver or other communication shall be effectively given upon receipt) and addressed to the Party to be notified as set forth above; or (iv) two (2) business days after deposit with a national overnight delivery service, postage prepaid, addressed to the Party to be notified as set forth above with next-business-day delivery guaranteed. A Party may change its or his notice address given above by giving the other Party ten (10) days’ written notice of the new address in the manner set forth in this Section 12.

 

13.          Continued Employment. Nothing herein shall entitle the Executive to continued employment with the Employer nor any of its Affiliates or to continued tenure in any specific office or position or level of compensation. The Executive’s employment with the Employer shall be terminable at the will of the Employer, with or without Cause, subject to the terms of this Agreement and any other written agreement as may be in effect between the parties.

 

14.          Assignment. The rights and obligations of the Employer under this Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Employer, as applicable, including without limitation, a purchaser of all or substantially all the assets of the Employer. If this Agreement is assigned pursuant to the foregoing sentence, the assignment shall be by novation and the Employer shall have no further liability hereunder, and the successor or assign, as applicable, shall become the “Employer” hereunder, but the Executive will not be deemed to have experienced a Termination of Employment by virtue of such assignment. This Agreement is a personal contract and the rights and interest of the Executive may not be assigned by the Executive. This Agreement shall inure to the benefit of and be enforceable by the Executive and the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

 

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15.          Waiver. A waiver by one Party to this Agreement of any breach of this Agreement by any other Party to this Agreement shall not be effective unless in writing, and no waiver shall operate or be construed as a waiver of the same or another breach on a subsequent occasion.

 

16.          Applicable Law and Choice of Forum. This Agreement shall be construed and enforced under and in accordance with the laws of the State of Georgia, except to the extent governed by the laws of the United States of America in which case federal laws shall govern. The Parties agree that any appropriate state court located in Fulton County, Georgia or federal court for the Northern District of Georgia shall have exclusive jurisdiction of any case or controversy arising under or in connection with this Agreement and shall be a proper forum in which to adjudicate such case or controversy. The Parties consent and waive any objection to the jurisdiction or venue of such courts.

 

17.          Mitigation. The Executive shall not be required to mitigate the amount of any Payment the Employer becomes obligated to make to the Executive in connection with this Agreement, by seeking other employment or otherwise. The amount of any Payment provided for in this Agreement shall not be reduced, offset or subject to recovery by the Employer by reason of any compensation earned by the Executive as the result of employment by another employer after any Termination of Employment, or otherwise.

 

18.          Interpretation. Words importing any gender include all genders. Words importing the singular form shall include the plural and vice versa. The terms “herein,” “hereunder,” “hereby,” “hereto,” “hereof” and any similar terms refer to this Agreement. Any captions, titles or headings preceding the text of any article, section or subsection herein are solely for convenience of reference and shall not constitute part of this Agreement or affect its meaning, construction or effect.

 

19.          Entire Agreement. This Agreement embodies the entire and final agreement of the Parties on the subject matter stated in this Agreement. No amendment or modification of this Agreement shall be valid or binding upon the Employer or the Executive unless made in writing and signed by all Parties. All prior understandings and agreements relating to the subject matter of this Agreement are hereby expressly terminated.

 

20.          Rights of Third Parties. Nothing herein expressed is intended to or shall be construed to confer upon or give to any Person, other than the Parties hereto and their permitted assigns, any rights or remedies under or by reason of this Agreement.

 

21.          Amendment/Termination. This Agreement may not be modified, amended, supplemented or terminated except by a written agreement between the Employer and the Executive.

 

22.          Survival. The provisions of Sections 2.4, 2.5 and 3 through 24 of this Agreement shall survive, as necessary, the expiration of the term of this Agreement or any other termination of this Agreement.

 

23.          Confidentiality. The Executive represents and agrees that the Executive will keep the terms, amount, value, and nature of consideration paid to the Executive, and the fact of this Agreement completely confidential, and that the Executive will not hereafter disclose any information concerning this Agreement to anyone other than the Executive’s immediate family and professional representatives who will be informed of and bound by this confidentiality clause.

 

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24.         Definitions. Whenever used in this Agreement, the following terms and their variant forms shall have the meanings set forth below:

 

(a)            “Affiliate” shall mean any entity which controls, is controlled by, or is under common control with another entity. For this purpose, “control” means ownership of more than fifty percent (50%) of the ordinary voting power or value of the outstanding equity securities of an entity.

 

(b)            “Area” shall mean the Atlanta-Sandy Springs-Roswell, Georgia Metropolitan Statistical Area. It is the express intent of the Parties that the Area as defined herein is the area where the Executive performs services on behalf of the Employer under this Agreement. In the event that the Employer expands the geographic reach of its business, the definition of Area shall expand to include the additional territory.

 

(c)            “Board of Directors” shall mean the board of directors of the Bank or the Company or both, as the context indicates, and, where appropriate, includes any committee thereof or other designee.

 

(d)            “Business of the Employer” shall mean the business conducted by the Employer, which is the business of commercial and consumer banking.

 

(e)            “Cause” shall mean:

 

(1)            a material breach of the terms of this Agreement by the Executive not cured by the Executive within twenty (20) business days after his receipt of the Employer’s written notice thereof, including, without limitation, a material failure by the Executive to perform the Executive’s duties and responsibilities in the manner and to the extent required under this Agreement which the Board of Directors believes does or is likely to result in material harm to the Employer or any of its Affiliates;

 

(2)            any act by the Executive of fraud against, material misappropriation from, or material dishonesty to either the Company or the Bank which the Board of Directors believes does or is likely to result in material harm to the Employer or any of its Affiliates;

 

(3)            conviction of the Executive of a crime involving breach of trust or moral turpitude or any felony;

 

(4)            conduct by the Executive that amounts to willful misconduct, gross and willful insubordination, gross neglect or inattention to or any intentional material failure to perform the Executive’s duties and responsibilities hereunder, including prolonged absences without the written consent of the Board of Directors; provided that the nature of such conduct shall be set forth with reasonable particularity in a written notice to the Executive who shall have ten (10) days following delivery of such notice to cure such alleged conduct, provided that such conduct is, in the reasonable discretion of the Board of Directors, susceptible to a cure;

 

(5)            the exhibition by the Executive of a standard of behavior within the scope of or related to his employment that is materially disruptive to the orderly conduct of the Employer’s business operations (including, without limitation, substance abuse, sexual harassment or sexual misconduct);

 

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(6)            receipt of any form of notice, written or otherwise, that any regulatory agency having jurisdiction over the Employer intends to institute any form of formal or informal regulatory action against the Executive; or

 

(7)            the Executive’s removal and/or permanent prohibition from participating in the conduct of the Employer’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the FDIA (12 U.S.C. 1818(e)(4) and (g)(1)).

 

(f)            “Change in Control” shall mean if, at any time after the Effective Date, any of the following events shall have occurred:

 

(1)            Any Person becomes a beneficial owner (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of more than fifty percent (50%) of the total voting power of the outstanding voting securities of the Company; provided, however, that the event described in this Subsection (f)(1) will not be deemed a Change in Control by virtue of any holdings or acquisitions: (i) by the Company or any of its subsidiaries, (ii) by any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries; provided that such holdings or acquisitions by any such plan (other than any plan maintained under Section 401(k) of the Code) or related trust do not exceed fifty percent (50%) of the total voting power of the then outstanding voting securities of the Company, (iii) by any underwriter temporarily holding securities of the Company pursuant to an offering of such securities or (iv) pursuant to a Non-Qualifying Transaction (as defined below);

 

(2)            The consummation of a merger, consolidation, statutory share exchange or similar transaction that requires adoption by the Company’s shareholders (a “Business Combination”), unless immediately following such Business Combination: (i) more than fifty percent (50%) of the total voting power of the outstanding voting securities of the corporation resulting from such Business Combination (the “Surviving Corporation”), or, if applicable, the ultimate parent corporation that, directly or indirectly, has beneficial ownership (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), of one hundred percent (100%) of the total voting power of the outstanding voting securities eligible to elect directors of the Surviving Corporation (the “Parent Corporation”), is represented by securities that were outstanding immediately before such Business Combination (or, if applicable, is represented by shares into which such voting securities were converted pursuant to such Business Combination), and (ii) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) following the consummation of the Business Combination are Incumbent Directors (as defined below) at the time the Board of Directors approved the execution of the agreement providing for such Business Combination (any Business Combination which satisfies all of the criteria specified in (i) and (ii) above will be deemed a “Non-Qualifying Transaction”);

 

(3)            Consummation of a plan of liquidation or dissolution of the Company or a sale of all or substantially all of the Company’s assets, in either event other than a Non-Qualifying Transaction; or

 

(4)            During any twelve (12)-month period, Incumbent Directors cease to constitute a majority of the members of the Board of Directors.

 

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For purposes of this Section 24(e), the term “Incumbent Director” means, as of any date of determination, an individual who is either (i) a member of the Board of Directors as of the Effective Date or (ii) a member who becomes a member of the Board of Directors subsequent to the Effective Date whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least sixty percent (60%) of the then incumbent board (either by a specific vote or by approval of the proxy statement of the Company in which that person is named as a nominee for director, without objection to that nomination), but excluding, for that purpose, any individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Exchange Act) 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 of Directors.

 

Notwithstanding the foregoing, none of the foregoing events will constitute a “Change in Control” unless the event qualifies as a change in the ownership or effective control of the Company, or in a substantial portion of the assets of the Company, within the meaning of Section 409A of the Code.

 

(g)            “Change in Control Protection Period” shall mean the period beginning six (6) months prior to and ending twelve (12) months after the closing of a Change in Control.

 

(h)            “Code” shall mean the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder.

 

(i)            “Competing Business” shall mean any entity (other than the Employer and its Affiliates) that is conducting business that is the same or substantially the same as the Business of the Employer.

 

(j)            “Confidential Information” shall mean data and information relating to the business of the Employer and its Affiliates (which does not rise to the status of a Trade Secret) which is or has been disclosed to the Executive or of which the Executive became aware as a consequence of or through the Executive’s relationship to the Employer and its Affiliates and which has value to the Employer and its Affiliates and is not generally known to its competitors. Confidential Information shall not include any data or information (i) that has been voluntarily disclosed to the public by the Employer or its Affiliates, provided that such public disclosure shall not be deemed to be voluntary when made without authorization by the Executive or any other employee of Employer, (ii) that has been independently developed and disclosed by others, or (iii) that otherwise enters the public domain through lawful means.

 

(k)            “Employer Information” shall mean, collectively, Confidential Information and Trade Secrets.

 

(l)            “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, as such law, rules and regulations may be amended from time to time.

 

(m)            “Good Reason” shall mean any of the following which occurs on or after the Effective Date:

 

(1)            a material reduction of the Executive’s annual base salary or annual bonus opportunity from its then current rate without the Executive’s consent, other than a reduction that also is applied to substantially all other executive officers of the Employer and the Executive’s reduction is substantially proportionate to, or no greater than, the reduction applied to substantially all other executive officers;

 

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(2)            a material diminution in the authority, responsibilities or duties of the Executive as in effect immediately after the Effective Date, or the assignment to the Executive of duties that are materially inconsistent with Executive’s authority, duties or responsibilities as in effect immediately after the Effective Date, in either case without the Executive’s consent;

 

(3)            the relocation of the Executive to any principal place of employment other than Atlanta, Georgia, or any requirement that the Executive relocate his residence other than to the Atlanta, Georgia metropolitan area, without the Executive’s express written consent to either such relocation; or

 

(4)            any material failure by the Company or the Bank to comply with the terms of this Agreement;

 

provided, however, that in each case of the above, the Executive must provide written notice to the Employer of the occurrence of such action within sixty (60) days after the action first occurs, and the Executive shall only have Good Reason to terminate his employment if the Employer fails to correct such action within thirty (30) days following receipt of such notice. If the Employer does so fail to correct such action, the Executive must give the Employer at least twenty (20) business days advance written notice of the Executive’s effective date of resignation due to such Good Reason, and the Executive must terminate his employment within ninety (90) days after the Employer fails to correct such action.

 

(n)            “Incapacity” shall mean the inability of the Executive to perform the essential functions of the Executive’s title and position, with or without reasonable accommodation, for a period of ninety (90) days in any consecutive rolling one hundred eighty (180)-day period.

 

(o)            “Person” shall mean any individual, corporation, bank, credit union, general or limited partnership, limited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature.

 

(p)            “Termination of Employment” shall mean a termination of the Executive’s employment where either (i) the Executive has ceased to perform any services for the Employer and all affiliated companies that, together with the Employer, constitute the “service recipient” within the meaning of Section 409A of the Code and the regulations thereunder (collectively, the “Service Recipient”) or (ii) the level of bona fide services the Executive performs for the Service Recipient after a given date (whether as an employee or as an independent contractor) permanently decreases (excluding a decrease as a result of military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six (6) months, or if longer, so long as the Executive retains a right to reemployment with the Service Recipient under an applicable statute or by contract) to no more than twenty percent (20%) of the average level of bona fide services performed for the Service Recipient (whether as an employee or an independent contractor) over the immediately preceding thirty-six (36)-month period (or the full period of service if the Executive has been providing services to the Service Recipient for less than thirty-six (36) months). Termination of Employment shall be construed consistent with the definition of a “separation from service” within the meaning of Section 409A of the Code.

 

 14 

 

 

(q)            “Trade Secrets” shall mean the Employer’s or its Affiliates’ information including, but not limited to, technical or nontechnical data, formulas, patterns, compilations, programs, devices, methods, techniques, drawings, processes, financial data, financial plans, product plans or lists of actual or potential customers or suppliers which:

 

(1)            derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other Persons who can obtain economic value from its disclosure or use; and

 

(2)            is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

 

25.            Deferred Compensation. It is intended that any payment or benefit which the Executive is to be paid or provided pursuant to or in connection with this Agreement which is considered to be deferred compensation subject to Section 409A of the Code shall be paid and provided in a manner, and at such time and form, as complies with the applicable requirements of Section 409A of the Code to avoid the unfavorable tax consequences provided therein for non-compliance.  Accordingly, notwithstanding any other provision of this Agreement, the Employer is authorized to amend this Agreement to amend or void any election made by the Executive under this Agreement and/or to accelerate or delay the payment of any monies and/or provision of any benefits in such manner as may be determined by it to be reasonably necessary or appropriate to comply, or to evidence or further evidence required compliance, with Section 409A of the Code.  Neither the Employer nor the Executive shall take any action to accelerate or delay the payment of any monies and/or provision of any benefits in any manner which would not be in compliance with Section 409A of the Code.  For purposes of this Agreement, (i) all rights to payments and benefits hereunder shall be treated as rights to receive a series of separate payments and benefits to the fullest extent allowed by Section 409A of the Code, and (ii) termination of employment shall mean a “separation from service” within the meaning of Section 409A of the Code.  In addition, any payments made under this Agreement which are paid on or before the last day of the applicable period for the short-term deferral exclusion under Treasury Regulation § 1.409A-1(b)(4) are intended to be excluded under such short-term deferral exclusion. Any remaining payments under this Agreement are intended to qualify for the exclusion for separation pay plans under Treasury Regulation § 1.409A-1(b)(9) to the maximum extent applicable. Nevertheless, if the Executive is deemed on the date of separation from service with the Employer to be a “specified employee”, within the meaning of that term under Code Section 409A(a)(2)(B) and using the identification methodology selected by the Employer from time to time, or if none, the default methodology, then with regard to any payment or benefit that is required to be delayed for six (6) months in compliance with Section 409A(a)(2)(B) of the Code, such payment or benefit shall be paid on the earlier of (i) the first day of the seventh (7th) month measured from the date of Executive’s separation from service or (ii) the date of Executive’s death. In the case of benefits required to be delayed under Section 409A of the Code, Executive may pay the cost of benefit coverage, and thereby obtain benefits, during such six (6) month delay period and then be reimbursed by the Company thereafter on the first day of the seventh (7th) month following the date of Executive’s separation from service or, if earlier, on the date of Executive’s death. Additionally, notwithstanding anything in this Agreement to the contrary, if any payment or benefit that constitutes nonqualified deferred compensation subject to Section 409A is conditioned upon the Executive’s execution, delivery, and non-revocation of a release of claims or separation agreement, and the period during which Executive may consider, execute, or revoke such release or separation agreement begins in one taxable year and ends in the following taxable year, then such payment or benefit shall be made or commence in the second taxable year, regardless of the year in which Executive actually executes and delivers the release or separation agreement. In all events, payment shall not be made or commence until the release or separation agreement has become effective and irrevocable. To the extent any reimbursement, in-kind benefit, or similar payment under this Agreement constitutes nonqualified deferred compensation subject to Section 409A: (i) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any taxable year shall not affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year; (ii) reimbursement shall be made no later than the last day of the Executive’s taxable year following the taxable year in which the expense was incurred; and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit. Notwithstanding any other provision of this Agreement, neither the Employer nor its subsidiaries or Affiliates shall be liable to the Executive or any other Person if any payment or benefit which is to be provided pursuant to this Agreement and which is considered deferred compensation subject to Section 409A of the Code fails to comply with, or be exempt from, the requirements of Section 409A of the Code.

 

[Signature Page Follows]

 

 15 

 

 

IN WITNESS WHEREOF, each of the Company and the Bank has caused this Agreement to be signed by its duly authorized officer and the Executive has affixed Executive’s signature hereto as of the date first shown above.

 

GEORGIA BANKING COMPANY, INC.:

 

  By:  
  Name:  
  Title:  

 

  GEORGIA BANKING COMPANY:

 

  By:  
  Name:  
  Title:  

 

  EXECUTIVE:

 

   
  [_____]

 

 16 

 

Exhibit 10.12

 

Georgia Banking Company, Inc.
Amended and Restated 2021 Stock Incentive Plan

 

Article 1
Effective Date, Objectives and Duration

 

1.1           Adoption of the Plan. The Board of Directors of Georgia Banking Company, Inc., a bank holding company organized and existing under the laws of the State of Georgia (the “Corporation”), hereby amends and restates, effective as of July 28, 2026 (the “Effective Date”), the Georgia Banking Company, Inc. 2021 Stock Incentive Plan, as amended by Amendment No. 1, Amendment No. 2, and Amendment No. 3, respectively (prior to this amendment and restatement, the “Prior Plan” and, after this amendment and restatement, the Georgia Banking Company, Inc. Amended and Restated 2021 Stock Incentive Plan (the “Plan”)). The Prior Plan was approved by the shareholders of the Corporation. The terms of the Plan are set forth herein. Awards may be granted under the Plan on and after the Effective Date; the amendment and restatement of the Prior Plan does not require the approval of the shareholders of the Corporation. Awards granted under the Prior Plan shall be governed by the terms of the Prior Plan and the applicable Award Agreements. The terms of this Plan are not intended to affect the interpretation of the terms of the Prior Plan.

 

1.2           Duration of the Plan. The Plan commenced on the date of adoption of the Prior Plan by the Board, and the shareholders of the Corporation approved the Prior Plan and all amendments thereto. The Plan shall remain in effect, subject to the right of the Board to amend or terminate the Plan at any time pursuant to Article 10 hereof, until the earlier of 11:59 p.m. (ET) on April 26, 2031, or the date all Shares subject to the Plan shall have been issued and the restrictions on all Restricted Shares granted under the Plan shall have lapsed, according to the Plan’s provisions.

 

Article 2
Definitions

 

Whenever used in the Plan, the following terms shall have the meanings set forth below:

 

2.1           “Affiliate” means any corporation, trade or business or other entity, including but not limited to partnerships, limited liability companies and joint ventures, directly or indirectly controlling, controlled by or under common control with the Corporation, within the meaning of Section 405 of the Securities Act. Affiliate includes any corporation, trade or business or other entity that becomes such on or after the Effective Date.

 

2.2           “Award” means Options (including Non-Qualified Stock Options and Incentive Stock Options), SARs, Restricted Shares, Restricted Stock Units, Dividend Equivalents, Bonus Shares and Other Stock-Based Awards granted under the Plan.

 

2.3           “Award Agreement” means a written agreement entered into by the Corporation and a Grantee setting forth the terms and provisions applicable to an Award granted under this Plan, including any amendment or modification thereof. The Committee may provide for the use of electronic, internet or other non-paper Award Agreements and the use of electronic, internet or other non-paper means for the acceptance thereof and actions thereunder by the Grantee.

 

2.4           “Beneficiary” means one or more persons or entities that become entitled to receive any amount payable under this Plan at the Grantee’s death. The Grantee’s Beneficiary is the Grantee’s surviving spouse, unless the Grantee designates one or more other persons or entities to be the Grantee’s Beneficiary. The Grantee may make, change or revoke a Beneficiary designation at any time before his or her death without the consent of the Grantee’s spouse or anyone the Grantee previously named as a Beneficiary, and the Grantee may designate primary and secondary Beneficiaries. A Beneficiary designation must comply with procedures established by the Committee and must be received by the Committee before the Grantee’s death. If the Grantee dies without a valid Beneficiary designation (as determined by the Committee) and has no surviving spouse, the Beneficiary shall be the Grantee’s estate.

 

 

 

2.5           “Board” means the Board of Directors of the Corporation.

 

2.6           “Bonus Shares” means Shares that are awarded to a Grantee with or without cost (save in all events for payment by the Grantee in cash of the nominal value per Share if required by applicable law) and without restrictions either in recognition of past performance (whether determined by reference to another employee benefit plan of the Corporation or otherwise), as an inducement to become an Eligible Person or, with the consent of the Grantee, as payment in lieu of any cash remuneration otherwise payable to the Grantee.

 

2.7           “Cause” shall have the same definition as under any employment or service agreement between the Corporation or any Affiliate and the Grantee or, if no such employment or service agreement exists or if such employment or service agreement does not contain any such definition or words of similar import, “Cause” means (i) the Grantee’s act or failure to act amounting to gross negligence or willful misconduct to the detriment of the Corporation or any Affiliate; (ii) the Grantee’s dishonesty, fraud, theft or embezzlement of funds or properties in the course of Grantee’s employment or other service; (iii) the Grantee’s commission of or pleading guilty to or confessing to any crime involving breach of trust or moral turpitude or any felony; (iv) the exhibition of a standard of behavior within the scope of or related to his employment or service that is materially disruptive to the orderly conduct of the Corporation’s business operations (including, without limitation, substance abuse, sexual harassment or sexual misconduct); (v) the Grantee’s breach of any restrictive covenant agreement with the Corporation or any Affiliate, including but not limited to, confidentiality covenants, covenants not to compete, non-solicitation covenants and non-disclosure covenants; (vi) receipt of any form of notice, written or otherwise, that any regulatory agency having jurisdiction over the Corporation intends to institute any form of formal or informal regulatory action against the Grantee; (vii) the Grantee’s removal and/or permanent prohibition from participating in the conduct of the Corporation’s affairs by an order issued under Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(4) and (g)(1)). For purposes of the Plan, the Grantee’s resignation without the Corporation’s or an Affiliate’s written consent in anticipation of termination by the Corporation or any Affiliate of Grantee’s employment for Cause shall constitute a termination of employment for Cause.

 

2.8           “Change in Control” shall mean if, at any time after the date hereof, any of the following events shall have occurred:

 

(a)           Any person becomes a beneficial owner (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power of the outstanding voting securities of the Corporation; provided, however, that the event described in this clause (a) will not be deemed a Change in Control by virtue of any holdings or acquisitions: (i) by the Corporation or any of its Subsidiaries, (ii) by any employee benefit plan (or related trust) sponsored or maintained by the Corporation or any of its Subsidiaries; provided that such holdings or acquisitions by any such plan (other than any plan maintained under Section 401(k) of the Code) or related trust do not exceed 50% of the total voting power of the then outstanding voting securities of the Corporation, (iii) by any underwriter temporarily holding securities of the Corporation pursuant to an offering of such securities or (iv) pursuant to a Non-Qualifying Transaction;

 

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(b)           The consummation of a merger, consolidation, statutory share exchange or similar transaction that requires adoption by the Corporation’s shareholders (a “Business Combination”), unless immediately following such Business Combination: (x) more than 50% of the total voting power of the outstanding voting securities of the corporation resulting from such Business Combination (the “Surviving Corporation”), or, if applicable, the ultimate parent corporation that, directly or indirectly, has beneficial ownership (as such term is defined in Sections 13d-3 and Rule 13d-5 under the Exchange Act), of 100% of the total voting power of the outstanding voting securities eligible to elect directors of the Surviving Corporation (the “Parent Corporation”), is represented by securities that were outstanding immediately before such Business Combination (or, if applicable, is represented by shares into which such voting securities were converted pursuant to such Business Combination), and (y) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) following the consummation of the Business Combination are Incumbent Directors (as defined below) at the time the Board approved the execution of the agreement providing for such Business Combination (any Business Combination which satisfies all of the criteria specified in (x) and (y) above will be deemed a “Non-Qualifying Transaction”);

 

(c)           Consummation of a plan of liquidation or dissolution of the Corporation or a sale of all or substantially all of the Corporation’s assets, in either event other than a Non-Qualifying Transaction; or

 

(d)           During any twelve (12)-month period, Incumbent Directors cease to constitute a majority of the members of the Board.

 

For purposes of this Section 2.8, the term “Incumbent Director” means, as of any date of determination, an individual who is either (a) a member of the Board as of the effective date of the adoption of this Plan or (b) a member who becomes a member of the Board subsequent to the date of the adoption of this Plan whose election, or nomination for election by the Corporation’s stockholders, was approved by a vote of at least sixty percent (60%) of the then Incumbent Board Members (either by a specific vote or by approval of the proxy statement of the Corporation in which that person is named as a nominee for director, without objection to that nomination), but excluding, for that purpose, any individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Exchange Act) 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.

 

Notwithstanding the foregoing, a Change in Control shall not occur for purposes of this Plan unless such Change in Control also constitutes a “change in control event” under Section 409A of the Code and the regulations thereunder.

 

2.9           “Code” means the Internal Revenue Code of 1986, as amended from time to time.

 

2.10         “Corporation” means Georgia Banking Company, Inc., a bank holding company organized and existing under the laws of the State of Georgia, and any successor thereto by operation of law or otherwise.

 

2.11         “Disability” or “Disabled” means, unless otherwise defined in an Award Agreement, or as otherwise determined under procedures established by the Committee for purposes of the Plan, for any Grantee, any injury, illness or sickness that qualifies as a long-term disability within the meaning of the Corporation’s long-term disability program (“LTD Program”) and on account of which such Grantee is entitled to receive LTD Program benefits; provided, however, in the case of an Incentive Stock Option, “Disability” or “Disabled” has the meaning under Section 22(e)(3) of the Code, and in case of any Award that constitutes deferred compensation within the meaning of Section 409A of the Code, “Disability” and “Disabled” means as defined in regulations under Code Section 409A where necessary for such Award to comply with Section 409A of the Code. For purpose of Code Section 409A, a Grantee will be considered to have incurred a Disability or to be Disabled if: (i) the Grantee is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that 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 (ii) the Grantee is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Grantee’s employer.

 

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2.12         “Dividend Equivalent” means a right to receive cash or Shares equal to any dividends paid on Shares, if and when paid or distributed, on a specified number of Shares, which dividends have a record date on or after the date of grant of the Dividend Equivalents or related Award and before the date the Dividend Equivalents or related Award become payable or are forfeited.

 

2.13         “Eligible Person” means any employee (including any officer) of, or non-employee consultant to, or Non-Employee Director of, the Corporation or any Affiliate, or potential employee (including a potential officer) of, or potential non-employee consultant to, or potential Non-Employee Director of, the Corporation or an Affiliate; provided, however, that (i) solely with respect to the grant of an Incentive Stock Option, “Eligible Person” shall mean any employee (including any officer) of the Corporation or any Subsidiary Corporation and (ii) the Committee may establish additional eligibility criteria for determining an Eligible Person for any Awards granted hereunder. Solely for purposes of Section 5.6, current or former employees or Non-Employee Directors of, or non-employee consultants to, an Acquired Entity who receive Substitute Awards in substitution for Acquired Entity Awards shall be considered Eligible Persons under this Plan with respect to such Substitute Awards.

 

2.14         “Exchange Act” means the Securities Exchange Act of 1934, as amended, and all rules and regulations promulgated thereunder.

 

2.15         “Exercise Price” means with respect to an Option, the price at which a Share may be purchased by a Grantee pursuant to such Option.

 

2.16         “Fair Market Value” means, unless the Committee determines otherwise, a price that is based on the closing price of a Share as reported on Nasdaq on the applicable trading date or any other established stock exchange or automated quotation system which is the principal stock exchange or automated quotation system upon which the Shares are traded on the applicable date or, if the Shares are not traded on such date, the immediately preceding trading day. Alternatively, if the Shares are exclusively traded over the counter at the time a determination of Fair Market Value is required to be made hereunder, Fair Market Value shall be deemed to be equal to the arithmetic mean between the reported high and low or closing bid and asked prices of a Share on the applicable date, or, if no such trades were made that day, then the most recent date on which Shares were so traded. In the event Shares are not publicly traded at the time a determination of their value is required to be made hereunder, the determination of their Fair Market Value shall be made by the Committee in such manner as it deems appropriate provided such manner is consistent with Treasury Regulation 1.409A-1(b)(5)(iv)(B). The Fair Market Value that the Committee determines shall be final, binding and conclusive on the Company, any Affiliate and each Grantee.

 

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2.1           “Good Reason” shall have the same definition as under any employment or service agreement between the Company or any Affiliate and the Grantee or, if no such employment or service agreement exists or if such employment or service agreement does not contain any such definition or words of similar import, “Good Reason” means, except as otherwise set forth in the Award Agreement, any of the following without the Grantee’s express written consent: (a) any action taken by the Company or an Affiliate which results in a material reduction in the Grantee’s authority, duties or responsibilities (except that any change in the foregoing that results solely from (i) the Company ceasing to be a publicly traded entity or from the Company becoming a wholly-owned subsidiary of another publicly traded entity or (ii) any change in the geographic scope of the Grantee’s authority, duties or responsibilities will not, in any event and standing alone, constitute a material reduction in the Grantee’s authority, duties or responsibilities); (b) the assignment to the Grantee of duties that are materially inconsistent with Grantee’s authority, duties or responsibilities; (c) any material decrease in the Grantee’s base salary or annual bonus opportunity, except to the extent the Company has instituted a salary or bonus reduction generally applicable to all similar employees of the Company other than in contemplation of or within one year after a Change in Control; or (d) the relocation of the Grantee to any principal place of employment other than that as of the date of grant of the Award, or any requirement that Grantee relocate his or her residence other than to that as of the date of grant of the Award, which in either event would increase the Grantee’s commute by more than fifty (50) miles; provided, however, this subsection (d) shall not apply in the case of business travel which requires the Grantee to relocate temporarily for periods of ninety (90) days or less. Notwithstanding the above, and without limitation, “Good Reason” shall not include any resignation by the Grantee where Cause for the Grantee’s termination by the Company or an Affiliate exists. The Grantee must give the Company or Affiliate that employs the Grantee notice of any event or condition that would constitute “Good Reason” within thirty (30) days of the event or condition which would constitute “Good Reason,” and upon the receipt of such notice the Company or Affiliate that employs the Grantee shall have thirty (30) days to remedy such event or condition. If such event or condition is not remedied within such thirty (30)-day period, any termination of employment by the Grantee for “Good Reason” must occur within thirty (30) days after the period for remedying such condition or event has expired.

 

2.2           “Grant Date” means the date on which an Award is granted or such later date as specified in advance by the Committee.

 

2.3           “Grantee” means an Eligible Person to whom an Award has been granted under the Plan.

 

2.4           “Incentive Stock Option” means an Option that is intended to meet the requirements of Section 422 of the Code.

 

2.5           “Incumbent Board Member” means an individual who either is (a) a member of the Board as of the effective date of the adoption of this Plan or (b) a member who becomes a member of the Board subsequent to the date of the adoption of this Plan whose election, or nomination for election by the Corporation’s shareholders, was approved by a vote of at least sixty percent (60%) of the then Incumbent Board Members (either by a specific vote or by approval of the proxy statement of the Corporation in which that person is named as a nominee for director, without objection to that nomination), but excluding, for that purpose, any individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Exchange Act) 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.

 

2.6           “Non-Employee Director” means a member of the Board, or the board of directors of an Affiliate, who is not an employee of the Corporation or any Affiliate.

 

2.7           “Non-Qualified Stock Option” means an option that is not intended to meet the requirements of Section 422 of the Code.

 

2.8           “Option” means an option granted under Article 6 of the Plan.

 

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2.9           “Other Stock-Based Award” means a right, granted under Article 12 hereof, that relates to or is valued by reference to Shares or other Awards relating to Shares.

 

2.10         “Period of Restriction” means the period during which Shares are subject to forfeiture if the conditions specified in the Award Agreement are not satisfied.

 

2.11         “Period of Vesting” means the period during which the Award is subject to forfeiture or may not be exercised if the conditions specified in the Award Agreement are not satisfied.

 

2.12         “Person” means any individual, sole proprietorship, partnership, joint venture, limited liability company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, entity or government instrumentality, division, agency, body or department.

 

2.13         “Plan” means this Georgia Banking Company, Inc. 2021 Stock Incentive Plan, in its current form or as hereafter amended.

 

2.14         “Restricted Shares” means Shares issued under Article 7 that are both subject to forfeiture and are nontransferable if the Grantee does not satisfy the conditions specified in the Award Agreement applicable to such Shares and subject to the Grantee paying the nominal value in cash for each Share to the extent required by the Committee.

 

2.15         “Restricted Stock Units” are rights, granted under Article 8, to receive Shares if the Grantee satisfies the conditions specified in the Award Agreement applicable to such rights, and subject always to the Grantee paying the nominal value in cash for each such Share.

 

2.16         “Rule 16b-3” means Rule 16b-3 promulgated by the SEC under the Exchange Act, as amended from time to time, together with any successor rule.

 

2.17         “SEC” means the United States Securities and Exchange Commission, or any successor thereto.

 

2.18         “Section 16 Non-Employee Director” means a member of the Board who satisfies the requirements to qualify as a “non-employee director” under Rule 16b-3.

 

2.19         “Section 16 Person” means a person who is subject to potential liability under Section 16(b) of the Exchange Act with respect to transactions involving equity securities of the Corporation.

 

2.20         “Securities Act” means the Securities Act of 1933, as amended, and all rules and regulations promulgated thereunder.

 

2.21         “Share” means the common stock, $0.01 par value per share, of the Corporation, and, unless the context otherwise requires, such other securities of the Corporation, as may be substituted or resubstituted for Shares pursuant to Section 4.2 hereof.

 

2.22         “Stock Appreciation Right” or “SAR” means an Award granted under Article 7 of the Plan.

 

2.23         “Subsidiary Corporation” means a corporation other than the Corporation in an unbroken chain of corporations beginning with the Corporation if, at the time of granting the Option, each of the corporations other than the last corporation in the unbroken chain owns shares or stock possessing fifty percent (50%) or more of the total combined voting power of all classes of shares or stock in one of the other corporations in such chain.

 

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2.24         “Surviving Company” means the surviving corporation in any merger or consolidation, involving the Corporation, including the Corporation if the Corporation is the surviving corporation, or the direct or indirect parent company of the Corporation or such surviving corporation following a sale of substantially all of the outstanding shares or stock of the Corporation.

 

2.25         “Term” of any Option or SAR means the period beginning on the Grant Date of an Option or SAR and ending on the date such Option or SAR expires, terminates or is cancelled. No Option or SAR granted under this Plan shall have a Term exceeding ten (10) years.

 

2.26         “Termination of Service” means (a) that the employee has terminated employment with the Corporation and its Affiliates, the non-employee consultant is no longer serving as a consultant to the Corporation or an Affiliate or the Non-Employee Director has ceased being a director of the Corporation or any Affiliate or (b) when an entity which is employing the employee or non-employee consultant or on whose board of directors the Non-Employee Director is serving, ceases to be an Affiliate, unless the Grantee otherwise is, or thereupon becomes, an employee, non-employee consultant or Non-Employee Director of the Corporation or another Affiliate, at the time such entity ceases to be an Affiliate. In the event an employee, non-employee consultant or Non-Employee Director becomes one of the other categories of Eligible Persons upon the termination of such employee’s employment, such consultant’s consultancy or such Non-Employee Director’s service, unless otherwise determined by the Committee, in its sole discretion, no Termination of Service will be deemed to have occurred until such time as such person is no longer an employee, non-employee consultant or Non-Employee Director. Notwithstanding the foregoing, however, if an Award constitutes deferred compensation within the meaning of Code Section 409A, Termination of Service with respect to such Award shall mean the Grantee’s Separation from Service within the meaning of Section 409A of the Code, to the extent necessary for such Award to comply with Section 409A of the Code.

 

Article 3
Administration

 

3.1           Committee.

 

(a)           The Plan shall be administered by the Compensation Committee or the Board itself if no Compensation Committee exists. Notwithstanding the foregoing, the Board may at any time and in one or more instances reserve administrative powers to itself as the Board. To the extent the Board or Compensation Committee considers it desirable to comply with Rule 16b-3, the Committee shall consist of two or more directors of the Company, all of whom qualify as “independent directors” within the meaning of the Nasdaq listing standards and as Section 16 Non-Employee Directors. The number of members of the Committee shall from time to time be increased or decreased, and shall be subject to such conditions, in each case if and to the extent the Board deems it appropriate to permit transactions in Shares pursuant to the Plan to satisfy such conditions of Rule 16b-3.

 

(b)           The Committee may act through subcommittees, in which case the subcommittee shall be subject to and have the authority hereunder applicable to the Committee, and the acts of the subcommittee shall be deemed to be the acts of the Committee hereunder. Additionally, to the extent applicable law so permits, the Board or the Compensation Committee may appoint and delegate to one or more officers of the Corporation, any or all of the authority of the Board or the Committee, as applicable, with respect to Awards to Grantees other than Grantees who are (i) “executive officers” of the Company (as defined by Rule 3b-7 under the Exchange Act) or to any “officer” of the Company (as defined by Rule 16a-1(f) under the Exchange Act), (ii) Non-Employee Directors, or (iii) expected to be Section 16 Persons at the time any such delegated authority is exercised, and provided that the Board or the Compensation Committee shall fix the maximum number of Shares subject to Awards that such officers may grant. The Committee may revoke or amend the terms of any delegation at any time but such action shall not invalidate any prior actions of the Committee’s delegate or delegates that were consistent with the terms of the Plan and the Committee’s prior delegation. An Award granted to an individual who is a member of the Committee may be approved by the Committee in accordance with the applicable Committee charters then in effect and other applicable law except that the Committee member must abstain from any action with respect to the Committee member’s own Awards.

 

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(c)           Unless the context requires otherwise, any references herein to “Committee” include references to, the Board or the Compensation Committee to the extent the Board or the Compensation Committee, as applicable, has assumed or exercises administrative powers as the Committee pursuant to subsection (a), and to one or more officers of the Corporation the extent they have been delegated authority pursuant to subsection (b), as applicable; provided that, (i) for purposes of Awards to Non-Employee Directors, “Committee” shall include only the full Board, and (ii) for purposes of Awards intended to comply with Rule 16b-3, “Committee” shall include only the Compensation Committee.

 

3.2           Powers of Committee. The Committee shall have authority to grant Awards upon such terms (not inconsistent with the provisions of this Plan) as the Committee may consider appropriate. Such terms may include conditions (in addition to those contained in this Plan) on the grant, exercisability, transferability, settlement and forfeitability of all or any part of an Award, among other terms. Notwithstanding any such conditions, the Committee may, in its discretion, accelerate the time at which any Award may be exercised, become transferable or nonforfeitable or be earned and settled including, without limitation, (i) in the event of the Grantee’s death, Disability or Termination of Service or (ii) in connection with a Change in Control. In addition, the Committee shall have complete authority to interpret all provisions of this Plan including, without limitation, the discretion to interpret any terms used in the Plan that are not defined herein; to prescribe the form of Agreements; to adopt, amend and rescind rules and regulations pertaining to the administration of the Plan; and to make all other determinations necessary or advisable for the administration of this Plan. The express grant in the Plan of any specific power to the Committee shall not be construed as limiting any power or authority of the Committee. Any decision made, or action taken, by the Committee in connection with the administration of this Plan shall be final, conclusive and binding on all persons. The members of the Committee shall not be liable for any act done in good faith with respect to this Plan or any Agreement or Award. Unless otherwise provided by the Bylaws of the Corporation, by resolution of the Board or applicable law, a majority of the members of the Committee shall constitute a quorum, and acts of the majority of the members present at any meeting at which a quorum is present, and any acts approved in writing by all members of the Committee without a meeting, shall be the acts of the Committee.

 

3.3           No Repricings. Notwithstanding any provision in Section 3.2 to the contrary, the terms of any outstanding Option or SAR may not be amended to reduce the Exercise Price of such Option or SAR, or cancel any outstanding Option or SAR in exchange for other Options or SARs with an Exercise Price that is less than the Exercise Price of the cancelled Option or SAR or for any cash payment (or Shares having a Fair Market Value) in an amount that exceeds the excess of the Fair Market Value of the Shares underlying such cancelled Option or SAR over the aggregate Exercise Price of such Option or SAR or for any other Award, without shareholder approval; provided, however, that the restrictions set forth in this Section 3.3, shall not apply (i) unless the Corporation has a class of shares or stock that is registered under Section 12 of the Exchange Act or (ii) to any adjustment allowed under Section 4.2.

 

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Article 4
Shares Subject to the Plan and Maximum Awards

 

4.1           Number of Shares Available for Grants. Subject to adjustment as provided in Section 4.2 and except as provided in Section 5.6, the maximum number of Shares hereby reserved for delivery in connection with Awards under the Plan (including Incentive Stock Options) shall be 1,125,000 Shares (the original 452,000 Shares reserved under the original plan and the additional 673,000 Shares added pursuant to Amendment No. 1, Amendment No. 2, and Amendment No. 3); 100% of such Shares may be delivered pursuant to the exercise of Incentive Stock Options granted under the Plan or the Prior Plan (in lieu of other Awards). A Share issued in connection with an Award under the Plan or the Prior Plan shall reduce the total number of Shares available for issuance under the Plan by one provided, however, that, upon settlement of a SAR, the greater of the number of Shares underlying the portion of the SAR that is exercised or the number of Shares actually issued will be treated as having been delivered for purposes of determining the maximum number of Shares available for grant under the Plan and shall not again be treated as available for grant under the Plan. If any Award under the Plan or the Prior Plan terminates without the delivery of Shares, whether by lapse, forfeiture, cancellation or otherwise, the Shares subject to such Award, to the extent of any such termination, shall again be available for grant under the Plan. To the extent Shares subject to an Option or stock-settled SAR granted under the Plan after the Effective Date are withheld by the Corporation for payment of the purchase price of the Shares or as a means of paying the exercise price, or for payment of federal, state or local income or wage tax withholding requirements, the Shares that are so withheld shall be treated as granted and shall not again be available for subsequent grants of Awards under the Plan; to the extent Shares subject to an Option or stock-settled SAR granted under the Prior Plan before the Effective Date are withheld by the Corporation for payment of the purchase price of the Shares or as a means of paying the exercise price, or for payment of federal, state or local income or wage tax withholding requirements, the Shares that are so withheld shall again be available for subsequent grants of Awards under the Plan. To the extent Shares subject to a full-value Award (i.e., an equity-based Award other than an Option or SAR) granted under the Plan or the Prior Plan are not actually issued to the Grantee at the time the Award is exercised or settled, including where Shares are withheld for payment of federal, state or local income or wage tax withholding requirements, the Shares that are so withheld shall again be available for grants of Awards under the Plan. The number of Shares available for issuance under the Plan may not be increased through the Corporation’s purchase of Shares on the open market with the proceeds obtained from the exercise of any Options or other purchase rights granted hereunder. In addition, in the case of any Substitute Award granted in assumption of or in substitution for an Acquired Entity Award, Shares delivered or deliverable in connection with such Substitute Award shall not be counted against the number of Shares reserved under the Plan (to the extent permitted by the rules of any other stock exchange or automated quotation system upon which the Shares are listed or quoted), and available shares of stock under a shareholder-approved plan of an Acquired Entity (as appropriately adjusted to reflect the transaction) also may be used for Awards under the Plan, which shall not reduce the number of Shares otherwise available under the Plan (subject to applicable requirements of any other stock exchange or automated quotation system upon which the Shares are listed or quoted). Shares may be allotted and issued pursuant to the Plan from the Corporation’s authorized but unissued share capital, or the reissue of treasury Shares. The proceeds that the Corporation receives in connection with Awards granted under the Plan, if any, shall be used for general corporate purposes and shall be added to the general funds of the Corporation.

 

4.2           Adjustments in Authorized Shares and Awards; Liquidation, Dissolution or Change in Control.

 

(a)           In the event that the Committee determines that any dividend or other distribution (excluding any ordinary dividend or distribution) (whether in the form of cash, Shares, or other property), recapitalization, forward or reverse stock split, subdivision, consolidation or reduction of capital, reorganization, merger, consolidation, scheme of arrangement, split-up, spin-off or combination involving the Corporation or repurchase or exchange of Shares or other securities of the Corporation or other rights to purchase Shares or other securities of the Corporation, or other corporate transaction or event affects the Shares such that any adjustment is determined by the Committee to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number and type of Shares (or other securities or property) with respect to which Awards may be granted, (ii) the number and type of Shares (or other securities or property) subject to outstanding Awards, (iii) the Exercise Price with respect to any Award or, if deemed appropriate, make provision for a cash payment to the holder of an outstanding Award, (iv) the number and kind of Shares of outstanding Restricted Shares, or the Shares underlying any Award of Restricted Stock Units and (v) any other terms and conditions of the Award. Notwithstanding the foregoing, (x) no such adjustment shall be authorized with respect to any Options or SAR to the extent that such adjustment would cause the Option (determined as if such Option was an Incentive Stock Option) or SAR to violate Section 424(a) of the Code or with respect to any Awards to the extent such adjustment would subject any Grantee to taxation under Section 409A of the Code; and (y) the number of Shares subject to any Award denominated in Shares shall always be a whole number.

 

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(b)           In the event of a merger or consolidation of the Corporation with or into another corporation or a sale of all or substantially all of the shares or stock of the Corporation or all or substantially all of the assets of the Corporation, including by way of a court sanctioned compromise or scheme of arrangement, reorganization, merger, combination, purchase, recapitalization, liquidation, or sale, transfer, exchange or other disposition (a “Corporate Transaction”) that results in a Change in Control, unless an outstanding Award is assumed by the Surviving Company or replaced with an equivalent Award granted by the Surviving Company in substitution for such outstanding Award, the Committee shall cancel any outstanding Awards that are not vested and nonforfeitable as of the consummation of such Corporate Transaction (unless the Committee in its discretion accelerates the vesting of such Awards without the need for the consent of any Grantee in Grantee’s status as the grantee of the Award) and with respect to any vested and nonforfeitable Awards, the Committee may either (i) allow all Grantees to exercise such Awards in the nature of Options to the extent then exercisable or to become exercisable upon the Corporate Transaction within a reasonable period prior to the consummation of the Corporate Transaction and cancel any Awards in the nature of Options or SARs that remain unexercised upon consummation of the Corporate Transaction, or (ii) cancel any or all of such outstanding Awards in exchange for a payment (in cash and/or in securities and/or other property) in an amount equal to the amount that the Grantee would have received (net of the Exercise Price with respect to any Awards in the nature of Options or SARs) and on the same terms (including without limitation any earn-out, escrow or other deferred consideration provisions) as if such vested Awards were settled or distributed or such Awards in the nature of vested Options or SARs were exercised immediately prior to the consummation of the Corporate Transaction. Notwithstanding the foregoing, if an Option or SAR is not assumed by the Surviving Company or replaced with an equivalent Award issued by the Surviving Company and the Exercise Price with respect to any outstanding Option or SAR equals or exceeds the amount payable per Share in the Corporation Transaction, such Awards shall be cancelled without any payment to the Grantee.

 

(c)           Immediately prior to consummation of any Corporate Transaction that results in a Change in Control (subject to consummation of the Change in Control), unless the Award Agreement provides otherwise, and except as otherwise set forth below as to any Award with respect to which the grant, vesting, payment and/or settlement is contingent upon the satisfaction of specified performance measures, all outstanding Awards will become vested and non-forfeitable, earned and payable and any conditions on any such Award shall lapse, as to all of such Award to the extent then outstanding, including Shares as to which the Award would not otherwise be exercisable or non-forfeitable or earned and payable, unless the outstanding Award is assumed by the Surviving Company or replaced with an equivalent Award granted by the Surviving Company in substitution for such outstanding Award. If the outstanding Award is assumed by the Surviving Company or replaced with an equivalent Award granted by the Surviving Company in substitution for such outstanding Award, then all such outstanding Awards will become vested and non-forfeitable, earned and payable and any conditions on any such Award shall lapse, as to all of such Award to the extent then outstanding, including Shares as to which the Award would not otherwise be exercisable or non-forfeitable or earned and payable, upon the Grantee’s subsequent death, Disability, or Termination of Service by the Company and its Affiliates without Cause or by the Grantee for Good Reason, in any such case on or within one (1) year after the Change in Control (provided such accelerated exercisability or vesting does not violate Code Section 409A).

 

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(d)           Notwithstanding the forgoing provisions, if an Award constitutes deferred compensation within the meaning of, and subject to, Code Section 409A, no payment or settlement of such Award shall be made pursuant to this Section, unless the Corporate Transaction or the dissolution or liquidation of the Company, as applicable, constitutes a change in ownership or effective control of the Company or a change in ownership of a substantial portion of the assets of the Company as described in Treasury Regulation Section 1.409A-3(i)(5), where necessary for such Award to comply with Section 409A of the Code, and such payment or settlement does not result in a violation of Section 409A of the Code. Additionally, with respect to any Award with respect to which the grant, vesting, payment and/or settlement is contingent upon the satisfaction of specified performance measures in the specified performance period and which is not assumed by the Surviving Company or replaced with an equivalent Award granted by the Surviving Company in substitution for such outstanding Award, unless the Award Agreement provides otherwise, the Award shall become vested, and be paid and settled, pursuant to this Section, at target, with the amount prorated based on the number of days in the specified performance period prior to and including the date of the Change in Control over the number of days in the specified performance period. If any such Awards are assumed by the Surviving Company or replaced with an equivalent Award granted by the Surviving Company in substitution for such outstanding Award, unless the Award Agreement provides otherwise, the Award shall be converted into a time-based Award as of the Change in Control at target, subject to the Grantee’s continued employment or other service, and such outstanding Awards will become vested and non-forfeitable, earned and payable and any conditions on any such Award shall lapse, as to all of such Award to the extent then outstanding, including Shares as to which the Award would not otherwise be exercisable or non-forfeitable or earned and payable, upon the Grantee’s subsequent death, Disability, or Termination of Service by the Company and its Affiliates without Cause or by the Grantee for Good Reason, in any such case on or within the one (1) year after the Change in Control (provided such accelerated exercisability or vesting does not violate Code Section 409A).

 

Article 5
Eligibility and General Conditions of Awards

 

5.1           Eligibility. The Committee may in its discretion grant Awards to any Eligible Person, whether or not such Eligible Person has previously received an Award; provided, however, that all Awards made to Non-Employee Directors shall be determined by the Board in its sole discretion. No Award may be granted at a time when such grant would constitute a breach of applicable law.

 

5.2           Award Agreement. To the extent not set forth in the Plan, the terms and conditions of each Award shall be set forth in an Award Agreement and, unless the Committee determines otherwise, such Agreement must be signed, acknowledged and returned by the Grantee to the Corporation. Unless the Committee determines otherwise, any failure by the Grantee to sign and return the Agreement within such period of time following the granting of the Award as the Committee shall prescribe shall cause such Award to the Grantee to be null and void. By accepting an Award or other benefits under the Plan (including participation in the Plan), each Grantee shall be conclusively deemed to have indicated acceptance and ratification of, and consented to, all provisions of the Plan and the Agreement.

 

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5.3           General Terms and Termination of Service. The Committee may impose on any Award or the exercise or settlement thereof, at the date of grant or, subject to the provisions of Section 14.2, thereafter, such additional terms and conditions not inconsistent with the provisions of the Plan as the Committee shall determine, including without limitation terms requiring forfeiture or transfer, or acceleration or pro-rata acceleration of Awards in the event of a Termination of Service by the Grantee. Awards may be granted for no consideration other than prior and future services save that in no event will Shares subject to an Award be allotted and issued unless the nominal value per Share is paid in cash, unless permitted otherwise by applicable law. Except as otherwise determined by the Committee pursuant to this Section 5.3 or set forth in an Award Agreement, all Options and SARs that have not been exercised, or any other Awards that remain subject to a risk of forfeiture or which are not otherwise vested, or which have outstanding performance periods, at the time of a Termination of Service shall be forfeited to the Corporation. Additionally, notwithstanding any other provision of this Plan or any Award Agreement to the contrary, no dividends or Dividend Equivalents shall be paid with respect to any Awards that do not become vested, non-forfeitable or payable under the Plan.

 

5.4           Nontransferability of Awards.

 

(a)           Each Award and each right under any Award shall be exercisable only by the Grantee during the Grantee’s lifetime, or, if permissible under applicable law, by the Grantee’s guardian or legal representative or by a transferee receiving such Award pursuant to a domestic relations order (a “DRO”) as defined in the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or the rules thereunder. Nothing herein shall be construed as requiring the Corporation or any Affiliate to honor a DRO except to the extent required under applicable law.

 

(b)           No Award (prior to the time, if applicable, Shares are delivered in respect of such Award), and no right under any Award, may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Grantee otherwise than by will or by the laws of descent and distribution (or in the case of Restricted Shares, to the Corporation) or pursuant to a DRO, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Corporation or any Affiliate; provided that the designation of a beneficiary to receive benefits in the event of the Grantee’s death shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance.

 

(c)           Notwithstanding subsections (a) and (b) above, to the extent provided in the Award Agreement, Awards (other than Incentive Stock Options and related SARs), may be transferred, without consideration, to a Permitted Transferee. For this purpose, a “Permitted Transferee” in respect of any Grantee means any member of the Immediate Family of such Grantee, any trust of which all of the primary beneficiaries are such Grantee or members of his or her Immediate Family, or any partnership (including limited liability companies and similar entities) of which all of the partners or members are such Grantee or members of his or her Immediate Family; and the “Immediate Family” of a Grantee means the Grantee’s spouse, any person sharing the Grantee’s household (other than a tenant or employee), children, stepchildren, grandchildren, parents, stepparents, siblings, grandparents, nieces and nephews. Such Award may be exercised by such transferee in accordance with the terms of the Award Agreement. If so determined by the Committee, a Grantee may, in the manner established by the Committee, designate a beneficiary or beneficiaries to exercise the rights of the Grantee, and to receive any distribution with respect to any Award upon the death of the Grantee. A transferee, beneficiary, guardian, legal representative or other person claiming any rights under the Plan from or through any Grantee shall be subject to and consistent with the provisions of the Plan and any applicable Award Agreement, except to the extent the Plan and Award Agreement otherwise provide with respect to such persons, and to any additional restrictions or limitations deemed necessary or appropriate by the Committee.

 

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5.5           Cancellation, Rescission and Forfeiture of Awards. Unless the Award Agreement specifies otherwise:

 

(a)           the Committee may cancel, rescind, suspend, withhold, or otherwise limit or restrict any unexercised or other Award at any time if (i) the Grantee is not in compliance with all applicable provisions of the Award Agreement and the Plan or (ii) the Grantee has a Termination of Service; and

 

(b)           a Grantee shall forfeit any and all rights under any Award or will reimburse the Corporation for any payment under any Award (with interest as required by applicable law) to the extent applicable law or any applicable claw-back or recoupment policy of the Corporation or any of its Affiliates requires such forfeiture or reimbursement.

 

5.6           Stand-Alone, Tandem and Substitute Awards.

 

(a)           Awards granted under the Plan may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution for, any other Award granted under the Plan unless such tandem or substitution Award would subject the Grantee to tax penalties imposed under Section 409A of the Code. If an Award is granted in substitution for another Award or any non-Plan award or benefit, the Committee shall require the surrender of such other Award or non-Plan award or benefit in consideration for the grant of the new Award. Awards granted in addition to or in tandem with other Awards or non-Plan awards or benefits may be granted either at the same time as or at a different time from the grant of such other Awards or non-Plan awards or benefits; provided, however, that if any SAR is granted in tandem with an Incentive Stock Option, such SAR and Incentive Stock Option must have the same Grant Date, Term and Exercise Price.

 

(b)           The Committee may, in its discretion and on such terms and conditions as the Committee considers appropriate in the circumstances, grant Awards under the Plan (“Substitute Awards”) in substitution for share or stock and share or stock-based awards (“Acquired Entity Awards”) held by current or former employees or non-employee directors of, or consultants to, another corporation or entity who become Eligible Persons as the result of a merger or consolidation of the employing corporation or other entity (the “Acquired Entity”) with the Corporation or an Affiliate or the acquisition by the Corporation or an Affiliate of property or shares or stock of the Acquired Entity immediately prior to such merger, consolidation or acquisition in order to preserve for the Grantee the economic value of all or a portion of such Acquired Entity Award at such price as the Committee determines necessary to achieve preservation of economic value. The limitations of Sections 4.1 on the number of Shares reserved or available for grants shall not apply to Substitute Awards granted under this Section 5.6.

 

5.7           Deferral of Award Payouts. The Committee may permit a Grantee to defer, or if and to the extent specified in an Award Agreement require the Grantee to defer, receipt of the payment of cash or the delivery of Shares that would otherwise be due by virtue of the lapse or waiver of restrictions with respect to Awards, the satisfaction of any requirements or goals with respect to Awards, the lapse or waiver of the deferral period for Awards, or the lapse or waiver of restrictions with respect to Awards. If the Committee permits such deferrals, the Committee shall establish rules and procedures for making such deferral elections and for the payment of such deferrals, which shall conform in form and substance with applicable regulations promulgated under Section 409A of the Code to ensure that the Grantee is not subjected to tax penalties under Section 409A of the Code with respect to such deferrals. Except as otherwise provided in an Award Agreement, any payment or any Shares that are subject to such deferral shall be made or delivered to the Grantee as specified in the Award Agreement or pursuant to the Grantee’s deferral election.

 

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5.8           Extension of Term of Award; Automatic Exercise.

 

(a)           Notwithstanding any provision of the Plan providing for the maximum term of an Award, in the event any Award would expire prior to exercise, vesting or settlement because trading in Shares is prohibited by law or by any insider trading policy of the Corporation, the Committee may extend the term of the Award (or provide for such in the applicable Award Agreement) until thirty (30) days after the expiration of any such prohibitions to permit the Grantee to realize the value of the Award, provided such extension (i) is permitted by law, (ii) does not violate Code Section 409A with respect to any Award, and (iii) does not otherwise adversely impact the tax consequences of the Award (such as with respect to incentive stock options and related Awards).

 

(b)           This Section 5.8(b) applies to an Option or SAR if (i) the Grantee to whom the Option or SAR was granted remains in the continuous employment or service of the Corporation or an Affiliate from the date the Option or SAR was granted until the expiration date of such Option or SAR, (ii) on the expiration date the Fair Market Value of a share exceeds the exercise price of the Option or SAR, (iii) the Option or SAR has become exercisable on or before the expiration date and (iv) the term of the Option or SAR will not be extended as described above. In that event, subject to the other terms of the Plan in all respects, each Option or SAR to which this Section 5.8(b) applies shall be exercised automatically on the expiration date to the extent that it is outstanding and unexercised on such date. An Option that is exercised pursuant to this Section 5.8(b) shall result in the issuance to the Grantee of that number of whole Shares that have a Fair Market Value that most nearly equals, but does not exceed, the excess of the Fair Market Value of a Share on the expiration date over the Option exercise price multiplied by the number of Shares subject to the exercisable portion of the Option. A SAR that is exercised pursuant to this Section 5.8(b) shall be settled in accordance with its terms on the expiration date.

 

5.9           Conditions on Delivery of Shares. The Corporation will not be obligated to deliver any Shares under the Plan or remove restrictions from Shares previously delivered under the Plan until (i) all Award conditions have been met or removed to the Corporation’s satisfaction, (ii) as determined by the Corporation, all other legal matters regarding the issuance and delivery of such Shares have been satisfied, including any applicable securities laws and rules and regulations of Nasdaq and any other stock exchange or automated quotation system upon which the Shares are listed or quoted, and (iii) the Grantee has executed and delivered to the Company such representations or agreements as the Committee deems necessary or appropriate to satisfy any applicable laws. The Corporation’s inability to obtain authority from any regulatory body having jurisdiction, which the Committee determines is necessary to the lawful issuance and sale of any Shares, will relieve the Corporation of any liability for failing to issue or sell such Shares as to which such requisite authority has not been obtained.

 

5.10         Performance-Based Awards. The Committee may impose such conditions and/or restrictions on Awards that include restrictions based upon the achievement of specific time-based restrictions, performance measures, time-based restrictions on vesting following the attainment of the performance measures, and/or restrictions under applicable law. In determining if any performance measures to which Awards are subject have been achieved, the Committee will adjust the performance targets in the event of any unbudgeted acquisition, divestiture or other unexpected fundamental change in the business of the Corporation, an Affiliate or business unit or in any product that is material taken as a whole as appropriate to fairly and equitably determine if the Award is to become exercisable, nonforfeitable and transferable or earned and payable pursuant to the conditions set forth in the Award. Additionally, in determining if such performance conditions have been achieved, the Committee also will adjust the performance targets in the event of any (i) unanticipated asset write-downs or impairment charges, (ii) litigation or claim judgments or settlements thereof, (iii) changes in tax laws, accounting principles or other laws or provisions affecting reported results, (iv) accruals for reorganization or restructuring programs, or (v) other extraordinary non-reoccurring items.

 

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Article 6
Stock Options

 

6.1           Grant of Options. Subject to and consistent with the provisions of the Plan, Options may be granted to any Eligible Person in such number, and upon such terms, and at any time and from time to time as shall be determined by the Committee. No dividend rights or dividend equivalent may be granted in conjunction with any grant of Options.

 

6.2           Award Agreement. Each Option grant shall be evidenced by an Award Agreement that shall specify the Exercise Price, the Term of the Option, the number of Shares to which the Option pertains, the time or times at which such Option shall be exercisable, whether the Option is intended to be a Non-Qualified Stock Option or an Incentive Stock Option and such other provisions as the Committee shall determine. Except as otherwise set forth in Section 5.6 above, no Option shall have a term of more than ten (10) years after its Grant Date, subject to earlier termination as provided herein or in the applicable Award Agreement. No Option may be exercised at a time when such exercise and/or the issuance of Shares pursuant to such exercise would be in breach of applicable law. No dividend rights or dividend equivalents may be granted in conjunction with any grant of Options.

 

6.3           Option Exercise Price. The Exercise Price of an Option under this Plan shall be determined in the sole discretion of the Committee but may not be less than one hundred percent (100%) of the Fair Market Value of a Share on the Grant Date (except as otherwise set forth in Section 5.6 above) and shall not be less than the nominal value per Share if required by applicable law.

 

6.4           Grant of Incentive Stock Options. At the time of the grant of any Option, the Committee may in its discretion designate that such Option shall be made subject to additional restrictions to permit it to qualify as an Incentive Stock Option. An Option designated as an Incentive Stock Option:

 

(a)           shall be granted only to an employee of the Corporation or a Subsidiary Corporation;

 

(b)           shall have an Exercise Price of not less than one hundred percent (100%) of the Fair Market Value of a Share on the Grant Date, and, if granted to a person who owns capital stock (including stock treated as owned under Section 424(d) of the Code) possessing more than ten percent (10%) of the total combined voting power of all classes of capital stock of the Corporation or any Subsidiary Corporation (a “More Than Ten Percent (10%) Owner”), have an Exercise Price not less than one hundred and ten percent (110%) of the Fair Market Value of a Share on its Grant Date;

 

(c)           shall be for a period of not more than 10 years (five years if the Grantee is a More Than 10% Owner) from its Grant Date, and shall be subject to earlier termination as provided herein or in the applicable Award Agreement;

 

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(d)           shall not have an aggregate Fair Market Value (as of the Grant Date) of the Shares with respect to which Incentive Stock Options (whether granted under the Plan or any other stock option plan of the Grantee’s employer or any parent or Subsidiary Corporation (“Other Plans”)) are exercisable for the first time by such Grantee during any calendar year (“Current Grant”), determined in accordance with the provisions of Section 422 of the Code, which exceeds $100,000 (the “$100,000 Limit”);

 

(e)           shall, if the aggregate Fair Market Value of the Shares (determined on the Grant Date) with respect to the Current Grant and all Incentive Stock Options previously granted under the Plan and any Other Plans which are exercisable for the first time during a calendar year (“Prior Grants”) would exceed the $100,000 Limit, be, as to the portion in excess of the $100,000 Limit, exercisable as a separate option that is not an Incentive Stock Option at such date or dates as are provided in the Current Grant;

 

(f)           shall require the Grantee to notify the Committee of any disposition of any Shares delivered pursuant to the exercise of the Incentive Stock Option under the circumstances described in Section 421(b) of the Code (relating to holding periods and certain disqualifying dispositions) (“Disqualifying Disposition”) within 10 days of such a Disqualifying Disposition;

 

(g)           shall by its terms not be assignable or transferable other than by will or the laws of descent and distribution and may be exercised, during the Grantee’s lifetime, only by the Grantee; provided, however, that the Grantee may, to the extent provided in the Plan in any manner specified by the Committee, designate in writing a beneficiary to exercise his or her Incentive Stock Option after the Grantee’s death; and

 

(h)           shall, if such Option nevertheless fails to meet the foregoing requirements, or otherwise fails to meet the requirements of Section 422 of the Code for an Incentive Stock Option, be treated for all purposes of this Plan, except as otherwise provided in subsections (d) and (e) above, as an Option that is not an Incentive Stock Option.

 

Notwithstanding the foregoing and Section 3.2, the Committee may, without the consent of the Grantee, at any time before the exercise of an Option (whether or not an Incentive Stock Option), take any action necessary to prevent such Option from being treated as an Incentive Stock Option. No Option that is intended to be an Incentive Stock Option shall be invalid for failure to qualify as an Incentive Stock Option.

 

6.5           Payment of Exercise Price. Except as otherwise provided by the Committee in an Award Agreement, Options shall be exercised by the delivery of a written notice of exercise to the Corporation, setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares made by any one or more of the following means:

 

(a)           cash, personal check, cash equivalent or wire transfer;

 

(b)           subject to applicable law and with the approval of the Committee, by delivery of Shares owned by the Grantee prior to exercise, valued at their Fair Market Value on the date of exercise;

 

(c)           subject to applicable law and with the approval of the Committee, Shares acquired upon the exercise of such Option, such Shares valued at their Fair Market Value on the date of exercise;

 

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(d)           subject to applicable law and with the approval of the Committee, Restricted Shares held by the Grantee prior to the exercise of the Option, each such share valued at the Fair Market Value of a Share on the date of exercise; or

 

(e)           subject to applicable law (including the prohibited loan provisions of Section 402 of Sarbanes-Oxley), through the sale of the Shares acquired on exercise of the Option through a broker-dealer to whom the Grantee has submitted an irrevocable notice of exercise and irrevocable instructions to deliver promptly to the Corporation the amount of sale proceeds sufficient to pay for such Shares, together with, if requested by the Corporation, the amount of federal, state, local or foreign withholding taxes payable by Grantee by reason of such exercise.

 

Upon exercise of the Option, the Corporation shall issue the respective Shares within thirty (30) days of the date the Option is exercised unless the Award Agreement specifies otherwise.

 

The Committee may in its discretion specify that, if any Restricted Shares (“Tendered Restricted Shares”) are used to pay the Exercise Price, (x) all the Shares acquired on exercise of the Option shall be subject to the same restrictions as the Tendered Restricted Shares, determined as of the date of exercise of the Option, or (y) a number of Shares acquired on exercise of the Option equal to the number of Tendered Restricted Shares shall be subject to the same restrictions as the Tendered Restricted Shares, determined as of the date of exercise of the Option.

 

6.6           No Reload Options. No Option granted under the Plan shall contain any provision entitling the Grantee to the automatic grant of additional Options in connection with the exercise of the original Option.

 

Article 7
Stock Appreciation Rights

 

7.1           Issuance. Subject to and consistent with the provisions of the Plan, the Committee, at any time and from time to time, may grant SARs to any Eligible Person either alone or in addition to other Awards granted under the Plan. Such SARs may, but need not, be granted in connection with a specific Option granted under Article 6. The Committee may impose such conditions or restrictions on the exercise of any SAR as it shall deem appropriate. No dividend rights or Dividend Equivalents may be granted in conjunction with any grant of SARs.

 

7.2           Award Agreements. Each SAR grant shall be evidenced by an Award Agreement in such form as the Committee may approve and shall contain such terms and conditions not inconsistent with other provisions of the Plan as shall be determined from time to time by the Committee. Except as otherwise set forth in Section 5.6(b) above, no SAR shall have a term of more than ten (10) years after its Grant Date (or the Term of the related Option if granted in tandem therewith), subject to earlier termination as provided herein or in the applicable Award Agreement. No SAR may be exercised at a time when such exercise and/or the issuance of Shares pursuant to such exercise would be in breach of Applicable Law.

 

7.3           SAR Exercise Price. The Exercise Price of a SAR shall be determined by the Committee in its sole discretion; provided that, except as otherwise set forth in Section 5.6(b), the Exercise Price shall not be less than one hundred percent (100%) of the Fair Market Value of a Share on the date of the grant of the SAR (or the exercise price of the related Option if granted in tandem therewith).

 

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7.4           Exercise and Payment. Upon the exercise of an SAR, a Grantee shall be entitled to receive payment from the Corporation in an amount determined by multiplying:

 

(a)           The excess of the Fair Market Value of a Share on the date of exercise over the Exercise Price; by

 

(b)           The number of Shares with respect to which the SAR is exercised.

 

SARs shall be deemed exercised on the date written notice of exercise in a form acceptable to the Committee is received by the Secretary of the Corporation. The Corporation shall make payment in respect of any SAR within thirty (30) days of the date the SAR is exercised, unless the Award Agreement specifically provides otherwise. Any payment by the Corporation in respect of a SAR may be made in cash, Shares, other property, or any combination thereof, as the Committee, in its sole discretion, shall determine.

 

Article 8
Restricted Shares

 

8.1           Grant of Restricted Shares. Subject to and consistent with the provisions of the Plan, the Committee, at any time and from time to time, may grant Restricted Shares to any Eligible Person in such amounts as the Committee shall determine.

 

8.2           Award Agreement. Each grant of Restricted Shares shall be evidenced by an Award Agreement that shall specify the Period(s) of Restriction, the number of Restricted Shares granted, and such other provisions as the Committee shall determine. The Committee may impose such conditions and/or restrictions on any Restricted Shares granted pursuant to the Plan as it may deem advisable, including restrictions based upon the achievement of specific time-based restrictions, performance measures, time-based restrictions on vesting following the attainment of the performance measures, and/or restrictions under applicable law.

 

8.3           Consideration for Restricted Shares. The Committee shall determine the amount, if any, that a Grantee shall pay for Restricted Shares provided that it shall be no less than the nominal value per Restricted Share if required to be paid by applicable law.

 

8.4           Effect of Forfeiture. If Restricted Shares are forfeited, and if the Grantee was required to pay for such shares or acquired such Restricted Shares upon the exercise of an Option, the Grantee shall be deemed to have resold such Restricted Shares to the Corporation at a price equal to the lesser of (x) the amount paid by the Grantee for such Restricted Shares, or (y) the Fair Market Value of a Share on the date of such forfeiture. The Corporation shall pay to the Grantee the deemed sale price as soon as is administratively practical. Such Restricted Shares shall cease to be outstanding and shall no longer confer on the Grantee thereof any rights as a shareholder of the Corporation, from and after the date of the event causing the forfeiture, whether or not the Grantee accepts the Corporation’s tender of payment for such Restricted Shares.

 

8.5           Voting and Dividend Equivalent Rights Attributable to Restricted Shares. A Grantee awarded Restricted Shares will have all voting rights with respect to such Restricted Shares. Unless the Committee determines and sets forth in the Award Agreement that Grantee will not be entitled to receive any dividends with respect to such Restricted Shares, a Grantee will have the right to receive all dividends in respect of such Restricted Shares, which dividends shall be either deemed reinvested in additional shares of Restricted Shares, which shall remain subject to the same forfeiture conditions applicable to the Restricted Shares to which such dividends relate, or paid in cash if and at the time the Restricted Shares are no longer subject to forfeiture, as the Committee shall set forth in the Award Agreement. No dividends may be paid with respect to Restricted Shares that are forfeited.

 

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8.6           Escrow; Legends. The Committee may provide that the certificates for any Restricted Shares if certificated (x) shall be held (together with a stock transfer form executed in blank by the Grantee) in escrow by the Secretary of the Corporation until such Restricted Shares become non-forfeitable or are forfeited and/or (y) shall bear an appropriate legend restricting the transfer of such Restricted Shares under the Plan. If any Restricted Shares become nonforfeitable, the Corporation shall cause certificates for such shares to be delivered without such legend.

 

Article 9
Restricted Stock Units

 

9.1           Grant of Restricted Stock Units. Subject to and consistent with the provisions of the Plan, the Committee, at any time and from time to time, may grant Restricted Stock Units to any Eligible Person, in such amount and upon such terms as the Committee shall determine.

 

(a)           Vesting and Delivery. Delivery of Shares subject to a grant of Restricted Stock Units shall occur no later than the 15th day of the third month following the end of the taxable year of the Grantee or the fiscal year of the Corporation in which the Grantee’s rights under such Restricted Stock Units are no longer subject to a substantial risk of forfeiture as defined in final regulations under Section 409A of the Code. Unless otherwise determined by the Committee, to the extent that the Grantee has a Termination of Service while the Restricted Stock Units remain subject to a substantial risk of forfeiture, such Restricted Stock Units shall be forfeited, unless the Committee determines that such substantial risk of forfeiture shall lapse in the event of the Grantee’s Termination of Service.

 

9.2           Voting and Dividend Equivalent Rights Attributable to Restricted Stock Units. A Grantee awarded Restricted Stock Units will have no voting rights with respect to such Restricted Stock Units prior to the delivery of Shares in settlement of such Restricted Stock Units. Unless the Committee determines and sets forth in the Award Agreement that a Grantee will not be entitled to receive any such dividend equivalents with respect to such Restricted Stock Units, the Grantee will have the right to receive dividend equivalents in respect of Restricted Stock Units, which dividend equivalents shall be either deemed reinvested in additional Shares of Restricted Stock Units, as applicable, which shall remain subject to the same forfeiture conditions applicable to the Restricted Stock Units to which such dividend equivalents relate, or paid in cash if and at the time the Restricted Stock Units are no longer subject to forfeiture and deliverable, as the Committee shall set forth in the Award Agreement. No dividend equivalents may be paid on Restricted Stock Units that are forfeited.

 

Article 10
Dividend Equivalents

 

The Committee is authorized to grant Awards of Dividend Equivalents alone or in conjunction with other Awards; provided, however, that no Dividend Equivalents may be granted in conjunction with any grant of Options or SARs, and no Dividend Equivalents may be paid on any Awards other than Options and SARs unless and until the Awards become vested, nonforfeitable and/or payable. The Committee may provide that Dividend Equivalents not paid in connection with an Award shall either be (i) paid or distributed in cash when the Dividend Equivalents or Awards to which such Dividend Equivalents relate become vested, nonforfeitable and/or payable or (ii) deemed to have been reinvested in additional Dividends Equivalents or Awards.

 

Article 11
Bonus Shares

 

Subject to the terms of the Plan, including without limitation the repricing restrictions set forth in Section 3.3, the Committee may grant Bonus Shares to any Eligible Person, in such amount and upon such terms and at any time and from time to time as shall be determined by the Committee.

 

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Article 12
Other Stock-Based Awards

 

The Committee is authorized, subject to limitations under applicable law, to grant such other Awards that are denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Shares, as deemed by the Committee to be consistent with the purposes of the Plan, including Shares awarded which are not subject to any restrictions or conditions, convertible or exchangeable debt securities or other rights convertible or exchangeable into Shares, and Awards valued by reference to the value of securities of or the performance of specified Affiliates. Subject to and consistent with the provisions of the Plan, the Committee shall determine the terms and conditions of such Awards. Except as provided by the Committee, Shares delivered pursuant to a purchase right granted under this Article 12 shall be purchased for such consideration, paid for by such methods and in such forms, including cash, Shares, outstanding Awards or other property, as the Committee shall determine.

 

Article 13
Non-Employee Director Awards

 

Subject to the terms of the Plan, the Committee may grant Awards to any Non-Employee Director, in such amount and upon such terms and at any time and from time to time as shall be determined by the Committee in its sole discretion. Except as otherwise provided in Section 5.6(b), a Non-Employee Director may not be granted Awards during any single calendar year that, taken together with any cash fees paid to such Non-Employee Director during such calendar year in respect of the Non-Employee Director’s service as a member of the Board during such year, exceeds $500,000 in total value (calculating the value of any such Awards based on the grant date fair value of such Awards for financial accounting purposes) (twice that limit for Awards that are granted to a Non-Employee Director in the fiscal year in which the Non-Employee Director first commences service) (based in each case on the highest level of performance resulting in the maximum payout). Notwithstanding the foregoing, the Board may make exceptions to this limit for individual Non-Employee Directors in extraordinary circumstances, as the Board may determine in its discretion, provided that the Non-Employee Director receiving such additional compensation may not participate in the decision to award such compensation.

 

Article 14
Amendment, Modification, and Termination

 

14.1         Amendment, Modification, and Termination. Subject to Section 14.2, the Board may, at any time and from time to time, alter, amend, suspend, discontinue or terminate the Plan in whole or in part without the approval of the Corporation’s shareholders, except that (a) any amendment or alteration shall be subject to the approval of the Corporation’s shareholders if such shareholder approval is required by any applicable law, and (b) the Board may otherwise, in its discretion, determine to submit other such amendments or alterations to shareholders for approval.

 

14.2         Awards Previously Granted. Except as otherwise specifically permitted in the Plan or an Award Agreement, no termination, amendment, or modification of the Plan shall adversely affect in any material way any Award previously granted under the Plan, without the written consent of the Grantee of such Award.

 

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Article 15
Withholding

 

15.1         Required Withholding.

 

(a)            The Committee in its sole discretion may provide that when taxes are to be withheld in connection with the exercise of an Option or SAR, or upon the lapse of restrictions on Restricted Shares, or upon the transfer of Shares, or upon payment of any other benefit or right under this Plan (the date on which such exercise occurs or such restrictions lapse or such payment of any other benefit or right occurs hereinafter referred to as the “Tax Date”), the Grantee may elect to make payment for the withholding of federal, state and local taxes, including Social Security and Medicare (“FICA”) taxes by one or a combination of the following methods:

 

(i)            payment of an amount in cash equal to the amount to be withheld (including cash obtained through the sale of the Shares acquired on exercise of an Option or SAR, upon the lapse of restrictions on Restricted Shares, or upon the transfer of Shares, through a broker-dealer to whom the Grantee has submitted irrevocable instructions to deliver promptly to the Corporation, the amount to be withheld);

 

(ii)           delivering part or all of the amount to be withheld in the form of Shares valued at its Fair Market Value on the Tax Date;

 

(iii)           requesting the Corporation to withhold from those Shares that would otherwise be received upon exercise of the Option or SAR, upon the lapse of restrictions on Restricted Stock, or upon the transfer of Shares, a number of Shares having a Fair Market Value on the Tax Date equal to the amount to be withheld; or

 

(iv)          withholding from any compensation otherwise due to the Grantee.

 

The Committee in its sole discretion may provide that the maximum amount of tax withholding upon exercise of an Option or SAR, upon the lapse of restrictions on Restricted Shares, or upon the transfer of Shares, to be satisfied by withholding Shares upon exercise of such Option or SAR, upon the lapse of restrictions on Restricted Shares, or upon the transfer of Shares, pursuant to clause (iii) above shall not exceed the minimum amount of taxes, including FICA taxes, required to be withheld under federal, state and local law that will not result in adverse financial accounting consequences with respect to such Awards and is permitted under applicable withholding rules promulgated by the Internal Revenue Service or another applicable governmental entity. An election by Grantee under this subsection is irrevocable. Any fractional share amount and any additional withholding not paid by the withholding or surrender of Shares must be paid in cash. If no timely election is made, the Grantee must deliver cash to satisfy all tax withholding requirements.

 

(b)           Any Grantee who makes a Disqualifying Disposition or an election under Section 83(b) of the Code shall remit to the Corporation an amount, if any, sufficient to satisfy all resulting tax withholding requirements in the same manner as set forth in subsection (a) (other than (a)(iii) above).

 

15.2         Notification under Code Section 83(b). If the Grantee, in connection with the exercise of any Option, or the grant of Restricted Shares, makes the election permitted under Section 83(b) of the Code to include in such Grantee’s gross income in the year of transfer the amounts specified in Section 83(b) of the Code, then such Grantee shall notify the Corporation of such election within 10 days of filing the notice of the election with the Internal Revenue Service, in addition to any filing and notification required pursuant to regulations issued under Section 83(b) of the Code. The Committee may, in connection with the grant of an Award or at any time thereafter, prohibit a Grantee from making the election described above.

 

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Article 16
Additional Provisions

 

16.1         Successors. All obligations of the Corporation under the Plan with respect to Awards granted hereunder shall be binding on any successor to the Corporation, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise of all or substantially all of the business and/or assets of the Corporation.

 

16.2         Severability. If any part of the Plan is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any other part of the Plan. Any Section or part of a Section so declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of such Section or part of a Section to the fullest extent possible while remaining lawful and valid.

 

16.3         Requirements of Law. The granting of Awards and the delivery of Shares under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or Nasdaq and any other stock exchange or automated quotation system upon which the Shares are listed or quoted as may be required. Notwithstanding any provision of the Plan or any Award, Grantees shall not be entitled to exercise, or receive benefits under, any Award, and the Corporation (and any Affiliate) shall not be obligated to deliver any Shares or deliver benefits to a Grantee, if such exercise or delivery would constitute a violation by the Grantee or the Corporation of any applicable law or regulation.

 

16.4         Securities Law Compliance.

 

(a)           If the Committee deems it necessary to comply with any applicable law, the Committee may impose any restriction on Awards or Shares acquired pursuant to Awards under the Plan as it may deem advisable. In addition, if requested by the Corporation and any underwriter engaged by the Corporation, Shares acquired pursuant to Awards may not be sold or otherwise transferred or disposed of for such period following the date of the final prospectus or prospectus supplement relating to an underwritten public offering as the Corporation or such underwriter shall specify reasonably and in good faith, not to exceed 180 days in the case of the initial public offering or 90 days in the case of any other public offering. All certificates for Shares delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the SEC, Nasdaq and any other stock exchange or automated quotation system upon which the Shares are listed or quoted, any applicable securities law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions. If so requested by the Corporation, the Grantee shall make a written representation to the Corporation that he or she will not sell or offer to sell any Shares unless a registration statement shall be in effect with respect to such Shares under the Securities Act and any applicable state securities law or unless he or she shall have furnished to the Corporation, in form and substance satisfactory to the Corporation, that such registration is not required.

 

(b)           If the Committee determines that the exercise or nonforfeitability of, or delivery of benefits pursuant to, any Award would violate any applicable law or result in the imposition of excise taxes on the Corporation or its Affiliates under the statutes, rules or regulations of any applicable jurisdiction, then the Committee may postpone any such exercise, nonforfeitability or delivery, as applicable, but the Corporation shall use all reasonable efforts to cause such exercise, nonforfeitability or delivery to comply with all such provisions at the earliest practicable date.

 

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(c)           The Committee may require each Grantee receiving Shares pursuant to an Award under the Plan to represent to and agree with the Corporation in writing that the Grantee is acquiring the Shares without a view to distribution thereof. In addition to any legend required by the Plan, the certificates for such Shares may include any legend that the Committee deems appropriate to reflect any restrictions on transfer. All certificates for Shares delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the SEC, Nasdaq and any other stock exchange or automated quotation system upon which the Shares are listed or quoted, any applicable federal or state securities law, and any applicable corporate law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

 

(d)           A Grantee shall be required to supply the Corporation with certificates, representations and information that the Corporation requests and otherwise cooperate with the Corporation in obtaining any listing, registration, qualification, exemption, consent or approval the Corporation deems necessary or appropriate.

 

16.5         No Rights as a Shareholder. Unless otherwise determined by the Committee and set forth in the Award Agreement, no Grantee shall have any rights as a shareholder of the Corporation with respect to the Shares (other than Restricted Shares) which may be deliverable upon exercise or payment of such Award until such Shares have been delivered to him or her. Restricted Shares, whether held by a Grantee or in escrow by the Secretary of the Corporation, shall confer on the Grantee all rights of a shareholder of the Corporation, except as otherwise provided in the Plan or Award Agreement. At the time of grant of an Award, the Committee may require the payment of cash dividends thereon to be deferred and, if the Committee so determines, reinvested in additional Awards. Stock dividends and deferred cash dividends issued with respect to Awards shall be subject to the same restrictions and other terms as apply to the Awards with respect to which such dividends are issued. The Committee may in its discretion provide for payment of interest on deferred cash dividends.

 

16.6         Employee Status. If the terms of any Award provide that it may be exercised or paid only during employment or continued service or within a specified period of time after termination of employment or continued service, the Committee may decide to what extent leaves of absence for governmental or military service, illness, temporary disability, or other reasons shall not be deemed interruptions of continuous employment or service. For purposes of the Plan, employment and continued service shall be deemed to exist between the Grantee and the Corporation and/or an Affiliate if, at the time of the determination, the Grantee is a director, officer, employee, consultant or advisor of the Corporation or an Affiliate. A Grantee on military leave, sick leave or other bona fide leave of absence shall continue to be considered an employee for purposes of the Plan during such leave if the period of leave does not exceed three months, or, if longer, so long as the individual’s right to re-employment with the Corporation or any of its Affiliates is guaranteed either by statute, agreement or contract. If the period of leave exceeds three months, and the individual’s right to re-employment is not guaranteed by statute, agreement or contract, the employment shall be deemed to be terminated on the first day after the end of such three-month period. Except as may otherwise be expressly provided in an Agreement, Awards granted to a director, officer, employee, consultant or adviser shall not be affected by any change in the status of the Grantee so long as the Grantee continues to be a director, officer, employee, consultant or advisor to the Corporation or any of its Affiliates (regardless of having changed from one to the other or having been transferred from one entity to another). The Grantee’s employment or continued service shall not be considered interrupted in the event the Committee, in its discretion and as specified at or prior to such occurrence, determines there is no interruption in the case of a spin-off, sale or disposition of the Grantee’s employer from the Corporation or an Affiliate, except that if the Committee does not otherwise specify such at or prior to such occurrence, the Grantee will be deemed to have a termination of employment or continuous service to the extent the Affiliate that employs the Grantee is no longer the Corporation or an entity that qualifies as an Affiliate.

 

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16.7         Governing Law. The Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of Georgia, other than its laws respecting choice of law, to the extent not preempted by federal law.

 

16.8         Jurisdiction; Waiver of Jury Trial. Any suit, action or proceeding with respect to the Plan or any Award, or any judgment entered by any court of competent jurisdiction in respect of any thereof, shall be resolved only in the courts of the State of Georgia or the United States District Court for the District of Georgia and the appellate courts having jurisdiction of appeals in such courts. In that context, and without limiting the generality of the foregoing, the Corporation and each Grantee shall irrevocably and unconditionally (a) submit in any proceeding relating to the Plan or any Award Agreement, or for the recognition and enforcement of any judgment in respect thereof (a “Proceeding”), to the exclusive jurisdiction of the courts of the State of Georgia, the court of the United States of America for the District of Georgia, and appellate courts having jurisdiction of appeals from any of the foregoing, and agree that all claims in respect of any such Proceeding shall be heard and determined in such Georgia State court or, to the extent permitted by law, in such federal court, (b) consent that any such Proceeding may and shall be brought in such courts and waives any objection that the Corporation and each Grantee may now or thereafter have to the venue or jurisdiction of any such Proceeding in any such court or that such Proceeding was brought in an inconvenient court and agree not to plead or claim the same, (c) waive all right to trial by jury in any Proceeding (whether based on contract, tort or otherwise) arising out of or relating to the Plan or any Award Agreement, (d) agree that service of process in any such Proceeding may be effected by mailing a copy of such process by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party, in the case of a Grantee, at the Grantee’s address shown in the books and records of the Corporation or, in the case of the Corporation, at the Corporation’s principal offices, attention Chief Financial Officer, and (e) agree that nothing in the Plan shall affect the right to effect service of process in any other manner permitted by the laws of the State of Georgia.

 

16.9         Unfunded Status of Awards; Creation of Trusts. The Plan is intended to constitute an “unfunded” plan for incentive compensation. With respect to any payments not yet made to a Grantee pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give any such Grantee any rights that are greater than those of a general creditor of the Corporation.

 

16.10       Military Service. Awards shall be administered in accordance with Section 414(u) of the Code and the Uniformed Services Employment and Reemployment Rights Act of 1994.

 

16.11       No Right to Continue in Service or Employment. Nothing in the Plan or any Award Agreement shall confer upon any Non-Employee Director the right to continue to serve as a director of the Corporation. Nothing contained in the Plan or any Agreement shall confer upon any Grantee any right with respect to the continuation of employment or service by the Corporation or any Affiliate or interfere in any way with the right of the Corporation or any Affiliate, subject to the terms of any separate employment agreement to the contrary, at any time to terminate such employment or service or to increase or decrease the compensation of the Grantee.

 

16.12       Payment on Behalf of Grantee or Beneficiary.

 

(a)           If the Grantee is incompetent to handle Grantee’s affairs at the time the Grantee is eligible to receive a payment from the Plan, the Committee will make payment to the Grantee’s court-appointed personal representative or, if none, the Committee, in its sole discretion, may make payment to the Grantee’s duly appointed guardian, legal representative, next-of-kin or attorney-in-fact for the benefit of the Grantee.

 

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(b)           If the Beneficiary of a deceased Grantee is a minor or is legally incompetent, the Committee will make payment to the Beneficiary’s court-appointed guardian or personal representative or to a trust established for the benefit of the Beneficiary, or if no such guardian, representative or trust exists, the Committee, in its sole discretion, may make payment to the Beneficiary’s surviving parent or his or her next-of-kin for the benefit of the Beneficiary.

 

(c)           If the Committee for any reason considers it improper to direct any payment as specified in this Section 16.12, the Committee may request a court of appropriate jurisdiction to determine the appropriate payee.

 

(d)           Any payment made by the Committee pursuant to this Section 16.12 shall be in full satisfaction of all liability of the Plan, the Corporation and its Affiliates with respect to any benefit due a Grantee or a Grantee’s Beneficiary under this Plan.

 

16.13       Data Privacy. As a condition for receiving an Award, each Grantee explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of personal data as described in this Section by and among the Company and its Affiliates exclusively for implementing, administering and managing the Grantee’s participation in the Plan. The Company and its Affiliates may hold certain personal information about a Grantee, including the Grantee’s name, address and telephone number; birthdate; social security, insurance number or other identification number; salary; nationality; job title(s); any Shares held in the Company or its Affiliates; and Award details, to implement, manage and administer the Plan and Awards (the “Data”). The Company and its Affiliates may transfer the Data amongst themselves as necessary to implement, administer and manage a Grantee’s participation in the Plan, and the Company and its Affiliates may transfer the Data to third parties assisting the Company with Plan implementation, administration and management. These recipients may be located in the Grantee’s country, or elsewhere, and the Grantee’s country may have different data privacy laws and protections than the recipients’ country. By accepting an Award, each Grantee authorizes such recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, to implement, administer and manage the Grantee’s participation in the Plan, including any required Data transfer to a broker or other third party with whom the Company or the Grantee may elect to deposit any Shares. The Data related to a Grantee will be held only as long as necessary to implement, administer, and manage the Grantee’s participation in the Plan. A Grantee may, at any time, view the Data that the Company holds regarding such Grantee, request additional information about the storage and processing of the Data regarding such Grantee, recommend any necessary corrections to the Data regarding the Grantee or refuse or withdraw the consents in this Section 16.13 in writing, without cost, by contacting the local human resources representative. The Company may cancel Grantee’s ability to participate in the Plan and, in the Committee’s discretion, the Grantee may forfeit any outstanding Awards if the Grantee refuses or withdraws the consents in this Section 16.13. For more information on the consequences of refusing or withdrawing consent, Grantees may contact their local human resources representative.

 

16.14       Awards Subject to Share Retention Guidelines and Claw-Back Policies. Notwithstanding any provisions herein to the contrary, (i) Shares acquired by a Grantee under the Plan upon the exercise, payment or settlement of an Award shall be subject to the terms of any Share retention guidelines currently in effect or subsequently adopted by the Board and (ii) all Awards granted under the Plan shall be subject to the terms of any recoupment policy currently in effect or subsequently adopted by the Board to implement Section 304 of Sarbanes-Oxley, Dodd-Frank or Section 10D of the Exchange Act (or with any amendment or modification of such recoupment policy adopted by the Board) to the extent that such Award (whether or not previously exercised or settled) or the value of such Award is required to be returned to the Corporation pursuant to the terms of such recoupment policy.

 

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16.15       Section 409A.

 

(a)           The provisions of this Section and Section 409A of the Code shall apply to any Award or portion thereof that is or becomes deferred compensation subject to Code Section 409A (a “409A Award”), notwithstanding any provision to the contrary contained in the Plan or the Award Agreement applicable to such Award, to the extent required for the Award to comply with Section 409A of the Code.

 

(b)           Except as otherwise permitted or required by Code Section 409A, no distribution in settlement of a 409A Award may commence earlier than (i) Separation from Service; (ii) the date the Grantee becomes Disabled (as defined in Section 2.26(b)); (iii) the date of the Grantee’s death; (iv) a specified time (or pursuant to a fixed schedule) that is either (a) specified by the Committee upon the grant of the Award and set forth in the Award Agreement or (b) specified by the Grantee in an Election complying with the requirements of Section 409A of the Code; or (vi) a change in control of the Company within the meaning of Treasury Regulation Section 1.409A-3(h)(5).

 

(c)           Notwithstanding anything herein or in any Award Agreement or election to the contrary, to the extent that distribution of a 409A Award is triggered by a Grantee’s Separation from Service, if the Grantee is then a “specified employee” (as defined in Treasury Regulation Section 1.409A-1(i)), no distribution may be made before the date which is six (6) months after such Grantee’s Separation from Service, or, if earlier, the date of the Grantee’s death, to the extent required to comply with Code Section 409A.

 

(d)           If an Award Agreement does not specify a payment date, payment of the Award will be made no later than the 15th day of the third month following the end of the taxable year of the Grantee, or the fiscal year of the Company, during which the Grantee’s right to payment is no longer subject to a substantial risk of forfeiture under Section 409A of the Code, whichever is later. All rights to payments and benefits under an Award shall be treated as rights to receive a series of separate payments and benefits to the fullest extent allowed by Section 409A of the Code.

 

(e)            With respect to Options, SARs and other Awards in the nature of purchase rights that are intended to be exempt from Section 409A of the Code, in applying Code Sections 1563(a)(l), (2) and (3) for purposes of determining a controlled group of corporations under Code Section 414(b), the language “at least 20 percent” shall be used instead of “at least 80 percent” at each place it appears in Sections 1563(a)(l), (2) and (3), and in applying Treasury Regulation § 1.414(c)-2 (or any successor provision) for purposes of determining trades or businesses (whether or not incorporated) that are under common control for purposes of Section 414(c), the language “at least 20 percent” shall be used instead of “at least 80 percent” at each place it appears in Treasury Regulation §1.414(c)-2.

 

16.16       Parachute Limitations. Notwithstanding any other provision of this Plan or of any other agreement, contract, or understanding heretofore or hereafter entered into by a Grantee with the Corporation or any Affiliate, except an agreement, contract, or understanding that expressly addresses Section 280G or Section 4999 of the Code (an “Other Agreement”), and notwithstanding any formal or informal plan or other arrangement for the direct or indirect provision of compensation to the Grantee (including groups or classes of Grantees or beneficiaries of which the Grantee is a member), whether or not such compensation is deferred, is in cash, or is in the form of a benefit to or for the Grantee (a “Benefit Arrangement”), if the Grantee is a “disqualified individual,” as defined in Section 280G(c) of the Code, any Award held by that Grantee and any right to receive any payment or other benefit under this Plan shall not become exercisable or vested to the extent that such right to exercise, vesting, payment, or benefit, taking into account all other rights, payments, or benefits to or for the Grantee under this Plan, all Other Agreements, and all Benefit Arrangements, would cause any payment or benefit to the Grantee under this Plan to be subject to the excise tax under Code Section 4999; provided, however, that the foregoing limitation on Awards under the Plan shall only be applicable to the extent that the imposition of such limitation is, on a net after tax basis, beneficial to the Grantee. The Committee shall have the authority to determine what restrictions and/or reductions in payments shall be made under this Section in order to avoid the detrimental tax consequences of Code Section 4999, and may use such authority to cause a reduction to payments or benefits that would be made by reason of contracts, agreements or arrangements that are outside the scope of the Plan, to the extent such a reduction would result in a greater, net after-tax benefit to the Grantee. Any such reduction shall be in the order specified by first reducing or eliminating any cash benefits, then by reducing or eliminating any accelerated vesting of equity awards in the manner that results in the largest amount being paid to Grantee and then by reducing or eliminating any other remaining payments, in each case in reverse order beginning with the payments which are to be paid the farthest in time from the date of the transaction triggering the reduction and reducing first any such payments within each category that are not subject to Section 409A of the Code.

 

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16.17       Miscellaneous.

 

(a)           No person shall have any claim or right to receive an Award hereunder. The Committee’s granting of an Award to a Grantee at any time shall neither require the Committee to grant any other Award to such Grantee or other person at any time or preclude the Committee from making subsequent grants to such Grantee or any other person.

 

(b)           Nothing contained herein prohibits the Grantee from: (1) reporting possible violations of federal law or regulations, including any possible securities laws violations, to any governmental agency or entity; (2) making any other disclosures that are protected under the whistleblower provisions of federal law or regulations; or (3) otherwise fully participating in any federal whistleblower programs, including but not limited to any such programs managed by the SEC. The Grantee does not need prior authorization from the Corporation to make any such reports or disclosures, and is not required to notify the Corporation about such disclosures.

 

(c)           Agreements evidencing Awards under the Plan shall contain such other terms and conditions, not inconsistent with the Plan, as the Committee may determine in its sole discretion, including penalties for the commission of competitive acts or other actions detrimental to the Corporation. Notwithstanding any other provision hereof, the Committee shall have the right at any time to deny or delay a Grantee’s exercise of Options or SARs or the settlement of an Award if such Grantee is reasonably believed by the Committee (i) to be engaged in material conduct adversely affecting the Corporation or (ii) to be contemplating such conduct, unless and until the Committee shall have received reasonable assurance that the Grantee is not engaged in, and is not contemplating, such material conduct adverse to the interests of the Corporation.

 

(d)           Grantees are and at all times shall remain subject to the securities trading policies adopted by the Corporation from time to time throughout the period of time during which they may exercise Options or sell Shares acquired pursuant to the Plan.

 

(e)           Notwithstanding any other provision of this Plan, (i) the Corporation shall not be obliged to issue any shares pursuant to an Award unless at least the par value of such newly issued share has been fully paid in advance in accordance with applicable law (which requirement may mean the holder of an Award is obliged to make such payment) and (ii) the Corporation shall not be obliged to issue or deliver any shares in satisfaction of Awards until all legal and regulatory requirements associated with such issue or delivery have been complied with to the satisfaction of the Committee.

 

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(f)            The Committee has no obligation to search for the whereabouts of any Grantee or Beneficiary if the location of such Grantee or Beneficiary are not made known to the Committee.

 

(g)            The Committee may in its discretion require the transferee of a Grantee to supply it with written notice of the Grantee’s death or Disability and to supply it with a copy of the will (in the case of the Grantee’s death) or such other evidence as the Committee deems necessary to establish the validity of the transfer of an Award. The Committee may also require that the agreement of the transferee to be bound by all of the terms and conditions of the Plan and the particular Award.

 

(h)            By accepting Awards and as a condition to the exercise of Awards and the enjoyment of any benefits of the Plan, including participation therein, each Grantee agrees to be bound by and subject to non-competition, confidentiality and invention ownership agreements acceptable to the Committee or any officer or director to whom the Committee elects to delegate such authority.

 

(i)            Notwithstanding any other provision of the Plan or any Agreement to the contrary, a Grantee shall forfeit any and all rights under an Award upon receipt of notice from the Corporation or an Affiliate that the Grantee will incur a Termination of Service by the Corporation or such Affiliate for Cause.

 

(j)            As a condition for the delivery of any Shares pursuant to any Award the Committee may require the Grantee to execute and be bound by any agreement that generally exists between the Corporation and similarly-situated shareholders.

 

(k)            The Committee in its discretion may provide in an Award Agreement that the Corporation may repurchase Shares issued pursuant to the Plan upon a Grantee’s termination of Continuous Service.

 

(l)            In connection with any underwritten public offering by the Corporation of its equity securities pursuant to an effective registration statement filed under the federal securities laws, including the Corporation’s initial public offering, Grantees shall not directly or indirectly sell, make any short sale of, loan, hypothecate, pledge, offer, grant or sell any option or other contract for the purchase of, purchase any option or other contract for the sale of, or otherwise dispose or transfer, or agree to engage in any of the foregoing transactions with respect to, any Shares acquired under this Plan without the prior written consent of the Corporation or its underwriters. Such restriction (the “Market Stand-Off”) shall be in effect for such period of time, not exceeding one hundred eighty (180) days, following the date of the final prospectus for the offering as may be requested by the Corporation or such underwriters. The Market Stand-Off shall in any event terminate two (2) years after the date of the Corporation’s initial public offering. In the event of the declaration of a stock dividend, a spin-off, a stock split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Corporation’s outstanding securities without receipt of consideration, any new, substituted or additional securities which are by reason of such transaction distributed with respect to any Shares subject to the Market Stand-Off, or into which such Shares thereby become convertible, shall immediately be subject to such Market Stand-Off. In order to enforce the Market Stand-Off, the Corporation may impose stop-transfer instructions with respect to the Shares acquired under this Plan until the end of the applicable stand-off period. The Corporation and its underwriters shall be beneficiaries of the agreement set forth in this paragraph. This paragraph shall not apply to Shares registered in a public offering under the federal securities laws, and the Grantee shall be subject to this paragraph only if the directors and officers of the Corporation are subject to similar arrangements.

 

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Exhibit 10.13

 

RESTRICTED STOCK UNIT AWARD AGREEMENT

(Time Based)

 

PURSUANT TO THE

Georgia Banking Company, Inc. Amended and Restated 2021 Stock Incentive Plan

 

Grantee:      __________________________

 

Grant Date:      __________________________

 

Number of RSUs subject to this Award: _______________ representing the right to receive a number of Shares equal to or lower than (including zero) the number of RSUs, subject to the terms and conditions attached hereto, and subject to adjustment pursuant to Section 4 of the Plan.

 

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”) dated as of the Grant Date specified above, is entered into by and between Georgia Banking Company, Inc., a bank holding company organized and existing under the laws of the State of Georgia (the “Company”), and the Grantee specified above, pursuant to the Georgia Banking Company, Inc. Amended and Restated 2021 Stock Incentive Plan, as in effect and as amended from time to time (the “Plan”), which is administered by the Executive Committee of the Board of Directors of the Company (the “Committee”); and

 

WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant the Restricted Stock Units provided herein to the Grantee;

 

NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:

 

1.            Incorporation by Reference; Plan Document Receipt. This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the award provided hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were each expressly set forth herein. Except as provided otherwise herein, any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan. The Grantee hereby acknowledges receipt of a true copy of the Plan and that the Grantee has read the Plan carefully and fully understands its content. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.

 

2.            Grant of Restricted Stock Units. The Company hereby grants to the Grantee, as of the Grant Date specified above, Restricted Stock Units (“RSUs”) in the amount set forth above, subject to, and in accordance with, the restrictions, terms and conditions set forth in this Agreement and the Plan. Except as otherwise provided by the Plan, the Grantee agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Grantee with any protection against potential future dilution of the Grantee’s interest in the Company for any reason. The Grantee shall have no rights as a shareholder with respect to any Shares covered by the RSUs unless and until the Grantee has become the holder of record of such Shares, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of any such Shares, except as otherwise specifically provided for in the Plan or this Agreement.

  

 

 

3.             Vesting.

 

(a)            Vesting. Subject to Section 3(b) hereof, the RSUs shall vest as of the date(s) set forth below (each a “Vesting Date”), provided the Grantee has not incurred a Termination of Service prior to such vesting date:

 

Vesting Date Number of RSU Shares
   

[Date]

 

[Date]

 

[Date]

[            ]

 

[            ]

 

[            ]

 

There shall be no proportionate or partial vesting in the periods prior to each Vesting Date and all vesting shall occur only on the appropriate Vesting Date, subject to the Grantee’s continued employment or service with the Company or any of its Affiliates on each applicable Vesting Date. If the Grantee incurs a Termination of Service prior to an applicable Vesting Date, the outstanding unvested RSUs shall immediately be forfeited as of the date of Termination of Service.

 

(b)            Change in Control. Notwithstanding the foregoing, in the event a Change in Control occurs, the outstanding unvested portion of the RSUs shall become vested as of the date of such Change in Control, provided the Grantee has not incurred a Termination of Service prior to the date of the Change in Control.

 

4.             Settlement of Vested RSUs.

 

(a)            Subject to Sections 5, 8 and 13 hereof, if the Grantee becomes vested in RSUs in accordance with Section 3, the Company shall pay to the Grantee the number of Shares equal to the number of vested RSUs in respect of such vested RSUs on the date of vesting. Such Shares shall be delivered in a lump sum within thirty (30) days following the Vesting Date as defined in Section 3. The Grantee shall have no right to dividend equivalents or dividends on the RSUs.

 

(b)            Notwithstanding Section 4(a), to the extent the Grantee is eligible to participate in a deferred compensation plan established for such purpose, the Grantee may elect to defer delivery of the Shares that would otherwise be due by virtue of the lapse or waiver of the vesting requirements as set forth in Section 3. If such deferral election is made, the Committee shall, in its sole discretion, establish the rules and procedures for such deferrals which shall be in compliance with Section 409A (as defined in Section 14 hereof).

 

5.             Further Holding Period. Following the Vesting Date, one-half of the Net Shares (as defined below) vesting on such applicable Vesting Date shall be subject to a further holding period of twenty-four (24) months, during which such shares may not be sold, assigned, pledged, mortgaged, transferred or otherwise disposed of, although the shares are considered vested and are no longer subject to forfeiture. The further holding period will be deemed satisfied and lapsed prior to the twenty-four (24)-month anniversary of the Vesting Date in the event of the Grantee’s death, Disability or the occurrence of a Change in Control. For this purpose, “Net Shares” are the net of any Shares withheld for the payment of taxes as provided in Section 8.

 

6.             Non-Transferability. The RSUs, and any rights and interests with respect thereto, issued under this Agreement and the Plan shall not be sold, exchanged, transferred, assigned, pledged, encumbered or otherwise disposed of or hypothecated in any way by the Grantee (or any beneficiary(ies) of the Grantee who holds the RSUs as a result of a transfer by will or by the laws of descent and distribution), other than by testamentary disposition by the Grantee or the laws of descent and distribution. Notwithstanding the foregoing, the Committee may, in its sole discretion, permit the RSUs to be transferred to a Permitted Transferee for no value, provided that such transfer shall only be valid upon execution of a written instrument in form and substance acceptable to the Committee in its sole discretion evidencing such transfer and the transferee’s acceptance thereof signed by the Grantee and the transferee, and provided, further, that the RSUs may not be subsequently transferred other than by will or by the laws of descent and distribution or to another Permitted Transferee (as permitted by the Committee in its sole discretion) in accordance with the terms of the Plan and this Agreement, and shall remain subject to the terms of the Plan and this Agreement. Any attempt to sell, exchange, transfer, assign, pledge, encumber or otherwise dispose of or hypothecate in any way the RSUs, or the levy of any execution, attachment or similar legal process upon the RSUs, contrary to the terms and provisions of this Agreement and/or the Plan shall be null and void and without legal force or effect.

 

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7.             Governing Law. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Georgia, without regard to the choice of law principles thereof.

 

8.             Withholding of Tax. The Company shall have the power and the right to deduct or withhold, or require the Grantee to remit to the Company, an amount sufficient to satisfy any federal, state, local and foreign taxes of any kind (including, but not limited to, the Grantee’s FICA and other obligations) which the Company, in its sole discretion, deems necessary to be withheld or remitted to comply with the Code and/or any other applicable law with respect to the RSUs and, if the Grantee fails to do so, the Company may otherwise refuse to issue or transfer any Shares otherwise required to be issued pursuant to this Agreement. Any required withholding obligation with regard to the Grantee may be satisfied as set forth in Article 15 of the Plan (if permitted by the Committee).

 

9.             Entire Agreement; Amendment. This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter. The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan. This Agreement may also be modified or amended by a writing signed by both the Company and the Grantee. The Company shall give written notice to the Grantee of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.

 

10.            Notices. Any notice hereunder by the Grantee shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the Chief Financial Officer of the Company. Any notice hereunder by the Company shall be given to the Grantee in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Grantee may have on file with the Company.

 

11.            No Right to Employment or Service. Any questions as to whether and when there has been a Termination of Service and the cause of such Termination of Service shall be determined in the sole discretion of the Committee. Nothing in this Agreement shall interfere with or limit in any way the right of the Company or its Affiliates to terminate the Grantee’s employment or service at any time, for any reason and with or without Cause.

 

12.            Transfer of Personal Data. The Grantee authorizes, agrees and unambiguously consents to the transmission by the Company (or any Affiliate) of any personal data related to the RSUs awarded under this Agreement for legitimate business purposes (including, without limitation, the administration of the Plan). This authorization and consent is freely given by the Grantee.

 

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13.           Compliance with Laws. The issuance of the RSUs (and the Shares upon settlement of the RSUs) pursuant to this Agreement shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act and in each case any respective rules and regulations promulgated thereunder) and any other law or regulation applicable thereto. The Company shall not be obligated to issue the RSUs or any of the Shares pursuant to this Agreement if any such issuance would violate any such requirements.

 

14.            Section 409A. This Agreement shall at all times be interpreted and operated in compliance with, or meet an exemption from, the requirements of Section 409A of the Internal Revenue Code of 1986, as amended and the standards, regulations or other guidance promulgated thereunder (“Section 409A”). Any action that may be taken (and, to the extent possible, any action actually taken) by the Company shall not be taken (or shall be void and without effect), if such action violates the requirements of Section 409A. Any provision in this Agreement that is determined to violate the requirements of Section 409A shall be void and without effect. In addition, any provision that is required to appear in this Agreement in accordance with Section 409A that is not expressly set forth herein shall be deemed to be set forth herein, and the Agreement shall be administered in all respects as if such provision were expressly set forth. The Company shall delay the commencement of any delivery of Shares that are payable to the Grantee upon his separation from service if the Grantee is a “key employee” of the Company (as determined by the Company in accordance with procedures established by the Company that are consistent with Section 409A) to the date which is immediately following the earlier of (i) six months after the date of the Grantee’s separation from service or (ii) the Grantee’s death, to the extent such delay is required under the provisions of Section 409A to avoid imposition of additional income and other taxes, provided that the Company and the Grantee agree to take into account any exemptions available under Section 409A. For purposes of this Agreement, termination of employment or Termination of Service shall be construed consistent with the meaning of a “separation from service” within the meaning of Section 409A.

 

15.            Binding Agreement; Assignment. This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns. The Grantee shall not assign (except in accordance with Section 5 hereof) any part of this Agreement without the prior express written consent of the Company.

 

16.            Headings. The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.

 

17.            Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.

 

18.            Further Assurances. Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.

 

19.            Severability. The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

 

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20.           Acquired Rights. The Grantee acknowledges and agrees that: (a) the Company may terminate or amend the Plan at any time; (b) the award of the RSUs made under this Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company; (c) no past grants or awards (including, without limitation, the RSUs awarded hereunder) give the Grantee any right to any grants or awards in the future whatsoever; and (d) any benefits granted under this Agreement are not part of the Grantee’s ordinary salary, and shall not be considered as part of such salary in the event of severance, redundancy or resignation.

 

21.            Restrictive Covenants.

 

 (a)             Definitions. For purposes of this Section 21, the following terms shall have the following meanings:

 

(i)“Business of Company” means the business of providing banking services to commercial and consumer customers.

 

(ii)“Company” means the Georgia Banking Company, Inc., or any of its subsidiaries, including Georgia Banking Company.

 

(iii)“Competing Business” means any Person, business or subdivision of a business which substantially engages in the Business of Company, or which is actively planning to engage in the Business of Company, excluding subdivisions of a business, if any, which are unrelated to the Business of Company.

 

(iv)“Confidential Information” means proprietary or confidential data, information, documents, or materials (in oral, written, electronic or other forms) that belongs to or pertains to the Company and which was disclosed to the Grantee or which the Grantee became aware of as a consequence of the Grantee’s relationship with the Company, which is of tangible or intangible value to the Company, and the details of which are not generally known to the competitors of the Company. Confidential Information shall include (but is not limited to): (i) the identities of the Company’s customers or potential customers, their purchasing histories, and the terms or proposed terms upon which the Company offers or may offer its products and services to such customers, (ii) the identity of Company vendors or potential vendors, and the terms or proposed terms upon which the Company may purchase products and services from such vendors, (iii) technology used by the Company to provide its services, (iv) marketing and/or business plans and strategies, (v) financial reports and analyses regarding the revenues, expenses, profitability and operations of the Company, (vi) the nature, origin, composition and development of the Company’s products and services, and (vii) information provided to the Company by third parties under a duty to maintain the confidentiality of such information. Notwithstanding the foregoing, Confidential Information shall not include information: (x) that has been voluntarily disclosed to the public by the Company, except where such public disclosure has been made by the Grantee without authorization from the Company, (y) that has been independently developed and disclosed by others, or (z) that has otherwise entered the public domain through lawful means.

 

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(v)“Customer” means any Person to which the Company has sold its products or provided its services (including those to which such products or services are sold or provided during the Grantee’s employment).

 

(vi)“Material Contact” for purposes of the non-solicitation of Company employees and contractors provision contained in Section 21(c) of this Agreement means contact in person, by telephone, or by paper or electronic correspondence, in furtherance of the business interests of the Company, and within the twenty-four (24) months prior to the solicitation.

 

(vii)“Material Contact” for purposes of the customer non-solicitation provision contained in Section 21(d) of this Agreement means contact between the Grantee and each Customer or potential customer of the Company within the twenty-four (24) months prior to the solicitation:

 

(1)with whom or which the Grantee dealt on behalf of the Company;

 

(2)whose dealings with the Company were coordinated or supervised by the Grantee;

 

(3)about whom the Grantee obtained Confidential Information in the ordinary course of business as a result of the Grantee’s association with the Company; or

 

(4)who receives products or services authorized by Company, the sale or provision of which results or resulted in compensation, commissions or earnings for the Grantee within the two (2) years prior to the date of the Grantee’s termination or resignation.

 

(viii)“Prospective Customer” means any Person which the Company has solicited to purchase the Company’s products or use its services (including those solicited during the Grantee’s employment).

 

(ix)“Restricted Period” means during the Grantee’s employment with the Company and the twelve (12) months following the Grantee’s separation from employment from the Company for any reason or no reason.

 

(x)“Trade Secrets” means trade secrets as defined by applicable law.

 

(b)            Confidentiality.

 

(i)No Disclosure of Confidential Information and Trade Secrets. The Grantee agrees that during employment, and following the Grantee’s separation from employment from the Company for any reason or no reason, the Grantee will not directly or indirectly use, copy, disclose, publish or otherwise distribute to any other Person or entity any Confidential Information or Trade Secrets of the Company. In the event that the Grantee becomes aware of unauthorized disclosures of the Confidential Information by anyone at any time, whether intentionally or by accident, the Grantee shall promptly notify the Company. This Agreement does not limit the remedies available to the Company under common or statutory law as to trade secrets or other types of confidential information, which may impose additional duties of non-use or non-disclosure.

 

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(ii)Exception for Disclosure of Trade Secrets in Certain Circumstances. Notwithstanding anything herein to the contrary, the Grantee shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a Trade Secret that (i) is made in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and solely for the purpose of reporting or investigating a suspected violation of law or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, if the Grantee files a lawsuit for retaliation for reporting a suspected violation of law, the Grantee may disclose the Trade Secret to his or her attorney and use the Trade Secret information in the court proceeding, as long as the Grantee files any document containing the Trade Secret under seal and does not disclose the Trade Secret, except pursuant to court order.

 

(c)            Non-Solicitation of Company Employees and Contractors. The Grantee agrees that during the Restricted Period, the Grantee shall not, directly or indirectly, whether on the Grantee’s own behalf or on behalf of any other Person, solicit, recruit, attempt to solicit or recruit, or induce any employee or independent contractor of the Company with whom the Grantee had Material Contact, to terminate or lessen such employment or contract with the Company.

 

(d)            Non-Solicitation of Company Customers. The Grantee agrees that during the Restricted Period, the Grantee shall not, directly or indirectly, whether on the Grantee’s own behalf or on behalf of any other Person, solicit, divert or appropriate any Customers, Prospective Customers, correspondents or other sources of or purchasers of loans of the Company with whom the Grantee had Material Contact, for the purpose of selling any products or services for a Competing Business.

 

(e)            Acknowledgements. The Grantee acknowledges and agrees that the provisions of Section 21 of this Agreement (the “Restrictive Covenants”) are reasonable as to time, scope and territory given the Company’s need to protect its Confidential Information and its relationships and goodwill with its Customers, suppliers, employees and contractors, all of which have been developed at great time and expense to the Company. The Grantee represents that the Grantee has the skills and abilities to obtain alternative employment that would not violate the Restrictive Covenants in the event that the Grantee leaves employment with the Company, and that the Restrictive Covenants do not pose an undue hardship on the Grantee. The Grantee further acknowledges that the Grantee’s breach of any of the Restrictive Covenants would likely cause irreparable injury to the Company, and therefore entitle the Company to injunctive relief, in addition to any other remedies available in law or equity or pursuant to Section 21(f) below.

 

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(f)            Claw Back. The Grantee further acknowledges and agrees that, if the Grantee breaches any of the Restrictive Covenants set forth herein, (i) the Grantee shall forfeit any and all rights with respect to the RSUs granted pursuant to this Agreement and the Plan (whether vested or otherwise) and any other rights and interests with respect thereto; (ii) no further Shares or other amounts shall be paid to the Grantee under this Agreement; and (iii) the Grantee shall return to the Company, no later than thirty (30) days after such breach, any Shares or other cash or property received with respect to the RSUs granted pursuant to this Agreement and the Plan (including any gross proceeds (before taxes or other deductions) received from the disposition of any Shares acquired pursuant to such RSUs or their then fair market value if no proceeds were received upon such disposition). The terms set forth in this Agreement concerning the right of the Company to a claw back are in addition to any other rights to recovery or damages available at law or equity and are not a limitation of any such rights. This provision shall survive the termination of the Grantee’s employment or service with the Company or any of its subsidiaries at any time and for any reason.

 

22.            Acknowledgment. BY ACCEPTING THIS AGREEMENT, THE GRANTEE ACKNOWLEDGES THAT THE GRANTEE HAS READ, UNDERSTOOD AND AGREES TO ALL OF THE PROVISIONS OF THIS AGREEMENT, AND THAT THE GRANTEE WAS AFFORDED SUFFICIENT OPPORTUNITY BY THE COMPANY TO OBTAIN INDEPENDENT LEGAL ADVICE AT THE GRANTEE’S EXPENSE PRIOR TO ACCEPTING THIS AGREEMENT.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

 

  GEORGIA BANKING COMPANY, INC.
   
  By:                       
   
  Name:  
   
  Title:  

 

By signing below, the Grantee hereby accepts the RSUs grant subject to all its terms and provisions and agrees to be bound by the terms and provisions of this Agreement, including Section 21, and the Plan. The Grantee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board of Directors of the Company, or the Committee or other committee responsible for the administration of the Plan, upon any questions arising under the Plan.

 

  GRANTEE
   
  By:                           
   
  Name:  

 

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Exhibit 10.14

 

RESTRICTED STOCK UNIT AWARD AGREEMENT

(Performance Based)

 

PURSUANT TO THE

Georgia Banking Company, Inc. Amended and Restated 2021 Stock Incentive Plan

 

Grantee:      __________________________

 

Grant Date:      __________________________

 

Number of RSUs subject to this Award: _______________ representing the right to receive a number of Shares equal to or lower than (including zero) the number of RSUs, subject to the terms and conditions attached hereto, and subject to adjustment pursuant to Section 4 of the Plan.

 

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”) dated as of the Grant Date specified above, is entered into by and between Georgia Banking Company, Inc., a bank holding company organized and existing under the laws of the State of Georgia (the “Company”), and the Grantee specified above, pursuant to the Georgia Banking Company, Inc. Amended and Restated 2021 Stock Incentive Plan, as in effect and as amended from time to time (the “Plan”), which is administered by the Executive Committee of the Board of Directors of the Company (the “Committee”); and

 

WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant the Restricted Stock Units provided herein to the Grantee;

 

NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:

 

1.            Incorporation by Reference; Plan Document Receipt. This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the award provided hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were each expressly set forth herein. Except as provided otherwise herein, any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan. The Grantee hereby acknowledges receipt of a true copy of the Plan and that the Grantee has read the Plan carefully and fully understands its content. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.

 

2.            Grant of Restricted Stock Units. The Company hereby grants to the Grantee, as of the Grant Date specified above, Restricted Stock Units (“RSUs”) in the amount set forth above, subject to, and in accordance with, the restrictions, terms and conditions set forth in this Agreement, Exhibit A and the Plan. Except as otherwise provided by the Plan, the Grantee agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Grantee with any protection against potential future dilution of the Grantee’s interest in the Company for any reason. The Grantee shall have no rights as a shareholder with respect to any Shares covered by the RSUs unless and until the Grantee has become the holder of record of such Shares, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of any such Shares, except as otherwise specifically provided for in the Plan or this Agreement.

 

 

 

 

3.            Vesting.

 

(a)            Subject to Section 3(b), the number of RSUs that shall become earned and vested (if any) will be determined based on performance during the Performance Period (defined in Exhibit A) in accordance with the performance measures, targets and methodology and subject to such time-based vesting conditions as set forth in Exhibit A.

 

No RSUs shall become earned and vested following the Grantee’s Termination of Service, except as expressly provided in herein or in Exhibit A, as applicable, or as otherwise provided pursuant to the terms of the Plan. RSUs will become earned and vested as of the last day of the Performance Period, and subject to additional time-based vesting, but only if the Grantee has remained continuously employed through the such date. If the Grantee incurs a Termination of Service prior to the last day of the Performance Period, or applicable time-based vesting date, the outstanding unvested RSUs shall immediately be forfeited as of the date of Termination of Service.

 

(b)            Change in Control. Notwithstanding the forgoing, if a Change in Control (as defined in the Plan) occurs on or before the last day of the Performance Period, the outstanding unvested performance-based RSUs shall be deemed earned at target and shall become vested and nonforfeitable and shall be paid upon the Change in Control.

 

4.            Settlement of Vested RSUs.

 

(a)            Subject to Sections 5, 8 and 13 hereof, if the Grantee becomes vested in RSUs in accordance with Section 3, the Company shall pay to the Grantee the number of Shares equal to the number of vested RSUs in respect of such vested RSUs on the date of vesting (each a “Vesting Date”). Such Shares shall be delivered in a lump sum within thirty (30) days following the Vesting Date as defined in Exhibit A, provided that in no event shall such Shares be delivered later than the 15th day of the third month following the end of the Grantee’s first taxable year in which the right to the payment is no longer subject to a substantial risk of forfeiture. The Grantee shall have no right to dividend equivalents or dividends on the RSUs.

 

(b)            Notwithstanding Section 4(a), to the extent the Grantee is eligible to participate in a deferred compensation plan established for such purpose, the Grantee may elect to defer delivery of the Shares that would otherwise be due by virtue of the lapse or waiver of the vesting requirements as set forth in Section 3. If such deferral election is made, the Committee shall, in its sole discretion, establish the rules and procedures for such deferrals which shall be in compliance with Section 409A (as defined in Section 14 hereof).

 

5.            Further Holding Period. Following the Vesting Date, one-half of the Net Shares (as defined below) vesting on such applicable Vesting Date shall be subject to a further holding period of twenty-four (24) months, during which such shares may not be sold, assigned, pledged, mortgaged, transferred or otherwise disposed of, although the shares are considered vested and are no longer subject to forfeiture. The further holding period will be deemed satisfied and lapsed prior to the twenty-four (24)-month anniversary of the Vesting Date in the event of the Grantee’s death, Disability or the occurrence of a Change in Control. For this purpose, “Net Shares” are the net of any Shares withheld for the payment of taxes as provided in Section 8.

 

6.            Non-Transferability. The RSUs, and any rights and interests with respect thereto, issued under this Agreement and the Plan shall not be sold, exchanged, transferred, assigned, pledged, encumbered or otherwise disposed of or hypothecated in any way by the Grantee (or any beneficiary(ies) of the Grantee who holds the RSUs as a result of a transfer by will or by the laws of descent and distribution), other than by testamentary disposition by the Grantee or the laws of descent and distribution. Notwithstanding the foregoing, the Committee may, in its sole discretion, permit the RSUs to be transferred to a Permitted Transferee for no value, provided that such transfer shall only be valid upon execution of a written instrument in form and substance acceptable to the Committee in its sole discretion evidencing such transfer and the transferee’s acceptance thereof signed by the Grantee and the transferee, and provided, further, that the RSUs may not be subsequently transferred other than by will or by the laws of descent and distribution or to another Permitted Transferee (as permitted by the Committee in its sole discretion) in accordance with the terms of the Plan and this Agreement, and shall remain subject to the terms of the Plan and this Agreement. Any attempt to sell, exchange, transfer, assign, pledge, encumber or otherwise dispose of or hypothecate in any way the RSUs, or the levy of any execution, attachment or similar legal process upon the RSUs, contrary to the terms and provisions of this Agreement and/or the Plan shall be null and void and without legal force or effect.

 

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7.            Governing Law. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Georgia, without regard to the choice of law principles thereof.

 

8.            Withholding of Tax. The Company shall have the power and the right to deduct or withhold, or require the Grantee to remit to the Company, an amount sufficient to satisfy any federal, state, local and foreign taxes of any kind (including, but not limited to, the Grantee’s FICA and other obligations) which the Company, in its sole discretion, deems necessary to be withheld or remitted to comply with the Code and/or any other applicable law with respect to the RSUs and, if the Grantee fails to do so, the Company may otherwise refuse to issue or transfer any Shares otherwise required to be issued pursuant to this Agreement. Any required withholding obligation with regard to the Grantee may be satisfied as set forth in Article 15 of the Plan (if permitted by the Committee).

 

9.            Entire Agreement; Amendment. This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter. The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan. This Agreement may also be modified or amended by a writing signed by both the Company and the Grantee. The Company shall give written notice to the Grantee of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.

 

10.          Notices. Any notice hereunder by the Grantee shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the Chief Financial Officer of the Company. Any notice hereunder by the Company shall be given to the Grantee in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Grantee may have on file with the Company.

 

11.          No Right to Employment or Service. Any questions as to whether and when there has been a Termination of Service and the cause of such Termination of Service shall be determined in the sole discretion of the Committee. Nothing in this Agreement shall interfere with or limit in any way the right of the Company or its Affiliates to terminate the Grantee’s employment or service at any time, for any reason and with or without Cause.

 

12.          Transfer of Personal Data. The Grantee authorizes, agrees and unambiguously consents to the transmission by the Company (or any Affiliate) of any personal data related to the RSUs awarded under this Agreement for legitimate business purposes (including, without limitation, the administration of the Plan). This authorization and consent is freely given by the Grantee.

 

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13.          Compliance with Laws. The issuance of the RSUs (and the Shares upon settlement of the RSUs) pursuant to this Agreement shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act and in each case any respective rules and regulations promulgated thereunder) and any other law or regulation applicable thereto. The Company shall not be obligated to issue the RSUs or any of the Shares pursuant to this Agreement if any such issuance would violate any such requirements.

 

14.          Section 409A. This Agreement shall at all times be interpreted and operated in compliance with, or meet an exemption from, the requirements of Section 409A of the Internal Revenue Code of 1986, as amended and the standards, regulations or other guidance promulgated thereunder (“Section 409A”). Any action that may be taken (and, to the extent possible, any action actually taken) by the Company shall not be taken (or shall be void and without effect), if such action violates the requirements of Section 409A. Any provision in this Agreement that is determined to violate the requirements of Section 409A shall be void and without effect. In addition, any provision that is required to appear in this Agreement in accordance with Section 409A that is not expressly set forth herein shall be deemed to be set forth herein, and the Agreement shall be administered in all respects as if such provision were expressly set forth. The Company shall delay the commencement of any delivery of Shares that are payable to the Grantee upon his separation from service if the Grantee is a “key employee” of the Company (as determined by the Company in accordance with procedures established by the Company that are consistent with Section 409A) to the date which is immediately following the earlier of (i) six months after the date of the Grantee’s separation from service or (ii) the Grantee’s death, to the extent such delay is required under the provisions of Section 409A to avoid imposition of additional income and other taxes, provided that the Company and the Grantee agree to take into account any exemptions available under Section 409A. For purposes of this Agreement, termination of employment or Termination of Service shall be construed consistent with the meaning of a “separation from service” within the meaning of Section 409A.

 

15.          Binding Agreement; Assignment. This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns. The Grantee shall not assign (except in accordance with Section 6 hereof) any part of this Agreement without the prior express written consent of the Company.

 

16.          Headings. The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.

 

17.          Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.

 

18.          Further Assurances. Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.

 

19.          Severability. The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

 

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20.          Acquired Rights. The Grantee acknowledges and agrees that: (a) the Company may terminate or amend the Plan at any time; (b) the award of the RSUs made under this Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company; (c) no past grants or awards (including, without limitation, the RSUs awarded hereunder) give the Grantee any right to any grants or awards in the future whatsoever; and (d) any benefits granted under this Agreement are not part of the Grantee’s ordinary salary, and shall not be considered as part of such salary in the event of severance, redundancy or resignation.

 

21.          Restrictive Covenants.

 

(a)            Definitions. For purposes of this Section 21, the following terms shall have the following meanings:

 

(i)“Business of Company” means the business of providing banking services to commercial and consumer customers.

 

(ii)“Company” means the Georgia Banking Company, Inc., or any of its subsidiaries, including Georgia Banking Company.

 

(iii)“Competing Business” means any Person, business or subdivision of a business which substantially engages in the Business of Company, or which is actively planning to engage in the Business of Company, excluding subdivisions of a business, if any, which are unrelated to the Business of Company.

 

(iv)“Confidential Information” means proprietary or confidential data, information, documents, or materials (in oral, written, electronic or other forms) that belongs to or pertains to the Company and which was disclosed to the Grantee or which the Grantee became aware of as a consequence of the Grantee’s relationship with the Company, which is of tangible or intangible value to the Company, and the details of which are not generally known to the competitors of the Company. Confidential Information shall include (but is not limited to): (i) the identities of the Company’s customers or potential customers, their purchasing histories, and the terms or proposed terms upon which the Company offers or may offer its products and services to such customers, (ii) the identity of Company vendors or potential vendors, and the terms or proposed terms upon which the Company may purchase products and services from such vendors, (iii) technology used by the Company to provide its services, (iv) marketing and/or business plans and strategies, (v) financial reports and analyses regarding the revenues, expenses, profitability and operations of the Company, (vi) the nature, origin, composition and development of the Company’s products and services, and (vii) information provided to the Company by third parties under a duty to maintain the confidentiality of such information. Notwithstanding the foregoing, Confidential Information shall not include information: (x) that has been voluntarily disclosed to the public by the Company, except where such public disclosure has been made by the Grantee without authorization from the Company, (y) that has been independently developed and disclosed by others, or (z) that has otherwise entered the public domain through lawful means.

 

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(v)“Customer” means any Person to which the Company has sold its products or provided its services (including those to which such products or services are sold or provided during the Grantee’s employment).

 

(vi)“Material Contact” for purposes of the non-solicitation of Company employees and contractors provision contained in Section 21(c) of this Agreement means contact in person, by telephone, or by paper or electronic correspondence, in furtherance of the business interests of the Company, and within the twenty-four (24) months prior to the solicitation.

 

(vii)“Material Contact” for purposes of the customer non-solicitation provision contained in Section 21(d) of this Agreement means contact between the Grantee and each Customer or potential customer of the Company within the twenty-four (24) months prior to the solicitation:

 

(1)with whom or which the Grantee dealt on behalf of the Company;

 

(2)whose dealings with the Company were coordinated or supervised by the Grantee;

 

(3)about whom the Grantee obtained Confidential Information in the ordinary course of business as a result of the Grantee’s association with the Company; or

 

(4)who receives products or services authorized by Company, the sale or provision of which results or resulted in compensation, commissions or earnings for the Grantee within the two (2) years prior to the date of the Grantee’s termination or resignation.

 

(viii)“Prospective Customer” means any Person which the Company has solicited to purchase the Company’s products or use its services (including those solicited during the Grantee’s employment).

 

(ix)“Restricted Period” means during the Grantee’s employment with the Company and the twelve (12) months following the Grantee’s separation from employment from the Company for any reason or no reason.

 

(x)            “Trade Secrets” means trade secrets as defined by applicable law.

 

(b)            Confidentiality.

 

(i)No Disclosure of Confidential Information and Trade Secrets. The Grantee agrees that during employment, and following the Grantee’s separation from employment from the Company for any reason or no reason, the Grantee will not directly or indirectly use, copy, disclose, publish or otherwise distribute to any other Person any Confidential Information or Trade Secrets of the Company. In the event that the Grantee becomes aware of unauthorized disclosures of the Confidential Information by anyone at any time, whether intentionally or by accident, the Grantee shall promptly notify the Company. This Agreement does not limit the remedies available to the Company under common or statutory law as to trade secrets or other types of confidential information, which may impose additional duties of non-use or non-disclosure.

 

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(ii)Exception for Disclosure of Trade Secrets in Certain Circumstances. Notwithstanding anything herein to the contrary, the Grantee shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a Trade Secret that (i) is made in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and solely for the purpose of reporting or investigating a suspected violation of law or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, if the Grantee files a lawsuit for retaliation for reporting a suspected violation of law, the Grantee may disclose the Trade Secret to his or her attorney and use the Trade Secret information in the court proceeding, as long as the Grantee files any document containing the Trade Secret under seal and does not disclose the Trade Secret, except pursuant to court order.

 

(c)            Non-Solicitation of Company Employees and Contractors. The Grantee agrees that during the Restricted Period, the Grantee shall not, directly or indirectly, whether on the Grantee’s own behalf or on behalf of any other Person, solicit, recruit, attempt to solicit or recruit, or induce any employee or independent contractor of the Company with whom the Grantee had Material Contact, to terminate or lessen such employment or contract with the Company.

 

(d)            Non-Solicitation of Company Customers. The Grantee agrees that during the Restricted Period, the Grantee shall not, directly or indirectly, whether on the Grantee’s own behalf or on behalf of any other Person, solicit, divert or appropriate any Customers, Prospective Customers, correspondents or other sources of or purchasers of loans of the Company with whom the Grantee had Material Contact, for the purpose of selling any products or services for a Competing Business.

 

(e)            Acknowledgements. The Grantee acknowledges and agrees that the provisions of Section 21 of this Agreement (the “Restrictive Covenants”) are reasonable as to time, scope and territory given the Company’s need to protect its Confidential Information and its relationships and goodwill with its Customers, suppliers, employees and contractors, all of which have been developed at great time and expense to the Company. The Grantee represents that the Grantee has the skills and abilities to obtain alternative employment that would not violate the Restrictive Covenants in the event that the Grantee leaves employment with the Company, and that the Restrictive Covenants do not pose an undue hardship on the Grantee. The Grantee further acknowledges that the Grantee’s breach of any of the Restrictive Covenants would likely cause irreparable injury to the Company, and therefore entitle the Company to injunctive relief, in addition to any other remedies available in law or equity or pursuant to Section 21(f) below.

 

(f)            Claw Back. The Grantee further acknowledges and agrees that, if the Grantee breaches any of the Restrictive Covenants set forth herein, (i) the Grantee shall forfeit any and all rights with respect to the RSUs granted pursuant to this Agreement and the Plan (whether vested or otherwise) and any other rights and interests with respect thereto; (ii) no further Shares or other amounts shall be paid to the Grantee under this Agreement; and (iii) the Grantee shall return to the Company, no later than thirty (30) days after such breach, any Shares or other cash or property received with respect to the RSUs granted pursuant to this Agreement and the Plan (including any gross proceeds (before taxes or other deductions) received from the disposition of any Shares acquired pursuant to such RSUs or their then fair market value if no proceeds were received upon such disposition). The terms set forth in this Agreement concerning the right of the Company to a claw back are in addition to any other rights to recovery or damages available at law or equity and are not a limitation of any such rights. This provision shall survive the termination of the Grantee’s employment or service with the Company or any of its subsidiaries at any time and for any reason.

 

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22.            Acknowledgment. BY ACCEPTING THIS AGREEMENT, THE GRANTEE ACKNOWLEDGES THAT THE GRANTEE HAS READ, UNDERSTOOD AND AGREES TO ALL OF THE PROVISIONS OF THIS AGREEMENT, AND THAT THE GRANTEE WAS AFFORDED SUFFICIENT OPPORTUNITY BY THE COMPANY TO OBTAIN INDEPENDENT LEGAL ADVICE AT THE GRANTEE’S EXPENSE PRIOR TO ACCEPTING THIS AGREEMENT.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

 

  GEORGIA BANKING COMPANY, INC.
   
  By:                     
   
  Name:  
   
  Title:  

 

By signing below, the Grantee hereby accepts the RSUs grant subject to all its terms and provisions and agrees to be bound by the terms and provisions of this Agreement, including Exhibit A and Section 21, and the Plan. The Grantee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board of Directors of the Company, or the Committee or other committee responsible for the administration of the Plan, upon any questions arising under the Plan.

 

  GRANTEE
   
  By:                     
   
  Name:  

 

 

[EXHIBIT A FOLLOWS]

 

8

 

 

Exhibit 10.15

 

INCENTIVE STOCK OPTION AGREEMENT

PURSUANT TO THE

GEORGIA BANKING COMPANY, INC. AMENDED AND RESTATED 2021 STOCK

INCENTIVE PLAN

 

Grantee:      __________________________

 

Grant Date:      __________________________

 

Per Share Exercise Price: $_______________

 

Number of Shares subject to this Option: _______________

 

Expiration Date: ________________________

 

THIS INCENTIVE STOCK OPTION AWARD AGREEMENT (this “Agreement”), dated as of the Grant Date specified above, is entered into by and between Georgia Banking Company, Inc., a bank holding company organized and existing under the laws of the State of Georgia (the “Company”), and the Grantee specified above, pursuant to the Georgia Banking Company, Inc. Amended and Restated 2021 Stock Incentive Plan, as in effect and as amended from time to time (the “Plan”), which is administered by the Executive Committee of the Board of Directors of the Company (the “Committee”); and

 

WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant the Incentive Stock Option provided herein to the Grantee;

 

NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:

 

1.            Incorporation by Reference; Plan Document Receipt. This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the award provided hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were each expressly set forth herein. Except as provided otherwise herein, any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan. The Grantee hereby acknowledges receipt of a true copy of the Plan and that the Grantee has read the Plan carefully and fully understands its content. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.

 

2.            Grant of Option. The Company hereby grants to the Grantee, as of the Grant Date specified above, an Incentive Stock Option (the “Option”) to acquire from the Company at the Per Share Exercise Price specified above, the aggregate number of shares of Common Stock specified above (the “Option Shares”). Except as otherwise provided by the Plan, the Grantee agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Grantee with any protection against potential future dilution of the Grantee’s interest in the Company for any reason. The Grantee shall have no rights as a shareholder with respect to any Shares covered by the Option unless and until the Grantee has become the holder of record of such Shares, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of any such Shares, except as otherwise specifically provided for in the Plan or this Agreement.

 

 

 

3.            Tax Matters. The Option granted hereunder is intended to qualify as an “incentive stock option” under Section 422 of the Code. Notwithstanding the foregoing, the Option will not qualify as an “incentive stock option,” among other events, (a) if the Grantee disposes of the Option Shares at any time during the two-year period following the date of this Agreement or the one-year period following the date of exercise of the Option pursuant to which such Option Shares were acquired; (b) except in the event of the Grantee’s death or Disability, if the Grantee is not employed by the Company, a Parent Corporation or a Subsidiary Corporation at all times during the period beginning on the date of this Agreement and ending on the day that is three months before the date of any exercise of the Option; or (c) to the extent that the aggregate fair market value of the Shares subject to “incentive stock options” held by the Grantee which become exercisable for the first time in any calendar year (under all plans of the Company, a Parent Corporation or a Subsidiary Corporation) exceeds $100,000. For purposes of clause (c) above, the “fair market value” of the Shares shall be determined as of the Grant Date. To the extent that the Option does not qualify as an “incentive stock option,” it shall not affect the validity of the Option and shall constitute a separate non-qualified stock option. In the event that the Grantee disposes of the Option Shares within either two (2) years following the Grant Date or one year following the date of exercise of the Option, the Grantee must deliver to the Company, within seven (7) days following such disposition, a written notice specifying the date on which such Shares were disposed of, the number of Shares so disposed, and, if such disposition was by a sale or exchange, the amount of consideration received.

 

4.            Vesting and Exercise.

 

(a)            Vesting. Subject to the provisions of Sections 4(b) to 4(d) hereof, the Option shall vest and become exercisable as of the date(s) set forth below (each a “Vesting Date”), provided the Grantee has not incurred a Termination of Service prior to such Vesting Date:

 

Vesting Date Number of Option Shares
   

[Date]

 

[Date]

 

[Date]

[            ]

 

[            ]

 

[            ]

 

There shall be no proportionate or partial vesting in the periods prior to each Vesting Date and all vesting shall occur only on the appropriate Vesting Date, subject to the Grantee’s continued employment or service with the Company or any of its Affiliates on each applicable Vesting Date. Upon expiration of the Option, the Option shall be cancelled and no longer exercisable.

 

(b)            Committee Discretion. In addition to the foregoing, the Committee may, in its sole discretion, accelerate vesting of the Option at any time and for any reason.

 

(c)            Change in Control. Notwithstanding the foregoing, in the event a Change in Control occurs, the Option shall become exercisable in full, to the extent not exercisable previously, on the earlier of the date of the Change in Control or the date the Option is to be terminated in connection with the Change in Control, provided the Grantee has not incurred a Termination of Service prior to the earlier of the date of the Change in Control or the date the Option is to be terminated in connection with the Change in Control.

 

(d)            Expiration. Unless earlier terminated in accordance with the terms and provisions of the Plan and/or this Agreement, all portions of the Option (whether vested or not vested) shall expire and shall no longer be exercisable after the Expiration Date specified above.

 

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(e)            Treatment of Unvested Options upon Termination of Service. Subject to this Section 4, any portion of the Option that is not vested as of the date of the Grantee’s Termination of Service for any reason shall terminate and expire as of the date of such Termination of Service.

 

5.            Exercise Following Termination of Service. Subject to the terms of the Plan and this Agreement, the Option, to the extent vested, shall remain exercisable as follows:

 

(a)            Termination of Service Due to Death or Disability. In the event of the Grantee’s Termination of Service by reason of death or Disability, the vested portion of the Option shall remain exercisable until the earlier of (i) one year from the date of such Termination of Service, and (ii) the expiration of the stated term of the Option pursuant to Section 4(d) hereof; provided, however, that in the case of a Termination of Service due to Disability, if the Grantee dies within such one year exercise period, any unexercised Option held by the Grantee shall thereafter be exercisable by the legal representative of the Grantee’s estate or the recipient of the unexercised Option by will or by the laws of descent and distribution, to the extent exercisable, for a period of one year from the date of death, but in no event beyond the expiration of the stated term of the Option pursuant to Section 4(d) hereof.

 

(b)            Termination Without Cause. In the event of the Grantee’s involuntary Termination of Service by the Company without Cause, the vested portion of the Option shall remain exercisable until the earlier of (i) ninety (90) days from the date of such Termination of Service, and (ii) the expiration of the stated term of the Option pursuant to Section 4(d) hereof.

 

(c)            Voluntary Resignation. In the event of the Grantee’s voluntary Termination of Service (other than a voluntary Termination of Service described in Section 5(d) hereof), the vested portion of the Option shall remain exercisable until the earlier of (i) thirty (30) days from the date of such Termination of Service, and (ii) the expiration of the stated term of the Option pursuant to Section 4(d) hereof.

 

(d)            Termination of Service for Cause. In the event of the Grantee’s Termination of Service for Cause or in the event of the Grantee’s voluntary Termination of Service (as provided in Section 5(c) hereof) after an event that would be grounds for a Termination of Service for Cause, the Grantee’s entire Option (whether or not vested) shall terminate and expire upon such Termination of Service. Additionally, during the first sixty (60) days after the Grantee’s Termination of Service for any reason other than Cause, the Company shall have the right to re-characterize such Termination of Service as a Termination of Service for Cause; upon such re-characterization, the entire outstanding Option (whether or not vested) will be forfeited.

 

6.            Method of Exercise and Payment. Subject to Section 10 hereof, to the extent that the Option has become vested and exercisable with respect to a number of Shares as provided herein, the Option may thereafter be exercised by the Grantee, in whole or in part, at any time or from time to time prior to the expiration of the Option as provided herein and in accordance with the Plan.

 

7.            Further Holding Period. Following the Vesting Date, one-half of the Net Shares (as defined below) subject to the Option vesting on such applicable Vesting Date shall be subject to a further holding period of twenty-four (24) months, during which such shares may not be sold, assigned, pledged, mortgaged, transferred or otherwise disposed of, although the shares are considered vested, exercisable and are no longer subject to forfeiture. The further holding period will be deemed satisfied and lapsed prior to the twenty-four (24)-month anniversary of the Vesting Date in the event of the Grantee’s death, Disability or the occurrence of a Change in Control. For this purpose, “Net Shares” are the net of any Shares withheld upon the exercise of such vested portion of the Option for the payment of the exercise price and/or taxes as provided in Sections 6 and 10.

 

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8.            Non-Transferability. The Option, and any rights and interests with respect thereto, issued under this Agreement and the Plan shall not be sold, exchanged, transferred, assigned, pledged, encumbered, or otherwise disposed of or hypothecated in any way by the Grantee (or any beneficiary(ies) of the Grantee who holds the Option as a result of a transfer by will or by the laws of descent and distribution), other than by testamentary disposition by the Grantee or the laws of descent and distribution. Any attempt to sell, exchange, transfer, assign, pledge, encumber or otherwise dispose of or hypothecate in any way the Option, or the levy of any execution, attachment or similar legal process upon the Option, contrary to the terms and provisions of this Agreement and/or the Plan shall be null and void and without legal force or effect.

 

9.            Governing Law. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Georgia, without regard to the choice of law principles thereof.

 

10.            Withholding of Tax. The Company shall have the power and the right to deduct or withhold, or require the Grantee to remit to the Company, an amount sufficient to satisfy any federal, state, local and foreign taxes of any kind (including, but not limited to, the Grantee’s FICA and other obligations) which the Company, in its sole discretion, deems necessary to be withheld or remitted to comply with the Code and/or any other applicable law with respect to the Option and, if the Grantee fails to do so, the Company may otherwise refuse to issue or transfer any Shares otherwise required to be issued pursuant to this Agreement. Any required withholding obligation with regard to the Grantee may be satisfied as set forth in Article 15 of the Plan (if permitted by the Committee) by reducing the amount of cash or Shares otherwise deliverable upon exercise of the Option.

 

11.            Entire Agreement; Amendment. This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter. The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan. This Agreement may also be modified or amended by a writing signed by both the Company and the Grantee. The Company shall give written notice to the Grantee of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.

 

12.            Notices. Any notice hereunder by the Grantee shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the Chief Financial Officer of the Company. Any notice hereunder by the Company shall be given to the Grantee in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Grantee may have on file with the Company.

 

13.            No Right to Employment or Service. Any questions as to whether and when there has been a Termination of Service and the cause of such Termination of Service shall be determined in the sole discretion of the Committee. Nothing in this Agreement shall interfere with or limit in any way the right of the Company or its Affiliates to terminate the Grantee’s employment or service at any time, for any reason and with or without Cause.

 

14.            Transfer of Personal Data. The Grantee authorizes, agrees and unambiguously consents to the transmission by the Company (or any Affiliate) of any personal data related to the Option awarded under this Agreement for legitimate business purposes (including, without limitation, the administration of the Plan). This authorization and consent is freely given by the Grantee.

 

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15.            Compliance with Laws. The issuance of the Option (and the Option Shares upon exercise of the Option) pursuant to this Agreement shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act and in each case any respective rules and regulations promulgated thereunder) and any other law or regulation applicable thereto. The Company shall not be obligated to issue the Option or any of the Option Shares pursuant to this Agreement if any such issuance would violate any such requirements.

 

16.            Section 409A. Notwithstanding anything herein or in the Plan to the contrary, the Option is intended to be exempt from the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent.

 

17.            Binding Agreement; Assignment. This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns. The Grantee shall not assign (except in accordance with Section 8 hereof) any part of this Agreement without the prior express written consent of the Company.

 

18.            Headings. The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.

 

19.            Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.

 

20.            Further Assurances. Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.

 

21.            Severability. The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

 

22.            Acquired Rights. The Grantee acknowledges and agrees that: (a) the Company may terminate or amend the Plan at any time; (b) the award of the Option made under this Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company; (c) no past grants or awards (including, without limitation, the Option awarded hereunder) give the Grantee any right to any grants or awards in the future whatsoever; and (d) any benefits granted under this Agreement are not part of the Grantee’s ordinary salary, and shall not be considered as part of such salary in the event of severance, redundancy or resignation.

 

23.            Restrictive Covenants.

 

(a)Definitions. For purposes of this Section 23, the following terms shall have the following meanings:

 

(i)“Business of Company” means the business of providing banking services to commercial and consumer customers.

 

5

 

 

(ii)“Company” means the Georgia Banking Company, Inc., or any of its subsidiaries, including Georgia Banking Company.

 

(iii)“Competing Business” means any Person, business or subdivision of a business which substantially engages in the Business of Company, or which is actively planning to engage in the Business of Company, excluding subdivisions of a business, if any, which are unrelated to the Business of Company.

 

(iv)“Confidential Information” means proprietary or confidential data, information, documents, or materials (in oral, written, electronic or other forms) that belongs to or pertains to the Company and which was disclosed to the Grantee or which the Grantee became aware of as a consequence of the Grantee’s relationship with the Company, which is of tangible or intangible value to the Company, and the details of which are not generally known to the competitors of the Company. Confidential Information shall include (but is not limited to): (i) the identities of the Company’s customers or potential customers, their purchasing histories, and the terms or proposed terms upon which the Company offers or may offer its products and services to such customers, (ii) the identity of Company vendors or potential vendors, and the terms or proposed terms upon which the Company may purchase products and services from such vendors, (iii) technology used by the Company to provide its services, (iv) marketing and/or business plans and strategies, (v) financial reports and analyses regarding the revenues, expenses, profitability and operations of the Company, (vi) the nature, origin, composition and development of the Company’s products and services, and (vii) information provided to the Company by third parties under a duty to maintain the confidentiality of such information. Notwithstanding the foregoing, Confidential Information shall not include information: (x) that has been voluntarily disclosed to the public by the Company, except where such public disclosure has been made by the Grantee without authorization from the Company, (y) that has been independently developed and disclosed by others, or (z) that has otherwise entered the public domain through lawful means.

 

(v)“Customer” means any Person to which the Company has sold its products or provided its services (including those to which such products or services are sold or provided during the Grantee’s employment).

 

(vi)“Material Contact” for purposes of the non-solicitation of Company employees and contractors provision contained in Section 23(c) of this Agreement means contact in person, by telephone, or by paper or electronic correspondence, in furtherance of the business interests of the Company, and within the twenty-four (24) months prior to the solicitation.

 

(vii)“Material Contact” for purposes of the customer non-solicitation provision contained in Section 23(d) of this Agreement means contact between the Grantee and each Customer or potential customer of the Company within the twenty-four (24) months prior to the solicitation:

 

(1)with whom or which the Grantee dealt on behalf of the Company;

 

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(2)whose dealings with the Company were coordinated or supervised by the Grantee;

 

(3)about whom the Grantee obtained Confidential Information in the ordinary course of business as a result of the Grantee’s association with the Company; or

 

(4)who receives products or services authorized by Company, the sale or provision of which results or resulted in compensation, commissions or earnings for the Grantee within the two (2) years prior to the date of the Grantee’s termination or resignation.

 

(viii)“Prospective Customer” means any Person which the Company has solicited to purchase the Company’s products or use its services (including those solicited during the Grantee’s employment).

 

(ix)“Restricted Period” means during the Grantee’s employment with the Company and the twelve (12) months following the Grantee’s separation from employment from the Company for any reason or no reason.

 

(x)            “Trade Secrets” means trade secrets as defined by applicable law.

 

(b)            Confidentiality.

 

(i)No Disclosure of Confidential Information and Trade Secrets. The Grantee agrees that during employment, and following the Grantee’s separation from employment from the Company for any reason or no reason, the Grantee will not directly or indirectly use, copy, disclose, publish or otherwise distribute to any other Person any Confidential Information or Trade Secrets of the Company. In the event that the Grantee becomes aware of unauthorized disclosures of the Confidential Information by anyone at any time, whether intentionally or by accident, the Grantee shall promptly notify the Company. This Agreement does not limit the remedies available to the Company under common or statutory law as to trade secrets or other types of confidential information, which may impose additional duties of non-use or non-disclosure.

 

(ii)Exception for Disclosure of Trade Secrets in Certain Circumstances. Notwithstanding anything herein to the contrary, the Grantee shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a Trade Secret that (i) is made in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and solely for the purpose of reporting or investigating a suspected violation of law or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, if the Grantee files a lawsuit for retaliation for reporting a suspected violation of law, the Grantee may disclose the Trade Secret to his or her attorney and use the Trade Secret information in the court proceeding, as long as the Grantee files any document containing the Trade Secret under seal and does not disclose the Trade Secret, except pursuant to court order.

 

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(c)Non-Solicitation of Company Employees and Contractors. The Grantee agrees that during the Restricted Period, the Grantee shall not, directly or indirectly, whether on the Grantee’s own behalf or on behalf of any other Person, solicit, recruit, attempt to solicit or recruit, or induce any employee or independent contractor of the Company with whom the Grantee had Material Contact, to terminate or lessen such employment or contract with the Company.

 

(d)Non-Solicitation of Company Customers. The Grantee agrees that during the Restricted Period, the Grantee shall not, directly or indirectly, whether on the Grantee’s own behalf or on behalf of any other Person, solicit, divert or appropriate any business of Customers, Prospective Customers, correspondents or other sources of or purchasers of loans of the Company with whom the Grantee had Material Contact, for the purpose of selling any products, services or loans for a Competing Business.

 

(e)Acknowledgements. The Grantee acknowledges and agrees that the provisions of Section 23 of this Agreement (the “Restrictive Covenants”) are reasonable as to time, scope and territory given the Company’s need to protect its Confidential Information and its relationships and goodwill with its Customers, suppliers, employees and contractors, all of which have been developed at great time and expense to the Company. The Grantee represents that the Grantee has the skills and abilities to obtain alternative employment that would not violate the Restrictive Covenants in the event that the Grantee leaves employment with the Company, and that the Restrictive Covenants do not pose an undue hardship on the Grantee. The Grantee further acknowledges that the Grantee’s breach of any of the Restrictive Covenants would likely cause irreparable injury to the Company, and therefore entitle the Company to injunctive relief, in addition to any other remedies available in law or equity or pursuant to Section 23(f) below.

 

(f)Claw Back. The Grantee further acknowledges and agrees that, if the Grantee breaches any of the Restrictive Covenants set forth herein, (i) the Grantee shall forfeit any and all rights with respect to the Options granted pursuant to this Agreement and the Plan (whether vested or otherwise) and any other rights and interests with respect thereto; (ii) no further Shares or other amounts shall be paid to the Grantee under this Agreement; and (iii) the Grantee shall return to the Company, no later than thirty (30) days after such breach, any Shares or other cash or property received with respect to the Options granted pursuant to this Agreement and the Plan (including any gross proceeds (before taxes or other deductions) received from the disposition of any Shares acquired pursuant to such Options or their then fair market value if no proceeds were received upon such disposition). The terms set forth in this Agreement concerning the right of the Company to a claw back are in addition to any other rights to recovery or damages available at law or equity and are not a limitation of any such rights. This provision shall survive the termination of the Grantee’s employment or service with the Company or any of its subsidiaries at any time and for any reason.

 

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24.            Acknowledgment. BY ACCEPTING THE AGREEMENT, THE GRANTEE ACKNOWLEDGES THAT THE GRANTEE HAS READ, UNDERSTOOD AND AGREES TO ALL OF THE PROVISIONS OF THIS AGREEMENT, AND THAT THE GRANTEE WAS AFFORDED SUFFICIENT OPPORTUNITY BY THE COMPANY TO OBTAIN INDEPENDENT LEGAL ADVICE AT THE GRANTEE’S EXPENSE PRIOR TO ACCEPTING THE AGREEMENT.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

 

  GEORGIA BANKING COMPANY, INC.
   
  By:                       
  Name:  
  Title:  

 

By signing below, the Grantee hereby accepts the Option subject to all its terms and provisions and agrees to be bound by the terms and provisions of this Agreement, including Section 23, and the Plan. The Grantee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board of Directors of the Company, or the Committee or other committee responsible for the administration of the Plan, upon any questions arising under the Plan.

 

  GRANTEE:
   
  By:                       
  Name:  

 

10

 

Exhibit 10.16

 

NON-QUALIFIED STOCK OPTION AGREEMENT

PURSUANT TO THE

GEORGIA BANKING COMPANY, INC. AMENDED AND RESTATED 2021 STOCK

INCENTIVE PLAN

 

Grantee:      __________________________

 

Grant Date:      __________________________

 

Per Share Exercise Price: $_______________

 

Number of Shares subject to this Option: _______________

 

Expiration Date: ________________________

 

THIS NON-QUALIFIED STOCK OPTION AWARD AGREEMENT (this “Agreement”), dated as of the Grant Date specified above, is entered into by and between Georgia Banking Company, Inc., a bank holding company organized and existing under the laws of the State of Georgia (the “Company”), and the Grantee specified above, pursuant to the Georgia Banking Company, Inc. Amended and Restated 2021 Stock Incentive Plan, as in effect and as amended from time to time (the “Plan”), which is administered by the Executive Committee of the Board of Directors of the Company (the “Committee”); and

 

WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant the Non-Qualified Stock Option provided herein to the Grantee;

 

NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:

 

1.            Incorporation by Reference; Plan Document Receipt. This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the award provided hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were each expressly set forth herein. Except as provided otherwise herein, any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan. The Grantee hereby acknowledges receipt of a true copy of the Plan and that the Grantee has read the Plan carefully and fully understands its content. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control. No part of the Option granted hereby is intended to qualify as an “incentive stock option” under Section 422 of the Code.

 

2.            Grant of Option. The Company hereby grants to the Grantee, as of the Grant Date specified above, a Non-Qualified Stock Option (the “Option”) to acquire from the Company at the Per Share Exercise Price specified above, the aggregate number of shares of Common Stock specified above (the “Option Shares”). Except as otherwise provided by the Plan, the Grantee agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Grantee with any protection against potential future dilution of the Grantee’s interest in the Company for any reason. The Grantee shall have no rights as a shareholder with respect to any Shares covered by the Option unless and until the Grantee has become the holder of record of such Shares, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of any such Shares, except as otherwise specifically provided for in the Plan or this Agreement.

 

 

 

3.            Vesting and Exercise.

 

(a)            Vesting. Subject to the provisions of Sections 3(b) to 3(d) hereof, the Option shall vest and become exercisable as of the date(s) set forth below (each a “Vesting Date”), provided the Grantee has not incurred a Termination of Service prior to such Vesting Date:

 

Vesting Date Number of Option Shares
   

[Date]

 

[Date]

 

[Date]

[            ]

 

[            ]

 

[            ]

 

There shall be no proportionate or partial vesting in the periods prior to each Vesting Date and all vesting shall occur only on the appropriate Vesting Date, subject to the Grantee’s continued employment or service with the Company or any of its Affiliates on each applicable Vesting Date. Upon expiration of the Option, the Option shall be cancelled and no longer exercisable.

 

(b)            Committee Discretion. In addition to the foregoing, the Committee may, in its sole discretion, accelerate vesting of the Option at any time and for any reason.

 

(c)            Change in Control. Notwithstanding the foregoing, in the event a Change in Control occurs, the Option shall become exercisable in full, to the extent not exercisable previously, on the earlier of the date of the Change in Control or the date the Option is to be terminated in connection with the Change in Control, provided the Grantee has not incurred a Termination of Service prior to the earlier of the date of the Change in Control or the date the Option is to be terminated in connection with the Change in Control.

 

(d)            Expiration. Unless earlier terminated in accordance with the terms and provisions of the Plan and/or this Agreement, all portions of the Option (whether vested or not vested) shall expire and shall no longer be exercisable after the Expiration Date specified above.

 

(e)            Treatment of Unvested Options upon Termination of Service. Subject to this Section 3, any portion of the Option that is not vested as of the date of the Grantee’s Termination of Service for any reason shall terminate and expire as of the date of such Termination of Service.

 

4.            Exercise Following Termination of Service. Subject to the terms of the Plan and this Agreement, the Option, to the extent vested, shall remain exercisable as follows:

 

(a)            Termination of Service Due to Death or Disability. In the event of the Grantee’s Termination of Service by reason of death or Disability, the vested portion of the Option shall remain exercisable until the earlier of (i) one year from the date of such Termination of Service and (ii) the expiration of the stated term of the Option pursuant to Section 3(d) hereof; provided, however, that in the case of a Termination of Service due to Disability, if the Grantee dies within such one-year exercise period, any unexercised Option held by the Grantee shall thereafter be exercisable by the legal representative of the Grantee’s estate or the recipient of the unexercised Option by will or by the laws of descent and distribution, to the extent exercisable, for a period of one year from the date of death, but in no event beyond the expiration of the stated term of the Option pursuant to Section 3(d) hereof.

 

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(b)            Termination Without Cause. In the event of the Grantee’s involuntary Termination of Service by the Company without Cause, the vested portion of the Option shall remain exercisable until the earlier of (i) ninety (90) days from the date of such Termination of Service, and (ii) the expiration of the stated term of the Option pursuant to Section 3(d) hereof.

 

(c)            Voluntary Resignation. In the event of the Grantee’s voluntary Termination of Service (other than a voluntary Termination of Service described in Section 4(d) hereof), the vested portion of the Option shall remain exercisable until the earlier of (i) thirty (30) days from the date of such Termination of Service, and (ii) the expiration of the stated term of the Option pursuant to Section 3(d) hereof.

 

(d)            Termination of Service for Cause. In the event of the Grantee’s Termination of Service for Cause or in the event of the Grantee’s voluntary Termination of Service (as provided in Section 4(c) hereof) after an event that would be grounds for a Termination of Service for Cause, the Grantee’s entire Option (whether or not vested) shall terminate and expire upon such Termination of Service. Additionally, during the first sixty (60) days after the Grantee’s Termination of Service for any reason other than Cause, the Company shall have the right to re-characterize such Termination of Service as a Termination of Service for Cause; upon such re-characterization, the entire outstanding Option (whether or not vested) will be forfeited.

 

5.            Method of Exercise and Payment. Subject to Section 8 hereof, to the extent that the Option has become vested and exercisable with respect to a number of Shares as provided herein, the Option may thereafter be exercised by the Grantee, in whole or in part, at any time or from time to time prior to the expiration of the Option as provided herein and in accordance with the Plan.

 

6.            Further Holding Period. Following the Vesting Date, one-half of the Net Shares (as defined below) subject to the Option vesting on such applicable Vesting Date shall be subject to a further holding period of twenty-four (24) months, during which such shares may not be sold, assigned, pledged, mortgaged, transferred or otherwise disposed of, although the shares are considered vested, exercisable and are no longer subject to forfeiture. The further holding period will be deemed satisfied and lapsed prior to the twenty-four (24)-month anniversary of the Vesting Date in the event of the Grantee’s death, Disability or the occurrence of a Change in Control. For this purpose, “Net Shares” are the net of any Shares withheld upon the exercise of such vested portion of the Option for the payment of the exercise price and/or taxes as provided in Sections 5 and 9.

 

7.            Non-Transferability. The Option, and any rights and interests with respect thereto, issued under this Agreement and the Plan shall not be sold, exchanged, transferred, assigned, pledged, encumbered or otherwise disposed of or hypothecated in any way by the Grantee (or any beneficiary(ies) of the Grantee who holds the Option as a result of a transfer by will or by the laws of descent and distribution), other than by testamentary disposition by the Grantee or the laws of descent and distribution. Notwithstanding the foregoing, the Committee may, in its sole discretion, permit the Option to be transferred to a Permitted Transferee for no value, provided that such transfer shall only be valid upon execution of a written instrument in form and substance acceptable to the Committee in its sole discretion evidencing such transfer and the transferee’s acceptance thereof signed by the Grantee and the transferee, and provided, further, that the Option may not be subsequently transferred other than by will or by the laws of descent and distribution or to another Permitted Transferee (as permitted by the Committee in its sole discretion) in accordance with the terms of the Plan and this Agreement, and shall remain subject to the terms of the Plan and this Agreement. Any attempt to sell, exchange, transfer, assign, pledge, encumber or otherwise dispose of or hypothecate in any way the Option, or the levy of any execution, attachment or similar legal process upon the Option, contrary to the terms and provisions of this Agreement and/or the Plan shall be null and void and without legal force or effect.

 

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8.            Governing Law. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Georgia, without regard to the choice of law principles thereof.

 

9.            Withholding of Tax. The Company shall have the power and the right to deduct or withhold, or require the Grantee to remit to the Company, an amount sufficient to satisfy any federal, state, local and foreign taxes of any kind (including, but not limited to, the Grantee’s FICA and other obligations) which the Company, in its sole discretion, deems necessary to be withheld or remitted to comply with the Code and/or any other applicable law with respect to the Option and, if the Grantee fails to do so, the Company may otherwise refuse to issue or transfer any Shares otherwise required to be issued pursuant to this Agreement. Any required withholding obligation with regard to the Grantee may be satisfied as set forth in Article 15 of the Plan (if permitted by the Committee) by reducing the amount of cash or Shares otherwise deliverable upon exercise of the Option.

 

10.            Entire Agreement; Amendment. This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter. The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan. This Agreement may also be modified or amended by a writing signed by both the Company and the Grantee. The Company shall give written notice to the Grantee of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.

 

11.            Notices. Any notice hereunder by the Grantee shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the Chief Financial Officer of the Company. Any notice hereunder by the Company shall be given to the Grantee in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Grantee may have on file with the Company.

 

12.            No Right to Employment or Service. Any questions as to whether and when there has been a Termination of Service and the cause of such Termination of Service shall be determined in the sole discretion of the Committee. Nothing in this Agreement shall interfere with or limit in any way the right of the Company or its Affiliates to terminate the Grantee’s employment or service at any time, for any reason and with or without Cause.

 

13.            Transfer of Personal Data. The Grantee authorizes, agrees and unambiguously consents to the transmission by the Company (or any Affiliate) of any personal data related to the Option awarded under this Agreement for legitimate business purposes (including, without limitation, the administration of the Plan). This authorization and consent is freely given by the Grantee.

 

14.            Compliance with Laws. The issuance of the Option (and the Option Shares upon exercise of the Option) pursuant to this Agreement shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act and in each case any respective rules and regulations promulgated thereunder) and any other law or regulation applicable thereto. The Company shall not be obligated to issue the Option or any of the Option Shares pursuant to this Agreement if any such issuance would violate any such requirements.

 

15.            Section 409A. Notwithstanding anything herein or in the Plan to the contrary, the Option is intended to be exempt from the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent.

 

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16.            Binding Agreement; Assignment. This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns. The Grantee shall not assign (except in accordance with Section 7 hereof) any part of this Agreement without the prior express written consent of the Company.

 

17.            Headings. The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.

 

18.            Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.

 

19.            Further Assurances. Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.

 

20.            Severability. The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

 

21.            Acquired Rights. The Grantee acknowledges and agrees that: (a) the Company may terminate or amend the Plan at any time; (b) the award of the Option made under this Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company; (c) no past grants or awards (including, without limitation, the Option awarded hereunder) give the Grantee any right to any grants or awards in the future whatsoever; and (d) any benefits granted under this Agreement are not part of the Grantee’s ordinary salary, and shall not be considered as part of such salary in the event of severance, redundancy or resignation.

 

22.            Restrictive Covenants.

 

(a)            Definitions. For purposes of this Section 22, the following terms shall have the following meanings:

 

(i)“Business of Company” means the business of providing banking services to commercial and consumer customers.

 

(ii)“Company” means the Georgia Banking Company, Inc., or any of its subsidiaries, including Georgia Banking Company.

 

(iii)“Competing Business” means any Person, business or subdivision of a business which substantially engages in the Business of Company, or which is actively planning to engage in the Business of Company, excluding subdivisions of a business, if any, which are unrelated to the Business of Company.

 

(iv)“Confidential Information” means proprietary or confidential data, information, documents, or materials (in oral, written, electronic or other forms) that belongs to or pertains to the Company and which was disclosed to the Grantee or which the Grantee became aware of as a consequence of the Grantee’s relationship with the Company, which is of tangible or intangible value to the Company, and the details of which are not generally known to the competitors of the Company. Confidential Information shall include (but is not limited to): (i) the identities of the Company’s customers or potential customers, their purchasing histories, and the terms or proposed terms upon which the Company offers or may offer its products and services to such customers, (ii) the identity of Company vendors or potential vendors, and the terms or proposed terms upon which the Company may purchase products and services from such vendors, (iii) technology used by the Company to provide its services, (iv) marketing and/or business plans and strategies, (v) financial reports and analyses regarding the revenues, expenses, profitability and operations of the Company, (vi) the nature, origin, composition and development of the Company’s products and services, and (vii) information provided to the Company by third parties under a duty to maintain the confidentiality of such information. Notwithstanding the foregoing, Confidential Information shall not include information: (x) that has been voluntarily disclosed to the public by the Company, except where such public disclosure has been made by the Grantee without authorization from the Company, (y) that has been independently developed and disclosed by others, or (z) that has otherwise entered the public domain through lawful means.

 

5

 

 

(v)“Customer” means any Person to which the Company has sold its products or provided its services (including those to which such products or services are sold or provided during the Grantee’s employment).

 

(vi)“Material Contact” for purposes of the non-solicitation of Company employees and contractors provision contained in Section 22(c) of this Agreement means contact in person, by telephone, or by paper or electronic correspondence, in furtherance of the business interests of the Company, and within the twenty-four (24) months prior to the solicitation.

 

(vii)“Material Contact” for purposes of the customer non-solicitation provision contained in Section 22(d) of this Agreement means contact between the Grantee and each Customer or potential customer of the Company within the twenty-four (24) months prior to the solicitation:

 

(1)with whom or which the Grantee dealt on behalf of the Company;

 

(2)whose dealings with the Company were coordinated or supervised by the Grantee;

 

(3)about whom the Grantee obtained Confidential Information in the ordinary course of business as a result of the Grantee’s association with the Company; or

 

(4)who receives products or services authorized by Company, the sale or provision of which results or resulted in compensation, commissions or earnings for the Grantee within the two (2) years prior to the date of the Grantee’s termination or resignation.

 

6

 

 

(viii)“Prospective Customer” means any Person which the Company has solicited to purchase the Company’s products or use its services (including those solicited during the Grantee’s employment).

 

(ix)“Restricted Period” means during the Grantee’s employment with the Company and the twelve (12) months following the Grantee’s separation from employment from the Company for any reason or no reason.

 

(x)            “Trade Secrets” means trade secrets as defined by applicable law.

 

(b)            Confidentiality.

 

(i)No Disclosure of Confidential Information and Trade Secrets. The Grantee agrees that during employment, and following the Grantee’s separation from employment from the Company for any reason or no reason, the Grantee will not directly or indirectly use, copy, disclose, publish or otherwise distribute to any other Person any Confidential Information or Trade Secrets of the Company. In the event that the Grantee becomes aware of unauthorized disclosures of the Confidential Information by anyone at any time, whether intentionally or by accident, the Grantee shall promptly notify the Company. This Agreement does not limit the remedies available to the Company under common or statutory law as to trade secrets or other types of confidential information, which may impose additional duties of non-use or non-disclosure.

 

(ii)Exception for Disclosure of Trade Secrets in Certain Circumstances. Notwithstanding anything herein to the contrary, the Grantee shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a Trade Secret that (i) is made in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney and solely for the purpose of reporting or investigating a suspected violation of law or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, if the Grantee files a lawsuit for retaliation for reporting a suspected violation of law, the Grantee may disclose the Trade Secret to his or her attorney and use the Trade Secret information in the court proceeding, as long as the Grantee files any document containing the Trade Secret under seal and does not disclose the Trade Secret, except pursuant to court order.

 

(c)            Non-Solicitation of Company Employees and Contractors. The Grantee agrees that during the Restricted Period, the Grantee shall not, directly or indirectly, whether on the Grantee’s own behalf or on behalf of any other Person, solicit, recruit, attempt to solicit or recruit, or induce any employee or independent contractor of the Company with whom the Grantee had Material Contact, to terminate or lessen such employment or contract with the Company.

 

(d)            Non-Solicitation of Company Customers. The Grantee agrees that during the Restricted Period, the Grantee shall not, directly or indirectly, whether on the Grantee’s own behalf or on behalf of any other Person, solicit, divert or appropriate any Customers, Prospective Customers, correspondents or other sources of or purchasers of loans of the Company with whom the Grantee had Material Contact, for the purpose of selling any products or services for a Competing Business.

 

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(e)            Acknowledgements. The Grantee acknowledges and agrees that the provisions of Section 22 of this Agreement (the “Restrictive Covenants”) are reasonable as to time, scope and territory given the Company’s need to protect its Confidential Information and its relationships and goodwill with its Customers, suppliers, employees and contractors, all of which have been developed at great time and expense to the Company. The Grantee represents that the Grantee has the skills and abilities to obtain alternative employment that would not violate the Restrictive Covenants in the event that the Grantee leaves employment with the Company, and that the Restrictive Covenants do not pose an undue hardship on the Grantee. The Grantee further acknowledges that the Grantee’s breach of any of the Restrictive Covenants would likely cause irreparable injury to the Company, and therefore entitle the Company to injunctive relief, in addition to any other remedies available in law or equity or pursuant to Section 22(f) below.

 

(f)            Claw Back. The Grantee further acknowledges and agrees that, if the Grantee breaches any of the Restrictive Covenants set forth herein, (i) the Grantee shall forfeit any and all rights with respect to the Options granted pursuant to this Agreement and the Plan (whether vested or otherwise) and any other rights and interests with respect thereto; (ii) no further Shares or other amounts shall be paid to the Grantee under this Agreement; and (iii) the Grantee shall return to the Company, no later than thirty (30) days after such breach, any Shares or other cash or property received with respect to the Options granted pursuant to this Agreement and the Plan (including any gross proceeds (before taxes or other deductions) received from the disposition of any Shares acquired pursuant to such Options or their then fair market value if no proceeds were received upon such disposition). The terms set forth in this Agreement concerning the right of the Company to a claw back are in addition to any other rights to recovery or damages available at law or equity and are not a limitation of any such rights. This provision shall survive the termination of the Grantee’s employment or service with the Company or any of its subsidiaries at any time and for any reason.

 

23.            Acknowledgment. BY ACCEPTING THIS AGREEMENT, THE GRANTEE ACKNOWLEDGES THAT THE GRANTEE HAS READ, UNDERSTOOD AND AGREES TO ALL OF THE PROVISIONS OF THIS AGREEMENT, AND THAT THE GRANTEE WAS AFFORDED SUFFICIENT OPPORTUNITY BY THE COMPANY TO OBTAIN INDEPENDENT LEGAL ADVICE AT THE GRANTEE’S EXPENSE PRIOR TO ACCEPTING THIS AGREEMENT.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

 

  GEORGIA BANKING COMPANY, INC.
   
  By:                      
  Name:  
  Title:  

 

By signing below, the Grantee hereby accepts the Option subject to all its terms and provisions and agrees to be bound by the terms and provisions of this Agreement, including Section 22, and the Plan. The Grantee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board of Directors of the Company, or the Committee or other committee responsible for the administration of the Plan, upon any questions arising under the Plan.

 

  GRANTEE:
   
  By:                       
  Name:  

 

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Exhibit 10.17

 

INCENTIVE STOCK OPTION AGREEMENT

PURSUANT TO THE

GEORGIA BANKING COMPANY, INC. 2021 STOCK INCENTIVE PLAN

 

Grantee:                 ________________________

 

Original Grant Date: __________________

 

Date of Assumption:            June 1, 2026

 

Adjusted Per Share Exercise Price: $_______________

 

Number of Shares subject to this Option: _______________

 

Expiration Date: ______________________

 

THIS INCENTIVE STOCK OPTION AWARD AGREEMENT (this “Agreement”), dated as of Date of Assumption specified above, is entered into by and between Georgia Banking Company, Inc., a bank holding company organized and existing under the laws of the State of Georgia (the “Company”), and the Grantee specified above, pursuant to the Georgia Banking Company, Inc. 2021 Stock Incentive Plan, as in effect and as amended from time to time (the “Plan”), which is administered by the Executive Committee of the Board of Directors of the Company (the “Committee”);

 

WHEREAS, the Company and Tandem Bancorp, Inc. (“Tandem”) entered into that certain Agreement and Plan of Merger, dated February 24, 2026, by and between the Company and Tandem (the “Merger Agreement”), pursuant to which Tandem merged with and into the Company, with the Company as the surviving corporation, effective as of June 1, 2026 (the “Merger”);

 

WHEREAS, prior to the Merger, Tandem granted to Grantee a stock option to purchase [●] shares of Tandem’s common stock (the “Tandem Option”), subject to the terms and conditions of the Amended and Restated Tandem Bancorp, Inc. 2019 Stock Incentive Plan, as amended, and Grantee’s corresponding Incentive Stock Option Agreement dated as of [●] (the “Tandem Agreement”);

 

WHEREAS, in connection with the Merger and pursuant to the Merger Agreement, Grantee elected to convert Grantee’s outstanding and unexercised Tandem Option into an option to purchase shares of the Company’s common stock (the “Option”) equal to the number (rounded down to the nearest whole share) of (x) the number of shares of Tandem’s common stock subject to the Tandem Option immediately prior to the Effective Time (as defined in the Merger Agreement) times (y) 0.4800 (the “Exchange Ratio”), at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of Tandem’s common stock under the Tandem Option immediately prior to the Effective Time divided by (B) the Exchange Ratio; and

 

WHEREAS, pursuant to the Merger Agreement, the Option became fully vested and exercisable, as of the Effective Time;

 

 

 

NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, and in fulfillment of the Company’s obligations under Section 3.2 of the Merger Agreement, the parties hereto hereby mutually covenant and agree as follows:

 

1.            Incorporation by Reference; Plan Document Receipt. This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the award provided hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were each expressly set forth herein. Except as provided otherwise herein, any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan. The Grantee hereby acknowledges receipt of a true copy of the Plan and that the Grantee has read the Plan carefully and fully understands its content. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.

 

2.            Grant of Option. The Company hereby grants to the Grantee, as of the Grant Date specified above, an Incentive Stock Option (the “Option”) to acquire from the Company at the Per Share Exercise Price specified above, the aggregate number of shares of Common Stock specified above (the “Option Shares”). Except as otherwise provided by the Plan, the Grantee agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Grantee with any protection against potential future dilution of the Grantee’s interest in the Company for any reason. The Grantee shall have no rights as a shareholder with respect to any Shares covered by the Option unless and until the Grantee has become the holder of record of such Shares, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of any such Shares, except as otherwise specifically provided for in the Plan or this Agreement. Grantee agrees and understands that Grantee’s Tandem Option has been cancelled as of the Effective Time (and is no longer exercisable) and converted into this Option to acquire Option Shares pursuant to the terms of this Agreement. Grantee releases and waives all rights to the Tandem Option under the Tandem Agreement, as set forth in the Option Holder Release Agreement.

 

3.            Tax Matters. The Option granted hereunder is intended to continue to qualify as an “incentive stock option” under Section 422 of the Code. Notwithstanding the foregoing, the Option will not qualify as an “incentive stock option,” among other events, (a) if the Grantee disposes of the Option Shares at any time during the two-year period following the Original Grant Date or the one-year period following the date of exercise of the Option pursuant to which such Option Shares were acquired; (b) except in the event of the Grantee’s death or Disability, if the Grantee is not employed by the Company, a Parent Corporation or a Subsidiary Corporation at all times during the period beginning on the date of this Agreement and ending on the day that is three months before the date of any exercise of the Option; or (c) to the extent that the aggregate fair market value of the Shares subject to “incentive stock options” held by the Grantee which become exercisable for the first time in any calendar year (under all plans of the Company, a Parent Corporation or a Subsidiary Corporation) (including any accelerated vesting and exercisability in connection with the Company’s assumption of the Tandem Option) exceeds $100,000. For purposes of clause (c) above, the “fair market value” of the Shares shall be determined as of the Original Grant Date (as adjusted). To the extent that the Option does not qualify as an “incentive stock option,” it shall not affect the validity of the Option and shall constitute a separate non-qualified stock option. In the event that the Grantee disposes of the Option Shares within either two (2) years following the Original Grant Date or one year following the date of exercise of the Option, the Grantee must deliver to the Company, within seven (7) days following such disposition, a written notice specifying the date on which such Shares were disposed of, the number of Shares so disposed, and, if such disposition was by a sale or exchange, the amount of consideration received.

 

4.             Vesting and Exercise.

 

(a)              Vesting. The Option is fully vested and exercisable as of the date of this Agreement (the “Vesting Date”).

 

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(b)              Expiration. Unless earlier terminated in accordance with the terms and provisions of the Plan and/or this Agreement, all portions of the Option that have not been exercised previously shall expire and shall no longer be exercisable after the Expiration Date specified above.

 

5.             Termination of Service. Subject to the terms of the Plan and this Agreement, the Option, to the extent vested, shall remain exercisable as follows:

 

(a)              Termination of Service Due to Death or Disability. In the event of the Grantee’s Termination of Service by reason of death or Disability, the vested portion of the Option shall remain exercisable until the earlier of (i) one year from the date of such Termination of Service, and (ii) the expiration of the stated term of the Option pursuant to Section 4(b) hereof; provided, however, that in the case of a Termination of Service due to Disability, if the Grantee dies within such one year exercise period, any unexercised Option held by the Grantee shall thereafter be exercisable by the legal representative of the Grantee’s estate or the recipient of the unexercised Option by will or by the laws of descent and distribution, to the extent exercisable, for a period of one year from the date of death, but in no event beyond the expiration of the stated term of the Option pursuant to Section 4(b) hereof.

 

(b)             Termination Without Cause. In the event of the Grantee’s involuntary Termination of Service by the Company without Cause, the vested portion of the Option shall remain exercisable until the earlier of (i) ninety (90) days from the date of such Termination of Service, and (ii) the expiration of the stated term of the Option pursuant to Section 4(b) hereof.

 

(c)             Voluntary Resignation. In the event of the Grantee’s voluntary Termination of Service (other than a voluntary Termination of Service subject to and described in Section 5(d) hereof), the unexercised portion of the Option shall remain exercisable until the earlier of (i) thirty (30) days from the date of such Termination of Service, and (ii) the expiration of the stated term of the Option pursuant to Section 4(b) hereof.

 

(d)             Termination of Service for Cause. In the event of the Grantee’s Termination of Service for Cause or in the event of the Grantee’s voluntary Termination of Service (as provided in Section 5(c) hereof) after an event that would be grounds for a Termination of Service for Cause, the Grantee’s entire Option shall terminate and expire upon such Termination of Service. Additionally, during the first sixty (60) days after the Grantee’s Termination of Service for any reason other than Cause, the Company shall have the right to re-characterize such Termination of Service as a Termination of Service for Cause; upon such re-characterization, the entire outstanding Option will be forfeited.

 

6.            Method of Exercise and Payment. Subject to Section 9 hereof, the Option may be exercised by the Grantee, in whole or in part, at any time or from time to time prior to the expiration of the Option as provided herein and in accordance with the Plan.

 

7.            Non-Transferability. The Option, and any rights and interests with respect thereto, issued under this Agreement and the Plan shall not be sold, exchanged, transferred, assigned, or otherwise disposed of in any way by the Grantee (or any beneficiary(ies) of the Grantee), other than by testamentary disposition by the Grantee or the laws of descent and distribution. Any attempt to sell, exchange, transfer, assign, pledge, encumber or otherwise dispose of or hypothecate in any way the Option, or the levy of any execution, attachment or similar legal process upon the Option, contrary to the terms and provisions of this Agreement and/or the Plan shall be null and void and without legal force or effect.

 

8.            Governing Law. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Georgia, without regard to the choice of law principles thereof.

 

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9.             Withholding of Tax. The Company shall have the power and the right to deduct or withhold, or require the Grantee to remit to the Company, an amount sufficient to satisfy any federal, state, local and foreign taxes of any kind (including, but not limited to, the Grantee’s FICA and other obligations) which the Company, in its sole discretion, deems necessary to be withheld or remitted to comply with the Code and/or any other applicable law with respect to the Option and, if the Grantee fails to do so, the Company may otherwise refuse to issue or transfer any Shares otherwise required to be issued pursuant to this Agreement. Any required withholding obligation with regard to the Grantee may be satisfied as set forth in Article 15 of the Plan (if permitted by the Committee) by reducing the amount of cash or Shares otherwise deliverable upon exercise of the Option.

 

10.          Entire Agreement; Amendment. This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter. The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan. This Agreement may also be modified or amended by a writing signed by both the Company and the Grantee. The Company shall give written notice to the Grantee of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.

 

11.          Notices. Any notice hereunder by the Grantee shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the Chief Financial Officer of the Company. Any notice hereunder by the Company shall be given to the Grantee in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Grantee may have on file with the Company.

 

12.          No Right to Employment or Service. Any questions as to whether and when there has been a Termination of Service and the cause of such Termination of Service shall be determined in the sole discretion of the Committee. Nothing in this Agreement shall interfere with or limit in any way the right of the Company or its Affiliates to terminate the Grantee’s employment or service at any time, for any reason and with or without Cause.

 

13.          Transfer of Personal Data. The Grantee authorizes, agrees and unambiguously consents to the transmission by the Company (or any Affiliate) of any personal data related to the Option awarded under this Agreement for legitimate business purposes (including, without limitation, the administration of the Plan). This authorization and consent is freely given by the Grantee.

 

14.          Compliance with Laws. The issuance of the Option (and the Option Shares upon exercise of the Option) pursuant to this Agreement shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act and in each case any respective rules and regulations promulgated thereunder) and any other law or regulation applicable thereto. The Company shall not be obligated to issue the Option or any of the Option Shares pursuant to this Agreement if any such issuance would violate any such requirements.

 

15.           Section 409A. Notwithstanding anything herein or in the Plan to the contrary, the Option is intended to be exempt from the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent.

 

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16.           Binding Agreement; Assignment. This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns. The Grantee shall not assign (except in accordance with Section 7 hereof) any part of this Agreement without the prior express written consent of the Company.

 

17.           Headings. The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.

 

18.          Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.

 

19.          Further Assurances. Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.

 

20.           Severability. The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

 

21.           Acquired Rights. The Grantee acknowledges and agrees that: (a) the Company may terminate or amend the Plan at any time; (b) the award of the Option made under this Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company pursuant to the terms of the Merger Agreement; (c) no past grants or awards (including, without limitation, the Option awarded hereunder) give the Grantee any right to any grants or awards in the future whatsoever; and (d) any benefits granted under this Agreement are not part of the Grantee’s ordinary salary, and shall not be considered as part of such salary in the event of severance, redundancy or resignation.

 

22.          Acknowledgment. BY ACCEPTING THE AGREEMENT, THE GRANTEE ACKNOWLEDGES THAT THE GRANTEE HAS READ, UNDERSTOOD AND AGREES TO ALL OF THE PROVISIONS OF THIS AGREEMENT, AND THAT THE GRANTEE WAS AFFORDED SUFFICIENT OPPORTUNITY BY THE COMPANY TO OBTAIN INDEPENDENT LEGAL ADVICE AT THE GRANTEE’S EXPENSE PRIOR TO ACCEPTING THE AGREEMENT.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

 

  GEORGIA BANKING COMPANY, INC.
   
   
  By:            
  Name:
  Title:

 

 

By signing below, the Grantee hereby accepts the Option subject to all its terms and provisions and agrees to be bound by the terms and provisions of this Agreement and the Plan. The Grantee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board of Directors of the Company, or the Committee or other committee responsible for the administration of the Plan, upon any questions arising under the Plan.

 

  GRANTEE:
   
   
  By:            
  Name:

 

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Exhibit 10.18

 

NON-QUALIFIED STOCK OPTION AGREEMENT

PURSUANT TO THE

AMENDED AND RESTATED

GEORGIA BANKING COMPANY, INC. 2021 STOCK INCENTIVE PLAN

 

Grantee:              __________________________

 

Original Grant Date: ____________________

 

Date of Assumption:             June 1, 2026

 

Adjusted Per Share Exercise Price: $_______________

 

Number of Shares subject to this Option: _______________

 

Expiration Date: ________________________

 

THIS NON-QUALIFIED STOCK OPTION AWARD AGREEMENT (this “Agreement”), dated as of Date of Assumption specified above, is entered into by and between Georgia Banking Company, Inc., a bank holding company organized and existing under the laws of the State of Georgia (the “Company”), and the Grantee specified above, pursuant to the Georgia Banking Company, Inc. 2021 Stock Incentive Plan, as in effect and as amended from time to time (the “Plan”), which is administered by the Executive Committee of the Board of Directors of the Company (the “Committee”);

 

WHEREAS, the Company and Tandem Bancorp, Inc. (“Tandem”) entered into that certain Agreement and Plan of Merger, dated February 24, 2026, by and between the Company and Tandem (the “Merger Agreement”), pursuant to which Tandem merged with and into the Company, with the Company as the surviving corporation, effective as of June 1, 2026 (the “Merger”);

 

 

WHEREAS, prior to the Merger, Tandem granted to Grantee a stock option to purchase [_________] shares of Tandem’s common stock (the “Tandem Option”), subject to the terms and conditions of the Amended and Restated Tandem Bancorp, Inc. 2019 Stock Incentive Plan, as amended, and Grantee’s corresponding Incentive Stock Option Agreement dated as of [______________], as amended by that certain First Amendment to Incentive Stock Option Agreement, dated as of May 28, 2026 (the “Tandem Agreement”);

 

 

WHEREAS, in connection with the Merger and pursuant to the Merger Agreement, Grantee elected to convert Grantee’s outstanding and unexercised Tandem Option into an option to purchase shares of the Company’s common stock (the “Option”) equal to the number (rounded down to the nearest whole share) of (x) the number of shares of Tandem’s common stock subject to the Tandem Option immediately prior to the Effective Time (as defined in the Merger Agreement) times (y) 0.4800 (the “Exchange Ratio”), at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of Tandem’s common stock under the Tandem Option immediately prior to the Effective Time divided by (B) the Exchange Ratio; and

 

 

WHEREAS, pursuant to the Merger Agreement, the Option became fully vested and exercisable, as of the Effective Time;

 

 

 

NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, and in fulfillment of the Company’s obligations under Section 3.2 of the Merger Agreement, the parties hereto hereby mutually covenant and agree as follows:

 

1.               Incorporation By Reference; Plan Document Receipt. This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the award provided hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were each expressly set forth herein. Except as provided otherwise herein, any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan. The Grantee hereby acknowledges receipt of a true copy of the Plan and that the Grantee has read the Plan carefully and fully understands its content. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control. No part of the Option granted hereby is intended to qualify as an “incentive stock option” under Section 422 of the Code.

 

2.              Grant of Option. The Company hereby grants to the Grantee, as of the Grant Date specified above, a Non-Qualified Stock Option (the “Option”) to acquire from the Company at the Per Share Exercise Price specified above, the aggregate number of shares of Common Stock specified above (the “Option Shares”). Except as otherwise provided by the Plan, the Grantee agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Grantee with any protection against potential future dilution of the Grantee’s interest in the Company for any reason. The Grantee shall have no rights as a shareholder with respect to any Shares covered by the Option unless and until the Grantee has become the holder of record of such Shares, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of any such Shares, except as otherwise specifically provided for in the Plan or this Agreement. Grantee agrees and understands that Grantee’s Tandem Option has been cancelled as of the Effective Time (and is no longer exercisable) and converted into this Option to acquire Option Shares pursuant to the terms of this Agreement. Grantee releases and waives all rights to the Tandem Option under the Tandem Agreement, as set forth in the Option Holder Release Agreement. Grantee also acknowledges and agrees that Grantee’s Tandem Option no longer qualified as an “incentive stock option” within the meaning of Section 422 of the Code as a result of the modification of the Tandem Option by that certain First Amendment to Incentive Stock Option Agreement, dated as of May 28, 2026 (the “First Amendment”), and therefore this Option does not qualify as an “incentive stock option,” and will not be eligible for tax treatment as an “incentive stock option,” on any exercise on or after the Date of Assumption (notwithstanding Section 2 of the First Amendment).

 

3.               Vesting and Exercise.

 

 (a)              Vesting. The Option is fully vested and exercisable as of the date of this Agreement (the “Vesting Date”).

 

 (b)              Expiration. Unless earlier terminated in accordance with the terms and provisions of the Plan and/or this Agreement, all portions of the Option that have not been exercised previously shall expire and shall no longer be exercisable after the Expiration Date specified above.

 

4.               Termination of Service. In the event of the Grantee’s Termination of Service for any reason other than Cause (and provided that Cause is not determined to exist as described below in this paragraph), the unexercised portion of the Option shall remain exercisable until the Expiration Date; provided, however, that in the case of a Termination of Service due to death or Disability, any unexercised Option held by the Grantee shall thereafter be exercisable, as applicable, by the legal representative of the Grantee or the Grantee’s estate or the recipient of the unexercised Option by will or by the laws of descent and distribution until the Expiration Date. In the event of the Grantee’s Termination of Service for Cause or in the event of the Grantee’s voluntary Termination of Service after an event that would be grounds for a Termination of Service for Cause, the Grantee’s entire Option (whether or not vested) shall terminate and expire upon such Termination of Service. Additionally, during the first sixty (60) days after the Grantee’s Termination of Service for any reason other than Cause, the Company shall have the right to re-characterize such Termination of Service as a Termination of Service for Cause; upon such re-characterization, the entire outstanding Option (whether or not vested) will be forfeited.

 

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5.               Method of Exercise and Payment. Subject to Section 8 hereof, the Option may be exercised by the Grantee, in whole or in part, at any time or from time to time prior to the expiration of the Option as provided herein and in accordance with the Plan.

 

6.               Non-Transferability. The Option, and any rights and interests with respect thereto, issued under this Agreement and the Plan shall not be sold, exchanged, transferred, assigned, or otherwise disposed of in any way by the Grantee (or any beneficiary(ies) of the Grantee), other than by testamentary disposition by the Grantee or the laws of descent and distribution. Notwithstanding the foregoing, the Committee may, in its sole discretion, permit the Option to be transferred to a Permitted Transferee for no value, provided that such transfer shall only be valid upon execution of a written instrument in form and substance acceptable to the Committee in its sole discretion evidencing such transfer and the transferee’s acceptance thereof signed by the Grantee and the transferee, and provided, further, that the Option may not be subsequently transferred other than by will or by the laws of descent and distribution or to another Permitted Transferee (as permitted by the Committee in its sole discretion) in accordance with the terms of the Plan and this Agreement, and shall remain subject to the terms of the Plan and this Agreement. Any attempt to sell, exchange, transfer, assign, pledge, encumber or otherwise dispose of or hypothecate in any way the Option, or the levy of any execution, attachment or similar legal process upon the Option, contrary to the terms and provisions of this Agreement and/or the Plan shall be null and void and without legal force or effect.

 

7.               Governing Law. All questions concerning the construction, validity and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Georgia, without regard to the choice of law principles thereof.

 

8.               Withholding of Tax. The Company shall have the power and the right to deduct or withhold, or require the Grantee to remit to the Company, an amount sufficient to satisfy any federal, state, local and foreign taxes of any kind (including, but not limited to, the Grantee’s FICA and other obligations) which the Company, in its sole discretion, deems necessary to be withheld or remitted to comply with the Code and/or any other applicable law with respect to the Option and, if the Grantee fails to do so, the Company may otherwise refuse to issue or transfer any Shares otherwise required to be issued pursuant to this Agreement. Any required withholding obligation with regard to the Grantee may be satisfied as set forth in Article 15 of the Plan (if permitted by the Committee) by reducing the amount of cash or Shares otherwise deliverable upon exercise of the Option.

 

9.               Entire Agreement; Amendment. This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter. The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan. This Agreement may also be modified or amended by a writing signed by both the Company and the Grantee. The Company shall give written notice to the Grantee of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.

 

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10.             Notices. Any notice hereunder by the Grantee shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the Chief Financial Officer of the Company. Any notice hereunder by the Company shall be given to the Grantee in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Grantee may have on file with the Company.

 

11.              No Right to Employment or Service. Any questions as to whether and when there has been a Termination of Service and the cause of such Termination of Service shall be determined in the sole discretion of the Committee. Nothing in this Agreement shall interfere with or limit in any way the right of the Company or its Affiliates to terminate the Grantee’s employment or service at any time, for any reason and with or without cause.

 

12.             Transfer of Personal Data. The Grantee authorizes, agrees and unambiguously consents to the transmission by the Company (or any Affiliate) of any personal data related to the Option awarded under this Agreement for legitimate business purposes (including, without limitation, the administration of the Plan). This authorization and consent is freely given by the Grantee.

 

13.             Compliance with Laws. The issuance of the Option (and the Option Shares upon exercise of the Option) pursuant to this Agreement shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act and in each case any respective rules and regulations promulgated thereunder) and any other law or regulation applicable thereto. The Company shall not be obligated to issue the Option or any of the Option Shares pursuant to this Agreement if any such issuance would violate any such requirements.

 

14.             Section 409A. Notwithstanding anything herein or in the Plan to the contrary, the Option is intended to be exempt from the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent.

 

15.             Binding Agreement; Assignment. This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns. The Grantee shall not assign (except in accordance with Section 6 hereof) any part of this Agreement without the prior express written consent of the Company.

 

16.             Headings. The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.

 

17.             Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.

 

18.             Further Assurances. Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.

 

19.             Severability. The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

 

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20.             Acquired Rights. The Grantee acknowledges and agrees that: (a) the Company may terminate or amend the Plan at any time; (b) the award of the Option made under this Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company pursuant to the Merger Agreement; (c) no past grants or awards (including, without limitation, the Option awarded hereunder) give the Grantee any right to any grants or awards in the future whatsoever; and (d) any benefits granted under this Agreement are not part of the Grantee’s ordinary salary, and shall not be considered as part of such salary in the event of severance, redundancy or resignation.

 

22.             Acknowledgment. BY ACCEPTING THE AGREEMENT, THE GRANTEE ACKNOWLEDGES THAT THE GRANTEE HAS READ, UNDERSTOOD AND AGREES TO ALL OF THE PROVISIONS OF THIS AGREEMENT, AND THAT THE GRANTEE WAS AFFORDED SUFFICIENT OPPORTUNITY BY THE COMPANY TO OBTAIN INDEPENDENT LEGAL ADVICE AT THE GRANTEE’S EXPENSE PRIOR TO ACCEPTING THE AGREEMENT.

 

[Remainder of Page Intentionally Left Blank]

 

5

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

 

 

  GEORGIA BANKING COMPANY, INC.
   
   
  By:            
  Name:
  Title:

 

By signing below, the Grantee hereby accepts the Option subject to all its terms and provisions and agrees to be bound by the terms and provisions of this Agreement and the Plan. The Grantee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board of Directors of the Company, or the Committee or other committee responsible for the administration of the Plan, upon any questions arising under the Plan.

 

  GRANTEE:
   
   
  By:            
  Name:

 

6

 

 

EXHIBIT A

 

[Performance criteria to be inserted, as applicable]

 

7

 

 

Exhibit 10.19

 

GEORGIA BANKING COMPANY, INC.

DEFERRED COMPENSATION PLAN

 

(As Amended and Restated Effective January 1, 2022)

 

 

 

 

GEORGIA BANKING COMPANY, INC.

DEFERRED COMPENSATION PLAN

(As Amended and Restated Effective January 1, 2022)

 

Georgia Banking Company, Inc., a bank holding company organized and existing under the laws of the State of Georgia (the “Company”), hereby amends and restates the Georgia Banking Company, Inc. Deferred Compensation Plan (the “Plan”), effective as of January 1, 2022 (the “Effective Date”), for the purpose of attracting and retaining high quality executives and Directors and promoting in them increased efficiency and an interest in the successful operation of the Company. The Plan is intended to, and shall be interpreted to, comply in all respects with Code Section 409A and those provisions of ERISA applicable to an unfunded plan maintained primarily to provide deferred compensation benefits for a select group of “management or highly compensated employees.”

 

ARTICLE I
DEFINITIONS

 

1.1           “Account” or “Accounts” shall mean the bookkeeping account or accounts established under this Plan pursuant to Article 4.

 

1.2           “Affiliate” of a person means, with respect to any person, any person which directly or indirectly controls, is controlled by, or is under common control with such 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 its Subsidiaries solely by reason of any investment in the Company. For purposes of this definition, “control” (including, with correlative meanings, the terms “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.

 

1.3           “Base Salary” shall mean a Participant’s annual base salary, excluding incentive and discretionary bonuses, commissions, reimbursements and other non-regular remuneration, received from the Employer prior to reduction for any salary deferrals under benefit plans sponsored by the Employer, including but not limited to plans established pursuant to Code Section 125 or qualified pursuant to Code Section 401(k).

 

1.4           “Beneficiary” or “Beneficiaries” shall mean the person, persons or entity designated as such pursuant to Section 7.1.

 

1.5           “Board” shall mean the Board of Directors of the Company.

 

1.6           “Bonus(es)” shall mean amounts paid to the Participant by the Employer in the form of discretionary or annual incentive compensation or any other bonus designated by the Committee, before reductions for contributions to or deferrals under any benefit plans sponsored by the Employer, including but not limited to plans established pursuant to Code Section 125 or qualified pursuant to Code Section 401(k).

 

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1.7           “Change in Control” shall mean if, at any time after the date hereof, any of the following events shall have occurred:

 

(a)           Any person becomes a beneficial owner (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the total voting power of the outstanding voting securities of the Company; provided, however, that the event described in this clause (a) will not be deemed a Change in Control by virtue of any holdings or acquisitions: (i) by the Company or any of its Subsidiaries, (ii) by any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its Subsidiaries; provided that such holdings or acquisitions by any such plan (other than any plan maintained under Section 401(k) of the Code) or related trust do not exceed 50% of the total voting power of the then outstanding voting securities of the Company, (iii) by any underwriter temporarily holding securities of the Company pursuant to an offering of such securities or (iv) pursuant to a Non-Qualifying Transaction;

 

(b)           The consummation of a merger, consolidation, statutory share exchange or similar transaction that requires adoption by the Company’s shareholders (a “Business Combination”), unless immediately following such Business Combination: (x) more than 50% of the total voting power of the outstanding voting securities of the corporation resulting from such Business Combination (the “Surviving Corporation”), or, if applicable, the ultimate parent corporation that, directly or indirectly, has beneficial ownership (as such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), of 100% of the total voting power of the outstanding voting securities eligible to elect directors of the Surviving Corporation (the “Parent Corporation”), is represented by securities that were outstanding immediately before such Business Combination (or, if applicable, is represented by shares into which such voting securities were converted pursuant to such Business Combination), and (y) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) following the consummation of the Business Combination are Incumbent Directors (as defined below) at the time the Board approved the execution of the agreement providing for such Business Combination (any Business Combination which satisfies all of the criteria specified in (x) and (y) above will be deemed a “Non-Qualifying Transaction”);

 

(c)           Consummation of a plan of liquidation or dissolution of the Company or a sale of all or substantially all of the Company’s assets, in either event other than a Non-Qualifying Transaction; or

 

(d)           During any twelve (12)-month period, Incumbent Directors cease to constitute a majority of the members of the Board.

 

For purposes of this Section 1.7, the term “Incumbent Director” means, as of any date of determination, an individual who is either (a) a member of the Board as of the effective date of the adoption of this Plan or (b) a member who becomes a member of the Board subsequent to the date of the adoption of this Plan whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least sixty percent (60%) of the then Incumbent Board Members (either by a specific vote or by approval of the proxy statement of the Company in which that person is named as a nominee for director, without objection to that nomination), but excluding, for that purpose, any individual whose initial assumption of office occurs as a result of an actual or threatened election contest (within the meaning of Rule 14a-11 of the Exchange Act) 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.

 

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Notwithstanding the foregoing, a Change of Control shall not occur for purposes of this Plan unless such Change of Control also constitutes a “change in control event” under Section 409A of the Code and the regulations thereunder.

 

1.8           “Code” shall mean the Internal Revenue Code of 1986, as amended, as interpreted by Treasury regulations and applicable authorities promulgated thereunder.

 

1.9           “Commissions” shall mean amounts paid to the Participant by the Employer in the form of commissions and designated by the Committee as eligible for deferral under the Plan, before reductions for contributions to or deferrals under any benefit plans sponsored by the Employer, including but not limited to plans established pursuant to Code Section 125 or qualified pursuant to Code Section 401(k).

 

1.10         “Committee” shall mean the person or persons appointed by the Board to administer the Plan in accordance with Article 9.

 

1.11         “Company Contributions” shall mean the contributions made by the Company pursuant to Section 3.3.

 

1.12         “Company Contribution Account” shall mean the Account maintained for the benefit of the Participant which is credited with Company Contributions, if any, pursuant to Section 4.2.

 

1.13         “Compensation” shall mean all amounts eligible for deferral for a particular Plan Year under Section 3.1.

 

1.14         “Crediting Rate” shall mean the notional earnings and losses credited on the Participant’s Account balance which are based on the Participant’s choice (or, if applicable, Committee’s direction) among the investment alternatives made available by the Committee pursuant to Section 3.4 of the Plan.

 

1.15         “Deferral Account” shall mean an Account maintained for each Participant that is credited with Participant Deferrals pursuant to Section 4.1

 

1.16         “Deferrals” shall mean the contributions made by the Participant pursuant to Section 3.1.

 

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1.17         “Director” shall mean a member of the Board and/or any member of the Board of Directors of any Subsidiary, who is selected by the Committee to be eligible to participate in the Plan.

 

1.18         “Director’s Fees” shall mean compensation for services as a member of the Board of Directors of the Company or any Subsidiary, excluding reimbursement of expenses or other non-regular forms of compensation, before reductions for contributions to or deferrals under any deferred compensation plan sponsored by the Company or any Subsidiary. The Committee may, in its discretion, provide for separate Participant Elections for the portion of the Director’s Fees that serves as a cash retainer and the portion of the Director’s Fees that reflects meeting fees, as applicable.

 

1.19         “Disability” or “Disabled” shall mean (consistent with the requirements of Code Section 409A) that the Participant (a) is unable to engage in any substantial gainful activity 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 12 months, or (b) is, 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 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Participant’s Employer. For purposes of this Plan, a Participant shall be deemed Disabled if determined to be totally disabled by the Social Security Administration. A Participant shall also be deemed Disabled if determined to be disabled in accordance with the applicable disability insurance program of such Participant’s Employer, provided that the definition of “disability” applied under such disability insurance program complies with the requirements of this Section.

 

1.20         “Distributable Amount” shall mean the vested balance in the applicable Account as determined under Article 4.

 

1.21         “Eligible Executive” shall mean a highly compensated or management level employee of an Employer selected by the Committee to be eligible to participate in the Plan.

 

1.22         “Employer(s)” shall be defined as follows:

 

(a)           Except as otherwise provided in part (b) of this Section, the term “Employer” shall mean the Company and/or any of its Subsidiaries (now in existence or hereafter formed or acquired) that have been selected by the Board to participate in the Plan and have adopted the Plan as a sponsor.

 

(b)           For the purpose of determining whether a Participant has experienced a Separation from Service, the term “Employer” shall mean:

 

(1)           The entity for which the Participant performs services and with respect to which the legally binding right to compensation deferred or contributed under this Plan arises; and

 

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(2)           All other entities with which the entity described above would be aggregated and treated as a single employer under Code Section 414(b) (controlled group of corporations) and Code Section 414(c) (a group of trades or businesses, whether or not incorporated, under common control), as applicable. In order to identify the group of entities described in the preceding sentence, however, the Committee shall use an ownership threshold of at least 50% as a substitute for the 80% minimum ownership threshold that appears in, and otherwise must be used when applying, the applicable provisions of (A) Code Section 1563 for determining a controlled group of corporations under Code Section 414(b), and (B) Treas. Reg. §1.414(c)-2 for determining the trades or businesses that are under common control under Code Section 414(c).

 

1.23         “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended, including Department of Labor and Treasury regulations and applicable authorities promulgated thereunder.

 

1.24         “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, as such law, rules and regulations may be amended from time to time.

 

1.25         “Financial Hardship” shall mean a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, or a dependent (as defined in Code Section 152, without regard to Code Section 152(b)(1), (b)(2), and (d)(1)(B))) of the Participant, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, but shall in all events correspond to the meaning of the term “unforeseeable emergency” under Code Section 409A.

 

1.26         “Fund” or “Funds” shall mean one or more of the investments selected by the Committee pursuant to Section 3.4 of the Plan.

 

1.27         “Hardship Distribution” shall mean an accelerated distribution of vested benefits or a cancellation of deferral elections pursuant to Section 6.6 to a Participant who has suffered a Financial Hardship.

 

1.28         “Joint Notices” shall mean the Employee Benefits Security Administration (“EBSA”) Disaster Relief Notice 2020-01, Notice of Extension of Certain Timeframes for Employee Benefit Plans, Participants, and Beneficiaries Affected by the COVID-19 Outbreak issued by the Department of Labor, the Department of the Treasury and the Internal Revenue Service, EBSA Disaster Relief Notice 2021-01, and any successors thereto.

 

1.29         “Outbreak Period” shall mean the period from March 1, 2020 through the date that is 60 days after the announced end of the national emergency related to the COVID-19 pandemic, or through such other date announced by the federal agencies.

 

1.30         “Participant” shall mean any Eligible Executive or Director who becomes a Participant in this Plan in accordance with Article 2.

 

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1.31         “Participant Election(s)” shall mean the forms or procedures by which a Participant makes elections with respect to (a) voluntary deferrals of his/her Compensation, (b) the Funds, which shall act as the basis for crediting of interest on Account balances, and (c) the form and timing of distributions from Accounts. Participant Elections may take the form of an electronic communication followed by appropriate confirmation according to specifications established by the Committee.

 

1.32         “Payment Date” shall mean the date by which a total distribution of the Distributable Amount shall be made or the date by which installment payments of the Distributable Amount shall commence.

 

(a)           For benefits triggered by the Separation from Service (including Retirement) or death of a Participant, the Payment Date shall be as soon as administratively practicable (but no later than ninety (90) days) after the event triggering the payout occurs, and the applicable amount shall be calculated as of the last business day of the month in which the event triggering the payout occurs. Subsequent installments, if any, shall be paid as soon as administratively practicable in, and no later than the last day of, the same calendar quarter of each Plan Year following the Plan Year in which the event triggering the payout occurs, and the applicable amount shall be calculated as of the last business day of the month immediately preceding the month in which the subsequent installment will be paid. In the case of death, the Committee shall be provided with documentation reasonably necessary to establish the fact of the Participant’s death; and

 

(b)           The Payment Date of a Scheduled Distribution or a Scheduled Vesting Date Distribution shall be that date as soon as administratively practicable (but no later than ninety (90) days) after the date on which the distribution is scheduled to commence, and the applicable Distributable Amount shall be calculated as of the last business day of the month immediately preceding the month in which the distribution will be paid. Subsequent installments, if any, shall be paid as soon as administratively practicable in, and no later than the last day of, the same calendar quarter of each Plan Year following the Plan Year in which the Payment Date of the Scheduled Distribution or Scheduled Vesting Date Distribution occurs, and the applicable amount shall be calculated as of the last business day of the month immediately preceding the month in which the subsequent installment will be paid.

 

Notwithstanding the foregoing, the Payment Date shall not be before the earliest date on which benefits may be distributed under Code Section 409A without violation of the provisions thereof, as reasonably determined by the Committee.

 

The Distributable Amount shall be determined for amounts credited to the Company Stock Unit Account based on the fair market value of the Stock, as determined by the Committee for valuing Stock and designated for use under the Plan, as of the last business day of the month immediately preceding the date the Distributable Amount is to be paid.

 

1.33         “Performance-Based Compensation” shall mean Compensation the entitlement to or amount of which is contingent on the satisfaction of pre-established organizational or individual performance criteria relating to a performance period of at least 12 consecutive months, as determined by the Committee in accordance with Treas. Reg. §1.409A-1(e).

 

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1.34         “Person” shall mean any individual, sole proprietorship, partnership, joint venture, limited liability company, trust, unincorporated organization, association, corporation, institution, public benefit corporation, entity or government instrumentality, division, agency, body or department.

 

1.35         “Plan Year” shall mean the calendar year.

 

1.36         “Prorated Percentage” shall mean that percentage, (i) the numerator of which is the sum of one (1) (provided the Participant remains employed by or in service to the Company or any Subsidiary from the date the amounts are credited to the Participant’s Account(s) through the last day of the Plan Year in which the amounts are credited to the Participant’s Account(s)) plus that number of full Plan Years after the Plan Year in which the amounts are credited to the Participant’s Account(s), during which the Participant remained employed by or in service to the Company or any Subsidiary, and (ii) the denominator of which is the sum of one (1) plus that number of Plan Years after the Plan Year in which the amounts are credited to the Participant’s Account(s) that Participant had to remain employed by or in service to the Company or any Subsidiary for the entirety of such amounts to vest in full.

 

1.37         “Restricted Stock Units” shall mean rights to receive shares of Stock (or cash based on the fair market value of shares of Stock) selected by the Committee in its sole discretion and awarded to the Participant under an equity incentive plan or director compensation program, and the deferred amount shall be calculated using the closing price of Stock (based on the most recently available determination of such pricing, as determined by the Committee in its sole discretion) at the end of the business day closest to the date such Restricted Stock Unit would otherwise vest, but for the election to defer. The portion of any Restricted Stock Unit deferred shall, at the time the Restricted Stock Unit would otherwise vest under the terms of the applicable equity incentive plan or director compensation program, but for the election to defer, be reflected on the books of the Company as an unfunded, unsecured promise to deliver to the Participant a specific number of actual shares of Stock in the future or the fair market value of such number of shares of Stock in the form of cash, as set forth in the agreement awarding the Restricted Stock Units.

 

1.38         “Retirement” shall mean, for Deferrals and modifications of the time and form of payment of Deferrals and Discretionary Contributions other than by a Director, the Participant’s Separation from Service on or after age sixty-five (65) with the approval of the Committee to treat the Separation from Service as a “Retirement” and, for Deferrals and modifications of the time and form of payment of Deferrals and Discretionary Contributions by a Director, the Participant’s Separation from Service.

 

1.39         “Scheduled Distribution” shall mean a scheduled distribution date elected by the Participant or specified by the Committee (if the Participant does not, or is not permitted to, elect any such date) for distribution of amounts from a specified Account, including notional earnings and losses credited thereon, as provided under Section 6.4.

 

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1.40         “Scheduled Vesting Date Distribution” shall mean a scheduled distribution date, based upon the vesting date or dates originally determined by the Company in its sole discretion and communicated to the Participant prior to the deadline established by the Committee for submitting the Participant’s Election(s) or such other date or dates set forth herein, upon which the Participant’s Account(s) or portions thereof will vest, or continue to vest, on and after the Participant’s Retirement, for distribution of such amounts from a specified Account, including notional earnings and losses credited thereon, as provided under Section 6.4.

 

1.41         “Separation from Service” shall mean a termination of services provided by a Participant to his or her Employer, whether voluntarily or involuntarily, other than by reason of death, as determined by the Committee in accordance with Treas. Reg. §1.409A-1(h). In determining whether a Participant has experienced a Separation from Service, the following provisions shall apply:

 

(a)           For a Participant who provides services to an Employer as an employee, except as otherwise provided in part (c) of this Section, a Separation from Service shall occur when such Participant has experienced a termination of employment with such employer. A Participant shall be considered to have experienced a termination of employment when the facts and circumstances indicate that the Participant and his or her employer reasonably anticipate that either (i) no further services will be performed for the employer after a certain date, or (ii) that the level of bona fide services the Participant will perform for the employer after such date (whether as an employee or as an independent contractor) will permanently decrease to no more than 20% of the average level of bona fide services performed by such Participant (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services to the employer if the Participant has been providing services to the Employer less than 36 months).

 

If a Participant is on military leave, sick leave, or other bona fide leave of absence, the employment relationship between the Participant and the Employer shall be treated as continuing intact, provided that the period of such leave does not exceed 6 months, or if longer, so long as the Participant retains a right to reemployment with the Employer under an applicable statute or by contract. If the period of a military leave, sick leave, or other bona fide leave of absence exceeds 6 months and the Participant does not retain a right to reemployment under an applicable statute or by contract, the employment relationship shall be considered to be terminated for purposes of this Plan as of the first day immediately following the end of such 6-month period. In applying the provisions of this paragraph, a leave of absence shall be considered a bona fide leave of absence only if there is a reasonable expectation that the Participant will return to perform services for the Employer.

 

(b)           For a Participant, if any, who provides services to an Employer as an independent contractor, except as otherwise provided in part (c) of this Section, a Separation from Service shall occur upon the expiration of the contract (or in the case of more than one contract, all contracts) under which services are performed for such Employer, provided that the expiration of such contract(s) is determined by the Committee to constitute a good-faith and complete termination of the contractual relationship between the Participant and such Employer.

 

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(c)           For a Participant, if any, who provides services to an Employer as both an employee and an independent contractor, a Separation from Service generally shall not occur until the Participant has ceased providing services for such Employer as both an employee and as an independent contractor, as determined in accordance with the provisions set forth in parts (a) and (b) of this Section, respectively. Similarly, if a Participant either (i) ceases providing services for an Employer as an independent contractor and begins providing services for such Employer as an employee, or (ii) ceases providing services for an Employer as an employee and begins providing services for such Employer as an independent contractor, the Participant will not be considered to have experienced a Separation from Service until the Participant has ceased providing services for such Employer in both capacities, as determined in accordance with the applicable provisions set forth in parts (a) and (b) of this Section.

 

Notwithstanding the foregoing provisions in this part (c), if a Participant provides services for an Employer as both an employee and as a Director, to the extent permitted by Treas. Reg. §1.409A-1(h)(5) the services provided by such Participant as a Director shall not be taken into account in determining whether the Participant has experienced a Separation from Service as an employee, and the services provided by such Participant as an employee shall not be taken into account in determining whether the Participant has experienced a Separation from Service as a Director.

 

1.42         “Stock” shall mean the Company’s common stock, $0.01 par value per share, or any other equity securities of the Company designated by the Committee.

 

1.43         “Subsidiary” shall mean any corporation, company or other entity (i) more than 50% of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, limited liability company, joint venture or unincorporated association), but more than 50% of whose ownership interest representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company.

 

1.44         “Switch Date” shall mean, with respect to a Participant other than a Director, the date on which the sum of the Participant’s age plus Years of Service equals sixty (60).

 

1.45         “Years of Service” shall mean the cumulative consecutive years of continuous full-time employment with the Employer (including approved leaves of absence of six months or less or legally protected leaves of absence), beginning on the date the Participant most recently began service with the Employer, and counting each anniversary thereof. A partial year of employment shall not be treated as a Year of Service.

 

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ARTICLE II
PARTICIPATION

 

2.1           Enrollment Requirements; Commencement of Participation

 

(a)           As a condition to participation, each Eligible Executive and Director shall complete, execute and return to the Committee the appropriate Participant Elections, as well as such other documentation and information as the Committee reasonably requests, by the deadline(s) established by the Committee. In addition, the Committee shall establish from time to time such other enrollment requirements as it determines, in its sole discretion, are necessary.

 

(b)           Each Eligible Executive and Director shall commence participation in the Plan on the date that the Committee determines that the Eligible Executive or Director has met all enrollment requirements set forth in this Plan and required by the Committee, including returning all required documents to the Committee within the specified time period.

 

(c)           If an Eligible Executive or Director fails to meet all requirements established by the Committee within the period required, that Eligible Executive or Director shall not be eligible to participate in the Plan during such Plan Year.

 

ARTICLE III
CONTRIBUTIONS & DEFERRAL ELECTIONS

 

3.1           Elections to Defer Compensation. Elections to defer Compensation shall take the form of a whole percentage (less applicable payroll withholding requirements for Social Security, Medicare and income taxes and employee benefit plans, as determined in the sole and absolute discretion of the Committee) of up to a maximum of:

 

(1)           70% of Base Salary,

(2)           70% of Commissions,

(3)           100% of Bonuses,

(4)           100% of Director’s Fees and

(5)           100% of Restricted Stock Units

 

The Committee may, in its sole discretion, adjust for subsequent Plan Years on a prospective basis the minimum (if any) and maximum deferral percentages described in this Section for one or more types of Compensation (including, without limitation, for particular types of Bonuses) and for one or more subsequent Plan Years; such revised deferral percentages shall be indicated on a Participant Election form approved by the Committee. Notwithstanding the foregoing, in no event shall the minimum and maximum deferral percentages be adjusted after the last date on which deferral elections for the applicable type(s) of Compensation must be submitted and become irrevocable in accordance with Section 3.2 below and the requirements of Code Section 409A.

 

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The Committee also may, in its sole discretion, establish a minimum and maximum dollar amount of Compensation that a Participant may defer for a Plan Year and may adjust that minimum and maximum for subsequent Plan Years on a prospective basis as the Committee may determine. Notwithstanding the foregoing, in no event shall the minimum and maximum dollar amounts that may be deferred be adjusted after the last date on which deferral elections for the applicable type(s) of Compensation must be submitted and become irrevocable in accordance with Section 3.2 below and the requirements of Code Section 409A.

 

In addition, the Committee may determine, it sole discretion, which of the types of Compensation described above shall be available for elective deferral under this Plan for any particular Plan Year; such determination by the Committee regarding the types of Compensation available for elective deferral shall be made no later than the date that any deferral election for such Compensation must become irrevocable in accordance with Section 3.2 below and the requirements of Code Section 409A.

 

3.2           Timing of Deferral Elections; Effect of Participant Election(s).

 

(a)           General Timing Rule for Deferral Elections. Except as otherwise provided in this Section 3.2, in order for a Participant to make a valid election to defer Compensation, the Participant must submit Participant Election(s) on or before the deadline established by the Committee, which shall be no later than the December 31st preceding the Plan Year in which the services relating to such compensation will begin to be performed. In the case of deferrals of Restricted Stock Units, except where otherwise permitted in accordance with this Section 3.2 and Code Section 409A, the Participant must submit such Participant Election on or before the deadline established by the Committee, which shall be no later than the December 31st preceding the Plan Year in which Restricted Stock Units are initially granted to the Participant under the terms of the applicable equity incentive plan or director compensation program.

 

Any deferral election made in accordance with this Section 3.2(a) shall be irrevocable; provided, however, that if the Committee permits or requires Participants to make a deferral election by the deadline described above for an amount that qualifies as Performance-Based Compensation, the Committee may permit a Participant to subsequently change his or her deferral election for such compensation by submitting new Participant Election(s) in accordance with Section 3.2(d) below.

 

(b)           Timing of Deferral Elections for New Plan Participants. An Eligible Executive or Director who first becomes eligible to participate in the Plan on or after the beginning of a Plan Year, as determined in accordance with Treas. Reg. §1.409A-2(a)(7)(ii) and the “plan aggregation” rules provided in Treas. Reg. §1.409A-1(c)(2), may be permitted to make an election to defer the portion of Compensation attributable to services to be performed after such election, provided that the Participant submits Participant Election(s) on or before the deadline established by the Committee, which in no event shall be later than thirty (30) days after the Participant first becomes eligible to participate in the Plan.

 

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Notwithstanding the foregoing, an Eligible Executive or Director who first becomes eligible to participate in the Plan as of the Effective Date may be permitted to make an election to defer the portion of Compensation attributable to services to be performed after the Effective Date, provided that the Participant submits Participant Election(s) before the Effective Date.

 

If a deferral election made in accordance with this Section 3.2(b) relates to compensation earned based upon a specified performance period, the amount eligible for deferral shall be equal to (i) the total amount of compensation for the performance period, multiplied by (ii) a fraction, the numerator of which is the number of days remaining in the service period after the Participant’s deferral election is made and becomes irrevocable, and the denominator of which is the total number of days in the performance period.

 

Any deferral election made in accordance with this Section 3.2(b) shall become irrevocable no later than the 30th day after the date the Participant first becomes eligible to participate in the Plan, except that any deferral election permitted to be made prior to the Effective Date shall become irrevocable no later than the Effective Date.

 

(c)           Timing of Deferral Elections for Fiscal Year Compensation. In the event that the fiscal year of an Employer is different than the taxable year of a Participant, the Committee may determine that a deferral election may be made for “fiscal year compensation” (as defined below), by submitting Participant Election(s) on or before the deadline established by the Committee, which in no event shall be later than the last day of the Employer’s fiscal year immediately preceding the fiscal year in which the services related to such compensation will begin to be performed. For purposes of this Section, the term “fiscal year compensation” shall only include Bonuses relating to a service period coextensive with one or more consecutive fiscal years of the Employer, of which no amount is paid or payable during the Employer’s fiscal year(s) that constitute the service period.

 

A deferral election made in accordance with this Section 3.2(c) shall be irrevocable; provided, however, that if the Committee permits or requires Participants to make a deferral election by the deadline described in this Section 3.2(c) for an amount that qualifies as Performance-Based Compensation, the Committee may permit a Participant to subsequently change his or her deferral election for such compensation by submitting new Participant Election(s) in accordance with 3.2(d) below.

 

(d)           Timing of Deferral Elections for Performance-Based Compensation. Subject to the limitations described below, the Committee may determine that an irrevocable deferral election for an amount that qualifies as Performance-Based Compensation may be made by submitting Participant Election(s) on or before the deadline established by the Committee, which in no event shall be later than six (6) months before the end of the performance period.

 

In order for a Participant to be eligible to make a deferral election for Performance-Based Compensation in accordance with the deadline established pursuant to this Section 3.2(d), the Participant must have performed services continuously from the later of (i) the beginning of the performance period for such compensation, or (ii) the date upon which the performance criteria for such compensation are established, through the date upon which the Participant makes the deferral election for such compensation. In no event shall a deferral election submitted under this Section 3.2(d) be permitted to apply to any amount of Performance-Based Compensation that has become readily ascertainable.

 

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(e)           Timing Rule for Deferral of Compensation Subject to Risk of Forfeiture. With respect to compensation (i) to which a Participant has a legally binding right to payment in a subsequent year, and (ii) that is subject to a forfeiture condition requiring the Participant’s continued services for a period of at least twelve (12) months from the date the Participant obtains the legally binding right, the Committee may determine that an irrevocable deferral election for such compensation may be made by timely delivering Participant Election(s) to the Committee in accordance with its rules and procedures, no later than the 30th day after the Participant obtains the legally binding right to the compensation, provided that the election is made and becomes irrevocable at least twelve (12) months in advance of the earliest date at which the forfeiture condition could lapse, as determined in accordance with Treas. Reg. §1.409A-2(a)(5).

 

Any deferral election(s) made in accordance with this Section 3.2(e) shall become irrevocable no later than the 30th day after the Participant obtains the legally binding right to the compensation subject to such deferral election(s).

 

For purposes of this 3.2(e), a condition will not be treated as failing to require the Participant to continue to provide services for a period of at least twelve (12) months from the date the Participant obtains the legally binding right merely because the condition immediately lapses upon the death or disability (as defined in § 1.409A-3(i)(4)) of the Participant, or upon a change in control event (as defined in § 1.409A-3(i)(5)), provided that if death, disability, or a change in control event occurs and the condition lapses before the end of such twelve (12)-month period, a deferral election may be given effect only if the deferral election is permitted without regard to this Section 3.2(e).

 

(f)           Separate Deferral Elections for Each Plan Year. In order to defer each type of Compensation for a Plan Year, a Participant must submit a separate deferral election with respect to each type of Compensation for such Plan Year with respect to which the Committee permits a separate deferral election by affirmatively filing a Participant Election during the enrollment period established by the Committee prior to the beginning of such Plan Year (or at such other time contemplated under this Section 3.2), which election shall be effective on the first day of the next following Plan Year (unless otherwise specified on the Participant Election). Notwithstanding any other provision of the Plan, no Scheduled Distribution Election may be made that would result in the Deferral being paid sooner than the third Plan Year immediately following the year in which the Compensation would be paid absent the deferral election, except with respect to Bonuses initially allocated to Funds other than the Company Stock Unit Fund which can be paid as soon as any Deferrals of Base Salary or, if none, Commissions, for the given Plan Year.

 

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3.3           Company Contributions. The Company shall have the discretion to make Company Contributions to the Plan at any time and in any amount on behalf of any Participant. If the amount of a Company Contribution is to be determined with reference to the amount of the Participant’s Deferrals, such contribution shall be referred to herein as a Matching Contribution. Any Company Contribution that is not determined with reference to the amount of the Participant’s Deferrals shall be referred to herein as a Discretionary Contribution. Company Contributions shall be made in the complete and sole discretion of the Company, and no Participant shall have the right to receive any Company Contribution in any particular Plan Year regardless of whether Company Contributions are made on behalf of other Participants. The Committee may, in its sole discretion, require that any such Company Contribution shall be allocated, initially and/or irrevocably, to the Company Stock Unit Fund (as described in Section 3.4 below). If the Committee elects to make Matching Contributions with respect to some or all of a Participant’s Deferrals, or will require some or all of a Participant’s Deferrals to be allocated to the Company Stock Unit Fund as a condition to receipt of Matching Contributions, the Committee intends to communicate same, along with the schedule or schedules, if any, on which such Deferrals and Matching Contributions and any notional earnings and losses thereon credited to the Participant’s Account(s) shall become vested, within a reasonable period of time in advance of the last date on which deferral elections for the applicable type(s) of Compensation must be submitted and become irrevocable.

 

3.4           Investment Elections.

 

(a)           Participant Designation. Except as otherwise provided in section 3.4(c) below, at the time of entering the Plan and/or of making a deferral election under the Plan, the Participant shall designate, on a Participant Election provided by the Committee, the Funds in which the Participant’s Accounts shall be deemed to be invested for purposes of determining the amount of notional earnings and losses to be credited to each Account. The Participant may specify that all or any percentage of his or her Accounts shall be deemed to be invested, in whole percentage increments, in one or more of the Funds selected as alternative investments under the Plan from time to time by the Committee pursuant to subsection (b) of this Section. If a Participant fails to make an election among the Funds as described in this section, the Participant’s Account balance shall automatically be allocated into the lowest-risk Fund, as determined by the Committee in its sole discretion (except as otherwise provided in Section 3.4(c) below). A Participant may change any designation made under this Section on a prospective basis as permitted by the Committee by filing a revised election, on a Participant Election provided by the Committee. Notwithstanding the foregoing, the Committee, in its sole discretion, may impose limitations on the frequency with which one or more of the Funds elected in accordance with this Section may be added or deleted by such Participant; furthermore, the Committee, in its sole discretion, may impose limitations on the frequency with which the Participant may change the portion of his or her Account balance allocated to each previously or newly elected Fund.

 

(b)           Investment Funds. The Committee may select, in its sole and absolute discretion, each of the types of commercially available investments communicated to the Participant pursuant to subsection (a) of this Section to be the Funds. The Crediting Rate of each such commercially available investment shall be used to determine the amount of notional earnings or losses to be credited to the Participant’s Account under Article IV. The Participant’s choice among investments shall be solely for purposes of calculation of the Crediting Rate on Accounts. The Employers shall have no obligation to set aside or invest amounts as directed by the Participant and, if an Employer elects to invest amounts as directed by the Participant, the Participant shall have no more right to such investments than any other unsecured general creditor of the Employer. Amounts allocated to Funds other than the Company Stock Unit Fund shall only be distributable in cash.

 

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(c)           Company Stock Unit Fund.

 

(1)           Notwithstanding Section 3.4(a) and (b) above, a Participant’s Restricted Stock Unit deferrals (to the extent payable in shares of Stock but for the election to defer), Matching Contributions (to the extent required by the Committee), Discretionary Contributions (to the extent required by the Committee), Bonuses (to the extent permitted by the Committee and elected by the Participant) and Director’s Fees (to the extent permitted by the Committee and elected by the Participant) will be allocated to a Fund that tracks the performance of the Company’s Stock (the “Company Stock Unit Fund”). Participants may not select any other Fund to be used to determine the amounts to be credited or debited to their Restricted Stock Unit deferrals (to the extent payable in shares of Stock but for the election to defer), Matching Contributions (to the extent required by the Committee), Discretionary Contributions (to the extent required by the Committee), Bonuses (to the extent required by the Committee to remain allocated to the Company Stock Unit Fund once allocated thereto by the Participant), and Director’s Fees (to the extent required by the Committee to remain allocated to the Company Stock Unit Fund once allocated thereto by the Participant). A Participant may not elect to allocate any Base Salary or Commissions deferrals to the Company Stock Unit Fund. Bonuses that the Committee permits, and the Participant elects, to be allocated to the Company Stock Unit Fund may be so allocated (to the extent elected by the Participant) only as of the time the Deferral is to be credited initially to the Participant’s Account(s), and no Bonus amounts initially allocated to the Company Stock Unit Fund may be re-allocated to any other Fund once allocated to the Company Stock Unit Fund, or re-allocated into the Company Stock Unit Fund once initially allocated to another Fund, unless otherwise permitted by the Committee. Director’s Fees (to the extent permitted by the Committee) may be allocated to the Company Stock Unit Fund at the election of the Participant only as of the time the Deferral is to be credited initially to the Participant’s Account(s), and no Director’s Fees initially allocated to the Company Stock Unit Fund may be re-allocated to any other Fund once allocated to the Company Stock Unit Fund or re-allocated into the Company Stock Unit Fund once initially allocated to another Fund other than the Company Stock Unit Fund, unless otherwise permitted by the Committee. Amounts allocated to the Company Stock Unit Fund shall only be distributable in actual shares of Stock, unless the Committee determines, in its sole discretion, that such amounts shall be distributed in cash.

 

(2)           Any stock dividends, cash dividends or other non-cash dividends that would have been payable on the Stock credited to a Participant’s Accounts shall be credited to the Participant’s Accounts in the form of additional shares of Stock and shall automatically be deemed to be re-invested in the Company Stock Unit Fund (irrevocably until such amounts are distributed to the Participant with respect to Restricted Stock Units, Company Contributions or other Deferrals to the extent required by the Committee). The number of shares credited to the Participant for a particular stock dividend shall be equal to (A) the number of shares of Stock credited to the Participant’s Account as of the record date for such dividend in respect of each share of Stock, multiplied by (B) the number of additional or fractional shares of Stock actually paid as a dividend in respect of each share of Stock. The number of shares credited to the Participant for a particular cash dividend or other non-cash dividend shall be equal to (A) the number of shares of Stock credited to the Participant’s Account as of the record date for such dividend in respect of each share of Stock, multiplied by (B) the fair market value of the dividend, divided by (C) the “fair market value” of the Stock on the payment date for such dividend.

 

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(3)           The number of shares of Stock credited to the Participant’s Account may be adjusted by the Committee, in its sole discretion, to prevent dilution or enlargement of Participants’ rights with respect to the portion of his or her Account allocated to the Company Stock Unit Fund in the event of any reorganization, reclassification, stock split, or other unusual corporate transaction or event which affects the value of the Stock, provided that any such adjustment shall be made taking into account any crediting of shares of Stock to the Participant under this Section.

 

(4)           For purposes of this Section, the fair market value of the Stock shall be, in the event the Stock is traded on a recognized securities exchange, an amount equal to the closing price of the Stock on such exchange on the date set for valuation or, if no sales of Stock were made on said exchange on that date, the closing price of the Stock on the next preceding day on which sales were made on such exchange; or, if the Stock is not so traded, the value determined, in its sole discretion, by the Committee in compliance with Code Section 409A.

 

3.5           Distribution Elections.

 

(a)           Initial Election. At the time of making a deferral election under the Plan, the Participant shall designate the time and form of distribution of Deferrals made pursuant to such election (together with any notional earnings and losses credited thereon) from among the alternatives specified under Article VI for the applicable distribution (except as otherwise set forth herein). Such distribution election for a given Plan Year shall relate solely to that Plan Year’s Deferrals and, if any, Matching Contributions on those Deferrals for the Plan Year (although the Participant will not be permitted to make a separate distribution election for a given Plan Year for Matching Contributions; Matching Contributions will be subject to the distribution election that the Participant makes with respect to the Deferrals to which the Matching Contributions relate, except as otherwise set forth herein). Unless the Committee permits otherwise, the deferral election a Participant makes for a given Plan Year for Deferrals of Base Salary, Deferrals of Commissions and Deferrals of Bonuses initially allocated to Funds other than Company Stock Unit Fund must be the same. In the event of any conflict, the Participant's deferral election for Deferrals of Base Salary shall control, and if there are no deferrals of Base Salary, the Participant's deferral election for Deferrals of Commissions shall control. The Participant may make separate deferral elections for each Plan Year for (i) Deferrals of Bonuses initially allocated to the Company Stock Unit Fund, (ii) Deferrals of Director’s Fees and (iii) Deferrals of Restricted Stock Units. A new distribution election must be made at the time of subsequent deferral elections in accordance with the Participant Election forms. Notwithstanding the foregoing, Matching Contributions may be distributed later than the Deferrals to which the Matching Contributions relate, as set forth in Article IV, to the extent such Matching Contributions will vest later than the deferrals to which they relate on account of a Separation from Service upon Retirement.

 

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(b)           Modification of Election. A distribution election with respect to previously deferred amounts may only be changed under the terms and conditions specified in Code Section 409A and this Section, and only to the extent permitted by the Committee in its sole discretion. Notwithstanding the foregoing, a distribution election with respect to Matching Contributions may only be changed if, and consistent with, any change made for the Deferrals to which the Matching Contributions relate. Further, because a single distribution election applies to Deferrals of Base Salary, Deferrals of Commissions and Deferrals of Bonuses initially allocated to Funds other than the Company Stock Unit Fund as described above, any change to such distribution election will control distribution of all amounts subject to that election. Additionally, the terms of distribution with respect to Discretionary Contributions set forth in Section 6.5 may be changed under the terms and conditions specified in Section 409A and this Section, to the extent permitted by the Committee in its sole discretion. Except as permitted under Code Section 409A, no acceleration of a distribution is permitted. A subsequent election that delays payment or changes the form of payment shall be permitted if and only if all of the following requirements are met:

 

(1)           the new election does not take effect until at least twelve (12) months after the date on which the new election is made;

 

(2)           in the case of payments made other than on account of death, Disability or Financial Hardship, the new election delays payment for at least five (5) years from the date that payment would otherwise have been made, absent the new election; and

 

(3)           in the case of payments made according to a Scheduled Distribution, the new election is made not less than twelve (12) months before the date on which payment would have been made (or, in the case of installment payments, the first installment payment would have been made) absent the new election.

 

For purposes of application of the above change limitations, installment payments shall be treated as a single payment under Code Section 409A. Election changes made pursuant to this Section shall be made in accordance with rules established by the Committee and shall comply with all requirements of Code Section 409A and applicable authorities.

 

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ARTICLE IV
ACCOUNTS

 

4.1           Deferral Accounts. The Committee shall establish and maintain a Deferral Account for each Participant under the Plan. Each Participant’s Deferral Account shall be further divided into separate subaccounts (“Fund Subaccounts”), each of which corresponds to a separate Participant Election and/or a Fund designated pursuant to Section 3.4. A Participant’s Deferral Account shall be credited as follows:

 

(a)           As soon as reasonably possible after amounts are withheld and deferred from a Participant’s Compensation (which shall generally be within three (3) business days of such withholding), the Committee shall credit the Fund Subaccounts of the Participant’s Deferral Account with an amount equal to Compensation deferred by the Participant in accordance with the designation under Section 3.4; that is, the portion of the Participant’s deferred Compensation designated to be deemed to be invested in a Fund shall be credited to the Fund Subaccount to be invested in that Fund;

 

(b)           Each business day, each Fund Subaccount of a Participant’s Deferral Account shall be credited with earnings or losses in an amount equal to that determined by multiplying the balance credited to such Fund Subaccount as of the prior day, less any distributions valued as of the end of the prior day, by the Crediting Rate for the corresponding Fund as determined by the Committee pursuant to Section 3.4; and

 

(c)           In the event that a Participant elects for a given Plan Year’s deferral of Compensation a Scheduled Distribution, all amounts attributed to the deferral of Compensation for such Plan Year shall be accounted for in a manner which allows separate accounting for the deferral of Compensation and investment gains and losses associated with amounts allocated to each such separate Scheduled Distribution.

 

4.2           Company Contribution Account. The Committee shall establish and maintain a Company Contribution Account for each Participant under the Plan. Each Participant’s Company Contribution Account shall be further divided into separate Fund Subaccounts corresponding to the Fund designated pursuant to Section 3.4 to the extent that such Company Contributions are not required to be allocated to the Company Stock Unit Fund. A Participant’s Company Contribution Account shall be credited as follows:

 

(a)           As soon as reasonably possible after a Company Contribution is made, the Company shall credit the Fund Subaccounts of the Participant’s Company Contribution Account with an amount equal to the Company Contributions, if any, made on behalf of that Participant, that is, the proportion of the Company Contributions, if any, designated to be deemed to be invested in a certain Fund shall be credited to the Fund Subaccount to be invested in that Fund. Unless the Participant elects otherwise, any Company Contribution that may not be deemed invested in such a Fund shall be deemed invested in the default Fund selected by the Committee for such purpose; and

 

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(b)           Each business day, each Fund Subaccount of a Participant’s Company Contribution Account shall be credited with earnings or losses in an amount equal to that determined by multiplying the balance credited to such Fund Subaccount as of the prior day, less any distributions valued as of the end of the prior day, by the Crediting Rate for the corresponding Fund as determined by the Committee pursuant to Section 3.4.

 

4.3           Trust. The Company shall be responsible for the payment of all benefits under the Plan. At its discretion, the Company may establish one or more grantor trusts for the purpose of providing for payment of benefits under the Plan. Such trust or trusts may be revocable or irrevocable prior to a Change in Control, but the assets thereof shall be subject to the claims of the Company’s creditors. Benefits paid to the Participant from any such trust or trusts shall be considered paid by the Company for purposes of meeting the obligations of the Company under the Plan. Notwithstanding the foregoing, the Company, prior to and in the event of a Change in Control, shall establish one or more irrevocable grantor trusts, and/or provide that any such revocable trusts previously established become irrevocable, until all obligations under the Plan are satisfied, for the purpose of providing for payment of benefits under the Plan, and the Company shall be responsible for contributing to such trusts cash and cash equivalents so that the assets held in the trusts, as of the date of the Change in Control, are no less than the aggregate balances of the total Deferral Accounts in the Plan as of the date of the Change in Control. After a Change of Control, any Participant or Beneficiary for whom a Deferral Account and payment schedule is on file with the Company at the time of such Change of Control shall be presumed conclusively, for all purposes, to be entitled to any deferred compensation payable to such Participant or Beneficiary on the basis of information contained in such Deferral Account and payment schedule, and the amount and the form of payment of the deferred compensation so payable shall be conclusive and binding on all parties. Nothing contained herein shall be construed to require a transfer of funds to any such trust in connection with a change in the Company’s financial health, or during a restricted period with respect to the Company, as such terms are defined in subsections (b)(2) and (b)(3) of Section 409A of the Code.

 

4.4           Statement of Accounts. The Committee shall provide each Participant with electronic statements at least quarterly setting forth the Participant’s Account balance as of the end of each applicable period.

 

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ARTICLE V
VESTING

 

5.1           Vesting of Deferral Accounts. The Participant shall be vested at all times in any Deferrals of Base Salary, Commissions, Bonuses initially allocated to a Fund other than the Company Stock Unit Fund, and/or Director's Fees and any notional earnings and losses thereon, credited to the Participant's Deferral Account(s). Deferrals of Bonuses that are initially allocated to the Company Stock Unit Fund and Deferrals of Restricted Stock Units, and any notional earnings and losses thereon, credited to the Participant’s Deferral Account(s) shall be vested upon the schedule or schedules determined by the Committee in its sole discretion and communicated to the Participant prior to the deadline established by the Committee for submitting the Participant’s Election(s), subject to the Participant remaining employed by or in service to the Company or any Subsidiary from the date the amounts are credited to the Participant’s Deferral Account(s) until the applicable vesting date, provided, however, that the entirety of the Participant’s Deferral Account(s) with respect to such amounts shall immediately become 100% vested (to the extent not vested previously) in the event of a Change in Control or the Participant’s death or Disability, in any case, prior to the Participant’s Separation from Service. Additionally, deferrals of Bonuses that are initially allocated to the Company Stock Unit Fund and Deferrals of Restricted Stock Units, and any notional earnings and losses thereon, credited to the Participant’s Deferral Account(s) for any Plan Year beginning on or after the Effective Date, shall continue to vest based upon the schedule or schedules originally determined by the Company in its sole discretion and communicated to the Participant prior to the deadline established by the Committee for submitting the Participant’s Election(s), in the event of the Participant’s Retirement, provided the Participant, no later than thirty (30) days after Participant’s Separation from Service upon Retirement, enters into and executes a Business Protections Agreement, which will include without limitation certain confidentiality, non-solicitation and non-competition restrictive covenants, in the form supplied by the Company, and continues to comply with the terms of such agreement through the applicable vesting date.

 

If no such vesting schedule or schedules are stated by the Committee and communicated to the Participant prior to the deadline established by the Committee for submitting the Participant’s Election(s), and the Committee does not state and communicate to the Participant prior to the deadline established by the Committee for submitting the Participant’s Election(s) that such amounts will be vested at all times, then such amounts will vest at the rate of twenty percent (20%) per Plan Year, beginning as of the last day of the Plan Year in which the amounts are credited to the Participant’s Deferral Account(s), and continuing through the last day of the fourth (4th) Plan Year following the Plan Year in which the amounts are credited to the Participant’s Deferral Account(s), until they become 100% vested, subject to the Participant remaining employed by or in service to the Company or any Subsidiary from the date the amounts are credited to the Participant’s Deferral Account(s) until the applicable vesting date, and such amounts shall become 100% vested (to the extent not vested previously) in the event of a Change in Control or the Participant’s death or Disability, in any case, prior to the Participant’s Separation from Service. Additionally, deferrals of Bonuses that are initially allocated to the Company Stock Unit Fund and Deferrals of Restricted Stock Units, and any notional earnings and losses thereon, credited to the Participant’s Deferral Account(s) for any Plan Year beginning on or after the Effective Date, shall continue to vest based upon the schedule or schedules originally determined by the Company in its sole discretion and communicated to the Participant prior to the deadline established by the Committee for submitting the Participant’s Election(s), in the event of the Participant’s Retirement, provided the Participant, no later than thirty (30) days after Participant’s Separation from Service upon Retirement, enters into and executes a Business Protections Agreement, which will include without limitation certain confidentiality, non-solicitation and non-competition restrictive covenants, in the form supplied by the Company, and continues to comply with the terms of such agreement through the applicable vesting date.

 

Notwithstanding the foregoing, the Committee may determine that Deferrals of Bonuses that are initially allocated to the Company Stock Unit Fund and Deferrals of Restricted Stock Units, and any notional earnings and losses thereon, credited to the Participant’s Deferral Account(s), shall be vested at all times.

 

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5.2           Vesting of Company Contribution Account. Amounts credited to the Participant’s Company Contribution Account, and any notional earnings and losses thereon, shall be vested based upon the schedule or schedules determined by the Company in its sole discretion and communicated to the Participant prior to the deadline established by the Committee for submitting the Participant’s Election(s); subject to the Participant remaining employed by or in service to the Company or any Subsidiary from the date the amounts are credited to the Participant’s Deferral Account(s) until the applicable vesting date; provided, however, the entirety of the Participant’s Company Contribution Account with respect to such amounts shall immediately become 100% vested (to the extent not vested previously) in the event of a Change in Control or the Participant’s death or Disability, in any case, prior to the Participant’s Separation from Service. Additionally, if and only if such amounts were scheduled to vest originally as of a single date, i.e., cliff vesting (and not in percentages, installments or portions over a specified time period), a Prorated Percentage of the amounts credited to the Participant’s Company Contribution Account, and any notional earnings and losses thereon, for any Plan Year beginning on or after the Effective Date, that are not vested as of the Participant’s Separation from Service, shall become vested as of the latest scheduled vesting date upon which the entirety of such amounts credited to the Participant’s Company Contribution Account, and any notional earnings and losses thereon, would have vested based upon the schedule or schedules originally determined by the Company in its sole discretion and communicated to the Participant prior to the deadline established by the Committee for submitting the Participant’s Election(s), in the event of the Participant’s Retirement, provided the Participant, no later than thirty (30) days after Participant’s Separation from Service upon Retirement, enters into and executes a Business Protections Agreement, which will include without limitation certain confidentiality, non-solicitation and non-competition restrictive covenants, in the form supplied by the Company, and continues to comply with the terms of such agreement through the applicable vesting date.

 

If no such vesting schedule or schedules are stated by the Committee and communicated to the Participant prior to the deadline established by the Committee for submitting the Participant’s Election(s), and the Committee does not state and communicate to the Participant prior to the deadline established by the Committee for submitting the Participant’s Election(s) that such amounts will be vested at all times, such amounts will become 100% vested as of the last day of the fourth (4th) Plan Year following the Plan Year in which the amounts are credited to the Participant’s Deferral Account(s), subject to the Participant remaining employed by or in service to the Company or any Subsidiary from the date the amounts are credited to the Participant’s Account(s) until such date, provided, however, the entirety of the Participant’s Company Contribution Account with respect to such amounts will be 100% vested (to the extent not vested previously) in the event of a Change in Control or the Participant’s death or Disability, in any case, prior to the Participant’s Separation from Service. Additionally, in the case of these default vesting provisions, a Prorated Percentage of the amounts credited to the Participant’s Company Contribution Account, and any notional earnings and losses thereon, for any Plan Year beginning on or after the Effective Date, that are not vested as of the Participant’s Separation from Service, shall become vested as of the latest scheduled vesting date upon which the entirety of such amounts credited to the Participant’s Company Contribution Account, and any notional earnings and losses thereon, would have vested based upon the schedule or schedules originally determined by the Company in its sole discretion and communicated to the Participant prior to the deadline established by the Committee for submitting the Participant’s Election(s), in the event of the Participant’s Retirement, provided the Participant, no later than thirty (30) days after Participant’s Separation from Service upon Retirement, enters into and executes a Business Protections Agreement, which will include without limitation certain confidentiality, non-solicitation and non-competition restrictive covenants, in the form supplied by the Company, and continues to comply with the terms of such agreement through the applicable vesting date.

 

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Notwithstanding the foregoing, the Committee may determine that amounts credited to the Participant’s Company Contribution Account, and any notional earnings and losses thereon, credited to the Participant’s Deferral Account(s), shall be vested at all times.

 

ARTICLE VI
DISTRIBUTIONS

 

6.1           Retirement Distributions. Except as otherwise provided herein, for any Distributable Amount credited to the Participant’s Account(s) with respect to a Plan Year beginning prior to the Effective Date, in the event of the Participant’s Separation from Service and, for a Participant other than a Director, provided the Separation from Service occurs on or after the Participant’s Switch Date, the Distributable Amount credited to the Participant’s Account(s) shall be paid to the Participant in a lump sum on the Payment Date as of or following the Participant’s Retirement, unless the Participant is permitted to make and has made an alternative benefit election on a timely basis to receive substantially equal annual installments over no more than fifteen (15) years. Except as otherwise provided herein, for any Distributable Amount credited to the Participant’s Account(s) with respect to a Plan Year beginning on or after the Effective Date, in the event of the Participant’s Retirement, the Distributable Amount credited to the Participant’s Account(s) shall be paid to the Participant in a lump sum on the Payment Date as of or following the later of (i) the Participant’s Retirement, if the amounts are vested as of such date, or (ii) subject to Section 5.2 above, the date on which the Distributable Amount is scheduled to vest, based upon the Participant’s continued compliance with the Business Protections Agreement through such date, unless the Participant is permitted to make and has made an alternative benefit election on a timely basis to receive substantially equal annual installments over no more than fifteen (15) years. In accordance with a Participant Election approved by the Committee, for each Plan Year the Participant may elect a separate form of distribution for amounts payable upon Retirement for each separately identifiable Deferral and, to the extent permitted by the Committee, any Company Contribution to be credited to the Participant’s Account(s) (as set forth in Section 3.2(f)). A Participant may delay and change the form of a Retirement distribution election, provided such change complies with the requirements of Section 3.5(b).

 

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6.2           Distributions Other Than Upon Retirement. Except as otherwise provided herein, for any Distributable Amount credited to the Participant’s Account(s) with respect to a Plan Year beginning prior to the Effective Date, in the event of the Participant’s Separation from Service, and, for a Participant other than a Director, provided the Separation from Service occurs prior to the Participant’s Switch Date, the Distributable Amount credited to the Participant’s Account(s) shall be paid to the Participant in a lump sum on the Payment Date as of or following the Participant’s Separation from Service. Except as otherwise provided herein, for any Distributable Amount credited to the Participant’s Account(s) with respect to a Plan Year beginning on or after the Effective Date, in the event of the Participant’s Separation from Service other than upon Retirement, the Distributable Amount credited to the Participant’s Account(s) shall be paid to the Participant in a lump sum on the Payment Date as of or following the Participant’s Separation from Service other than upon Retirement, if the amounts are vested as of such date, unless the Participant is permitted to make and has made an alternative benefit election on a timely basis to receive substantially equal annual installments over no more than fifteen (15) years. In accordance with a Participant Election approved by the Committee, for each Plan Year the Participant may elect a separate form of distribution for amounts payable upon a Separation from Service other than upon Retirement for each separately identifiable Deferral and, to the extent permitted by the Committee, any Company Contribution to be credited to the Participant’s Account(s) (as set forth in Section 3.2(f)). A Participant may delay and change the form of a Separation from Service other than upon Retirement distribution election, provided such change complies with the requirements of Section 3.5(b).

 

6.3           Death Benefits. In the event that a Participant dies prior to complete distribution of his or her vested Account(s), the Company shall pay to the Participant’s Beneficiary a death benefit equal to the total Distributable Amount remaining in the Participant’s Account(s), to the extent vested as of such date, in a lump sum on the Payment Date as of or following the Participant’s death.

 

6.4           Scheduled Distributions.

 

(a)           Scheduled Distribution Election. Participants shall be entitled to elect to receive a Scheduled Distribution with respect to all, but not less than all, of his or her Deferrals for a Plan Year. In the case of a Participant who has elected to receive a Scheduled Distribution, such Participant shall receive the Distributable Amount, with respect to the specified Deferrals, including notional earnings and losses thereon, which have been elected by the Participant to be subject to such Scheduled Distribution election in accordance with Section 3.5 of the Plan on the applicable Payment Date. The Committee shall determine the earliest commencement date that may be elected by the Participant for each Scheduled Distribution and such date shall be indicated on the Participant Election; provided, however, that the earliest commencement date that may be elected by the Participant for any Scheduled Distribution selected with respect to an amount credited to the Participant’s Account(s) for a given Plan Year shall be the Plan Year in which the entirety of such amount credited to the Participant’s Account(s) for the Plan Year becomes 100% vested. The Scheduled Distribution shall be distributed in a single lump sum, unless the Participant elects in accordance with Section 3.5 to receive the Scheduled Distribution in substantially equal annual installments over a period of no more than five (5) years.

 

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In accordance with a Participant Election approved by the Committee, as set forth in Section 3.2(f), for each Plan Year the Participant may elect a separate Scheduled Distribution Election for (i) Deferrals of Base Salary, Commissions and Bonuses initially allocated to Funds other than the Company Stock Unit Fund (which must be subject to the same deferral election), (ii) Deferrals of Bonuses initially allocated to the Company Stock Unit Fund, (iii) Deferrals of Director's Fees and (iv) Deferrals of Restricted Stock Units.

 

A Participant may delay and change the form of a Scheduled Distribution, provided such change complies with the requirements of Section 3.5(b) and applies to the Participant’s Scheduled Distribution with respect to all of his or her Deferrals for the given Plan Year.

 

(b)           Relationship to Other Benefits.

 

(1)           With respect to any Scheduled Distribution that relates to any Plan Year beginning prior to the Effective Date, in the event that distribution of a Participant’s Account with respect to that Plan Year is triggered as the result of a Separation from Service (including Retirement) or death prior to commencement of a Scheduled Distribution or in the case of the Participant’s death after a Scheduled Distribution has commenced installment payments, the amounts subject to such Scheduled Distribution shall not be distributed under this Section 6.4, but rather shall be distributed in accordance with Sections 6.1, 6.2 or 6.3, as applicable. With respect to any Scheduled Distribution that relates to any Plan Year beginning on or after the Effective Date, in the event that distribution of a Participant’s Account is triggered as the result of a Participant’s death prior to commencement of a Scheduled Distribution or in the case of the Participant’s death after a Scheduled Distribution has become distributable or commenced installment payments, the amounts subject to such Scheduled Distribution shall not be distributed under this Section 6.4, but rather shall be distributed in accordance with Section 6.3.

 

(2)           With respect to any Scheduled Distribution that relates to any Plan Year beginning prior to the Effective Date, in the event of a Participant’s Separation from Service (including Retirement) after a Scheduled Distribution has commenced installment payments, such Scheduled Distribution benefits shall continue to be paid at the same time and in the same form as they would have been paid to the Participant had the Separation from Service (including Retirement) not occurred. With respect to any Scheduled Distribution that relates to any Plan Year beginning on or after the Effective Date, in the event of a Participant’s Separation from Service (including Retirement) prior to commencement of a Scheduled Distribution or after a Scheduled Distribution has commenced or otherwise become distributable, such Scheduled Distribution benefits shall be paid or continue to be paid at the same time and in the same form as they would have been paid to the Participant had the Separation from Service (including Retirement) not occurred, if the amounts are vested as of such Scheduled Distribution date.

 

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(3)           In the event of a Participant’s Separation from Service upon Retirement prior to commencement of a Scheduled Distribution, the Distributable Amount, including notional earnings and losses thereon, which relate to any Plan Year beginning on or after the Effective Date and which have been elected by the Participant to be subject to such Scheduled Distribution shall continue to vest based upon the schedule or schedules originally determined by the Company in its sole discretion and communicated to the Participant prior to the deadline established by the Committee for submitting the Participant’s Election(s), to the extent set forth in Section 5.1 above, or become vested to the extent set forth in Section 5.2 above, in the event of the Participant’s Retirement prior to the Scheduled Distribution; provided the Participant, no later than thirty (30) days after Participant’s Separation from Service upon Retirement, enters into and executes a Business Protections Agreement, which will include without limitation certain confidentiality, non-solicitation and non-competition restrictive covenants, in the form supplied by the Company, and continues to comply with the terms of such agreement through the applicable vesting date(s).

 

6.5           Company Contributions Distributions. Matching Contributions will be distributed from the Plan in accordance with the Participant Election made by the Participant for the Participant’s Deferrals with respect to which the Matching Contributions are made, subject to the other provisions of this Article VI to the extent applicable. A Participant may delay and change the form of a Matching Contribution distribution election, provided such change complies with the requirements of Section 3.5(b), except that Matching Contributions (other than Matching Contributions that vest later than the Participant’s Deferrals to which the Matching Contributions relate) can only be distributed at the same time and in the same form as the Participant’s Deferrals to which the Matching Contributions relate. For purposes of clarity, the time or form of payment applicable to Matching Contributions may only be modified to the extent the time or form of payment applicable to the related Deferrals is modified, unless otherwise provided by the Committee. Subject to Section 6.4(b) and, to the extent applicable, the other provisions of this Article VI, Discretionary Contributions shall be distributed in a lump sum as a Scheduled Distribution that has been elected to be distributed on the first business day of June of the Plan Year in which the entirety of the Discretionary Contribution credited to the Participant’s Account(s) for the given Plan Year becomes 100% vested, provided, however, if the Discretionary Contribution is not scheduled to vest in its entirety as of June of such Plan Year, the Discretionary Contributions shall be distributed on such day in the Plan Year that the Discretionary Contributions are scheduled to vest in their entirety, unless the Participant modifies the time and form of payment applicable to such Discretionary Contribution in accordance with the provisions of Section 3.5(b).

 

6.6           Hardship Distribution. Upon a finding that the Participant has suffered a Financial Hardship, in accordance with Code Section 409A, the Committee may, at the request of the Participant, accelerate distribution of vested benefits and/or approve cancellation of deferral elections under the Plan, subject to the following conditions:

 

(a)           The request to take a Hardship Distribution shall be made by filing a form provided by and filed with the Committee prior to the end of any calendar month.

 

(b)           A Hardship Distribution made pursuant to this Section with respect to the Financial Hardship shall not exceed the amount necessary to satisfy such Financial Hardship, plus amounts necessary to pay taxes reasonably anticipated as a result of the distribution, after taking into account the extent to which such hardship is or may be relieved through reimbursement or compensation by insurance or otherwise, by liquidation of the Participant’s assets (to the extent the liquidation of such assets would not itself cause severe financial hardship), or by cancellation of Deferrals.

 

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(c)           The amount (if any) determined by the Committee as a Hardship Distribution shall be paid in a single lump sum as soon as practicable after the end of the calendar month in which the Hardship Distribution determination is made by the Committee. A Hardship Distribution will reduce the Participant’s vested Account(s) on a pro rata basis.

 

6.7           Limited Cashouts. Notwithstanding any provision in this Plan to the contrary, the Committee shall, if the Participant incurs a Separation from Service, and may, in its sole discretion, in any other circumstances, distribute in a mandatory lump sum any Participant’s entire Account under the Plan, provided that any such distribution is made in accordance with the requirements of Treas. Reg. §1.409A-3(j)(4)(v) or its successor (each such payment, a “Limited Cashout”). Specifically, any such Limited Cashout pursuant to this Section 6.7 shall be subject to the following requirements:

 

(a)To the extent the Limited Cashout is being made pursuant to the Committee’s exercise of discretion, such discretion shall be evidenced in writing no later than the date of the lump sum payment;

 

(b)The lump sum payment shall result in the termination and liquidation of the entirety of the Participant's Account under the Plan, as applicable, as well as the Participant’s interest in all other plans, agreements, methods, programs, or other arrangements with respect to which deferrals of compensation are treated as having been deferred under a single nonqualified deferred compensation plan under Treas. Reg. §1.409A–1(c)(2) with the Account(s) that is being distributed from this Plan; and

 

(c)The lump sum payment (and the Participant’s entire interest in any and all other “plans” that would be aggregated with the Account(s) being distributed from this Plan in accordance with Treas. Reg. §1.409A–1(c)(2)) is not greater than the applicable dollar amount under Code Section 402(g)(1)(B) at the time of the Limited Cashout.

 

Any Limited Cashout that is made pursuant to the Committee’s exercise of discretion shall be calculated as of the last business day of any month that is no earlier than ninety (90) days prior to the date on which the Limited Cashout occurs and in accordance with Section 409A of the Code. A Limited Cashout on a Separation from Service will be calculated in the same manner as any other distribution upon a Separation from Service.

 

6.8           Forfeiture of Non-Vested Amounts. Notwithstanding any other provision of the Plan, the portion of the Participant’s Account(s) that is not vested (and will not become vested) at the time of the Participant’s Separation from Service (including Retirement) or death, including any notional earnings and losses thereon, shall be forfeited at such time without any payment to the Participant.

 

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6.9           Acceleration of Vesting. Notwithstanding any other provision of the Plan, in no event will any acceleration of vesting of a Participant’s Account(s) change the time of distribution of the Participant’s Account(s) if the change in the time of the distribution would fail to be in compliance with Section 409A of the Code.

 

ARTICLE VII

PAYEE DESIGNATIONS AND LIMITATIONS

 

7.1           Beneficiaries.

 

(a)           Beneficiary Designation. The Participant shall have the right, at any time, to designate any person or persons as Beneficiary (both primary and contingent) to whom payment under the Plan shall be made in the event of the Participant’s death. The Participant may revoke an existing Beneficiary designation by filing another Beneficiary designation. The Beneficiary designation shall be effective when it is submitted to and acknowledged by the Committee during the Participant’s lifetime in the format prescribed by the Committee.

 

(b)           Absence of Valid Designation. If a Participant fails to designate a Beneficiary as provided above, or if every person designated as Beneficiary predeceases the Participant or dies prior to complete distribution of the Participant’s benefits, then the Participant’s Beneficiary shall be: (i) the Participant’s legally married spouse, if any, (ii) if no such spouse exists, the Participant’s children (including adopted children) per stirpes, or (iii) if there are no children, then the Participant’s estate. The Committee shall direct the distribution of such benefits to the appropriate Beneficiary.

 

7.2           Payments to Minors. In the event any amount is payable under the Plan to a minor, payment shall not be made to the minor, but instead such payment shall be made (a) to that person’s living parent(s) to act as custodian, (b) if that person’s parents are then divorced, and one parent is the sole custodial parent, to such custodial parent, to act as custodian, or (c) if no parent of that person is then living, to a custodian selected by the Committee to hold the funds for the minor under the Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction in which the minor resides. If no parent is living and the Committee decides not to select another custodian to hold the funds for the minor, then payment shall be made to the duly appointed and currently acting guardian of the estate for the minor or, if no guardian of the estate for the minor is duly appointed and currently acting within sixty (60) days after the date the amount becomes payable, payment shall be deposited with the court having jurisdiction over the estate of the minor.

 

7.3           Payments on Behalf of Persons Under Incapacity. In the event that any amount becomes payable under the Plan to a person who, in the sole judgment of the Committee, is considered by reason of physical or mental condition to be unable to give a valid receipt therefore, the Committee may direct that such payment be made to any person found by the Committee, in its sole judgment, to have assumed the care of such person. Any payment made pursuant to such determination shall constitute a full release and discharge of any and all liability of the Committee and the Company under the Plan.

 

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ARTICLE VIII
LEAVE OF ABSENCE

 

8.1           Paid Leave of Absence. If a Participant is authorized by the Participant's Employer to take a paid leave of absence from the employment of the Employer, and such leave of absence does not constitute a Separation from Service, (a) the Participant shall continue to be considered eligible for the benefits provided under the Plan, and (b) Deferrals shall continue to be withheld during such paid leave of absence in accordance with Article III.

 

8.2           Unpaid Leave of Absence If a Participant is authorized by the Participant's Employer to take an unpaid leave of absence from the employment of the Employer for any reason, and such leave of absence does not constitute a Separation from Service, such Participant shall continue to be eligible for the benefits provided under the Plan. During the unpaid leave of absence, the Participant shall not be allowed to make any additional Deferral elections but existing deferral elections will continue to the extent required by Section 409A of the Code. However, if the Participant returns to employment, the Participant may elect to defer for the Plan Year following his or her return to employment and for every Plan Year thereafter while a Participant in the Plan, provided such deferral elections are otherwise allowed and a Participant Election is delivered to and accepted by the Committee for each such election in accordance with Article III above.

 

ARTICLE IX
ADMINISTRATION

 

9.1           Committee. The Plan shall be administered by a Committee appointed by the Board, which shall have the exclusive right and full discretion (a) to appoint agents to act on its behalf, (b) to select and establish Funds, (c) to interpret the Plan, (d) to decide any and all matters arising hereunder (including the right to remedy possible ambiguities, inconsistencies, or admissions), (e) to make, amend and rescind such rules as it deems necessary for the proper administration of the Plan and (f) to make all other determinations and resolve all questions of fact necessary or advisable for the administration of the Plan, including determinations regarding eligibility for benefits payable under the Plan. All interpretations of the Committee with respect to any matter hereunder shall be final, conclusive and binding on all persons affected thereby. No member of the Committee or agent thereof shall be liable for any determination, decision, or action made in good faith with respect to the Plan. The Company will indemnify and hold harmless the members of the Committee and its agents from and against any and all liabilities, costs, and expenses incurred by such persons as a result of any act, or omission, in connection with the performance of such persons’ duties, responsibilities, and obligations under the Plan, other than such liabilities, costs, and expenses as may result from the bad faith, willful misconduct, or criminal acts of such persons.

 

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9.2           Filing of Claim. All claims for benefits under the Plan shall be submitted, in writing, to the Committee or, on forms prescribed by the Committee for such purpose, and must be signed by the Participant or, in the case of a death benefit, by Participant’s Beneficiary or legal representative. Any Participant or Beneficiary who disputes the amount of his or her entitlement to Plan benefits must file a claim in writing within one hundred eighty (180) days of the event that the Participant or Beneficiary is asserting constitutes an entitlement to such Plan benefits or, if later, within ninety (90) days of the date the payment is due. Failure by the Participant or Beneficiary to submit such claim within such time periods shall bar the Participant or Beneficiary from any claim for benefits under the Plan as the result of the occurrence of such event or the failure to make such payment. In no event shall the Participant or other claimant be entitled to challenge a decision of the Committee with respect to a claim unless and until the claims procedures herein have been complied with and exhausted. Each claim shall be approved or disapproved by the Committee within ninety (90) days of the Committee’s receipt of each such claim. However, if special circumstances require an extension of time for the Committee to process the claim, the ninety (90) day period may be extended for an additional ninety (90) days. Prior to the termination of the initial ninety (90) day period, the Committee shall provide the claimant with a written notice setting forth the reason for the extension. The notice shall indicate the special circumstance requiring the extension of time and the date by which the Committee expects to render the benefit determination. A claim for benefits that depends on a determination of a Disability (a “Disability claim”) is subject to different time periods as described in Section 9.5 below.

 

9.3           Denial of Claim. In the event any claim (or benefit) is denied in whole or in part, the Committee shall, within the time period described in Section 9.2 above, notify the claimant in writing of such denial and of the claimant’s right to a review by the Committee and shall set forth, in a manner calculated to be understood by the claimant, specific reasons for such denial; including specific references to the Plan provisions on which the denial is based; descriptions of, and reasons for, any material or information necessary for the claimant to perfect his claim for review; and an explanation of the Plan’s review procedure and time limits applicable to such procedures, including the claimant’s right to bring civil action following an adverse benefit determination on review.

 

9.4           Appeal of Denied Claim. Any person whose application is denied in whole or in part may appeal to the Committee for a review of such denial and may review pertinent Plan documents to help prepare for the appeal. Such appeal shall be made by submitting to the Committee, within sixty (60) days of the receipt of initial denial, a written statement requesting a review of such denial and setting forth the grounds on which such appeal is made and any issues or comments which the claimant deems pertinent to his application. The claimant shall have the opportunity to submit written comments, documents and records relating to the claim and shall have reasonable access to and copies of documents and records relevant to the claim, upon request and free of charge. The Committee shall make an independent determination of the claimant’s eligibility for benefits within sixty (60) days of such appeal and shall give written notice to the claimant of its determination on review within such time period. If there are special circumstances requiring an extension of time for processing, a decision shall be rendered within one hundred twenty (120) days after receipt of the request for review. If an extension of time is required, the Committee will provide the claimant with written notification of the special circumstances involved and the date by which the Committee expects to render a final decision. The Committee shall conduct a full and fair review of the claim that takes into account all comments, documents, records, and other information submitted by the claimant or the claimant’s authorized representative relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The decision of the Committee on any appeal for benefits shall be final and conclusive. If a claimant’s request is wholly or partially denied on review, the Committee must give written notice to the claimant, in a manner calculated to be understood by the claimant, that contains the specific reasons for the denial, the Plan provisions on which the denial is based, a description of the Plan’s claim review procedures and the time limits applicable thereto, including the claimant’s right to bring civil action, and a statement of the claimant’s right to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits.

 

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9.5           Disability. Notwithstanding the claim procedures set forth in Sections 9.2, 9.3 and 9.4 above, the following claim procedures shall apply for any claim based on a Disability.

 

(a)           If a Participant applies for a benefit under the Plan based on a Disability, and in the event a claim for benefits is wholly or partially denied by the Committee, the Committee shall, within a reasonable period of time, but no later than forty-five (45) days after receipt of the claim, notify the claimant in writing of the denial of the claim. This forty-five (45) day period may be extended up to thirty (30) days if such an extension is necessary due to matters beyond the control of the Plan, and the claimant is notified, prior to the expiration of the initial forty-five (45) day period, of the circumstances requiring the extension of time and the date by which the Committee expects to render a decision. If, prior to the end of the first thirty (30) day extension period, the Committee determines that, due to matters beyond the control of the Plan, a decision cannot be rendered within that extension period, the period for making the determination may be extended for up to an additional thirty (30) days, provided that the Committee notifies the claimant, prior to the expiration of the first thirty (30) days extension period, of the circumstances requiring the extension and the date as of which the Committee expects to render a decision. In the case of any extension, the notice of extension also shall specifically explain the standards on which entitlement to a benefit upon Disability is based, the unresolved issues that prevent a decision on the claim, and the additional information needed to resolve those issues, and the claimant shall be afforded at least forty-five (45) days within which to provide the specified information, if any.

 

(b)           If the Committee denies the claim for a Disability benefit in whole or in part, the claimant shall be provided with written notice of the denial stating the specific reason for the denial; reference to the specific Plan provisions on which the denial is based; a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and a description of the Plan’s review procedures (as set forth below) and the time limits applicable to such procedures, including the claimant’s right to bring civil action following an adverse benefit determination. The notice will be provided in a culturally and linguistically appropriate manner as described in 29 CFR § 2560.503-1(o)(1)(i) – (iii). The notice will Provide a discussion of the decision, including an explanation of the basis for disagreeing with or not following the views presented by the claimant to the Plan of health care professionals treating the claimant and vocational professionals who evaluated the claimant, the views of medical or vocational experts whose advice was obtained on behalf of the Plan in connection with a claimant’s adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination, or a disability determination regarding the claimant presented by the claimant to the Plan made by the Social Security Administration. If the adverse benefit determination is based on a medical necessity or experimental treatment or similar exclusion or limit, the notice must either provide an explanation of the scientific or clinical judgment for the determination, applying the terms of the Plan to the claimant’s medical circumstances, or provide a statement that such explanation will be provided free of charge upon request in writing. The notice will explain the specific internal rules, guidelines, protocols, standards or other similar criteria of the Plan relied upon in making the adverse determination or, alternatively, provide a statement that such rules, guidelines, protocols, standards or other similar criteria of the Plan do not exist. The notice also will provide a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimants claim for benefits.

 

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(c)           If the claim for a Disability benefit is denied in full or in part, the claimant shall have the right to appeal the decision and may review pertinent Plan documents to help prepare for the appeal, by sending a written request for review to the Committee within one hundred eighty (180) days of his receipt of the claim denial notification. The claimant may submit written comments, documents, records, and other information relating to his or her claim for benefits. Upon request, the claimant shall be provided free of charge and reasonable access to, and copies of, all documents, records and other information relevant to his claim.

 

(d)           Upon receipt of the claimant’s appeal of the denial of his claim, the Committee shall conduct a review that takes into account all comments, documents, records, and other information submitted by the claimant or his authorized representative relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The review shall not afford deference to the initial benefit determination and shall be conducted by an individual who is neither the individual who made the adverse benefit determination that is the subject of the appeal, nor the subordinate of such individual. The Committee shall consult a medical professional who has appropriate training and experience in the field of medicine relating to the claimant’s disability and who is neither consulted as part of the initial denial nor is the subordinate to such individual and shall identify the medical or vocational experts whose advice is obtained with respect to the initial benefit denial, without regard to whether the advice was relied upon in making the decisions. If a claim is denied due a medical judgment, the Committee will consult with a healthcare professional who has appropriate training and experience in the field of medicine involved in the medical judgment. The healthcare professional consulted will not be the same person consulted in connection with the initial benefit decision (nor be the subordinate of that person). The decision on review also will identify any medical or vocational experts who advised the Company’s benefits department in connection with the original benefit decision, even if the advice was not relied upon in making the decision.

 

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(e)           The Committee shall notify the claimant of its determination on review within a reasonable period of time, but generally not later than forty-five (45) days after receipt of the request for review, unless the Committee determines that special circumstances require an extension of time for processing the claim. If the Committee determines that an extension of time for processing is required, written notice of the extension will be furnished to the claimant prior to the termination of the initial forty-five (45) day period. In no event shall such extension exceed a period of forty-five (45) days from the end of the initial period. The extension notice shall indicate the special circumstances requiring extension of time and the date by which the Committee expects to render the determination on review.

 

(f)            Before issuing an adverse benefit determination on review, the Committee shall provide the claimant, free of charge, with any new or additional evidence considered, relied upon, or generated by the Plan or other person making the benefit determination (or at the direction of the Plan or such other person) in connection with the clam; such evidence must be provided as soon as possible and sufficiently in advance of the date on which the notice of adverse benefit determination on review is required to be provided under this Section 9.5 to give the claimant a reasonable opportunity to respond prior to that date. Before the Committee can issue an adverse benefit determination on review based on a new or additional rationale, the Committee shall provide the claimant, free of charge, with the rationale; such rationale must be provided as soon as possible and sufficiently in advance of the date on which notice of adverse benefit determination on review is required to be provided under this Section 9.5 to give the claimant a reasonable opportunity to respond prior to that date.

 

(g)           If the Committee denies the claim on appeal, it shall notify the claimant in writing, in a manner calculated to be understood by him, of the specific reason or reasons for the adverse determination; reference to the specific Plan provisions on which the adverse determination is based; a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to his claim; and a statement indicating the claimant’s right to file a lawsuit upon completion of the claims procedure process and any applicable contractual limitations period that applies to the claimant’s right to bring such an action, including the calendar date on which the contractual limitations period expires for the claim. The notice will provide a discussion of the decision, including an explanation of the basis for disagreeing with or not following the views presented by the claimant to the Plan of health care professionals treating the claimant and vocational professionals who evaluated the claimant, the views of medical or vocational experts whose advice was obtained on behalf of the Plan in connection with a claimant’s adverse benefit determination, without regard to whether the advice was relied upon in making the benefit determination, or a disability determination regarding the claimant presented by the claimant to the Plan made by the Social Security Administration. If the adverse benefit determination is based on a medical necessity or experimental treatment or similar exclusion or limit, the notice must either provide an explanation of the scientific or clinical judgment for the determination, applying the terms of the Plan to the claimant’s medical circumstances, or provide a statement that such explanation will be provided free of charge upon request in writing. The notice must provide the specific internal rules, guidelines, protocols, standards or other similar criteria of the Plan in making the adverse determination or, alternatively, a statement that such rules, guidelines, protocols, standards or other similar criteria of the Plan do not exist. The notice will be provided in a culturally and linguistically appropriate manner as described in 29 C.F.R. § 2560.503-1(o)(1)(i) – (iii).

 

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(h)           The decision upon appeal, or the initial decision if no appeal is taken, shall be final, conclusive and binding on all parties, subject, however, to the provisions of the Internal Revenue Code and ERISA.

 

9.6           Tolling Requirements. Effective as of the original adoption date of the Plan, notwithstanding anything in this Section IX or the Plan to the contrary, the Outbreak Period will be disregarded in determining the deadline for filing a claim for benefits and for requesting a review of a denied claim for benefits under the Plan, in accordance with, and subject to, applicable agency guidance; provided, however, in no event shall any period of time that is to be disregarded during the Outbreak Period in accordance with the Joint Notices exceed a period of one year from the date the individual was first required or permitted to take an action that is covered by the Joint Notices.

 

9.7           Time to File Suit. No lawsuit by a Participant or other claimant may be filed prior to exhausting the Plan’s administrative appeal process. Except for any action against a fiduciary for a breach of fiduciary duty under ERISA, the Participant or other claimant shall only have one hundred eighty (180) days from the date of receipt of the Committee’s final decision on review in which to file suit regarding a claim for benefits under the Plan. If suit is not filed within such one hundred eighty (180) days, it shall be forever barred. The Committee’s decisions made hereunder shall be final and binding on all interested parties.

 

9.8           Disability Claim: Deemed Exhaustion of Claims Procedure. If the Plan fails to strictly adhere to all the requirements of the procedures set out in this Article IX with respect to a Disability claim, the claimant is deemed to have exhausted the administrative remedies available under the Plan, except as provided in this Section 9.7. Accordingly, the claimant is entitled to pursue any available remedies under Section 502(a) of ERISA on the basis that the Plan failed to provide a reasonable claims procedure that would yield a decision on the merits of the claim. If a claimant chooses to pursue remedies under Section 502(a) of ERISA under such circumstances, the claim or appeal is deemed denied on review without the exercise of discretion by an appropriate fiduciary. The administrative remedies available under the Plan with respect to a Disability claim will not be deemed exhausted based on de minimis violations that do not cause, and are not likely to cause, prejudice or harm to the claimant so long as the Plan demonstrates that the violation was for good cause or due to matters beyond the control of the Plan and that the violation occurred in the context on an ongoing, good faith exchange of information between the Plan and the claimant. This exception is not available if the violation is part of a pattern or practice of violations by the Plan. The claimant may request a written explanation of the violation from the Plan, and the Plan must provide such explanation within ten (10) days, including a specific description of its bases, if any, for asserting that the violation should not cause the administrative remedies available under the Plan to be deemed exhausted. If a court rejects the claimant’s request for immediate review under this Section 9.7 on the basis that the Plan met the standards for the exception under this Section 9.7, the claim shall be considered as re-filed on appeal upon the Plan’s receipt of the court’s decision. Within a reasonable time after the receipt of the decision, the Plan shall provide the claimant with notice of the resubmission.

 

33

 

 

9.9           Disability Claim: Independence and Impartiality of Decision Maker. In the case of a Disability claim, the Plan shall ensure that all claims and appeals for disability benefits are adjudicated in a manner designed to ensure the independence and impartiality of the persons involved in making the decision. Accordingly, decisions regarding hiring, compensation, termination, promotion, or other similar matters with respect to any individual (such as a claims adjudicator or medical or vocational expert) shall not be based on the likelihood that the individual will support the denial of benefits.

 

ARTICLE X
MISCELLANEOUS

 

10.1         Termination of Plan Although the Company anticipates that it will continue the Plan for an indefinite period of time, there is no guarantee that the Company will continue the Plan or will not terminate the Plan at any time in the future. Accordingly, the Company reserves the right to terminate the Plan with respect to any or all Participants. In the event of a Plan termination, no new deferral elections shall be permitted for the affected Participants and such Participants shall no longer be eligible to receive new Company Contributions. However, after the Plan termination the Account balances of such Participants shall continue to be credited with deferrals attributable to any deferral election that was in effect prior to the Plan termination to the extent deemed necessary to comply with Code Section 409A and related Treasury Regulations, and additional amounts shall continue to be credited or debited to such Participants’ Account balances pursuant to Article IV. In addition, following a Plan termination, Participant Account balances shall remain in the Plan and shall not be distributed until such amounts become eligible for distribution in accordance with the other applicable provisions of the Plan. Notwithstanding the preceding sentence, to the extent permitted by Treas. Reg. §1.409A-3(j)(4)(ix) or as otherwise permitted under Code Section 409A, the Company may provide that upon termination of the Plan, all Account balances of the Participants shall be distributed, subject to and in accordance with any rules established by the Company deemed necessary to comply with the applicable requirements and limitations of Code Section 409A.

 

10.2         Amendment. The Company may, at any time, amend or modify the Plan in whole or in part with respect to any Employer. Notwithstanding the foregoing, no amendment or modification shall be effective to decrease the value of a Participant's vested Account balance in existence at the time the amendment or modification is made.

 

10.3         Unsecured General Creditor. The benefits paid under the Plan shall be paid from the general assets of the Company, and the Participant and any Beneficiary or their heirs or successors shall be no more than unsecured general creditors of the Company with no special or prior right to any assets of the Company for payment of any obligations hereunder. It is the intention of the Company that this Plan be unfunded for purposes of ERISA and the Code.

 

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10.4         Restriction Against Assignment. The Company shall pay all amounts payable hereunder only to the person or persons designated by the Plan and not to any other person or entity. No part of a Participant’s Accounts shall be liable for the debts, contracts, or engagements of any Participant, Beneficiary, or their successors in interest, nor shall a Participant’s Accounts be subject to execution by levy, attachment, or garnishment or by any other legal or equitable proceeding, nor shall any such person have any right to alienate, anticipate, sell, transfer, commute, pledge, encumber, or assign any benefits or payments hereunder in any manner whatsoever. No part of a Participant’s Accounts shall be subject to any right of offset against or reduction for any amount payable by the Participant or Beneficiary, whether to the Company or any other party, under any arrangement other than under the terms of this Plan.

 

10.5         Withholding. The Participant shall make appropriate arrangements with the Company for satisfaction of any federal, state or local income tax withholding requirements, Social Security, Medicare and other employee tax or other requirements applicable to the granting, crediting, vesting or payment of benefits under the Plan. There shall be deducted from each payment made under the Plan or any other Compensation payable to the Participant (or Beneficiary) all taxes that are required to be withheld by the Company in respect to such payment or participation in this Plan. To the extent permissible under Code Section 409A, the Company shall have the right to reduce any payment (or other Compensation) by the amount of cash sufficient to provide the amount of said taxes.

 

10.6         Code Section 409A. The Company intends that the Plan comply with the requirements of Code Section 409A (and all applicable Treasury Regulations and other guidance issued thereunder) and shall be operated and interpreted consistent with that intent. Notwithstanding the foregoing, the Company makes no representation that the Plan complies with Code Section 409A, and the Company shall not be liable to any person if the Plan fails to comply with Section 409A of the Code. Notwithstanding any other provision of the Plan, in no event shall payment to a Participant who is a “specified employee” within the meaning of Code Section 409A on his or her Separation from Service date, commence earlier than the first day following the earlier of (i) the end of the six (6) month period following such date or (ii) the Participant’s death, if and only to the extent required by Code Section 409A. In that event, any payments that would otherwise have been made prior to the earlier of (i) the end of the six (6) month period following such date or (ii) the Participant’s death will be accumulated and paid in a lump sum as soon as administratively practicable (and no later than the calendar month) following the earlier of such dates. The Committee may, its discretion, accelerate the payment of all or a portion of a Participant’s vested Account prior to the time specified in this Plan to the extent such acceleration is permitted by Treasury Regulation Section 1.409A-3(j)(4). Such permitted accelerations shall include payments to comply with domestic relations orders, payments to comply with conflicts of interest laws, payment of employment taxes, payment upon income inclusion under Code Section 409A, and/or such other circumstances as are permitted by Section 409A and the Treasury Regulations thereunder.

 

35

 

 

10.7         Effect of Payment. Any payment made in good faith to a Participant or the Participant’s Beneficiary shall, to the extent thereof, be in full satisfaction of all claims against the Committee, its members, the Employer and the Company.

 

10.8         Errors in Account Statements, Deferrals or Distributions. In the event an error is made in an Account statement, such error shall be corrected on the next statement following the date such error is discovered. In the event of an operational error, including, but not limited to, errors involving deferral amounts, overpayments or underpayments, such operational error shall be corrected in a manner consistent with and as permitted by any correction procedures established under Code Section 409A. If any portion of a Participant’s Account(s) under this Plan is required to be included in income by the Participant prior to receipt due to a failure of this Plan to comply with the requirements of Code Section 409A, the Committee may determine that such Participant shall receive a distribution from the Plan in an amount equal to the lesser of (i) the portion of his or her Account required to be included in income as a result of the failure of the Plan to comply with the requirements of Code Section 409A, or (ii) the unpaid vested Account balance.

 

10.9         Domestic Relations Orders Notwithstanding any provision in this Plan to the contrary, in the event that the Committee receives a domestic relations order, as defined in Code Section 414(p)(1)(B), pursuant to which a court has determined that a spouse or former spouse of a Participant has an interest in the Participant’s benefits under the Plan, the Committee shall have the right to immediately distribute the spouse’s or former spouse’s vested interest in the Participant’s benefits under the Plan to such spouse or former spouse to the extent necessary to fulfill such domestic relations order, provided that such distribution is in accordance with the requirements of Code Section 409A.

 

10.10           Employment Not Guaranteed. Nothing contained in the Plan nor any action taken hereunder shall be construed as a contract of employment or as giving any Participant any right to continue the provision of services in any capacity whatsoever to the Employer.

 

10.11           No Guarantee of Tax Consequences. The Employer, Company, Board and Committee make no commitment or guarantee to any Participant that any federal, state or local tax treatment will apply or be available to any person eligible for benefits under the Plan and assume no liability whatsoever for the tax consequences to any Participant.

 

10.12           Successors of the Company. The rights and obligations of the Company under the Plan shall inure to the benefit of, and shall be binding upon, the successors and assigns of the Company.

 

10.13           Notice. Any notice or filing required or permitted to be given to the Company or the Participant under this Agreement shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, in the case of the Company, to the principal office of the Company, directed to the attention of the Committee, and in the case of the Participant, to the last known address of the Participant indicated on the employment records of the Company. Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. Notices to the Company may be permitted by electronic communication according to specifications established by the Committee.

 

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10.14           Headings. Headings and subheadings in this Plan are inserted for convenience of reference only and are not to be considered in the construction of the provisions hereof.

 

10.15           Gender, Singular and Plural. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, or neuter, as the identity of the person or persons may require. As the context may require, the singular may be read as the plural and the plural as the singular.

 

10.16           Governing Law. The Plan is intended to be an unfunded plan maintained primarily to provide deferred compensation benefits for a select group of “management or highly compensated employees” within the meaning of Sections 201, 301 and 401 of ERISA and therefore to be exempt from Parts 2, 3 and 4 of Title I of ERISA. To the extent any provision of, or legal issue relating to, this Plan is not fully preempted by federal law, such issue or provision shall be governed by the laws of the State of Georgia.

 

10.17           Entire Agreement. Unless specifically indicated otherwise, this Plan supersedes any and all prior communications, understandings, arrangements or agreements between the parties, including the Employer, the Company, the Board, the Committee and any and all Participants, whether written, oral, express or implied relating thereto.

 

10.18           Binding Arbitration. Any claim, dispute or other matter in question of any kind relating to this Plan which is not resolved by the claims procedures under this Plan shall be settled by arbitration in accordance with the applicable employment dispute resolution rules of the American Arbitration Association. Notice of demand for arbitration shall be made in writing to the opposing party and to the American Arbitration Association within a reasonable time after the claim, dispute or other matter in question has arisen. In no event shall a demand for arbitration be made after the date when the applicable statute of limitations would bar the institution of a legal or equitable proceeding based on such claim, dispute or other matter in question. The decision of the arbitrators shall be final and may be enforced in any court of competent jurisdiction. The arbitrators may award reasonable fees and expenses to the prevailing party in any dispute hereunder and shall award reasonable fees and expenses in the event that the arbitrators find that the losing party acted in bad faith or with intent to harass, hinder or delay the prevailing party in the exercise of its rights in connection with the matter under dispute.

 

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IN WITNESS WHEREOF, the Board of the Company has approved the adoption of this Plan as of the Effective Date and has caused the Plan to be executed by its duly authorized representative this 25th day of October, 2021.

 

  Georgia Banking Company, Inc.
   
  By: /s/ Bartow Morgan, Jr.
    Bartow Morgan, Jr.
    Chief Executive Officer

 

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GEORGIA BANKING COMPANY, INC. DEFERRED COMPENSATION PLAN

 

Exhibit A - General Plan Information

 

Plan Name

 

Georgia Banking Company, Inc. Nonqualified Deferred Compensation Plan

 

Plan Sponsor

 

Georgia Banking Company, Inc. 

1776 Peachtree Street NW, Suite 540 

Atlanta, GA 30309 

(770) 226-8800

 

Employer Identification Number (EIN)

 

58-2382447

 

Plan Type

 

The Plan is a nonqualified deferred compensation plan that is maintained primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees.

 

Plan Administrator

 

Plan Administrative Committee 

Georgia Banking Company, Inc. 

1776 Peachtree Street NW, Suite 540 

Atlanta, GA 30309 

(770) 226-8800

 

Agent for Service of Legal Process

 

c/o Suzanne Deep 

Georgia Banking Company, Inc. 

1776 Peachtree Street NW, Suite 540 

Atlanta, GA 30309

 

Plan Year

 

The calendar year

 

 

 

 

GEORGIA BANKING COMPANY, INC. DEFERRED COMPENSATION PLAN

 

Exhibit B – Statement of ERISA Rights

 

As participant in this Plan, you are entitled to certain rights and protections under ERISA. ERISA provides that all Plan participants shall be entitled to:

 

·examine, without charge at the Plan Administrative Committee’s office and at other specified locations, such as worksites and union halls, all documents governing the Plan, including collective bargaining agreements, and a copy of the latest Annual Report (Form 5500 series), if any, filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration (f/k/a the Pension Welfare Benefits Administration).

 

·obtain copies of all documents governing the operation of the Plan including collective bargaining agreements and copies of the latest Annual Report (Form 5500 series), if any, and an updated summary plan description, by making a written request to the Plan Administrative Committee and paying a reasonable charge for the copies.

 

receive a summary of the Plan’s annual financial report. The Plan Administrative Committee is required by law to furnish each participant under the Plan with a copy of this summary annual report.

 

In addition to creating rights for Plan participants, ERISA imposes duties upon the people who are responsible for the operation of the Plan. The people who operate the Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in your interest and in the interest of the other Plan participants and beneficiaries.

 

No one, including your employer, your union, or any other person may fire you or otherwise discriminate against you, in any way solely to prevent you from getting a benefit or exercising your rights under ERISA. If your claim for a benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

 

Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of Plan documents or the latest Annual Report from the Plan and do not receive them within thirty (30) days, you may file suit in federal court. In such a case, the court may require the Plan Administrative Committee to provide the documents and pay you up to $110 a day until you receive them, unless they were not sent because of reasons beyond the control of the Plan Administrative Committee.

 

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If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court. If it should happen that Plan fiduciaries misuse the Plan’s money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If your suit is successful, the court may order the person you have sued to pay costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

 

If you have any questions about the Plan, you should contact the Plan Administrative Committee. If you have any questions about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrative Committee, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

 

3

 

Exhibit 10.20

 

GEORGIA PRIMARY BANK
2017 LONG-TERM INCENTIVE PLAN

 

 

 

 

GEORGIA PRIMARY BANK
2017 LONG-TERM INCENTIVE PLAN

 

TABLE OF CONTENTS

 

Page

 

SECTION 1 SECTION I. DEFINITIONS  3
1.1. Definitions  3
      
SECTION 2 THE LONG-TERM INCENTIVE PLAN  7
2.1. Purpose of the Plan  7
2.2. Stock Subject to the Plan  7
2.3. Administration of the Plan  7
2.4. Eligibility and Limits  8
      
SECTION 3 TERMS OF AWARDS  8
3.1. Terms and Conditions of All Awards  8
3.2. Terms and Conditions of Options  9
3.3. Terms and Conditions of Stock Appreciation Rights  11
3.4. Terms and Conditions of Other Stock-Based Awards  12
3.5. Terms and Conditions of Cash Performance Awards  12
3.6. Treatment of Awards on Termination of Service  13
      
SECTION 4 RESTRICTIONS ON STOCK  13
4.1. Escrow of Shares  13
4.2. Restrictions on Transfer  14
      
SECTION 5 GENERAL PROVISIONS  14
5.1. Withholding  14
5.2. Changes in Capitalization; Merger; Liquidation  14
5.3. Compliance with Code  15
5.4. Other Cash Awards  16
5.5. Right to Terminate Employment or Service  16
5.6. Non-Alienation of Benefits  16
5.7. Restrictions on Delivery and Sale of Shares; Legends  16
5.8. Listing and Legal Compliance  16
5.9. Termination and Amendment of the Plan  17
5.10. Stockholder Approval  17
5.11. Choice of Law  17
5.12. Effective Date of Plan  17

 

 

 

 

GEORGIA PRIMARY BANK
2017 LONG-TERM INCENTIVE PLAN

 

SECTION 1 SECTION I. DEFINITIONS

 

1.1.          Definitions. Whenever used herein, the masculine pronoun will be deemed to include the feminine, and the singular to include the plural, unless the context clearly indicates otherwise, and the following capitalized words and phrases are used herein with the meaning thereafter ascribed:

 

(a)            “Affiliate” means:

 

(1)          Any Subsidiary or Parent;

 

(2)          An entity that directly or through one or more intermediaries controls, is controlled by, or is under common control with the Company, as determined by the Company; or

 

(3)          Any entity in which the Company has such a significant interest that the Company determines it should be deemed an “Affiliate”, as determined in the sole discretion of the Company.

 

(b)            “Award Agreement” means any written agreement, contract, or other instrument or document as may from time to time be designated by the Company as evidencing an Award granted under the Plan.

 

(c)            “Award Program” means a written program established by the Committee, pursuant to which Awards are granted under the Plan under uniform terms, conditions, and restrictions set forth in such written program.

 

(d)            “Awards” means, collectively, Cash Performance Awards, Incentive Stock Options, Nonqualified Stock Options, Other Stock-Based Awards, and Stock Appreciation Rights.

 

(e)            “Board of Directors” means the board of directors of the Company.

 

(f)             “Cash Performance Award” means an Award described in Section 3.5 that is settled in cash and does not have a value that is derivative of the value of, determined by reference to a number of shares of, or determined by reference to dividends payable on, Stock.

 

(g)            “Code” means the Internal Revenue Code of 1986, as amended, and the applicable rules and regulations promulgated thereunder.

 

(h)            “Committee” means the committee appointed by the Board of Directors to administer the Plan; provided that, if no such committee is appointed, the Board of Directors in its entirety shall constitute the Committee. Notwithstanding the foregoing, with respect to Awards granted by an officer or officers of the Company and/or the Chairperson of the Committee pursuant to Section 2.3(b), the “Committee” as used in the Plan shall mean such officer or officers and/or such Chairperson, unless the context would clearly indicate otherwise.

 

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(i)             “Company” means Georgia Primary Bank, a bank organized under the laws of the State of Georgia.

 

(j)             “Disability” unless otherwise defined by the Committee in the applicable Award Agreement or Award Program, has the same meaning as provided in the longterm disability plan or policy maintained or, if applicable, most recently maintained, by the Company or, if applicable, any Affiliate of the Company for the Participant. If no long-term disability plan or policy was ever maintained on behalf of the Participant or, if the determination of Disability relates to an Incentive Stock Option, Disability means that condition described in Code Section 22(e)(3), as amended from time to time. In the event of a dispute, the determination of Disability will be made by the Committee and will be supported by advice of a physician competent in the area to which such Disability relates.

 

(k)            “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and the applicable rules and regulations promulgated thereunder.

 

(l)             “Exercise Price” means the exercise price per share of Stock purchasable under an Option.

 

(m)           “Fair Market Value” means the value of a share of Stock as of a date, determined as follows:

 

(1)          if the shares of Stock are readily tradable or reported on an established securities market, Fair Market Value of the Stock may be determined based upon the last sale before or the first sale after such date, the closing price on the trading day before or the trading day of such date, the arithmetic mean of the high and low prices on the trading day before or the trading day of such date, or any other reasonable method using actual transactions in the Stock as reported by such market or system; or

 

(2)          if the shares of Stock are not readily tradable or reported on an established securities market, Fair Market Value of the Stock shall mean the fair market value of a share of Stock determined by the reasonable application of a reasonable valuation method, where such valuation method is based on the facts, circumstances, and all other available information that are material to the value of the Company as of the valuation date.

 

An “established securities market” includes a national securities exchange which is registered under Section 6 of the Exchange Act; a foreign national securities exchange which is officially recognized, sanctioned, or supervised by governmental authority; and any over-the-counter market. For purposes of Clause (1), Fair Market Value of a share of Stock also may be determined using an average selling price during a specified period that is within thirty (30) days before or thirty (30) days after the applicable determination date provided that the process under which the Award is granted irrevocably specifies the commitment to the grant with a price set using such an average selling price before the beginning of the specified period. For purposes of Clause (2), the use of a value previously calculated under a reasonable valuation method is not reasonable as of a later date if such calculation fails to reflect information available after the date of the calculation that may materially affect the value of the Company or if the value was calculated with respect to a date that is more than twelve (12) months earlier than the date for which the valuation is being used. For purposes of granting Nonqualified Stock Options or Stock Appreciation Rights, Fair Market Value of the Stock shall be determined in accordance with any other applicable requirements of Code Section 409A. Notwithstanding anything to the contrary in this Section 1.1(m), for purposes of granting Incentive Stock Options, Fair Market Value of the Stock shall be determined in accordance with the requirements of Code Section 422.

 

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(n)            “Incentive Stock Option” means an incentive stock option within the meaning of Code Section 422.

 

(o)            “Nonqualified Stock Option” means a stock option that is not an Incentive Stock Option.

 

(p)            “Option” means a Nonqualified Stock Option or an Incentive Stock Option.

 

(q)            “Other Stock-Based Award” means an Award described in Section 3.4 that has a value that is derivative of the value of, determined by reference to a number of shares of, or determined by reference to dividends payable on, Stock and may be settled in cash or in Stock. Other Stock-Based Awards may include, but not be limited to, grants of Stock, grants of rights to receive Stock in the future, or dividend equivalent rights.

 

(r)             “Over 10% Owner” means an individual who at the time an Incentive Stock Option to such individual is granted owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or its Parent or Subsidiaries, determined by applying the attribution rules of Code Section 424(d).

 

(s)            “Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if, with respect to Incentive Stock Options, at the time of the granting of the Option, each of the corporations other than the Company owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. A Parent shall include any entity other than a corporation to the extent permissible under Code Section 424(f) or regulations and rulings thereunder.

 

(t)             “Participant” means an individual who receives an Award hereunder.

 

(u)            “Plan” means the Georgia Primary Bank 2017 Long-Term Incentive Plan.

 

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(v)            “Separation from Service” shall mean a termination of a Participant’s employment or other service relationship with the Company, subject to the following requirements:

 

(1)           in the case of a Participant who is an employee of the Company, a termination of the Participant’s employment where either (i) the Participant has ceased to perform any services for the Company and all affiliated companies that, together with the Company, constitute the “service recipient” within the meaning of Code Section 409A (collectively, the “Service Recipient”) or (ii) the level of bona fide services the Participant performs for the Service Recipient after a given date (whether as an employee or as an independent contractor) permanently decreases (excluding a decrease as a result of military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months, or if longer, so long as the Participant retains a right to reemployment with the Service Recipient under an applicable statute or by contract) to no more than twenty percent (20%) of the average level of bona fide services performed for the Service Recipient (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of service if the Participant has been providing services to the Service Recipient for less than 36 months); or

 

(2)           in the case of a Participant who is an independent contractor engaged by the Service Recipient, a termination of the Participant’s service relationship with the Service Recipient where (i) the contract (or in the case of more than one contract, all contracts) under which services are performed for the Service Recipient expires, if the expiration constitutes a good-faith and complete termination of the contractual relationship; or (ii) with respect to amounts payable to the Participant under an Award upon the termination of the independent contractor’s relationship with the Service Recipient, no amount will be paid to the Participant before a date that is at least twelve (12) months after the day on which the contract expires under which the Participant performs services for the Service Recipient (or, in the case of more than one contract, all such contracts expire) and no amount payable to the Participant on that date is actually paid to the Participant if, after the expiration of the contract (or contracts) and before that date, the Participant performs services for the Service Recipient as an independent contractor or an employee; or in any case, as may otherwise be permitted under, or required by, Code Section 409A.

 

(w)           “Stock” means the Company’s common stock, $5.00 par value per share.

 

(x)            “Stock Appreciation Right” means a stock appreciation right described in Section 3.3.

 

(y)            “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company if, at the relevant time, each of the corporations other than the last corporation in the unbroken chain owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in the chain. A “Subsidiary” shall include any entity other than a corporation to the extent permissible under Code Section 424(f) or regulations or rulings thereunder.

 

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(z)            “Termination of Employment” means the termination of the employment relationship between a Participant and the Company and its Affiliates, regardless of whether severance or similar payments are made to the Participant for any reason, including, but not by way of limitation, a termination by resignation, discharge, death, Disability or retirement. The Committee will, in its absolute discretion, determine the effect of all matters and questions relating to a Termination of Employment as it affects an Award, including, but not by way of limitation, the question of whether a leave of absence constitutes a Termination of Employment.

 

SECTION 2 THE LONG-TERM INCENTIVE PLAN

 

2.1.          Purpose of the Plan. The Plan is intended to (a) provide incentives to certain officers, employees, directors, consultants, and other service providers of the Company and its Affiliates to stimulate their efforts toward the continued success of the Company and to operate and manage the business in a manner that will provide for the long-term growth and profitability of the Company; (b) encourage stock ownership by certain officers, employees, directors, consultants, and other service providers by providing them with a means to acquire a proprietary interest in the Company, acquire shares of Stock, or to receive compensation which is based upon appreciation in the value of Stock; and (c) provide a means of obtaining, rewarding and retaining officers, employees, directors, consultants, and other service providers.

 

2.2.          Stock Subject to the Plan.

 

(a)            Subject to adjustment in accordance with Section 5.2, 237,353 shares of Stock are hereby reserved exclusively for issuance upon exercise, settlement, or payment pursuant to Awards, all or any of which may be pursuant to any one or more Awards, including without limitation, Incentive Stock Options.

 

(b)            Shares of Stock shall not be deemed to have been issued pursuant to the Plan with respect to any portion of an Award that is settled in cash. The shares of Stock attributable to the nonvested, unpaid, unexercised, unconverted, or otherwise unsettled portion of any Award that is forfeited or cancelled or expires or terminates for any reason without becoming vested, paid, exercised, converted, or otherwise settled in full in Stock will again be available for purposes of the Plan. For purposes of determining the number of shares of Stock issued upon the exercise, settlement, or grant of an Award under this Section, any shares of Stock withheld to satisfy tax withholding obligations or the Exercise Price shall be considered issued under the Plan.

 

2.3.          Administration of the Plan.

 

(a)            The Plan is administered by the Committee. The Committee has full authority in its discretion to determine the officers, employees, directors, consultants, and other service providers of the Company or its Affiliates to whom Awards will be granted and the terms and provisions of Awards, subject to the Plan. Subject to the provisions of the Plan, the Committee has full and conclusive authority to interpret the Plan; to prescribe, amend, and rescind rules and regulations relating to the Plan; to determine the terms and provisions of the respective Award Agreements and Award Programs and to make all other determinations necessary or advisable for the proper administration of the Plan. The Committee’s determinations under the Plan 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). The Committee’s decisions are final and binding on all Participants. Each member of the Committee shall serve at the discretion of the Board of Directors and the Board of Directors may from time to time remove members from or add members to the Committee. Vacancies on the Committee shall be filled by the Board of Directors.

 

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(b)            Notwithstanding any other provision of this Plan, the Board of Directors may by resolution authorize one or more officers of the Company and/or the Chairman of the Committee to do one or more of the following: (1) designate individuals (other than the individual(s) to whom such authority is delegated) to receive Awards under the Plan; (2) determine the number of shares of Stock or cash value subject to such Awards; provided however, that the resolution shall specify the total number of shares of Stock or cash value, as applicable, that may be granted subject to such Awards; (3) interpret the provisions of an Award Agreement or Award Program; and/or (4) determine the treatment of Awards upon a Termination of Employment or Separation from Service.

 

2.4.          Eligibility and Limits. Awards may be granted only to officers, employees, directors, consultants, and other service providers of the Company or any Affiliate of the Company; provided, however, that an Incentive Stock Option may only be granted to an employee of the Company or any Parent or Subsidiary. In the case of Incentive Stock Options, the aggregate Fair Market Value (determined as of the date an Incentive Stock Option is granted) of Stock with respect to which stock options intended to meet the requirements of Code Section 422 become exercisable for the first time by an individual during any calendar year under all plans of the Company and its Parents and Subsidiaries may not exceed $100,000; provided further, that if the limitation is exceeded, the Incentive Stock Option(s) which cause the limitation to be exceeded will be treated as Nonqualified Stock Option(s), unless the provisions of the applicable Award Agreement provide otherwise.

 

SECTION 3 TERMS OF AWARDS

 

3.1.          Terms and Conditions of All Awards.

 

(a)            The number of shares of Stock as to which an Award may be granted or the amount of an Award will be determined by the Committee in its sole discretion, subject to the provisions of Section 2.2 as to the total number of shares available for grants under the Plan.

 

(b)            Each Award will either be evidenced by an Award Agreement in such form and containing such terms, conditions, and restrictions as the Committee may determine to be appropriate, including without limitation, performance criteria, if any, that must be achieved as a condition to vesting or settlement of the Award, or, except as provided in the Plan, be made subject to the terms of an Award Program, containing such terms, conditions, and restrictions as the Committee may determine to be appropriate, including without limitation, performance criteria, if any, that must be achieved as a condition to vesting or settlement of the Award. Each Award Agreement or Award Program is subject to the terms of the Plan and any provisions contained in the Award Agreement or Award Program that are inconsistent with the Plan are null and void.

 

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(c)            The date as of which an Award is granted will be the date on which the Committee has approved the terms and conditions of the Award and has determined the recipient of the Award and the number of shares, if any, covered by the Award, and has taken all such other actions necessary to complete the grant of the Award or such later date as may be specified in the approval of such Award.

 

(d)            Any Award may be granted in connection with all or any portion of a previously or contemporaneously granted Award. Exercise or vesting of an Award granted in connection with another Award may result in a pro rata surrender or cancellation of any related Award, as specified in the applicable Award Agreement or Award Program.

 

(e)            Awards are not transferable or assignable except by will or by the laws of descent and distribution governing the State in which the Participant was domiciled at the time of the Participant’s death, and are exercisable, during the Participant’s lifetime, only by the Participant; or in the event of the Disability of the Participant, by the legal representative of the Participant; or in the event of death of the Participant, by the legal representative of the Participant’s estate or if no legal representative has been appointed within ninety (90) days of the Participant’s death, by the person(s) taking under the laws of descent and distribution governing the State in which the Participant was domiciled at the time of the Participant’s death; except to the extent that the Committee may provide otherwise as to any Awards, other than Incentive Stock Options.

 

(f)             After the date of grant of an Award, the Committee may, in its sole discretion, modify the terms and conditions of an Award, except to the extent that such modification would be inconsistent with other provisions of the Plan or would adversely affect the rights of a Participant under the Award, except as otherwise permitted under the Plan or Award.

 

3.2.          Terms and Conditions of Options. Each Option granted under the Plan must be evidenced by an Award Agreement. At the time any Option is granted, the Committee will determine whether the Option is to be an Incentive Stock Option described in Code Section 422 or a Nonqualified Stock Option, and the Option must be clearly identified as to its status as an Incentive Stock Option or a Nonqualified Stock Option. Incentive Stock Options may only be granted to employees of the Company or any Subsidiary or Parent. At the time any Incentive Stock Option granted under the Plan is exercised, the Company will be entitled to legend the certificates representing the shares of Stock purchased pursuant to the Option to clearly identify them as representing the shares purchased upon the exercise of an Incentive Stock Option. An Incentive Stock Option may only be granted within ten (10) years from the earlier of the date the Plan is adopted by the Board of Directors or approved by the Company’s stockholders, or any extension of such period permitted by Code Section 422.

 

(a)            Option Price. Subject to adjustment in accordance with Section 5.2 and the other provisions of this Section 3.2, the Exercise Price must be as set forth in the applicable Award Agreement, but in no event may it be less than the Fair Market Value on the date the Option is granted. With respect to each grant of an Incentive Stock Option to a Participant who is an Over 10% Owner, the Exercise Price may not be less than one hundred and ten percent (110%) of the Fair Market Value on the date the Option is granted.

 

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(b)            Option Term. Any Incentive Stock Option granted to a Participant who is not an Over 10% Owner is not exercisable after the expiration of ten (10) years after the date the Option is granted. Any Incentive Stock Option granted to an Over 10% Owner is not exercisable after the expiration of five (5) years after the date the Option is granted. The term of any Nonqualified Stock Option shall be as specified in the applicable Award Agreement.

 

(c)            Payment. Payment for all shares of Stock purchased pursuant to exercise of an Option will be made in any form or manner authorized by the Committee in the Award Agreement or by amendment thereto, including, but not limited to, cash, cash equivalents, or, if the Award Agreement provides, but in any case subject to such procedures or restrictions as the Committee may impose:

 

(1)          by delivery to the Company of a number of shares of Stock owned by the holder having an aggregate Fair Market Value of not less than the product of the Exercise Price multiplied by the number of shares the Participant intends to purchase upon exercise of the Option on the date of delivery;

 

(2)          in a cashless exercise through a broker, except if and to the extent prohibited by law as to officers and directors, including without limitation, the Sarbanes-Oxley Act of 2002, as amended; or

 

(3)          by having a number of shares of Stock withheld, the Fair Market Value of which as of the date of exercise is sufficient to satisfy the Exercise Price. Payment must be made at the time that the Option or any part thereof is exercised, and no shares may be issued or delivered upon exercise of an Option until full payment has been made by the Participant. The holder of an Option, as such, has none of the rights of a stockholder.

 

(d)            Conditions to the Exercise of an Option. Each Option granted under the Plan is exercisable by whom, at such time or times, or upon the occurrence of such event or events, and in such amounts, as the Committee specifies in the Award Agreement; provided, however, that subsequent to the grant of an Option, the Committee, at any time before complete termination of such Option, may modify the terms of an Option to the extent not prohibited by the terms of the Plan, including, without limitation, accelerating the time or times at which such Option may be exercised in whole or in part, including, without limitation, upon a change in control and may permit the Participant or any other designated person to exercise the Option, or any portion thereof, for all or part of the remaining Option term, notwithstanding any provision of the Award Agreement to the contrary.

 

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(e)            Termination of Incentive Stock Option. With respect to an Incentive Stock Option, in the event of Termination of Employment of a Participant, the Option or portion thereof held by the Participant which is unexercised will expire, terminate, and become unexercisable no later than the expiration of three (3) months after the date of Termination of Employment; provided, however, that in the case of a holder whose Termination of Employment is due to death or Disability, one (1) year may be substituted for such three (3) month period; provided, further that such time limits may be exceeded by the Committee under the terms of the grant, in which case, the Incentive Stock Option will be a Nonqualified Option if it is exercised after the time limits that would otherwise apply. For purposes of this Subsection (e), a Termination of Employment of the Participant will not be deemed to have occurred if the Participant is employed by another corporation (or a parent or subsidiary corporation of such other corporation) which has assumed the Incentive Stock Option of the Participant in a transaction to which Code Section 424(a) is applicable.

 

(f)             Special Provisions for Certain Substitute Options. Notwithstanding anything to the contrary in this Section 3.2, any Option issued in substitution for an option previously issued by another entity, which substitution occurs in connection with a transaction to which Code Section 424(a) is applicable, may provide for an exercise price computed in accordance with such Code Section and may contain such other terms and conditions as the Committee may prescribe to cause such substitute Option to contain as nearly as possible the same terms and conditions (including the applicable vesting and termination provisions) as those contained in the previously issued option being replaced thereby.

 

(g)            Limitation on Repricing. Except as provided in Section 5.2, the Exercise Price of an Option may not be reduced, directly or indirectly, after the grant of the Option if such reduction would have adverse tax implications under Code Section 409A.

 

3.3.          Terms and Conditions of Stock Appreciation Rights. Each Stock Appreciation Right granted under the Plan must be evidenced by an Award Agreement. A Stock Appreciation Right entitles the Participant to receive the excess of (i) the Fair Market Value of a specified or determinable number of shares of the Stock at the time of payment or exercise over (ii) a specified or determinable price, which may not be less than the Fair Market Value on the date of grant. A Stock Appreciation Right granted in connection with an Award may only be exercised to the extent that the related Award has not been exercised, paid, or otherwise settled.

 

(a)            Settlement. Upon settlement of a Stock Appreciation Right, the Company must pay to the Participant, at the discretion of the Committee, the appreciation in cash or shares of Stock (valued at the aggregate Fair Market Value on the date of payment or exercise) as provided in the Award Agreement or, in the absence of such provision, as the Committee may determine.

 

(b)            Conditions to Exercise. Each Stock Appreciation Right granted under the Plan is exercisable or payable at such time or times, or upon the occurrence of such event or events, and in such amounts, as the Committee specifies in the Award Agreement; provided, however, that subsequent to the grant of a Stock Appreciation Right, the Committee, at any time before complete termination of such Stock Appreciation Right, may accelerate the time or times at which such Stock Appreciation Right may be exercised or paid in whole or in part.

 

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(c)            Limitation on Repricing. Except as provided in Section 5.2, the price of a Stock Appreciation Right may not be reduced, directly or indirectly, after the grant of the Stock Appreciation Right, if such reduction would have adverse tax implications under Code Section 409A.

 

3.4.          Terms and Conditions of Other Stock-Based Awards. An Other Stock-Based Award shall entitle the Participant to receive, at a specified future date, payment of an amount equal to all or a portion of either (i) a number of, or the value of, a specified or determinable number of shares of Stock granted by the Committee, (ii) a percentage or multiple of the value of a specified number of shares of Stock determined by the Committee, or (iii) dividend equivalents on a specified, or a determinable number, or a percentage or multiple of a specified number, of shares of Stock determined by the Committee. At the time of the grant, the Committee must determine the specified number of shares of Stock or the percentage or multiple of the specified number of shares of Stock, as may be applicable; and the performance criteria, if any, applicable to the determination of the ultimate payment value of the Other Stock-Based Award. The Committee may provide for an alternate percentage or multiple under certain specified conditions.

 

(a)            Payment. Payment in respect of Other Stock-Based Awards may be made by the Company in cash or shares of Stock (valued at Fair Market Value as of the date payment is owed) as provided in the applicable Award Agreement or Award Program or, in the absence of such provision, as the Committee may determine.

 

(b)            Conditions to Payment. Each Other Stock-Based Award granted under the Plan shall be payable at such time or times, or upon the occurrence of such event or events, and in such amounts, as the Committee may specify in the applicable Award Agreement or Award Program; provided, however, that subsequent to the grant of an Other Stock-Based Award, the Committee, at any time before complete termination of such Other Stock-Based Award, may accelerate the time or times at which such Other Stock-Based Award may be paid in whole or in part.

 

3.5.          Terms and Conditions of Cash Performance Awards. A Cash Performance Award shall entitle the Participant to receive, at a specified future date, payment of an amount equal to all or a portion of either (i) the value of a specified or determinable number of units (stated in terms of a designated or determinable dollar amount per unit) granted by the Committee, or (ii) a percentage or multiple of a specified amount determined by the Committee. At the time of the grant, the Committee must determine the base value of each unit; the number of units subject to a Cash Performance Award; the specified amount and the percentage or multiple of the specified amount, as may be applicable; and the performance criteria, if any, applicable to the determination of the ultimate payment value of the Cash Performance Award. The Committee may provide for an alternate base value for each unit or an alternate percentage or multiple under certain specified conditions.

 

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(a)            Payment. Payment in respect of Cash Performance Awards shall be made by the Company in cash.

 

(b)            Conditions to Payment. Each Cash Performance Award granted under the Plan shall be payable at such time or times, or upon the occurrence of such event or events, and in such amounts, as the Committee may specify in the applicable Award Agreement or Award Program; provided, however, that subsequent to the grant of a Cash Performance Award, the Committee, at any time before complete termination of such Cash Performance Award, may accelerate the time or times at which such Cash Performance Award may be paid in whole or in part.

 

3.6.          Treatment of Awards on Termination of Service. Except as otherwise provided by Section 3.2(e), any Award under this Plan to a Participant who has experienced a Termination of Employment, Separation from Service, or termination of some other service relationship with the Company and its Affiliates may be cancelled, accelerated, paid or continued, as provided in the applicable Award Agreement or Award Program, or, as the Committee may otherwise subsequently determine to the extent not prohibited by the Plan. The portion of any Award exercisable in the event of continuation or the amount of any payment due under a continued Award may be adjusted by the Committee to reflect the Participant’s period of service from the date of grant through the date of the Participant’s Termination of Employment, Separation from Service or termination of some other service relationship or such other factors as the Committee determines are relevant to its decision to continue the Award.

 

SECTION 4 RESTRICTIONS ON STOCK

 

4.1.          Escrow of Shares. Any certificates representing the shares of Stock issued under the Plan will be issued in the Participant’s name, but, if the applicable Award Agreement or Award Program so provides, the shares of Stock will be held by a custodian designated by the Committee (the “Custodian”). Each applicable Award Agreement or Award Program providing for transfer of shares of Stock to the Custodian may require a Participant to complete an irrevocable stock power appointing the Custodian or the Custodian’s designee as the attorney-in-fact for the Participant for the term specified in the applicable Award Agreement or Award Program, with full power and authority in the Participant’s name, place and stead to transfer, assign, and convey to the Company any shares of Stock held by the Custodian for such Participant, if the Participant forfeits the shares under the terms of the applicable Award Agreement or Award Program. During the period that the Custodian holds the shares subject to this Section, the Participant is entitled to all rights, except as provided in the applicable Award Agreement or Award Program, applicable to shares of Stock not so held. Any dividends declared on shares of Stock held by the Custodian must, as provided in the applicable Award Agreement or Award Program, be paid directly to the Participant or, in the alternative, be retained by the Custodian or by the Company until the expiration of the period specified in the applicable Award Agreement or Award Program and shall then be delivered, together with any proceeds, with the shares of Stock to the Participant or to the Company, as applicable.

 

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4.2.          Restrictions on Transfer. The Participant does not have the right to make or permit to exist any disposition of the shares of Stock issued pursuant to the Plan except as provided in the Plan or the applicable Award Agreement or Award Program. Any disposition of the shares of Stock issued under the Plan by the Participant not made in accordance with the Plan or the applicable Award Agreement or Award Program will be void. The Company will not recognize, or have the duty to recognize, any disposition not made in accordance with the Plan and the applicable Award Agreement or Award Program, and the shares so transferred will continue to be bound by the Plan and the applicable Award Agreement or Award Program.

 

SECTION 5 GENERAL PROVISIONS

 

5.1.          Withholding. The Company shall deduct from all cash distributions under the Plan any taxes required to be withheld by federal, state, or local government. Whenever the Company proposes or is required to issue or transfer shares of Stock under the Plan or upon the vesting of any Award, the Company has the right to require the recipient to remit to the Company an amount sufficient to satisfy any federal, state, and local tax withholding requirements prior to the delivery of any certificate or certificates for such shares or the vesting of such Award. A Participant may satisfy the withholding obligation in cash, cash equivalents, in kind or, if and to the extent the applicable Award Agreement, Award Program, or Committee procedure so provides, a Participant may elect to have the number of shares of Stock the Participant is to receive reduced by, or tender back to the Company, the smallest number of whole shares of Stock which, when multiplied by the Fair Market Value of the shares of Stock, is sufficient to satisfy federal, state, and local, if any, withholding obligations arising from the settlement or vesting of an Award.

 

5.2.          Changes in Capitalization; Merger; Liquidation.

 

(a)            The number and kind of shares of Stock reserved for the grant of Options, Stock Appreciation Rights, and Other Stock-Based Awards under the Plan; the number and kind of shares of Stock pertaining to each outstanding Option, Stock Appreciation Right, and Other Stock-Based Award and reserved for issuance upon the exercise, settlement, vesting, grant or payment, as applicable, of such Award; the Exercise Price of each outstanding Option; the threshold price of each outstanding Stock Appreciation Right; and the total number of shares of Stock that may be subject to Awards granted by one or more officers of the Company and/or the Chairperson of the Committee shall be proportionately adjusted for any nonreciprocal transaction between the Company and the holders of capital stock of the Company that causes the per share value of the shares of Stock underlying an Award to change, such as a stock dividend, stock split, spinoff, rights offering, or recapitalization through a large, nonrecurring cash dividend (each, an “Equity Restructuring”).

 

(b)            In the event of a merger, consolidation, reorganization, extraordinary dividend, sale of substantially all of the Company’s assets, other change in capital structure of the Company, tender offer for shares of Stock, or a change in control, that in each case does not constitute an Equity Restructuring, the Committee may make such adjustments with respect to Awards and take such other action as it deems necessary or appropriate, including, without limitation, the substitution of new Awards by the Company or by a third party, the settlement of any Award in cash or cash equivalents, the acceleration of Awards, the removal of restrictions on outstanding Awards, other adjustments to outstanding Awards, or the termination of outstanding Awards in exchange for the cash value, if any, determined in good faith by the Committee of the vested and/or unvested portion of the Awards, all as may be provided in the applicable Award Agreement or Award Program or, if not expressly addressed therein, as the Committee subsequently may determine in its sole discretion. The Committee may also use the Plan to assume awards not originally granted under the Plan. Any adjustment pursuant to this Section 5.2 may provide, in the Committee’s discretion, for the elimination without payment therefor of any fractional shares that might otherwise become subject to any Award, but except as set forth in this Section may not otherwise diminish the then value of the Award.

 

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(c)            Notwithstanding any other provision of this Plan to the contrary, in taking any action pursuant to Subsection (a) or (b) with respect to a Nonqualified Stock Option or a Stock Appreciation Right, the Committee shall consider any provisions of Code Section 409A and the regulations thereunder that are required to be followed as a condition of the Nonqualified Stock Option and the Stock Appreciation Right not being treated as the grant of a new Option or Stock Appreciation Right or a change in the form of payment. Any adjustment described in the preceding sentence may include a substitution in whole or in part of other equity securities of the issuer in lieu of the shares of Stock that are subject to the Award.

 

(d)            The existence of the Plan and the Awards granted pursuant to the Plan shall not affect in any way the right or power of the Company to make or authorize any adjustment, reclassification, reorganization or other change in its capital or business structure, any merger or consolidation of the Company, any issue of debt or equity securities having preferences or priorities as to the Stock or the rights thereof, the dissolution or liquidation of the Company, any sale or transfer of all or any part of its business or assets, or any other corporate act or proceeding.

 

5.3.          Compliance with Code.

 

(a)            Code Section 422. All Incentive Stock Options to be granted hereunder are intended to comply with Code Section 422, and all provisions of the Plan and all Incentive Stock Options granted hereunder must be construed in such manner as to effectuate that intent.

 

(b)            Code Section 409A. Except to the extent provided otherwise by the Committee, Awards under the Plan are intended to satisfy the requirements of Code Section 409A (and the Treasury Department guidance and regulations issued thereunder) so as to avoid the imposition of any additional taxes or penalties under Code Section 409A. If the Committee determines that an Award, Award Agreement, Award Program, payment, distribution, deferral election, transaction, or any other action or arrangement contemplated by the provisions of the Plan would, if undertaken, cause a Participant to become subject to any additional taxes or other penalties under Code Section 409A, then unless the Committee provides otherwise, such Award, Award Agreement, Award Program, payment, distribution, deferral election, transaction, or other action or arrangement shall not be given effect to the extent it causes such result and the related provisions of the Plan, Award Agreement, and/or Award Program will be deemed modified, or, if necessary, suspended in order to comply with the requirements of Code Section 409A to the extent determined appropriate by the Committee, in each case without the consent of or notice to the Participant.

 

15

 

 

5.4.          Other Cash Awards. The Committee may, at any time and in its discretion, grant to any holder of an Award the right to receive, at such times and in such amounts as determined by the Committee in its discretion, a cash amount which is intended to reimburse such person for all or a portion of the federal, state, and local income taxes imposed upon such person as a consequence of the receipt, vesting, or settlement of the Award.

 

5.5.          Right to Terminate Employment or Service. Nothing in the Plan or in any Award Agreement or Award Program confers upon any Participant the right to continue as an officer, employee, director, consultant, or other service provider of the Company or any of its Affiliates or affect the right of the Company or any of its Affiliates to terminate the Participant’s employment or services at any time.

 

5.6.          Non-Alienation of Benefits. Other than as provided herein, no benefit under the Plan may be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge; and any attempt to do so shall be void. No such benefit may, prior to receipt by the Participant, be in any manner liable for or subject to the debts, contracts, liabilities, engagements, or torts of the Participant.

 

5.7.          Restrictions on Delivery and Sale of Shares; Legends. Each Award is subject to the condition that if at any time the Committee, in its discretion, shall determine that the listing, registration, or qualification of the shares covered by such Award upon any securities exchange or under any state or federal law is necessary or desirable as a condition of or in connection with the granting of such Award or the purchase or delivery of shares thereunder, the delivery of any or all shares pursuant to such Award may be withheld unless and until such listing, registration, or qualification shall have been effected. If a registration statement is not in effect under the Securities Act of 1933 or any applicable state securities laws with respect to the shares of Stock purchasable or otherwise deliverable under Awards then outstanding, the Committee may require, as a condition of exercise of any Option or as a condition to any other delivery of Stock pursuant to an Award, that the Participant or other recipient of an Award represent, in writing, that the shares received pursuant to the Award are being acquired for investment and not with a view to distribution and agree that the shares will not be disposed of except pursuant to an effective registration statement, unless the Company shall have received an opinion of counsel that such disposition is exempt from such requirement under the Securities Act of 1933 and any applicable state securities laws. The Company may include on certificates representing shares delivered pursuant to an Award such legends referring to the foregoing representations or restrictions or any other applicable restrictions on resale as the Company, in its discretion, shall deem appropriate.

 

5.8.          Listing and Legal Compliance. The Committee may suspend the exercise or payment of any Award so long as it determines that securities exchange listing or registration or qualification under any securities laws is required in connection therewith and has not been completed on terms acceptable to the Committee.

 

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5.9.          Termination and Amendment of the Plan. The Board of Directors at any time may amend or terminate the Plan without stockholder approval. Unless the Award Agreement or Award Program explicitly provides otherwise, no such termination or amendment without the consent of the holder of an Award may adversely affect the rights of the Participant under such Award. The Board of Directors shall consider that to preserve the Plan’s ability to grant Incentive Stock Options, stockholder approval is required for any amendment to the Plan that increases the number of shares of Stock available for the grant of Incentive Stock Options under the Plan or changes the employees (or class of employees) eligible to receive Incentive Stock Options, or, subject to certain exceptions, if the Plan is assumed in connection with a corporate transaction which results in a change in either the granting corporation or the stock available for purchase or grant under the Plan.

 

5.10.        Stockholder Approval. The Plan shall be submitted to the stockholders of the Company for their approval within twelve (12) months before or after the adoption of the Plan by the Board of Directors of the Company. If such approval is not obtained, any Award granted hereunder will be void.

 

5.11.        Choice of Law. The laws of the State of Georgia shall govern the Plan, to the extent not preempted by federal law, without reference to the principles of conflict of laws.

 

5.12.        Effective Date of Plan. The Plan shall become effective as of the date the Plan was approved by the Board of Directors.

 

IN WITNESS WHEREOF, the Company has executed this Plan, and the Plan has become effective, pursuant to Section 5.12, as of March 21, 2017, the date of its adoption by the Board of Directors.

 

    GEORGIA PRIMARY BANK
       
    By: /s Jane Skelton
       
    Title: Chief Financial Officer & Corporate Secretary

 

17

 

Exhibit 10.21

 

FIRST AMENDMENT TO THE
GEORGIA PRIMARY BANK
2017 LONG-TERM INCENTIVE PLAN

 

THIS FIRST AMENDMENT is made as of April 1, 2021, by Primary Bancshares, Inc., a bank holding company organized under the laws of the State of Georgia (the “Company”).

 

WHEREAS, pursuant to that certain Agreement and Plan of Share Exchange (the “Share Exchange Agreement”) between the Georgia Primary Bank (the “Bank”) and the Company by which all issued and outstanding shares of the Bank’s common stock were exchanged for shares of the Company’s common stock (the “Share Exchange”) and by which the Bank is now wholly-owned by the Company, a bank holding company (the “Reorganization”), the Company has assumed sponsorship of the Georgia Primary Bank 2017 Long–Term Incentive Plan (the “Plan”); and

 

WHEREAS, in connection with the Reorganization and the Share Exchange, the Company wishes to amend the Plan to reflect the change in Plan sponsorship, to reflect that shares of common stock of the Company have been substituted for shares of common stock of the Bank, and to make other conforming changes to the Plan resulting from the consequences of the Reorganization and Share Exchange;

 

NOW, THEREFORE, BE IT RESOLVED, that the Plan is hereby amended, effective immediately following the effective date of the Reorganization, as follows:

 

1.             By deleting the phrase “Georgia Primary Bank 2017 Long-Term Incentive Plan” each time it appears in the Plan and substituting therefor the phrase “Primary Bancshares, Inc. 2017 Long-Term Incentive Plan.”

 

2.             By deleting existing Section 1.1(i) and substituting therefor the following:

 

“(i)         ‘Company’ means, prior to the adoption of the Plan by Primary Bancshares, Inc., Georgia Primary Bank and, after the adoption of the Plan by Primary Bancshares, Inc., Primary Bancshares, Inc..”

 

3.              By deleting existing Section 1.1(u) in its entirety and by substituting therefor the following:

 

“(u)        ‘Plan’ means the “Primary Bancshares, Inc. 2017 Long-Term Incentive Plan.”

 

4.              By deleting existing Section 1.1(w) in its entirety and by substituting therefor the following:

 

“(w) ‘Stock’ means, prior to the adoption of the Plan by Primary Bancshares, Inc., the common stock of Georgia Primary Bank, $5.00 par value per share and, after the adoption of the Plan by Primary Bancshares, Inc., the common stock of Primary Bancshares, Inc., $5.00 par value per share.”

 

 

 

 

5.              By deleting Section 2.2 in its entirety and by substituting therefor the following:

 

“2.2       Stock Subject to the Plan.

 

(a)          Subject to adjustment in accordance with Section 5.2, Two Hundred Thirty-Seven Thousand Three Hundred Fifty-Three (237,353) shares of Stock (the ‘Maximum Plan Shares’) are hereby reserved exclusively for issuance upon exercise or payment pursuant to Awards, all or any of which may be Incentive Stock Options, such number including shares of the common stock of Georgia Primary Bank, if any, issued pursuant to Awards prior to the adoption of the Plan by Primary Bancshares, Inc.

 

(b)          Shares of Stock shall not be deemed to have been issued pursuant to the Plan with respect to any portion of an Award that is settled in cash. The shares of Stock attributable to the nonvested, unpaid, unexercised, unconverted, or otherwise unsettled portion of any Award that is forfeited or cancelled or expires or terminates for any reason without becoming vested, paid, exercised, converted, or otherwise settled in full in Stock will again be available for purposes of the Plan. For purposes of determining the number of shares of Stock issued upon the exercise, settlement, or grant of an Award under this Section, any shares of Stock withheld to satisfy tax withholding obligations or the Exercise Price shall be considered issued under the Plan.”

 

6.              By deleting the last sentence of the head language of Section 3.2 in its entirety.

 

7.              By deleting Section 5.1 in its entirety and substituting therefor the following:

 

“5.1        Withholding. The Company shall deduct or, if applicable, shall cause the appropriate Affiliate to deduct from all cash distributions under the Plan any taxes required to be withheld by federal, state, or local government. Whenever the Company proposes or is required to issue or transfer shares of Stock under the Plan or upon the vesting of any Award, the Company has the right to require the recipient to remit to the Company or appropriate Affiliate an amount sufficient to satisfy any federal, state, and local tax withholding requirements prior to the delivery of any certificate or certificates for such shares or the vesting of such Award. A Participant may satisfy the withholding obligation in cash, cash equivalents, in kind or, if and to the extent the applicable Award Agreement, Award Program, or Committee procedure so provides, a Participant may elect to have the number of shares of Stock the Participant is to receive reduced by, or tender back to the Company, the smallest number of whole shares of Stock which, when multiplied by the Fair Market Value of the shares of Stock, is sufficient to satisfy federal, state, and local, if any, withholding obligations arising from the settlement or vesting of an Award.”

 

8.              By deleting Section 5.10 in its entirety and substituting therefor the following:

 

“5.10     Stockholder Approval. The Plan was originally approved by the board of directors of Georgia Primary Bank on March 21, 2017, and by the stockholders of Georgia Primary Bank on April 18, 2017. The assumption of the Plan by the Company, its substitution as the granting corporation under the Plan and the substitution of Company common stock as the securities issuable under the Plan was approved by the shareholders of Georgia Primary Bank in connection with their approval of the Agreement and Plan of Share Exchange between the Georgia Primary Bank and the Company and was approved by the sole shareholder of the Company within twelve (12) months before the adoption of the Plan by the Company.”

 

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9.              By deleting Section 5.12 in its entirety and substituting therefor the following:

 

“5.12.     Effective Date of the Plan. The effective date of the Plan, as adopted by the Board of Directors of the Company, is December 15, 2020. Incentive Stock Options may continue to be granted under the Plan on and after this effective date until December 14, 2030, subject to any earlier termination of the Plan pursuant to Section 5.9 or any extension of such period permitted by Code Section 422.”

 

Except as specifically amended hereby, the remaining provisions of the Plan shall remain in full force and effect as prior to the adoption of this First Amendment.

 

IN WITNESS WHEREOF, the Company has caused this First Amendment to be executed effective immediately following the effective date of the Reorganization.

 

    PRIMARY BANCSHARES, INC.:
       
    By: /s/ Jane Skelton
       
    Title: Chief Financial Officer & Secretary

 

3

 

Exhibit 10.22

 

GEORGIA BANKING COMPANY, INC.

 

AMENDMENT TO THE
PRIMARY BANCSHARES, INC. 2017 LONG-TERM INCENTIVE PLAN

 

THIS AMENDMENT TO PRIMARY BANCSHARES, INC. 2017 LONG-TERM INCENTIVE PLAN (this “Amendment”) is made as of March 1, 2025, by Georgia Banking Company, Inc. (the “Company”), a successor by merger to Primary Bancshares, Inc. (“Primary”).

 

WHEREAS, the Company and Primary have entered into that certain Agreement and Plan of Merger, dated October 9, 2024, by and between the Company and Primary, as amended by that certain First Amendment to Agreement and Plan of Merger, dated as of January 22, 2025 (collectively, the “Company Merger Agreement”), pursuant to which Primary will merge with and into the Company, with the Company as the surviving corporation (the “Company Merger”);

 

WHEREAS, immediately following the Company Merger, Primary’s wholly-owned Georgia bank subsidiary, Georgia Primary Bank (“Primary Bank”), will merge with and into the Company’s wholly-owned Georgia bank subsidiary, Georgia Banking Company (the “Bank”), with the Bank as the surviving bank (the “Bank Merger” and together with the Company Merger, the “Mergers”), in accordance with the terms and conditions of that certain Agreement and Plan of Merger, dated as of October 9, 2024, by and between the Bank and Primary Bank (the “Bank Merger Agreement”);

 

WHEREAS, Primary granted stock options to purchase shares of Primary’s common stock (“Options”) to certain current and former service providers of Primary and/or Primary Bank (the “Optionees”), subject to the terms and conditions of the Primary Bancshares, Inc. 2017 Long-Term Incentive Plan, as amended (the “Plan”) and each Optionee’s Nonqualified Stock Option Award (the “Award Notice”) and the Terms and Conditions to the Nonqualified Stock Option Award (“Terms and Conditions” and together with the Award Notice, the “Award Agreements”);

 

WHEREAS, in connection with the Company Merger and pursuant to the Company Merger Agreement and Section 5.2 of the Plan, certain Optionees elected to convert their outstanding and unexercised Options into options to purchase shares of the Company’s common stock (the “Rollover Options”);

 

WHEREAS, pursuant to the Merger Agreement, the Company has assumed the Plan and any Rollover Options granted thereunder, as of the Effective Time;

 

WHEREAS, pursuant to Section 5.9 of the Plan, the Company now desires to amend the Plan;

 

WHEREAS, immediately following the Effective Time (the “Amendment Effective Time”), the Plan is hereby amended to reflect the assumption of the Plan by the Company; and

 

WHEREAS, capitalized terms used in this Amendment and not otherwise defined herein shall have the meanings given to such terms in the Plan.

 

1

 

 

NOW, THEREFORE, effective as of the Amendment Effective Time, the Plan is hereby amended as follows:

 

I.              The Plan is hereby amended to add a “Preamble” before “Section I. Definitions” to read as follows:

 

“PREAMBLE

 

Primary Bancshares, Inc. and Georgia Banking Company, Inc. entered into that certain Agreement and Plan of Merger, dated October 9, 2024, by and between the Company and Primary, as amended by that certain First Amendment to Agreement and Plan of Merger, dated as of January 22, 2025 (collectively, the “Merger Agreement”), pursuant to which Primary Bancshares, Inc. merged with and into the Georgia Banking Company, Inc. on or about March 1, 2025 (the “Closing Date”), with the Georgia Banking Company, Inc. as the surviving corporation (the “Merger”).

 

In connection with the Merger, Georgia Banking Company, Inc. assumed the Plan, as well as any Options granted under the Plan that were outstanding and unexercised immediately prior to the Closing Date and that were to be converted into options to purchase shares of Georgia Banking Company, Inc.’s common stock (collectively, the “Rollover Options”). Georgia Banking Company, Inc. intends to maintain the Plan following the Closing Date to govern the outstanding Rollover Options and permit the grant of new equity incentives to eligible service providers of Georgia Banking Company, Inc. and its Subsidiaries.”

 

II.             Section 1.1(i) of the Plan is hereby amended by deleting the definition of “Company” therein and replacing it in its entirety with the following:

 

“(i)           “Company” means (i) “Primary Bancshares, Inc.” prior to the Closing Date, and (ii) “Georgia Banking Company, Inc.” after the Closing Date”

 

III.           Section 1.1(u) of the Plan is hereby amended by deleting the definition of “Plan” therein and replacing it in its entirety with the following:

 

“(u)          “Plan” means (i) the “Primary Bancshares, Inc. 2017 Long Term Incentive Plan” prior to the Closing Date, and (ii) the “Georgia Banking Company, Inc. 2017 Long Term Incentive Plan” after the Closing Date”

 

IV.           Section 1.1(p) of the Plan is hereby amended by deleting the definition of “Stock” therein and replacing it in its entirety with the following:

 

“(w)         “Stock” means the common stock, $0.01 par value per share, of Georgia Banking Company, Inc.”

 

2

 

 

V.             Section 2.2 of the Plan is hereby amended and restated in its entirety to read as follows:

 

“2.2          Stock Subject to the Plan.

 

(a)             Subject to adjustment in accordance with Section 5.2, One Hundred Thirty Nine Thousand Three Hundred Twenty Six (139,326) shares of Stock (the “Maximum Plan Shares”) are hereby reserved exclusively for issuance upon exercise or payment pursuant to Awards, including upon exercise of any Rollover Options, all or any of which may be Incentive Stock Options.

 

(b)            Shares of Stock shall not be deemed to have been issued pursuant to the Plan with respect to any portion of an Award that is settled in cash. The shares of Stock attributable to the nonvested, unpaid, unexercised, unconverted, or otherwise unsettled portion of any Award, including any adjusted shares subject to a Rollover Option that is forfeited or cancelled or expires or terminates for any reason without becoming vested, paid, exercised, converted, or otherwise settled in full in Stock will again be available for purposes of the Plan. For purposes of determining the number of shares of Stock issued upon the exercise, settlement, or grant of an Award under this Section, any shares of Stock withheld to satisfy tax withholding obligations or the Exercise Price shall be considered issued under the Plan.”

 

VI.            Section 2.4 of the Plan is hereby amended and restated in its entirety to read as follows:

 

“2.4          Eligibility and Limits. Awards may be granted only to officers, employees, directors, consultants, and other service providers of the Company or any Affiliate of the Company that provided services to Primary Bankshares, Inc. or its Affiliates prior to the Closing Date continued provide services Georgia Banking Company, Inc. or its Affiliates following the Closing Date; provided, however, that an Incentive Stock Option may only be granted to an employee of the Company or any Parent or Subsidiary. In the case of Incentive Stock Options, the aggregate Fair Market Value (determined as of the date an Incentive Stock Option is granted) of Stock with respect to which stock options intended to meet the requirements of Code Section 422 become exercisable for the first time by an individual during any calendar year under all plans of the Company and its Parents and Subsidiaries may not exceed $100,000; provided further, that if the limitation is exceeded, the Incentive Stock Option(s) which cause the limitation to be exceeded will be treated as Nonqualified Stock Option(s), unless the provisions of the applicable Award Agreement provide otherwise.”

 

VII.          Section 5.12 of the Plan is hereby amended and restated in its entirety to read as follows:

 

“5.12.      Effective Date of the Plan. The effective date of the Plan, as assumed and adopted by the Board of Directors of the Company, is March 1, 2025; provided, however, no Incentive Stock Options shall be granted unless and until the Company’s stockholders approve the Plan.”

 

VIII.         Except as specifically amended by this Amendment, all terms and conditions of the Award Agreement shall remain in full force and effect and shall not be modified by this Amendment.

 

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its duly authorized officer as of the date first written above.

 

    GEORGIA BANKING COMPANY, INC.,
    a Georgia Corporation
       
    By: /s/ Bartow Morgan, Jr.
      Bartow Morgan, Jr.
      Chief Executive Officer

 

[Signature Page to Amendment to 2017 Long-Term Incentive Plan]

 

 

Exhibit 10.23

 

NONQUALIFIED STOCK OPTION AWARD

PURSUANT TO THE PRIMARY BANCHARES, INC.

2017 LONG-TERM INCENTIVE PLAN

 

THIS NONQUALIFIED STOCK OPTION AWARD is granted as of the Grant Date by PRIMARY BANCSHSARES, INC. (the “Company”), a bank holding company organized under the laws of the State of Georgia, in favor of __________________________ (the “Optionee”).

 

Upon and subject to the Terms and Conditions attached hereto and incorporated herein by reference and further subject to the provisions of the Primary Banchares, Inc. 2017 Long-Term Incentive Plan, the Company hereby awards as of the Grant Date to Optionee a nonqualified stock option (the “Option”), as described below, to purchase the Option Shares.

 

A.Grant Date: _______________________.

 

B.Type of Option: Nonqualified Stock Option.

 

C.Plan under which granted: Primary Bancshares, Inc. 2017 Long-Term Incentive Plan.

 

D.Option Shares: All or any part of _________ shares of the Company’s common stock, $5.00 par value per share (the “Common Stock”), subject to adjustment as provided in the attached Terms and Conditions.

 

E.Exercise Price: $______ per share, subject to adjustment as provided in the attached Terms and Conditions. The Exercise Price is, in the judgment of the Committee, not less than 100% of the Fair Market Value of a share of Common Stock on the Grant Date.

 

F.Option Period: The Option may be exercised only during the Option Period which commences on the Grant Date and ends, generally, on the earlier of (a) the tenth (10th) anniversary of the Grant Date; or (b) the earliest of (i) immediately upon the Optionee’s involuntary Termination of Employment for Cause, (ii) thirty (30) days following the date the Optionee ceases to be an employee of the Company (including any Affiliate) for reasons other than for Cause or due to death or Disability, or (iii) one (1) year following the date the Optionee ceases to be an employee of the Company (including any Affiliate) due to death or Disability. Note that other limitations to exercising the Option, as described in the attached Terms and Conditions, may apply.

 

G.Vesting Schedule: The Option may be exercised only to the extent of Vested Option Shares (as defined in Schedule 1). Option Shares shall become vested in accordance with Schedule 1 hereto (the “Vesting Schedule”). Any portion of the Option which is not vested at the time of Optionee’s Termination of Employment shall be forfeited to the Company.

 

IN WITNESS WHEREOF, the parties have signed this Award as of the Grant Date set forth above.

 

PRIMARY BANCSHARES, INC.:
 
By:                      
 
Title:    

 

 

 

TERMS AND CONDITIONS

TO THE

NONQUALIFIED STOCK OPTION AWARD

PURSUANT TO THE PRIMARY BANCSHARES, INC.

2017 LONG-TERM INCENTIVE PLAN

 

1.            Exercise of Option. Subject to the provisions provided in the Award, these accompanying Terms and Conditions and the provisions of the Plan, the Option may be exercised with respect to all or any portion of the Vested Option Shares at any time during the Option Period by:

 

(a)            the delivery to the Company, at its principal place of business, of a written notice of exercise in substantially the form attached hereto as Exhibit 1, which shall be actually delivered to the Company no earlier than thirty (30) days and no later than ten (10) days prior to the date upon which Optionee desires to exercise all or any portion of the Option, unless prior notice is waived by the Committee;

 

(b)            payment to the Company of the Exercise Price multiplied by the number of Vested Option Shares being purchased (the “Purchase Price”), as provided in Section 3; and

 

(c)            satisfaction of the withholding tax obligations under Section 2.

 

(d)            Notwithstanding any other provision of this Award, in the event that the capital of Georgia Primary Bank falls below the minimum requirements determined by its primary federal regulator (the “Regulator”), the Regulator may direct the Company to require the Optionee to exercise, or otherwise forfeit, the Option in whole or in part. If the Regulator gives such direction, the Company will notify the Optionee within forty-five (45) days from the date the Regulator notifies the Company in writing that the Optionee must exercise, or otherwise forfeit, the Option in whole or in part. If the Optionee does not exercise the Option in accordance with the Company’s direction within twenty-one (21) days of the Company’s notification to the Optionee, the Committee may provide for the cancellation of the Option.

 

Upon acceptance of such notice and receipt of payment in full of the Purchase Price and, if applicable, withholding taxes, the Company shall cause to be issued a certificate representing the Vested Option Shares purchased. Notwithstanding the foregoing, in the event the Optionee is given notice of Termination of Employment for Cause, the Optionee’s ability to exercise the Option shall be suspended from the giving of such notice until such time as the Optionee cures the circumstance(s) constituting Cause, if expressly permitted by the applicable employment or services agreement or otherwise, or, if there is no opportunity to cure or no cure is timely effected, from and after the giving of such notice through and including the effective date of the Optionee’s Termination of Employment.

 

2.            Withholding. The Optionee must satisfy applicable federal, state and local, if any, withholding taxes imposed by reason of the exercise of the Option by paying to the Company the full amount of the withholding obligation in cash or by certified or bank cashier’s check.

 

3.            Purchase Price. Payment of the Purchase Price for all Vested Option Shares purchased pursuant to the exercise of an Option shall be made:

 

(a)            in cash or certified or bank cashier’s check;

 

 

 

(b)            at the discretion of the Committee, by electing to have the number of shares of Common Stock to be issued upon exercise reduced by the number of shares of Common Stock having a Fair Market Value, as determined under the Plan, on the date of exercise either equal to the Purchase Price or in combination with cash or certified or bank cashier’s check equal to the Purchase Price; in such case, the Optionee will be deemed to have elected to receive a taxable payment of cash equal to the excess of the Fair Market Value of the number of shares of Common Stock withheld to pay the Purchase Price (less any cash or certified or bank cashier’s check payment actually paid by the Optionee) over the portion of the Purchase Price attributable to the shares withheld, which amount shall be used to pay the Purchase Price, in exchange for cancellation of the portion of the vested Option attributable to the number of shares of Common Stock the Company has withheld to satisfy the Purchase Price; or

 

(c)            if and when the Common Stock becomes traded by brokers, whether on a national securities exchange or otherwise, by receipt of the Purchase Price in cash from a broker, dealer or other “creditor” as defined by Regulation T issued by the Board of Governors of the Federal Reserve System following delivery by the Optionee to the Committee of instructions in a form acceptable to the Committee regarding delivery to such broker, dealer or other creditor of that number of Vested Option Shares with respect to which the Option is exercised;

 

(d)            by the delivery to the Company of a number of shares of Common Stock owned by the Optionee having an aggregate Fair Market Value on the date of exercise equal to the Purchase Price; or

 

(e)            in any combination of the foregoing.

 

4.            Rights as Shareholder. Until the stock certificates reflecting the Option Shares accruing to the Optionee upon exercise of the Option are issued to the Optionee, the Optionee shall have no rights as a shareholder with respect to such Option Shares. The Company shall make no adjustment for any dividends or distributions or other rights on or with respect to Option Shares for which the record date is prior to the issuance of that stock certificate, except as the Plan or the attached Award otherwise provides.

 

5.            Restriction on Transfer of Option.

 

(a)            General Restrictions. The Optionee (and any subsequent holder of the Option) may not sell, pledge or otherwise directly or indirectly transfer (whether with or without consideration and whether voluntarily or involuntarily or by operation of law) any interest in or any beneficial interest in the Option except pursuant to the provisions of this Award. Any sale, pledge or other transfer (or any attempt to effect the same) of the Option in violation of any provision of this Award shall be void, and the Company shall not record such transfer, assignment, pledge or other disposition on its books or treat any purported transferee or pledgee of the Option as the owner or pledgee of the Option for any purpose.

 

(b)            Certain Permitted Transfers of Options. The restrictions contained in this Section will not apply with respect to transfers of the Option pursuant to applicable laws of descent and distribution; provided that the restrictions contained in this Section will continue to be applicable to the Option after any such transfer; and provided further that the transferee(s) of the Option must agree in writing to be bound by the provisions of this Award.

 

6.            Changes in Capitalization.

 

(a)            The number of Option Shares and the Exercise Price shall be proportionately adjusted for nonreciprocal transactions between the Company and the holders of capital stock of the Company that cause the per share value of the shares of Common Stock underlying the Option to change, such as a stock dividend, stock split, spinoff, rights offering, or recapitalization through a large, nonrecurring cash dividend (each, an “Equity Restructuring”).

 

 2 

 

 

(b)            In the event of a merger, consolidation, reorganization, extraordinary dividend, sale of substantially all of the Company’s assets or other material change in the capital structure of the Company, or a tender offer for shares of Common Stock, or a change in control of the Company, that in each case is not an “Equity Restructuring,” the Committee shall take such action to make such adjustments in the Option or the terms of this Award as the Committee, in its sole discretion, determines in good faith is necessary or appropriate, including, without limitation, adjusting the number and class of securities subject to the Option, with a corresponding adjustment in the Exercise Price, substituting a new option to replace the Option, accelerating the termination of the Option Period or terminating the Option in consideration of a cash payment to the Optionee in an amount equal to the excess of the then Fair Market Value of the Option Shares over the aggregate Exercise Price of the Vested Option Shares. Any determination made by the Committee pursuant to this Subsection (b) will be final and binding on the Optionee. Any action taken by the Committee need not treat all optionees equally.

 

(c)            The existence of the Plan and the Option granted pursuant to this Award shall not affect in any way the right or power of the Company to make or authorize any adjustment, reclassification, reorganization or other change in its capital or business structure, any merger or consolidation of the Company, any issue of debt or equity securities having preferences or priorities as to the Common Stock or the rights thereof, the dissolution or liquidation of the Company, any sale or transfer of all or any part of its business or assets, or any other corporate act or proceeding. Any adjustment pursuant to this Section may provide, in the Committee’s discretion, for the elimination without payment therefor of any fractional shares that might otherwise become subject to any Option.

 

7.            Special Limitation on Exercise. No purported exercise of the Option shall be effective without the approval of the Committee, which may be withheld to the extent that the exercise, either individually or in the aggregate together with the exercise of other previously exercised stock options and/or offers and sales pursuant to any prior or contemplated offering of securities, would, in the sole and absolute judgment of the Committee, require the filing of a registration statement with the United States Securities and Exchange Commission or with the securities commission of any state. If a registration statement is not in effect under the Securities Act of 1933 or any applicable state securities law with respect to shares of Common Stock purchasable or otherwise deliverable under the Option, the Optionee (a) shall deliver to the Company, prior to the exercise of the Option or as a condition to the delivery of Common Stock pursuant to the exercise of an Option, such information, representations and warranties as the Company may reasonably request in order for the Company to be able to satisfy itself that the Option Shares are being acquired in accordance with the terms of an applicable exemption from the securities registration requirements of applicable federal and state securities laws and (b) shall agree that the shares of Common Stock so acquired will not be disposed of except pursuant to an effective registration statement, unless the Company shall have received an opinion of counsel that such disposition is exempt from such requirement under the Securities Act of 1933 and any applicable state securities law.

 

 3 

 

 

8.            Legend on Stock Certificates. Certificates evidencing the Option Shares, to the extent appropriate at the time, shall have noted conspicuously on the certificate legends intended to give all persons full notice of the existence of the conditions, restrictions, rights and obligations set forth herein and in the Plan, and the Optionee shall not make any transfer of the Option Shares without first complying with the restrictions on transfer described in such legends. Such legends may include the following:

 

transfer is restricted

 

The shares evidenced by this certificate have been issued pursuant to an exemption from registration under the Securities Act of 1933, as amended (the “Securities Act”) and applicable state securities laws and as such may only be sold or otherwise transferred: (1) pursuant to registration or an exemption from registration under the Securities Act, including but not limited to Rule 144 thereunder, and the securities laws of any applicable state or other jurisdiction; or (2) if, in the opinion of counsel, in form and substance satisfactory to the issuer, such transfer is exempt from registration or is otherwise in compliance with applicable federal and state securities laws.

 

The securities evidenced by this certificate are subject to restrictions on transfer which also apply to the transferee as set forth in a Nonqualified Stock Option Award, dated __________________, a copy of which is available from the Company.

 

9.            Governing Laws. This Award and these Terms and Conditions shall be construed, administered and enforced according to the laws of the State of Georgia; provided, however, the Option may not be exercised except in compliance with exemptions available under applicable state securities laws of the state in which the Optionee resides and/or any other applicable securities laws.

 

10.          Successors. This Award and these Terms and Conditions shall be binding upon and inure to the benefit of the heirs, legal representatives, successors and permitted assigns of the Optionee and the Company.

 

11.          Notice. Except as otherwise specified herein, all notices and other communications required or permitted under this Award shall be in writing and, if mailed by prepaid first-class mail or certified mail, return receipt requested, shall be deemed to have been received on the earlier of the date shown on the receipt or three (3) business days after the postmarked date thereof. In addition, notices hereunder may be delivered by hand, facsimile transmission or overnight courier, in which event the notice shall be deemed effective when delivered or transmitted. All notices and other communications under this Agreement shall be given to the parties hereto at the following addresses: to the Company (attention of the Secretary), at 3880 Roswell Road, Atlanta, GA 30342, or at any other address as the Company, by notice to Optionee, may designate in writing from time to time; and to Optionee, at Optionee's address as shown on the records of the Company, or at any other address as Optionee, by notice to the Company, may designate in writing from time to time.

 

12.          Severability. In the event that any one or more of the provisions or portion thereof contained in the Award and these Terms and Conditions shall for any reason be held to be invalid, illegal or unenforceable in any respect, the same shall not invalidate or otherwise affect any other provisions of the Award and these Terms and Conditions, and the Award and these Terms and Conditions shall be construed as if the invalid, illegal or unenforceable provision or portion thereof had never been contained herein.

 

13.          Entire Agreement. Subject to the terms and conditions of the Plan, the Award and the Terms and Conditions express the entire understanding of the parties with respect to the Option.

 

14.          Violation. Except as provided in Section 5, any transfer, pledge, sale, assignment, or hypothecation of the Option or any portion thereof shall be a violation of the terms of the Award or these Terms and Conditions and shall be void and without effect.

 

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15.          Headings and Capitalized Terms. Section headings used herein are for convenience of reference only and shall not be considered in construing the Award or these Terms and Conditions. Capitalized terms used, but not defined, in either the Award or the Terms and Conditions shall be given the meaning ascribed to them in the Plan.

 

16.          Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of the Award and these Terms and Conditions, the party or parties who are thereby aggrieved shall have the right to specific performance and injunction in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.

 

17.          No Right to Continued Retention. Neither the establishment of the Plan nor the award of Option Shares hereunder shall be construed as giving the Optionee the right to continued employment with the Company or any Affiliate.

 

18.          Definitions. For purposes of this Award, the following terms shall have the meanings ascribed to them below:

 

(a)            For purposes of this Award, the term “Cause” has the same meaning as provided in the employment agreement between the Optionee and the Company and/or, if applicable, any Affiliate on the date of Termination of Employment, or if no such definition or employment agreement exists, “Cause” means:

 

(i)            any act by the Optionee of fraud against, material misappropriation from, or material dishonesty to either the Company or any Affiliate;

 

(ii)           conviction of the Optionee of a crime involving breach of trust or moral turpitude or any felony;

 

(iii)          conduct by the Optionee that amounts to willful misconduct, gross and willful insubordination, gross neglect or inattention to or material failure to perform the Optionee’s duties and responsibilities in the manner and to the extent required by his position(s) with the Company or any Affiliate, including prolonged absences; provided that the nature of such conduct shall be set forth with reasonable particularity in a written notice to the Optionee who shall have ten (10) days following delivery of such notice to cure such alleged conduct, provided that such conduct is, in the reasonable discretion of the Company, susceptible to a cure;

 

(iv)          exhibition by the Optionee of a standard of behavior within the scope of or related to his employment that is materially disruptive to the orderly conduct of the business operations of the Company or any Affiliate (including, without limitation, substance abuse, sexual harassment or sexual misconduct) in the reasonable opinion of the Company;

 

(v)           receipt of any form of notice, written or otherwise, that any regulatory agency having jurisdiction over the Company or any Affiliate intends to institute any form of formal or informal regulatory action against the Optionee; or

 

(vi)          the Optionee’s removal and/or permanent prohibition from participating in the conduct of the affairs of the Company or any Affiliate by an order issued under Section 8(e)(4) or 8(g)(1) of the Federal Deposit Insurance Act (12 U.S.C. 1818(e)(4) and (g)(1)).

 

 5 

 

 

(b)            “Change in Control” shall mean the occurrence of any of the following events on or after the Grant Date:

 

(i)            the acquisition by any one person of the ability to vote or to direct the disposition of more than fifty percent (50%) of the total voting power of the Company; or

 

(ii)           the consummation of a merger, share exchange, consolidation or other business combination of the Company with any other person or affiliate thereof, other than a merger, share exchange, consolidation or business combination that would result in the outstanding Common Stock immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into common stock of the surviving entity or a parent or affiliate thereof) more than fifty percent (50%) of the outstanding Common Stock, or of the common stock of such surviving entity or parent or affiliate thereof, outstanding immediately after such merger, consolidation or business combination

 

Notwithstanding the foregoing, in the event of a merger, consolidation, reorganization, share exchange or other transaction as to which the holders of the capital stock of the Company before the transaction continue after the transaction to hold, directly or indirectly through a holding company or otherwise, shares of capital stock of the Company (or other surviving company) representing more than fifty percent (50%) of the value or ordinary voting power to elect directors of the capital stock of the Company (or other surviving company), such transaction shall not constitute a Change in Control.

 

(c)            Other capitalized terms that are not defined herein have the meaning set forth in the Plan or the Award, except where the context does not reasonably permit.

 

 6 

 

 

EXHIBIT 1

 

NOTICE OF EXERCISE OF

STOCK OPTION TO PURCHASE

COMMON STOCK OF

PRIMARY BANCSHARES, INC.

 

  Name  
  Address  
     
  Date  

 

Primary Bancshares, Inc.

3880 Roswell Road

Atlanta, GA 30342

Attn: Corporate Secretary

 

Re:      Exercise of Nonqualified Stock Option

 

Gentlemen:

 

Subject to acceptance hereof by Primary Bancshares, Inc. (the “Company”) and pursuant to the provisions of the Primary Bancshares, Inc. 2017 Long-Term Incentive Plan (the “Plan”), I hereby give notice of my election to exercise options granted to me to purchase ______________ shares of Common Stock of the Company under the Nonqualified Stock Option Award (the “Award”) dated as of ____________________. The purchase shall take place as of __________, 20___ (the “Exercise Date”).

 

On or before the Exercise Date, I will pay the applicable purchase price as follows:

 

[  ]by delivery of cash or a certified (or bank cashier’s) check for $___________ for the full purchase price payable to the order of Primary Bancshares, Inc.

 

[  ]by having a number of Option Shares withheld, the Fair Market Value of which as of the date of exercise is sufficient to satisfy the Exercise Price; I understand that as a result of this election, I will be deemed to have elected to receive a taxable payment of cash equal to the excess of the Fair Market Value of the number of shares of Common Stock withheld to pay the Purchase Price (less any payment I make by certified or bank cashier’s check) over the portion of the purchase price attributable to the shares withheld, which amount shall be used to pay the purchase price, in exchange for a cancellation of the portion of the vested Option attributable to the number of shares of Common Stock the Company has withheld to satisfy the purchase price;

 

[  ]by delivery of the purchase price by _________________________, a broker, dealer or other “creditor” as defined by Regulation T issued by the Board of Governors of the Federal Reserve System. I hereby authorize the Company to issue a stock certificate for the number of shares indicated above in the name of said broker, dealer or other creditor or its nominee pursuant to instructions received by the Company and to deliver said stock certificate directly to that broker, dealer or other creditor (or to such other party specified in the instructions received by the Company from the broker, dealer or other creditor) upon receipt of the purchase price. Note: This choice is available only if and when the Common Stock becomes traded by brokers; or

 

[  ]by delivery of shares of Common Stock that I own and that are represented by a stock certificate I will surrender to the Company with my endorsement. If the number of shares of Common Stock represented by such stock certificate exceed the number to be applied against the purchase price, I understand that a new stock certificate will be issued to me reflecting the excess number of shares.

 

 Exhibit 1 – Page 1 of 3 

 

 

The required federal, state, and local income tax withholding obligations on the exercise of the Award shall be paid on or before the Exercise Date in cash or by certified or bank cashier’s check as provided in the Award.

 

I understand that I am not permitted to exercise the Option if I have been given notice that my employment will be terminated for Cause. I understand that if my ability to exercise is suspended in the manner provided for in the foregoing sentence, my ability to exercise may only be reinstated in the event that I cure the circumstances specified in such notice that was the basis for my termination for Cause and only if such ability to cure is expressly provided for in the applicable employment agreement or otherwise.

 

As soon as the stock certificate is registered in my name, please deliver it to me at the above address.

 

If the Common Stock being acquired is not registered for issuance to and resale by the Optionee pursuant to an effective registration statement on Form S-8 (or successor form) filed under the Securities Act of 1933, as amended (the “1933 Act”), I hereby represent, warrant, covenant, and agree with the Company as follows:

 

The shares of the Common Stock being acquired by me will be acquired for my own account without the participation of any other person, with the intent of holding the Common Stock for investment and without the intent of participating, directly or indirectly, in a distribution of the Common Stock and not with a view to, or for resale in connection with, any distribution of the Common Stock, nor am I aware of the existence of any distribution of the Common Stock;

 

I am not acquiring the Common Stock based upon any representation, oral or written, by any person with respect to the future value of, or income from, the Common Stock but rather upon an independent examination and judgment as to the prospects of the Company;

 

The Common Stock was not offered to me by means of publicly disseminated advertisements or sales literature, nor am I aware of any offers made to other persons by such means;

 

I am able to bear the economic risks of the investment in the Common Stock, including the risk of a complete loss of my investment therein;

 

I understand and agree that the Common Stock will be issued and sold to me without registration under any state law relating to the registration of securities for sale, and will be issued and sold in reliance on the exemptions from registration under the 1933 Act, provided by Sections 3(b) and/or 4(2) thereof and the rules and regulations promulgated thereunder;

 

The Common Stock cannot be offered for sale, sold or transferred by me other than pursuant to: (A) an effective registration under the 1933 Act or in a transaction otherwise in compliance with the 1933 Act; and (B) evidence satisfactory to the Company of compliance with the applicable securities laws of other jurisdictions. The Company shall be entitled to rely upon an opinion of counsel satisfactory to it with respect to compliance with the above laws;

 

The Company will be under no obligation to register the Common Stock or to comply with any exemption available for sale of the Common Stock without registration or filing, and the information or conditions necessary to permit routine sales of securities of the Company under Rule 144 under the 1933 Act are not now available and no assurance has been given that it or they will become available. The Company is under no obligation to act in any manner so as to make Rule 144 available with respect to the Common Stock;

 

 Exhibit 1 – Page 2 of 3 

 

 

I have and have had complete access to and the opportunity to review and make copies of all material documents related to the business of the Company, including, but not limited to, contracts, financial statements, tax returns, leases, deeds and other books and records. I have examined such of these documents as I wished and am familiar with the business and affairs of the Company. I realize that the purchase of the Common Stock is a speculative investment and that any possible profit therefrom is uncertain;

 

I have had the opportunity to ask questions of and receive answers from the Company and any person acting on its behalf and to obtain all material information reasonably available with respect to the Company and its affairs. I have received all information and data with respect to the Company which I have requested and which I have deemed relevant in connection with the evaluation of the merits and risks of my investment in the Company;

 

I have such knowledge and experience in financial and business matters that I am capable of evaluating the merits and risks of the purchase of the Common Stock hereunder and I am able to bear the economic risk of such purchase; and

 

The agreements, representations, warranties and covenants made by me herein extend to and apply to all of the Common Stock of the Company issued to me pursuant to this Award. Acceptance by me of the certificate representing such Common Stock shall constitute a confirmation by me that all such agreements, representations, warranties and covenants made herein shall be true and correct at that time.

 

I understand that the certificates representing the shares being purchased by me in accordance with this notice shall bear a legend referring to the foregoing covenants, representations and warranties and restrictions on transfer, and I agree that a legend to that effect may be placed on any certificate which may be issued to me as a substitute for the certificates being acquired by me in accordance with this notice. I further understand that capitalized terms used in this Notice of Exercise without definition shall have the meanings given to them in the Award or the Plan, as applicable.

 

Very truly yours,    
     
     
AGREED TO AND ACCEPTED:    
     
PRIMARY BANCSHARES, INC.:    
   
By:                             Date:           
     
Title:      

 

Number of Shares Exercised: _______ Number of Shares Remaining: _________

 

 Exhibit 1 – Page 3 of 3 

 

 

SCHEDULE 1

VESTING SCHEDULE

NONQUALIFIED STOCK OPTION AWARD

ISSUED PURSUANT TO THE

PRIMARY BANCSHARES, INC.

2017 LONG-TERM INCENTIVE PLAN

 

A.“Vested Option Shares” means only that percentage of the number of Option Shares subject to the Option as to which the Option becomes exercisable if the Optionee continues, at all times, as an officer or employee of the Company or any Affiliate from the Grant Date to the applicable anniversary of the Grant Date below.

 

    Percentage of Option Shares
  Vesting Date which are Vested Option Shares
     
  Prior to the first anniversary of the Grant Date       0%
  First anniversary of the Grant Date 331/3%
  Second anniversary of the Grant Date  662/3%
  Third anniversary of the Grant Date    100%

 

B.Notwithstanding Item A above, if a Change in Control occurs during the Option Period prior to the Optionee experiencing a Termination of Employment, the Option shall become fully vested upon the effective date of such Change in Control.

 

C.Any portion of the Option which is not vested as of the date the Optionee experiences a Termination of Employment shall be forfeited.

 

 Schedule 1 – Page 1 of 1 

 

Exhibit 10.25

 

GEORGIA BANKING COMPANY, INC.

 

AMENDMENT TO
NONQUALIFIED STOCK OPTION AWARD
PURSUANT TO THE 2017 LONG-TERM INCENTIVE PLAN

 

THIS AMENDMENT TO NONQUALIFIED STOCK OPTION AWARD PURSUANT TO THE 2017 LONG-TERM INCENTIVE PLAN (this “Amendment”) is made as of March 1, 2025, by Georgia Banking Company, Inc. (the “Company”), a successor by merger to Primary Bancshares, Inc. (“Primary”).

 

WHEREAS, the Company and Primary have entered into that certain Agreement and Plan of Merger, dated October 9, 2024, by and between the Company and Primary, as amended by that certain First Amendment to Agreement and Plan of Merger, dated as of January 22, 2025 (collectively, the “Company Merger Agreement”), pursuant to which Primary will merge with and into the Company, with the Company as the surviving corporation (the “Company Merger”);

 

WHEREAS, immediately following the Company Merger, Primary’s wholly-owned Georgia bank subsidiary, Georgia Primary Bank (“Primary Bank”), will merge with and into the Company’s wholly-owned Georgia bank subsidiary, Georgia Banking Company (the “Bank”), with the Bank as the surviving bank (the “Bank Merger” and together with the Company Merger, the “Mergers”), in accordance with the terms and conditions of that certain Agreement and Plan of Merger, dated as of October 9, 2024, by and between the Bank and Primary Bank (the “Bank Merger Agreement”);

 

WHEREAS, Primary granted stock options to purchase shares of Primary’s common stock (“Options”) to certain current and former service providers of Primary and/or Primary Bank (the “Optionees”), subject to the terms and conditions of the Primary Bancshares, Inc. 2017 Long-Term Incentive Plan, as amended (the “Plan”) and each Optionee’s Nonqualified Stock Option Award (the “Award Notice”) and the Terms and Conditions to the Nonqualified Stock Option Award (“Terms and Conditions” and together with the Award Notice, the “Award Agreements”);

 

WHEREAS, in connection with the Company Merger and pursuant to the Company Merger Agreement and Section 5.2 of the Plan, certain Optionees elected to convert their outstanding and unexercised Options into options to purchase shares of the Company’s common stock (the “Rollover Options”) equal to the number (rounded down to the nearest whole number) of (x) the number of shares of Primary’s common stock subject to such Option immediately prior to the Effective Time (as defined in the Company Merger Agreement) times (y) 0.5870 (the “Exchange Ratio”), at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of Primary’s common stock of such Option immediately prior to the Effective Time divided by (B) the Exchange Ratio (the “Option Conversion”);

 

WHEREAS, pursuant to the Company Merger Agreement and the terms and conditions of the applicable Award Agreements and Plan, the Rollover Options will be fully vested and exercisable, as of the Effective Time;

 

1

 

 

WHEREAS, pursuant to the Merger Agreement, the Company has assumed the Plan and any Rollover Options granted thereunder (including the Award Agreements governing the Rollover Options) as of the Effective Time, with the modifications described above;

 

WHEREAS, as of the Effective Time (the “Amendment Effective Time”), each Award Agreement, set forth on Exhibit A is hereby amended to reflect the Option Conversion and the assumption by the Company of the Rollover Options and the Plan under which the Options were granted, with such modifications as may be necessary to reflect the Mergers;

 

WHEREAS, following the Amendment Effective Time, the Rollover Options shall continue to be governed by their terms as in effect prior to the Closing Date, except as amended by this Amendment; and

 

WHEREAS, capitalized terms used in this Amendment and not otherwise defined herein shall have the meanings given to such terms in the Plan.

 

NOW, THEREFORE, effective as of the Amendment Effective Time, the Award Agreements are hereby amended as follows:

 

I.            Following the Amendment Effective Time, references to the “Plan” and the “Georgia Primary Bank 2017 Long-Term Incentive Plan” shall refer to the “Georgia Banking Company, Inc. 2017 Long-Term Incentive Plan.”

 

II.          Following the Amendment Effective Time, references to the “Company” and “Primary Bankshares, Inc.” shall refer to “Georgia Banking Company, Inc.”

 

III.         Following the Amendment Effective Time, references to “Common Stock” shall refer to the common stock, $0.01 par value per share, of Georgia Banking Company, Inc.

 

IV.         Clause C of the Award Notice is hereby amended and restated in its entirety to read as follows:

 

“C.        Plan under which granted: Georgia Banking Company, Inc. 2017 Long-Term Incentive Plan”

 

V.          The following sentence is added to the end of Clause D of the Award Notice to read as follows:

 

“Notwithstanding the foregoing, the number of outstanding Option Shares subject to the unexercised portion of the Option shall be adjusted effective as of the Amendment Effective Time, and shall equal the product (rounded down to the nearest whole number) of (x) the number of unexercised Option Shares subject to the Option (as set forth above) times (y) 0.5870 (the “Exchange Ratio”).”

 

VI.         The following sentence is added to the end of Clause E of the Award Notice to read as follows:

 

“Notwithstanding the foregoing, the Exercise Price per Option Share shall be adjusted effective as of the Amendment Effective Time, and shall equal the quotient (rounded up to the nearest whole cent) of (A) the Exercise Price per Option Share immediately prior to the Effective Time divided by (B) the Exchange Ratio.”

 

2

 

 

VII.        Clause F of the Award Notice is hereby amended and restated in its entirety to read as follows:

 

“F.Option Period: The vested portion of the Option may be exercised only during the Option Period which commences on the Grant Date and ends, generally, on the earlier of (a) the tenth (10th) anniversary of the Grant Date; or (b) the earliest of (i) immediately upon the Optionee’s involuntary Termination of Employment for Cause, (ii) ninety (90) days following the date the Optionee ceases to be an employee of the Company (including any Affiliate) for reasons other than for Cause or due to death or Disability, or (iii) one (1) year following the date the Optionee ceases to be an employee of the Company (including any Affiliate) due to death or Disability. Note that other limitations to exercising the Option, as described in the attached Terms and Conditions, may apply.”

 

VIII.      Except as specifically amended by this Amendment, all terms and conditions of the Award Agreement shall remain in full force and effect and shall not be modified by this Amendment.

 

[SIGNATURE PAGE FOLLOWS]

3

 

 

IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its duly authorized officer as of the date first written above.

 

    GEORGIA BANKING COMPANY, INC.,
    a Georgia Corporation
       
    By: /s/ Bartow Morgan, Jr.
      Bartow Morgan, Jr.
      Chief Executive Office

 

[Signature Page to Amendment to Non-Qualified Stock Option Award Pursuant to the 2017 Long-Term Incentive Plan]

 

Exhibit 10.26

 

GEORGIA BANKING COMPANY, INC.

 

AMENDMENT TO
NONQUALIFIED STOCK OPTION AWARD

 

THIS AMENDMENT TO NONQUALIFIED STOCK OPTION AWARD (this “Amendment”) is made as of March 1, 2025, by Georgia Banking Company, Inc. (the “Company”), a successor by merger to Primary Bancshares, Inc. (“Primary”).

 

WHEREAS, the Company and Primary have entered into that certain Agreement and Plan of Merger, dated October 9, 2024, by and between the Company and Primary, as amended by that certain First Amendment to Agreement and Plan of Merger, dated as of January 22, 2025 (collectively, the “Company Merger Agreement”), pursuant to which Primary will merge with and into the Company, with the Company as the surviving corporation (the “Company Merger”);

 

WHEREAS, immediately following the Company Merger, Primary’s wholly-owned Georgia bank subsidiary, Georgia Primary Bank (“Primary Bank”), will merge with and into the Company’s wholly-owned Georgia bank subsidiary, Georgia Banking Company (the “Bank”), with the Bank as the surviving bank (the “Bank Merger” and together with the Company Merger, the “Mergers”), in accordance with the terms and conditions of that certain Agreement and Plan of Merger, dated as of October 9, 2024, by and between the Bank and Primary Bank (the “Bank Merger Agreement”);

 

WHEREAS, Primary granted stock options to purchase shares of Primary’s common stock (“Options”) to certain current and former service providers of Primary and/or Primary Bank (the “Optionees”), subject to the terms and conditions of each Optionee’s Nonqualified Stock Option Award (the “Award Notice”) and the Terms and Conditions to the Nonqualified Stock Option Award (“Terms and Conditions” and together with the Award Notice, the “Award Agreements”);

 

WHEREAS, in connection with the Company Merger and pursuant to the Company Merger Agreement and Section 6 of the Terms and Conditions, certain Optionees elected to convert their outstanding and unexercised Options into options to purchase shares of the Company’s common stock (the “Rollover Options”) equal to the number (rounded down to the nearest whole number) of (x) the number of shares of Primary’s common stock subject to such Option immediately prior to the Effective Time (as defined in the Company Merger Agreement) times (y) 0.5870 (the “Exchange Ratio”), at an exercise price per share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of Primary’s common stock of such Option immediately prior to the Effective Time divided by (B) the Exchange Ratio(the “Option Conversion”);

 

WHEREAS, pursuant to the Company Merger Agreement and the terms and conditions of the applicable Award Agreements, the Rollover Options will be fully vested and exercisable, as of the Effective Time;

 

WHEREAS, pursuant to the Merger Agreement, the Company has assumed the Rollover Options and the Award Agreements governing the Rollover Options granted thereunder, as of the Effective Time, with the modifications described above;

 

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WHEREAS, as of the Effective Time (the “Amendment Effective Time”), each Award Agreement, set forth on Exhibit A is hereby amended to reflect the Option Conversion and the assumption by the Company of the Rollover Options and the Plan under which the Options were granted, with such modifications as may be necessary to reflect the Mergers;

 

WHEREAS, following the Amendment Effective Time, the Rollover Options shall continue to be governed by their terms as in effect prior to the Closing Date, except as amended by this Amendment; and

 

WHEREAS, capitalized terms used in this Amendment and not otherwise defined herein shall have the meanings given to such terms in the Award Agreement.

 

NOW, THEREFORE, effective as of the Amendment Effective Time, the Award Agreements are hereby amended as follows:

 

I.          Following the Amendment Effective Time, references to the “Company” and “Primary Bankshares, Inc.” shall refer to “Georgia Banking Company, Inc.”

 

II.        Following the Amendment Effective Time, references to “Common Stock” shall refer to the common stock, $0.01 par value per share, of Georgia Banking Company, Inc.

 

III.       The following sentence is added to the end of Clause D of the Award Notice to read as follows:

 

“Notwithstanding the foregoing, the number of outstanding Option Shares subject to the unexercised portion of the Option shall be adjusted effective as of the Amendment Effective Time, and shall equal the product (rounded down to the nearest whole number) of (x) the number of unexercised Option Shares subject to the Option (as set forth above) times (y) 0.5870 (the “Exchange Ratio”).”

 

IV.       The following sentence is added to the end of Clause E of the Award Notice to read as follows:

 

“Notwithstanding the foregoing, the Exercise Price per Option Share shall be adjusted effective as of the Amendment Effective Time, and shall equal the quotient (rounded up to the nearest whole cent) of (A) the Exercise Price per Option Share immediately prior to the Effective Time divided by (B) the Exchange Ratio.”

 

V.        Except as specifically amended by this Amendment, all terms and conditions of the Award Agreement shall remain in full force and effect and shall not be modified by this Amendment.

 

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Company has caused this Amendment to be executed by its duly authorized officer as of the date first written above.

 

    GEORGIA BANKING COMPANY, INC.,
    a Georgia Corporation
       
    By: /s/ Bartow Morgan, Jr.
      Bartow Morgan, Jr.
      Chief Executive Officer

 

[Signature Page to Amendment to Non-Qualified Stock Option Award]

 

Exhibit 10.27

 

CERTAIN CONFIDENTIAL INFORMATION (MARKED BY BRACKETS AS “[***]”) HAS
BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND
(II) IS THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR
CONFIDENTIAL.

 

SUBORDINATED NOTE PURCHASE AGREEMENT

 

This SUBORDINATED NOTE PURCHASE AGREEMENT (this “Agreement”) is dated as of July 25, 2025, and is made by and among Tandem Bancorp, Inc., a Georgia corporation (the “Company”), and the purchasers of the Subordinated Notes (as defined herein) identified on the signature pages hereto (each a “Purchaser” and collectively, the “Purchasers”).

 

RECITALS

 

WHEREAS, the Company is offering up to $12,000,000 in aggregate principal amount of Subordinated Notes, which aggregate amount is intended to be eligible to qualify as Tier 2 Capital (as defined herein);

 

WHEREAS, the Company has engaged Performance Trust Capital Partners, LLC as its exclusive placement agent (“Placement Agent”) for the offering of the Subordinated Notes;

 

WHEREAS, each of the Purchasers is an institutional “accredited investor” as such term is defined in Rule 501(a)(1), (2), (3), (7), (8) or (9) of Regulation D (“Regulation D”) promulgated under the Securities Act of 1933, as amended (the “Securities Act”) or a QIB (as defined herein);

 

WHEREAS, the offer and sale of the Subordinated Notes by the Company is being made in reliance upon the exemptions from registration available under Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D; and

 

WHEREAS, each Purchaser is willing to purchase from the Company a Subordinated Note in the principal amount set forth on such Purchaser’s respective signature page hereto (the “Subordinated Note Amount”) in accordance with the terms, subject to the conditions and in reliance on, the recitals, representations, warranties, covenants and agreements set forth herein and in the Subordinated Notes.

 

NOW, THEREFORE, in consideration of the mutual covenants, conditions and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

AGREEMENT

 

1.              DEFINITIONS.

 

1.1            Defined Terms. The following capitalized terms used in this Agreement and in the Subordinated Notes have the meanings defined or referenced below. Certain other capitalized terms used only in specific sections of this Agreement may be defined in such sections.

 

“Affiliate(s)” means, with respect to any Person (as defined herein), such Person’s immediate family members, partners, members, managers, or parent and subsidiary corporations, and any other Person directly or indirectly controlling, controlled by, or under common control with said Person and its respective Affiliates.

 

 

 

 

“Agreement” has the meaning set forth in the preamble hereto.

 

“Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Subordinated Note represented by a global certificate, the rules and procedures of DTC (as defined below) that apply to such transfer or exchange.

 

“Articles” means the Articles of Incorporation of the Company, as in effect on the Closing Date.

 

“Bank” means Tandem Bank, a Georgia state-chartered bank and wholly owned subsidiary of the Company.

 

“Board” means the board of directors of the Company.

 

“Business Day” means any day other than a Saturday, Sunday or any other day on which banking institutions in the State of Georgia are permitted or required by any applicable law or executive order to close.

 

“Bylaws” means the Bylaws of the Company, as in effect on the Closing Date.

 

“Closing” has the meaning set forth in Section 2.5.

 

“Closing Date” means July 25, 2025.

 

“Common Stock” has the meaning set forth in Section 4.1.2.

 

“Company” has the meaning set forth in the preamble hereto and shall include any successors to the Company.

 

“Company Covered Person” has the meaning set forth in Section 4.2.4.

 

“Company’s Reports” means (i) the Company’s audited consolidated financial statements for the year ended December 31, 2024; (ii) the Company unaudited consolidated financial statements for the three-months ended March 31, 2025; and (iii) the Consolidated Reports of Condition and Income of the Bank for the quarter ended March 31, 2025, as filed with the FDIC.

 

“Data Room” means the electronic data room established by the Company in connection with the transactions contemplated by this Agreement.

 

“Disbursement” has the meaning set forth in Section 3.1.

 

“Disqualification Event” has the meaning set forth in Section 4.2.4.

 

“DTC” means The Depository Trust Company.

 

“Equity Interest” means any and all shares, interests, participations or other equivalents (however designated) of capital stock of a corporation, any and all equivalent ownership interests in a Person which is not a corporation, and any and all warrants, options or other rights to purchase any of the foregoing.

 

“Event of Default” has the meaning set forth in the Subordinated Notes.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

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“FDIC” means the Federal Deposit Insurance Corporation.

 

“FRB” means the Board of Governors of the Federal Reserve System.

 

“GAAP” means generally accepted accounting principles in effect from time to time in the United States of America.

 

“Global Note” has the meaning set forth in Section 3.1.

 

“Governmental Agency(ies)” means, individually or collectively, any federal, state, county or local governmental body, department, commission, board, regulatory authority or agency (including, without limitation, each applicable Regulatory Agency (as defined herein)) with jurisdiction over the Company or a Subsidiary (as defined herein) of the Company.

 

“Governmental Licenses” has the meaning set forth in Section 4.3.

 

“Hazardous Materials” means flammable explosives, asbestos, urea formaldehyde insulation, polychlorinated biphenyls, radioactive materials, hazardous wastes, toxic or contaminated substances or similar materials, including, without limitation, any substances which are “hazardous substances,” “hazardous wastes,” “hazardous materials” or “toxic substances” under the Hazardous Materials Laws and/or other applicable environmental laws, ordinances or regulations.

 

“Hazardous Materials Laws” means any laws, regulations, orders, permits, licenses or requirements pertaining to the protection, preservation, conservation or regulation of the environment, including, without limitation: the Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq.; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq.; the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. Section 6901 et seq.; the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (including the Superfund Amendments and Reauthorization Act of 1986), 42 U.S.C. Section 9601 et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq.; the Occupational Safety and Health Act, as amended, 29 U.S.C. Section 651; the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977, as amended, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; and all comparable state and local laws, laws of other jurisdictions or orders and regulations.

 

“Indebtedness” means: (i) all items arising from the borrowing of money that, according to GAAP, would be included in determining total liabilities as shown on the consolidated balance sheet of the Company; and (ii) all obligations secured by any lien in property (real, personal, or mixed) owned by the Company or any Subsidiary of the Company whether or not such obligations shall have been assumed; provided, however, Indebtedness shall not include deposits or other indebtedness created, incurred or maintained in the ordinary course of the Company’s or the Bank’s business (including, without limitation, federal funds purchased, advances from any Federal Home Loan Bank, secured deposits of municipalities, letters of credit issued by the Company or the Bank or any other Subsidiary of the Company or the Bank and repurchase arrangements, and interest rate swaps) and consistent with customary banking practices and applicable laws and regulations.

 

“Leases” means all leases, licenses or other documents providing for the use or occupancy of any portion of any Property (as defined herein), including all amendments, extensions, renewals, supplements, modifications, sublets and assignments thereof and all separate letters or separate agreements relating thereto.

 

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“Material Adverse Effect” means, with respect to any Person, any change or effect that (i) is or would be reasonably likely to be material and adverse to the financial condition, results of operations or business or assets of such Person and its Subsidiaries taken as a whole, or (ii) would materially impair the ability of such Person to perform its respective obligations under any of the Transaction Documents (as defined herein), or otherwise materially impede the consummation of the transactions contemplated hereby; provided, however, that “Material Adverse Effect” shall not be deemed to include the impact of (1) changes in banking and similar laws, rules or regulations of general applicability or interpretations thereof by Governmental Agencies, (2) changes in GAAP or regulatory accounting requirements applicable to financial institutions and their holding companies generally, (3) changes after the date of this Agreement in general economic or capital market conditions affecting financial institutions or their market prices generally and not specifically related to the Company, the Bank or the Purchasers, (4) pandemics, epidemics, disease outbreaks, and other public health emergencies, (5) direct effects of compliance with this Agreement on the operating performance of the Company, the Bank or the Purchasers, including expenses incurred by the Company, the Bank or the Purchasers in consummating the transactions contemplated by this Agreement, and (6) the effects of any action or omission taken by the Company with the prior written consent of the Purchasers, and vice versa, or as otherwise contemplated by this Agreement and the Subordinated Notes.

 

“Maturity Date” means July 30, 2035.

 

“Paying Agency Agreement” means the Paying Agency and Registrar Agreement, dated as of July 25, 2025, between the Company and the Paying Agent.

 

“Paying Agent” means UMB, National Bank, as paying agent and registrar under the Paying Agency Agreement, or any successor in accordance with the applicable provisions of the Paying Agency Agreement.

 

“Person” means an individual, a corporation (whether or not for profit), a partnership (general or limited), a limited liability company, a joint venture, an association, a trust, an unincorporated organization, a government or any department or agency thereof (including a Governmental Agency) or any other entity or organization.

 

“Placement Agent” has the meaning set forth in the Recitals.

 

“Property” means any real property owned or leased by the Company or any Affiliate or Subsidiary of the Company.

 

“Purchaser” or “Purchasers” has the meaning set forth in the preamble hereto.

 

“QIB” means a Qualified Institutional Buyer within the meaning of Rule 144A under the Securities Act.

 

“Regulation D” has the meaning set forth in the Recitals.

 

“Regulatory Agency” means any federal or state agency charged with the supervision or regulation of depository institutions or holding companies of depository institutions, or engaged in the insurance of depository institution deposits, or any court, administrative agency or commission or other authority, body or agency having supervisory or regulatory authority with respect to the Company, the Bank or any of their Subsidiaries.

 

“Secondary Market Transaction” has the meaning set forth in Section 5.5.

 

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“Securities Act” has the meaning set forth in the Recitals.

 

“Settlement Agent” means UMB, National Bank, as settlement agent under the Settlement Agent Agreement, or any successor in accordance with the applicable provisions of the Settlement Agent Agreement.

 

“Settlement Agent Agreement” means the Settlement Agent Services Agreement, dated as of July 25, 2025, between the Company and the Settlement Agent.

 

“Subordinated Note” means the Subordinated Note in the form attached as Exhibit A hereto, as amended, restated, supplemented or modified from time to time, and each Subordinated Note delivered in substitution or exchange for such Subordinated Note (any one or more Subordinated Notes into which this Subordinated Note may be subdivided, exchanged, or substituted in the future referred to, collectively, with this Subordinated Note, as the “Subordinated Notes”).

 

“Subordinated Note Amount” has the meaning set forth in the Recitals.

 

“Subsidiary” or “Subsidiaries” means with respect to any Person, any corporation or other entity a majority of the outstanding Equity Interests of which is directly or indirectly owned by such Person.

 

“Tier 2 Capital” has the meaning given to the term “Tier 2 capital” in 12 C.F.R. Part 217, 12 C.F.R. Part 225 and 12 C.F.R. 250, as amended, modified and supplemented and in effect from time to time or any replacement thereof.

 

“Transaction Documents” has the meaning set forth in Section 3.2.1.1.

  

1.2            Interpretations. The foregoing definitions are equally applicable to both the singular and plural forms of the terms defined. The words “hereof,” “herein” and “hereunder” and words of like import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The word “including” when used in this Agreement without the phrase “without limitation,” shall mean “including, without limitation.” All references to time of day herein are references to Eastern Time unless otherwise specifically provided. All references to this Agreement or the Subordinated Notes shall be deemed to be to such documents as amended, modified or restated from time to time. With respect to any reference in this Agreement to any defined term, (i) if such defined term refers to a Person, then it shall also mean all heirs, legal representatives and permitted successors and assigns of such Person, and (ii) if such defined term refers to a document, instrument or agreement, then it shall also include any amendment, replacement, extension or other modification thereof.

 

1.3            Exhibits Incorporated. All Exhibits attached hereto are hereby incorporated into this Agreement.

 

2.              SUBORDINATED DEBT.

 

2.1            Certain Terms. Subject to the terms and conditions herein contained and on the Closing Date, the Company hereby agrees to issue and sell to the Purchasers, severally and not jointly, Subordinated Notes in an aggregate principal amount equal to the aggregate of each Purchaser’s Subordinated Note Amounts. The Purchasers, severally and not jointly, each agree to purchase the Subordinated Notes in an amount equal to such Purchaser’s Subordinated Note Amount from the Company on the Closing Date in accordance with the terms of, and subject to the conditions and provisions set forth in, this Agreement and the Subordinated Notes. The Subordinated Note Amounts shall be disbursed in accordance with Section 3.1. The Subordinated Notes shall bear interest per annum as set forth in the Subordinated Notes. The unpaid principal balance of the Subordinated Notes plus all accrued but unpaid interest thereon shall be due and payable on the Maturity Date, or such earlier date on which such amount shall become due and payable on account of (i) acceleration by the Purchasers in accordance with the terms of the Subordinated Notes and this Agreement or (ii) the Company’s delivery of a notice of redemption or repayment in accordance with the terms of the Subordinated Notes. In the event of an irreconcilable conflict between this Agreement and the Subordinated Notes with respect to the terms of the Subordinated Notes, the Subordinated Notes will govern.

 

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2.2            Subordination. The Subordinated Notes shall be subordinated in accordance with the subordination provisions set forth therein.

 

2.3            Maturity Date. On the Maturity Date, the Company shall pay all sums due and owing under this Agreement and the Subordinated Notes in full. The Company acknowledges and agrees that the Purchasers have not made any commitments, either express or implied, to extend the terms of the Subordinated Notes past their Maturity Date and shall not extend such terms beyond the Maturity Date unless the Company and the Purchasers hereafter specifically otherwise agree in writing.

 

2.4            Unsecured Obligations. The obligations of the Company to the Purchasers under the Subordinated Notes shall be unsecured and not covered by a guarantee of the Company or any Affiliate of the Company.

 

2.5            The Closing. The closing of the sale and purchase of the Subordinated Notes (the “Closing”) shall occur remotely via the electronic or other exchange of documents and signature pages, at 10:00 a.m. Eastern Time on the Closing Date, or at such other place or time or on such other date as the parties hereto may agree.

 

2.6            Payments. The Company agrees that matters concerning payments and application of payments shall be as set forth in this Agreement and in the Subordinated Notes.

 

2.7            No Right of Offset. Each Purchaser hereby expressly waives any right of offset it may have against the Company or any of its Subsidiaries.

 

2.8            Use of Proceeds. The Company shall use the net proceeds from the sale of Subordinated Notes for organic growth, general corporate purposes, and potential future strategic opportunities.

 

3.              DISBURSEMENT.

 

3.1            Disbursement. On the Closing Date, assuming all of the terms and conditions set forth in Section 3.2 have been satisfied by the Company and the Company has executed and delivered to each of the Purchasers this Agreement and any other related documents in form and substance reasonably satisfactory to the Purchasers, each Purchaser shall disburse in immediately available funds the Subordinated Note Amount set forth on each Purchaser’s respective signature page hereto to the Company in exchange for either (a) for each Purchaser who is a QIB, an electronic securities entitlement through the facilities of DTC in accordance with the Applicable Procedures with a principal amount equal to such Purchaser’s Subordinated Note Amount, or (b) for each Purchaser who is not a QIB, a physical Subordinated Note with a principal amount equal to such Purchaser’s Subordinated Note Amount (the “Disbursement”). The Company will deliver to the Paying Agent a global certificate representing the Subordinated Notes (the “Global Note”), registered in the name of Cede & Co., as nominee for DTC, representing all Subordinated Note Amounts settled through the facilities of DTC. The Company will deliver to each Purchaser who is not a QIB a physical Subordinated Note in definitive form (or evidence of the same with the original physical Subordinated Note to be delivered by the Company by overnight delivery on the next Business Day in accordance with the delivery instructions of such Purchaser), registered in such names and denominations as such Purchasers may reasonably request.

 

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3.2            Conditions Precedent to Disbursement.

 

3.2.1         Conditions to the Purchasers’ Obligation. The obligation of each Purchaser to consummate the purchase of the Subordinated Notes to be purchased by such Purchaser at Closing and to effect the Disbursement is subject to delivery by or at the direction of the Company to such Purchaser (or, with respect to the Settlement Agent Agreement and the Paying Agency Agreement, to the Settlement Agent and the Paying Agent, respectively) of each of the following (or written waiver by such Purchaser prior to the Closing of such delivery):

 

3.2.1.1             Transaction Documents. This Agreement, the Settlement Agent Agreement, the Paying Agency Agreement and the Global Note or such Purchaser’s physical Subordinated Note (collectively, the “Transaction Documents”), each duly authorized and executed by the Company.

 

3.2.1.2             Authority Documents.

 

(a)            A copy, certified by the Secretary or Assistant Secretary of the Company, of the Articles of the Company;

 

(b)            A certificate of existence of the Company issued by the Georgia Secretary of State;

 

(c)            A copy, certified by the Secretary or Assistant Secretary of the Company, of the Bylaws of the Company;

 

(d)            A copy, certified by the Secretary or Assistant Secretary of the Company, of the resolutions of the Board, and any committee thereof, authorizing the issuance of the Subordinated Notes and the execution, delivery and performance of the Transaction Documents;

 

(e)            An incumbency certificate of the Secretary or Assistant Secretary of the Company certifying the names of the officer or officers of the Company authorized to sign the Transaction Documents and the other documents provided for in this Agreement;

 

(f)            The opinion of Troutman Pepper Locke LLP, counsel to the Company, dated as of the Closing Date, substantially in the form set forth at Exhibit B attached hereto addressed to the Purchasers and the Placement Agent;

 

(g)            Evidence of the Company’s status as a registered bank holding company under the Bank Holding Company Act of 1956, as amended; and

 

(h)            Evidence of the Bank’s status as an insured depository institution under the applicable provisions of the Federal Deposit Insurance Act.

 

3.2.1.3             Other Documents. Such other certificates, schedules, resolutions, notes and/or other documents which are provided for hereunder or as a Purchaser may reasonably request.

 

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3.2.2         Conditions to the Company’s Obligation.

 

3.2.2.1             With respect to a given Purchaser, the obligation of the Company to consummate the sale of the Subordinated Notes and to effect the Closing is subject to delivery by or at the direction of such Purchaser to the Company of this Agreement, duly authorized and executed by such Purchaser and the Company’s receipt of the Subordinated Note Amount set forth on such Purchaser’s signature page hereto.

 

4.              REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

 

The Company hereby represents and warrants to each Purchaser as follows:

 

4.1            Organization and Authority.

 

4.1.1         Organization Matters of the Company and Its Subsidiaries.

 

4.1.1.1             The Company is a duly organized corporation, is validly existing and in good standing under the laws of the State of Georgia and has all requisite corporate power and authority to conduct its business and activities as presently conducted, to own its properties, and to perform its obligations under the Transaction Documents. The Company is duly qualified as a foreign corporation to transact business and is in good standing in each other jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except where the failure to so qualify or to be in good standing would not result in a Material Adverse Effect with respect to the Company. The Company is duly registered as a bank holding company under the Bank Holding Company Act of 1956, as amended.

 

4.1.1.2             The entities set forth on Schedule A attached hereto are the only direct or indirect Subsidiaries of the Company. Other than the Bank, the Company has no Subsidiaries. All of the issued and outstanding shares of capital stock or other equity interests in the Bank have been duly authorized and validly issued, are fully paid and non-assessable and are owned by the Company, directly, free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim; none of the outstanding shares of capital stock of, or other Equity Interests in, the Bank were issued in violation of the preemptive or similar rights of any security holder of the Bank or any other entity.

 

4.1.1.3             The Bank is a Georgia state-chartered bank. The deposit accounts of the Bank are insured by the FDIC up to applicable limits. The Bank has not received any notice or other information indicating that the Bank is not an “insured depository institution” as defined in 12 U.S.C. Section 1813, nor has any event occurred which could reasonably be expected to adversely affect the status of the Bank as an FDIC-insured institution. The Bank has the requisite corporate power and authority to own, lease and operate its properties and assets and to conduct its business as presently conducted.

 

4.1.1.4             The Company and its Subsidiaries have made payment of all franchise and similar taxes in all of the respective jurisdictions in which they are incorporated, chartered or qualified, except for such taxes (i) where the failure to pay such taxes will not have a Material Adverse Effect on the Company or its Subsidiaries, (ii) the validity of which is being contested in good faith, or (iii) for which proper reserves have been set aside on the books of the Company or any applicable Subsidiary of the Company, as the case may be.

 

4.1.2         Capital Stock and Related Matters. The Articles of the Company authorize the Company to issue up to (i) 20,000,000 shares of common stock, $1.00 par value per share (“Common Stock”) and (ii) 1,000,000 shares of preferred stock, $1.00 par value per share. As of the date hereof, there are 2,396,734 shares of the Company’s common stock issued and outstanding and no shares of the Company’s preferred stock issued and outstanding. All of the outstanding capital stock of the Company has been duly authorized and validly issued and is fully paid and non-assessable. There are, as of the date hereof, no outstanding options, rights, warrants or other agreements or instruments obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional shares of the capital stock of the Company or obligating the Company to grant, extend or enter into any such agreement or commitment to any Person other than the Company, except (i) pursuant to the Company’s equity incentive plans duly adopted by the Company’s Board and (ii) the warrants issued in connection with the opening of the Bank to purchase an aggregate of 173,000 shares of Common Stock, with an exercise price of $10.00 per share, expiring November 1, 2029.

 

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4.2            No Impediment to Transactions.

 

4.2.1          Transaction is Legal and Authorized. The issuance of the Subordinated Notes, the borrowing of the aggregate of the Subordinated Note Amount, the use of proceeds, the execution and delivery of the Transaction Documents and compliance by the Company with all of the provisions of the Transaction Documents are within the corporate and other powers of the Company.

 

4.2.2          Agreement, Settlement Agent Agreement and Paying Agency Agreement. This Agreement, the Settlement Agent Agreement and the Paying Agency Agreement have been duly authorized, executed and delivered by the Company, and, assuming due authorization, execution and delivery by the other parties thereto, constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally or by general equitable principles.

 

4.2.3          Subordinated Notes. The Subordinated Notes have been duly authorized by the Company and when executed by the Company and issued, delivered to and paid for by the Purchasers in accordance with the terms of the Agreement, will have been duly executed, authenticated, issued and delivered, and will constitute legal, valid and binding obligations of the Company and enforceable against the Company in accordance with their terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally or by general equitable principles.

 

4.2.4          Exemption from Registration. Neither the Company, nor any of its Subsidiaries or Affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the Subordinated Notes. Assuming the accuracy of the representations and warranties of each Purchaser set forth in this Agreement, the Subordinated Notes will be issued in a transaction exempt from the registration requirements of the Securities Act. No “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of the Securities Act (a “Disqualification Event”) is applicable to the Company or, to the Company’s knowledge, any Person described in Rule 506(d)(1) (each, a “Company Covered Person”). The Company has exercised reasonable care to determine whether any Company Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e).

 

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4.2.5          No Defaults or Restrictions. Neither the execution and delivery of the Transaction Documents by the Company nor compliance by the Company with their respective terms and conditions will (whether with or without the giving of notice or lapse of time or both) (i) violate, conflict with or result in a breach of, or constitute a default under: (1) the Articles or Bylaws; (2) any of the terms, obligations, covenants, conditions or provisions of any corporate restriction or of any contract, agreement, indenture, note, mortgage, deed of trust, pledge, bank loan or credit agreement, or any other agreement or instrument to which the Company or Bank, as applicable, is now a party or by which it or any of its properties may be bound or affected; (3) any judgment, order, writ, injunction, decree or demand of any court, arbitrator, grand jury, or Governmental Agency applicable to the Company or the Bank; or (4) any statute, rule or regulation applicable to the Company, except, in the case of items (2), (3) or (4), for such violations and conflicts that would not, singularly or in the aggregate, result in a Material Adverse Effect on the Company and its Subsidiaries taken as a whole, or (ii) result in the creation or imposition of any lien, charge or encumbrance of any nature whatsoever upon any property or asset of the Company. Neither the Company nor the Bank is in default in the performance, observance or fulfillment of any of the terms, obligations, covenants, conditions or provisions contained in any indenture or other agreement creating, evidencing or securing Indebtedness of any kind or pursuant to which any such Indebtedness is issued, or any other agreement or instrument to which the Company or the Bank, as applicable, is a party or by which the Company or the Bank, as applicable, or any of its properties may be bound or affected, except, in each case, for defaults that would not, singularly or in the aggregate, result in a Material Adverse Effect on the Company.

 

4.2.6          Governmental Consent. No governmental orders, permissions, consents, approvals or authorizations are required to be obtained by the Company that have not been obtained, and no registrations or declarations are required to be filed by the Company that have not been filed in connection with, or, in contemplation of, the execution and delivery of, and performance under, the Transaction Documents, except for applicable requirements, if any, of the Securities Act, the Exchange Act or state securities laws or “blue sky” laws of the various states and any applicable federal or state banking laws and regulations customarily made or obtained following Closing. Prior to the Closing Date, the Company and the Bank have received from the Regulatory Agencies any required approval of, or consent or nonobjection to, the issuance and sale of the Subordinated Notes contemplated by this Agreement.

 

4.3            Possession of Licenses and Permits. The Company and its Subsidiaries possess such permits, licenses, approvals, consents and other authorizations (collectively, “Governmental Licenses”) issued by the appropriate Governmental Agencies necessary to conduct the business now operated by them, except where the failure to possess such Governmental Licenses would not, singularly or in the aggregate, have a Material Adverse Effect on the Company or such applicable Subsidiary. The Company and each Subsidiary of the Company is in compliance with the terms and conditions of all such Governmental Licenses, except where the failure to so comply would not, individually or in the aggregate, have a Material Adverse Effect on the Company or such applicable Subsidiary of the Company. All such Governmental Licenses are valid and in full force and effect, except where the invalidity of such Governmental Licenses or the failure of such Governmental Licenses to be in full force and effect would not have a Material Adverse Effect on the Company or such applicable Subsidiary of the Company. Neither the Company nor any Subsidiary of the Company has received any notice of proceedings relating to the revocation or modification of any such Governmental Licenses.

 

4.4            Financial Condition.

 

4.4.1          Company Financial Statements. The financial statements of the Company included in the Company’s Reports (including the related notes, where applicable), which have been made available to the Purchasers (i) have been prepared from, and are in accordance with, the books and records of the Company; (ii) fairly present in all material respects the results of operations, cash flows, changes in stockholders’ equity and financial position of the Company and its consolidated Subsidiaries, for the respective fiscal periods or as of the respective dates therein set forth (subject in the case of unaudited statements to recurring year-end audit adjustments normal in nature and amount), as applicable; (iii) complied as to form, as of their respective dates of filing in all material respects with applicable accounting and banking requirements as applicable, with respect thereto; and (iv) have been prepared in accordance with GAAP consistently applied during the periods involved, except, in each case, (x) as indicated in such statements or in the notes thereto, (y) for any statement therein or omission therefrom that was corrected, amended or supplemented or otherwise disclosed or updated in a subsequent Company’s Report, and (z) to the extent that any unaudited interim financial statements do not contain the footnotes required by GAAP, and were or are subject to normal and recurring year-end adjustments, which were not or are not expected to be material in amount, either individually or in the aggregate. The books and records of the Company have been, and are being, maintained in all material respects in accordance with GAAP and any other applicable legal and accounting requirements. The Company does not have any material liability of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether due or to become due), except for those liabilities that are reflected or reserved against on the consolidated balance sheet of the Company contained in the Company’s Reports for the Company’s most recently completed quarterly or annual fiscal period since the end of such quarterly or annual fiscal period, as applicable, and for liabilities incurred in the ordinary course of business consistent with past practice or in connection with this Agreement and the transactions contemplated hereby.

 

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4.4.2          Absence of Default. Since the end of the Company’s last fiscal year ended December 31, 2024, no event has occurred which either of itself or with the lapse of time or the giving of notice or both, would give any creditor of the Company the right to accelerate the maturity of any material Indebtedness of the Company. The Company is not in default under any Lease, agreement or instrument, or any law, rule, regulation, order, writ, injunction, decree, determination or award, except for such default(s) as would not result in a Material Adverse Effect on the Company.

 

4.4.3          Solvency. After giving effect to the consummation of the transactions contemplated by this Agreement, the Company has capital sufficient to carry on its business and transactions and is solvent and able to pay its debts as they mature. No transfer of property is being made and no Indebtedness is being incurred in connection with the transactions contemplated by this Agreement with the intent to hinder, delay or defraud either present or future creditors of the Company or any Subsidiary of the Company.

 

4.4.4          Ownership of Property. The Company and each of its Subsidiaries have good and marketable title as to all real property owned by them and good title to all assets and properties owned by the Company and such Subsidiaries in the conduct of their businesses, whether such assets and properties are real or personal, tangible or intangible, including assets and property reflected in the most recent balance sheet contained in the Company’s Reports or acquired subsequent thereto (except to the extent that such assets and properties have been disposed of in the ordinary course of business, since the date of such balance sheet), subject to no encumbrances, liens, mortgages, security interests or pledges, except (i) those items which secure liabilities for public or statutory obligations or any discount with, borrowing from or other obligations to the Federal Home Loan Bank or FRB, inter-bank credit facilities, reverse repurchase agreements or any transaction by the Bank acting in a fiduciary capacity, (ii) statutory liens for amounts not yet delinquent or which are being contested in good faith and (iii) such as do not, individually or in the aggregate, materially and adversely affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company or any of its Subsidiaries. The Company and each of its Subsidiaries, as lessee, have the right under valid and existing Leases of real and personal properties that are material to the Company or such Subsidiary, as applicable, in the conduct of their business to occupy or use all such properties as presently occupied and used by them. Such existing Leases and commitments to Lease constitute or will constitute operating Leases for both tax and financial accounting purposes except as otherwise disclosed in the Company’s Reports and the Lease expense and minimum rental commitments with respect to such Leases and Lease commitments are as disclosed in all material respects in the Company’s Reports.

 

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4.5            No Material Adverse Change. Since the end of the Company’s fiscal year ended December 31, 2024, there has been no development or event which has had or could reasonably be expected to have a Material Adverse Effect on the Company or any of its Subsidiaries.

 

4.6            Legal Matters.

 

4.6.1          Compliance with Law. The Company and each of its Subsidiaries (i) has complied with and (ii) is not under investigation with respect to, and, to the Company’s knowledge, has not been threatened to be charged with or given any notice of any material violation of, any applicable statutes, rules, regulations, orders and restrictions of any domestic or foreign government, or any Governmental Agency, having jurisdiction over the conduct of its business or the ownership of its properties, except where any such failure to comply or violation would not reasonably be expected to have a Material Adverse Effect on the Company. The Company and each of its Subsidiaries is in compliance with, and at all times prior to the date hereof has been in compliance with its own privacy policies and written commitments to customers, consumers and employees, concerning data protection, the privacy and security of personal data, and the nonpublic personal information of its customers, consumers and employees, in each case except where any such failure to comply would not result, individually or in the aggregate, in a Material Adverse Effect on the Company. At no time during the two years prior to the date hereof has the Company or any of its Subsidiaries received any written notice asserting any violations of any of the foregoing, except for any violations that have not had and are not reasonably expected to have a Material Adverse Effect. Notwithstanding the foregoing, nothing in this Section 4.6.1 or otherwise in this Agreement shall require the Company or any of its Subsidiaries to disclose any confidential supervisory information of the Company or any of its Subsidiaries.

 

4.6.2          Regulatory Enforcement Actions. The Company, the Bank and the Company’s and the Bank’s other Subsidiaries, if any, are in compliance in all material respects with all laws administered by and regulations of any Governmental Agency applicable to it or to them, except where the failure to comply would not have a Material Adverse Effect on the Company or the applicable Subsidiary. None of the Company, the Bank, the Company’s or the Bank’s Subsidiaries nor any of their officers or directors is now operating under any restrictions, agreements, memoranda, commitment letter, supervisory letter or similar regulatory correspondence, or other commitments (other than restrictions of general application) imposed by any Governmental Agency, nor are, to the Company’s knowledge any such restrictions threatened, or any agreements, memoranda or commitments being sought by any Governmental Agency. To the Company’s knowledge, no legal or regulatory violations previously identified by, or penalties or other remedial action previously imposed by, any Governmental Agency remain unresolved.

 

4.6.3          Pending Litigation. There are no actions, suits, proceedings or written agreements pending, or, to the Company’s knowledge, threatened or proposed, against the Company or any of its Subsidiaries at law or in equity or before or by any Governmental Agency that would reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole, or materially and or adversely affect the issuance or payment of the Subordinated Notes; and neither the Company nor any of its Subsidiaries is a party to or named as subject to the provisions of any order, writ, injunction, or decree of, or any written agreement with, any court, commission, board or agency, domestic or foreign, that either separately or in the aggregate, could reasonably be expected to result in a Material Adverse Effect on the Company and its Subsidiaries, taken as a whole.

 

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4.6.4          Environmental. No Property is or, to the Company’s knowledge, has been a site for the use, generation, manufacture, storage, treatment, release, threatened release, discharge, disposal, transportation or presence of any Hazardous Materials and neither the Company nor any of its Subsidiaries has engaged in such activities. There are no claims or actions pending or, to the Company’s knowledge, threatened against the Company or any of its Subsidiaries by any Governmental Agency or by any other Person relating to any Hazardous Materials or pursuant to any Hazardous Materials Laws.

  

4.6.5          Brokerage Commissions. Except for commissions paid or payable to the Placement Agent, neither the Company nor any Affiliate of the Company is obligated to pay any brokerage commission or finder’s fee to any Person in connection with the transactions contemplated by this Agreement.

 

4.6.6          Investment Company Act. Neither the Company nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

 

4.7            No Misstatement or Omission. None of the representations or warranties made by the Company in this Agreement or in any certificate, or other document delivered to the Purchasers by or on behalf of the Company pursuant to or in connection with this Agreement, when taken together as a whole with the Company’s Reports, contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein not misleading in light of the circumstances in which they were made.

 

4.8            Internal Accounting Controls. The Company and the Bank have established and maintain a system of internal control over financial reporting that pertains to the maintenance of records that accurately and fairly reflect the transactions and dispositions of the Company’s assets (on a consolidated basis), provides reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that the Company’s and the Bank’s receipts and expenditures and receipts and expenditures of each of the Company’s other Subsidiaries are being made only in accordance with authorizations of the Company’s management and Board, and provides reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets of the Company (on a consolidated basis) that could have a Material Adverse Effect on the Company. Such internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with GAAP. Since the conclusion of the Company’s last completed fiscal year there has not been and there currently is not (i) any significant deficiency or material weakness in the design or operation of its internal control over financial reporting which is 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 or the Bank’s internal control over financial reporting. The Company (A) has implemented and maintains disclosure controls and procedures reasonably designed and maintained to ensure that material information relating to the Company is made known to the Chief Executive Officer and the Chief Financial Officer of the Company by others within the Company and (B) has disclosed, based on its most recent evaluation prior to the date hereof, to the Company’s outside auditors and the audit committee of the Board any significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting. Such disclosure controls and procedures are effective for the purposes for which they were established.

 

4.9            Tax Matters. The Company, the Bank and each other Subsidiary of the Company other than the Bank have (i) filed all material foreign, U.S. federal, state and local tax returns, information returns and similar reports that are required to be filed, and all such tax returns are true, correct and complete in all material respects, and (ii) paid all material taxes required to be paid by it and any other material assessment, fine or penalty levied against it other than taxes (x) currently payable without penalty or interest, or (y) being contested in good faith by appropriate proceedings.

 

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4.10          Exempt Offering. Assuming the accuracy of each Purchaser’s representations and warranties set forth in this Agreement, no registration under the Securities Act is required for the offer and sale of the Subordinated Notes by the Company to the Purchasers.

  

4.11          Representations and Warranties Generally. The representations and warranties of the Company set forth in this Agreement that do not contain a “Material Adverse Effect” qualification or other express materiality or similar qualification are true and correct as of the date hereof, except where failure of such representations and warranties to be so true and correct does not have a Material Adverse Effect; provided, however, that any such representations and warranties made as of a specified date need only be true and correct as of such date. The representations and warranties of the Company set forth in this Agreement that contain a “Material Adverse Effect” qualification or other express materiality or similar qualification, are true and correct as of the date hereof; provided, however, that any such representations and warranties made as of a specified date need only be true and correct as of such date.

 

5.              GENERAL COVENANTS, CONDITIONS AND AGREEMENTS.

 

The Company hereby further covenants and agrees with each Purchaser as follows:

 

5.1            Compliance with Transaction Documents. The Company shall comply with, observe and timely perform each and every one of the covenants, agreements and obligations under the Transaction Documents.

 

5.2            Affiliate Transactions. The Company shall not itself, nor shall it cause, permit or allow any of its Subsidiaries to enter into any transaction, including the purchase, sale or exchange of property or the rendering of any service, with any Affiliate of the Company except in the ordinary course of business and pursuant to the reasonable requirements of the Company’s or such Affiliate’s business and upon terms consistent with applicable laws and regulations and reasonably found by the appropriate board(s) of directors to be fair and reasonable and no less favorable to the Company or such Affiliate than would be obtained in a comparable arm’s length transaction with a Person not an Affiliate.

 

5.3            Compliance with Laws.

 

5.3.1          Generally. The Company shall comply and cause the Bank and each of its other Subsidiaries to comply in all material respects with all applicable statutes, laws, rules, regulations, orders and restrictions in respect of the conduct of its business and the ownership of its properties, except, in each case, where such noncompliance would not reasonably be expected to have a Material Adverse Effect on the Company.

 

5.3.2          Regulated Activities. The Company shall not itself, nor shall it cause, permit or allow the Bank or any other of its Subsidiaries to (i) engage in any business or activity not permitted by all applicable laws and regulations, except where such business or activity (or the effect thereof if such laws and regulations were enforced) would not reasonably be expected to have a Material Adverse Effect on the Company, the Bank and/or such of its Subsidiaries or (ii) make any loan or advance secured by the capital stock of another bank or depository institution, or acquire the capital stock, assets or obligations of or any interest in another bank or depository institution, in each case other than in accordance with applicable laws and regulations and safe and sound banking practices.

 

5.3.3          Taxes. The Company shall and shall cause the Bank and any other of its Subsidiaries to promptly pay and discharge all taxes, assessments and other governmental charges imposed upon the Company, the Bank or any other of its Subsidiaries or upon the income, profits, or property of the Company or any Subsidiary of the Company and all claims for labor, material or supplies which, if unpaid, might by law become a lien or charge upon the property of the Company, the Bank or any other of its Subsidiaries. Notwithstanding the foregoing, none of the Company, the Bank or any other of its Subsidiaries shall be required to pay any such tax, assessment, charge or claim, so long as the validity thereof shall be contested in good faith by appropriate proceedings, and appropriate reserves therefor shall be maintained on the books of the Company, the Bank or such other Subsidiary, as the case may be.

 

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5.3.4          Corporate Existence. The Company shall do or cause to be done all things necessary to maintain, preserve and renew its corporate existence and that of the Bank and the Company’s other Subsidiaries and its and their rights and franchises, and comply in all material respects with all related laws applicable to the Company, the Bank or the Company’s other Subsidiaries; provided, however, (i) that the Company will not be required to preserve the existence (corporate or other) or rights of any of its Subsidiaries (other than the Bank) if the Board determines that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries taken as a whole and that the loss thereof will not be disadvantageous in any material respect to the Noteholders (as defined in the Subordinated Notes), and (ii) that the Company may consummate a merger in which (A) the Company is the surviving entity or (B) if the Company is not the surviving entity, the surviving entity assumes, by operation of law or otherwise, all of the obligations of the Company under the Subordinated Notes.

 

5.3.5          Dividends, Payments, and Guarantees During Event of Default. Upon the occurrence of an Event of Default (as defined under the Subordinated Notes), until such Event of Default is cured by the Company or waived by the Noteholders in accordance with Section 17 (Waiver and Consent) of the Subordinated Notes and except as required by any federal or state Governmental Agency, the Company shall not (a) declare or pay any dividends or distributions on, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock; (b) make any payment of principal of, or interest or premium, if any, on, or repay, repurchase or redeem any of the Company’s Indebtedness that ranks equal with or junior to the Subordinated Notes; or (c) make any payments under any guarantee that ranks equal with or junior to the Subordinated Notes, other than (i) any dividends or distributions in shares of, or options, warrants or rights to subscribe for or purchase shares of, any class of the Company’s common stock; (ii) any declaration of a non-cash dividend in connection with the implementation of a shareholders’ rights plan, or the issuance of stock under any such plan in the future, or the redemption or repurchase of any such rights pursuant thereto; (iii) as a result of a reclassification of the Company’s capital stock or the exchange or conversion of one class or series of the Company’s capital stock for another class or series of the Company’s capital stock; (iv) the purchase of fractional interests in shares of the Company’s capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged; or (v) purchases of any class of the Company’s common stock related to or from any benefit plans for the Company’s directors, officers or employees or any of the Company’s dividend reinvestment plans.

 

5.3.6          Tier 2 Capital. If all or any portion of the Subordinated Notes ceases to be deemed to be Tier 2 Capital, other than due to the limitation imposed on the capital treatment of subordinated debt during the five (5) years immediately preceding the Maturity Date of the Subordinated Notes, the Company will immediately notify the Noteholders, and thereafter the Company and the Noteholders will work together in good faith to execute and deliver all agreements as reasonably necessary in order to restructure the applicable portions of the obligations evidenced by the Subordinated Notes to cause the same to be eligible to qualify as Tier 2 Capital; provided, however, that nothing contained in this Agreement shall limit the Company’s right to redeem the Subordinated Notes upon the occurrence of a Tier 2 Capital Event as described in the Subordinated Notes.

 

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5.4            Absence of Control. It is the intent of the parties to this Agreement that in no event shall the Purchasers, by reason of any of the Transaction Documents, be deemed to control, directly or indirectly, the Company, and the Purchasers shall not exercise, or be deemed to exercise, directly or indirectly, a controlling influence over the management or policies of the Company.

 

5.5            Secondary Market Transactions. To the extent and so long as not in violation of Section 6.4 hereof, each Purchaser shall have the right at any time and from time to time to securitize its Subordinated Note(s) or any portion thereof in a single asset securitization or a pooled loan securitization of rated single or multi-class securities secured by or evidencing ownership interests in the Subordinated Note(s) (each such securitization is referred to herein as a “Secondary Market Transaction”). In connection with any such Secondary Market Transaction, the Company shall, at the Company’s expense, cooperate with the Purchasers and otherwise reasonably assist the Purchasers in satisfying the market standards to which the Purchasers customarily adhere or which may be reasonably required in the marketplace or by applicable rating agencies in connection with any such Secondary Market Transaction, but in no event shall the Company be required to incur any material costs or expenses in connection therewith. Subject to any written confidentiality obligation, including the terms of any non-disclosure agreement between the Purchasers and the Company, all information regarding the Company may be furnished to any Person reasonably deemed necessary by the Purchaser in connection with participation in such Secondary Market Transaction. All documents, financial statements, appraisals and other data relevant to the Company or the Subordinated Notes may be retained by any such Person, subject to the terms of any confidentiality or nondisclosure agreement between the Purchaser and the Company.

 

5.6            Information Available to Facilitate Resales.

 

5.6.1          Rule 144A Information. While any Subordinated Notes remain “restricted securities” within the meaning of the Securities Act, the Company will make available, upon request, to any seller of such Subordinated Notes the information specified in Rule 144A(d)(4) under the Securities Act, unless the Company is then subject to Section 13 or 15(d) of the Exchange Act.

 

5.6.2          Current Public Information. At the written request of a Purchaser or any holder of a Subordinated Note, with a view to making available to the Purchaser or such holder the benefits of certain rules and regulations of the Securities and Exchange Commission permitting the sale of the Subordinated Notes without registration as soon as allowed, the Company shall, at all times from the date of this Agreement through the date that the restrictive legend is removed from the Subordinated Notes, use its commercially reasonable efforts to make and keep available adequate current public information with respect to the Company, as those terms are understood and defined in Rule 144(c) or any similar or analogous rules promulgated under the Securities Act, and, upon written request of a Purchaser or a holder of a Subordinated Note, the Company shall provide a written statement that the Company has complied with such requirements.

 

5.7            Partial Redemption through DTC. With respect to any partial redemption of the Subordinated Notes, partial redemptions for Subordinated Notes redeemed through DTC will be processed through the Depository Trust Issuer Corporation, in accordance with its rules and procedures, as a “Pro Rata Pass-Through Distribution of Principal.”

 

6.              REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS.

 

Each Purchaser hereby represents and warrants to the Company, and covenants with the Company, severally and not jointly, as follows:

 

6.1            Legal Power and Authority. The Purchaser has all necessary power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby. The Purchaser is an entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization or incorporation.

 

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6.2            Authorization and Execution. The execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of such Purchaser, and, assuming due authorization, execution and delivery by the other parties hereto, this Agreement is a legal, valid and binding obligation of such Purchaser, enforceable against such Purchaser in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting creditors’ rights generally or by general equitable principles.

 

6.3            No Conflicts. Neither the execution or delivery of or performance under the Transaction Documents nor the consummation of any of the transactions contemplated thereby will conflict with, violate, constitute a breach of or a default under (whether with or without the giving of notice or lapse of time or both) (i) the Purchaser’s organizational documents, (ii) any agreement to which the Purchaser is party, (iii) any law applicable to the Purchaser or (iv) any order, writ, judgment, injunction, decree, determination or award binding upon or affecting the Purchaser.

 

6.4            Purchase for Investment. The Purchaser acknowledges that the Subordinated Notes have not been registered under the Securities Act or under any state securities laws. The Purchaser is purchasing the Subordinated Note for its own account and not with a view to distribution and with no present intention of reselling, distributing or otherwise disposing of the same. The Purchaser has no present or contemplated agreement, undertaking, arrangement, obligation, Indebtedness or commitment providing for, or which is likely to compel, a disposition of the Subordinated Notes in any manner.

 

6.5            Institutional Accredited Investor. The Purchaser is and will be on the Closing Date (i) an institutional “accredited investor” as such term is defined in Rule 501(a) of Regulation D and as contemplated by subsections (1), (2), (3), (7), (8) or (9) of Rule 501(a) of Regulation D, and has no less than $5,000,000 in total assets, or (ii) a QIB.

 

6.6            Financial and Business Sophistication. The Purchaser has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the prospective investment in the Subordinated Notes. The Purchaser has relied solely upon its own knowledge of, and/or the advice of its own legal, financial or other advisors with regard to, the legal, financial, tax and other considerations involved in deciding to invest in the Subordinated Notes.

 

6.7            Ability to Bear Economic Risk of Investment. The Purchaser recognizes that an investment in the Subordinated Notes is a speculative investment that involves substantial risk, including risks related to the Company’s business, operating results, financial condition and cash flows, which risks it has carefully considered in connection with making an investment in the Subordinated Notes. The Purchaser has the ability to bear the economic risk of the prospective investment in the Subordinated Notes, including the ability to hold the Subordinated Notes indefinitely, and further including the ability to bear a complete loss of all of its investment in the Company.

 

6.8            Information. The Purchaser acknowledges that (i) it is not being provided with the disclosures that would be required if the offer and sale of the Subordinated Notes were registered under the Securities Act, nor is it being provided with any offering circular, private placement memorandum or prospectus prepared in connection with the offer and sale of the Subordinated Notes; (ii) it has conducted its own examination of the Company and the terms of the Subordinated Notes to the extent it deems necessary to make its decision to invest in the Subordinated Notes; (iii) it has availed itself of publicly available financial and other information concerning the Company to the extent it deems necessary to make its decision to purchase the Subordinated Notes (including meeting with representatives of the Company); and (iv) it has not received nor relied on any form of general solicitation or general advertising (within the meaning of Regulation D) from the Company in connection with the offer and sale of the Subordinated Notes. The Purchaser has reviewed the information set forth in the Company’s Reports and the exhibits and schedules thereto and hereto and the information contained in the Data Room.

 

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6.9            Access to Information. The Purchaser acknowledges that it and its advisors have been furnished with all materials relating to the business, finances and operations of the Company and its Subsidiaries that have been requested by it or its advisors and have been provided access to the Data Room and reviewed the information contained therein, given the opportunity to ask questions of, and to receive answers from, persons acting on behalf of the Company concerning the terms and conditions of the transactions contemplated by this Agreement in order to make an informed and voluntary decision to enter into this Agreement.

 

6.10          Investment Decision. The Purchaser has made its own investment decision based upon its own judgment, due diligence and advice from such advisors as it has deemed necessary and not upon any view expressed by any other Person or entity, including the Placement Agent. Neither any inquiries nor any other due diligence investigations conducted by it or its advisors or representatives, if any, shall modify, amend or affect its right to rely on the Company’s representations and warranties contained herein. The Purchaser is not relying upon, and has not relied upon, any advice, statement, representation or warranty made by any Person by or on behalf of the Company, including, without limitation, the Placement Agent, except for the express statements, representations and warranties of the Company made or contained in this Agreement. Furthermore, the Purchaser acknowledges that (i) the Placement Agent has not performed any due diligence review on behalf of it and (ii) nothing in this Agreement or any other materials presented by or on behalf of the Company to it in connection with the purchase of the Subordinated Notes constitutes legal, tax or investment advice.

 

6.11          Private Placement; No Registration; Restricted Legends. The Purchaser understands and acknowledges that the Subordinated Notes are characterized as “restricted securities” under Rule 144 of the Securities Act and are being sold by the Company without registration under the Securities Act in reliance on the exemption from federal and state registration set forth in, respectively, Rule 506(b) of Regulation D promulgated under Section 4(a)(2) of the Securities Act and Section 18 of the Securities Act, or any state securities laws, and accordingly, may be resold, pledged or otherwise transferred only if exemptions the registration requirements of the from the Securities Act and applicable state securities laws are available to it. The Purchaser is not subscribing for the Subordinated Notes 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. The Purchaser further acknowledges and agrees that all certificates or other instruments representing the Subordinated Notes will bear the restrictive legend set forth in the form of Subordinated Note. The Purchaser further acknowledges its primary responsibilities under the Securities Act and, accordingly, will not sell or otherwise transfer the Subordinated Notes or any interest therein without complying with the requirements of the Securities Act and the rules and regulations promulgated thereunder and the requirements set forth in this Agreement. Neither the Placement Agent nor the Company have or has made or are or is making any representation, warranty or covenant, express or implied, as to the availability of any exemption from registration under the Securities Act or any applicable state securities laws for the resale, pledge or other transfer of the Subordinated Notes, or that the Subordinated Notes purchased by the Purchaser will ever be able to be lawfully resold, pledged or otherwise transferred.

 

6.12          Placement Agent. The Purchaser will purchase the Subordinated Note(s) directly from the Company and not from the Placement Agent and understands that neither the Placement Agent nor any other broker or dealer has any obligation to make a market in the Subordinated Notes.

 

18

 

  

6.13          Tier 2 Capital. If the Company provides notice as contemplated in Section 5.3.6 of the occurrence of the event contemplated in such section, thereafter the Company and the Noteholders will work together in good faith to execute and deliver all agreements as reasonably necessary in order to restructure the applicable portions of the obligations evidenced by the Subordinated Notes so that the Subordinated Notes qualify as Tier 2 Capital; provided, however, that nothing contained in this Agreement shall limit the Company’s right to redeem the Subordinated Notes upon the occurrence of a Tier 2 Capital Event as described in the Subordinated Notes.

 

6.14          Not Debt of the Bank; Not Savings Accounts, etc. The Purchaser acknowledges that the Company is a bank holding company and the Company’s rights and the rights of the Company’s creditors, including, the Noteholders, to participate in the assets of any Company Subsidiary during its liquidation or reorganization are structurally subordinate to the prior claims of the Subsidiary’s creditors. The Purchaser acknowledges and agrees that the Subordinated Notes are not savings accounts or deposits of the Bank and are not insured or guaranteed by the FDIC or any other Governmental Agency, and that no Governmental Agency has passed upon or will pass upon the offer or sale of the Subordinated Notes or has made or will make any finding or determination as to the fairness of this investment.

 

6.15          Accuracy of Representations. The Purchaser understands that each of the Placement Agent and the Company are relying and will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements in connection with the transactions contemplated by this Agreement, and agrees that if any of the representations or acknowledgements made by it are no longer accurate as of the Closing Date, or if any of the agreements made by it are breached on or prior to the Closing Date, it shall promptly notify the Placement Agent and the Company.

 

7.              MISCELLANEOUS.

 

7.1            Prohibition on Assignment by the Company. Except as described in Section 8(b) (Merger or Sale of Assets) of the Subordinated Notes, the Company may not assign, transfer or delegate any of its rights or obligations under this Agreement or the Subordinated Notes without the prior written consent of all the Noteholders.

 

7.2            Time of the Essence. Time is of the essence for this Agreement.

 

7.3            Waiver or Amendment. No waiver or amendment of any term, provision, condition, covenant or agreement herein or in the Subordinated Notes shall be effective except with the consent of the holders of more than fifty percent (50%) of the aggregate principal amount (excluding any Subordinated Notes held by the Company or any of its Affiliates) of the Subordinated Notes at the time outstanding; provided, however, that without the consent of each holder of an affected Subordinated Note, no such amendment or waiver may: (i) reduce the principal amount of the Subordinated Note; (ii) reduce the rate of or change the time for payment of interest on any Subordinated Note; (iii) extend the maturity of any Subordinated Note; (iv) change the currency in which payment of the obligations of the Company under this Agreement and the Subordinated Notes are to be made; (v) lower the percentage of aggregate principal amount of outstanding Subordinated Notes required to approve any amendment of this Agreement or the Subordinated Notes; (vi) make any changes to Section 4(c) (Partial Redemption), Section 5 (Events of Default; Acceleration), Section 6 (Failure to Make Payments), Section 7 (Affirmative Covenants of the Company), Section 8 (Negative Covenants of the Company), Section 15 (Priority), or Section 17 (Waiver and Consent) of the Subordinated Notes that adversely affect the rights of any holder of a Subordinated Note; or (vii) make any change to this Section 7.3 (Waiver or Amendment) that adversely affects the rights of any holder of a Subordinated Note. Notwithstanding the foregoing, the Company may amend or supplement the Subordinated Notes without the consent of the holders of the Subordinated Notes to cure any ambiguity, defect or inconsistency or to provide for uncertificated Subordinated Notes in addition to or in place of certificated Subordinated Notes, or to make any change that does not adversely affect the rights of any holder of any of the Subordinated Notes. No failure to exercise or delay in exercising, by a Purchaser or any holder of the Subordinated Notes, of any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege preclude any other or further exercise thereof, or the exercise of any other right or remedy provided by law. The rights and remedies provided in this Agreement are cumulative and not exclusive of any right or remedy provided by law or equity. No notice or demand on the Company in any case shall, in itself, entitle the Company to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Purchasers to any other or further action in any circumstances without notice or demand. No consent or waiver, expressed or implied, by the Purchasers to or of any breach or default by the Company in the performance of its obligations hereunder shall be deemed or construed to be a consent or waiver to or of any other breach or default in the performance of the same or any other obligations of the Company hereunder. Failure on the part of the Purchasers to complain of any acts or failure to act or to declare an Event of Default, irrespective of how long such failure continues, shall not constitute a waiver by the Purchasers of their rights hereunder or impair any rights, powers or remedies on account of any breach or default by the Company.

 

19

 

 

7.4            Severability. Any provision of this Agreement which is unenforceable or invalid or contrary to law, or the inclusion of which would adversely affect the validity, legality or enforcement of this Agreement, shall be of no effect and, in such case, all the remaining terms and provisions of this Agreement shall subsist and be fully effective according to the tenor of this Agreement the same as though any such invalid portion had never been included herein. Notwithstanding any of the foregoing to the contrary, if any provisions of this Agreement or the application thereof are held invalid or unenforceable only as to particular persons or situations, the remainder of this Agreement, and the application of such provision to persons or situations other than those to which it shall have been held invalid or unenforceable, shall not be affected thereby, but shall continue valid and enforceable to the fullest extent permitted by law.

 

7.5            Notices. Any notice which any party hereto may be required or may desire to give hereunder shall be deemed to have been given if in writing and if delivered personally, or if mailed, postage prepaid, by United States registered or certified mail, return receipt requested, or if delivered by a responsible overnight commercial courier promising next Business Day delivery, or transmitted by email with confirmation of transmission, addressed:

 

if to the Company:

Tandem Bancorp, Inc.

2356 Main Street

Tucker, GA 30084

Attention: Charles DeWitt, President and Chief Executive Officer

Email: [***]

 

with a copy to:

Troutman Pepper Locke LLP

600 Peachtree Street, N.E.

Suite 3000

Atlanta, GA 30308

Attention: James Stevens and Brenna Sheffield

Emails: [***] and [***]

 

if to the Purchasers: To the address indicated on such Purchaser’s signature page.

 

20

 

 

or to such other address or addresses as the party to be given notice may have furnished in writing to the party seeking or desiring to give notice, as a place for the giving of notice; provided that no change in address shall be effective until five (5) Business Days after being given to the other party in the manner provided for above. Any notice given in accordance with the foregoing shall be deemed effective when delivered personally or, if mailed, three (3) Business Days after it shall have been deposited in the United States mail as aforesaid or, if sent by overnight courier, the Business Day following the date of delivery to the courier (provided next Business Day delivery was requested), or, if sent by email, upon receipt of confirmation of transmission.

 

7.6            Successors and Assigns. This Agreement shall inure to the benefit of the parties and their respective heirs, legal representatives, successors and assigns; except that (i) unless a Purchaser consents in writing, no assignment made by the Company in violation of this Agreement shall be effective or confer any rights on any purported assignee of the Company, and (ii) unless the assignment complies with the Assignment Form attached to the Subordinated Notes, no assignment made by a Purchaser shall be effective or confer any rights on any purported assignee of the Purchaser. The term “successors and assigns” will not include a purchaser of any of the Subordinated Notes from any Purchaser merely because of such purchase but shall include a purchaser of any of the Subordinated Notes pursuant to an assignment complying with the Assignment Form attached to the Subordinated Notes.

 

7.7            No Joint Venture. Nothing contained herein or in any document executed pursuant hereto and no action or inaction whatsoever on the part of a Purchaser, shall be deemed to make a Purchaser a partner or joint venturer with the Company.

 

7.8            Documentation. All documents and other matters required by any of the provisions of this Agreement to be submitted or furnished to a Purchaser shall be in form and substance satisfactory to such Purchaser.

 

7.9            Entire Agreement. This Agreement and the Subordinated Notes, along with any exhibits hereto and thereto, and any nondisclosure agreements between the Purchaser and the Company or the Placement Agent, constitute the entire agreement between the parties hereto with respect to the subject matter hereof and may not be modified or amended in any manner other than by supplemental written agreement executed by the parties hereto. No party, in entering into this Agreement, has relied upon any representation, warranty, covenant, condition or other term that is not set forth in this Agreement or in the Subordinated Notes.

 

7.10          Choice of Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York without giving effect to its laws or principles of conflict of laws. Nothing herein shall be deemed to limit any rights, powers or privileges which a Purchaser may have pursuant to any law of the United States of America or any rule, regulation or order of any department or agency thereof and nothing herein shall be deemed to make unlawful any transaction or conduct by a Purchaser which is lawful pursuant to, or which is permitted by, any of the foregoing.

 

7.11          No Third Party Beneficiary. This Agreement is made for the sole benefit of the Company and the Purchasers, and no other Person shall be deemed to have any privity of contract hereunder nor any right to rely hereon to any extent or for any purpose whatsoever, nor shall any other Person have any right of action of any kind hereon or be deemed to be a third party beneficiary hereunder; provided, that the Placement Agent may rely on the representations and warranties contained herein (including those of the Company and Purchasers) to the same extent as if it were a party to this Agreement, and the Placement Agent may rely on the opinion of counsel to the Company to be delivered pursuant to Section 3.2.1.2(f) .

 

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7.12          Legal Tender of United States. All payments hereunder shall be made in coin or currency which at the time of payment is legal tender in the United States of America for public and private debts.

 

7.13          Captions; Counterparts. Captions contained in this Agreement in no way define, limit or extend the scope or intent of their respective provisions. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. In the event that any signature is delivered by facsimile transmission, or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

 

7.14          Knowledge; Discretion. All references herein to a Purchaser’s or the Company’s knowledge shall be deemed to mean the knowledge of such party based on the actual knowledge of such party’s Chief Executive Officer and Chief Financial Officer or such other persons holding equivalent offices. Unless specified to the contrary herein, all references herein to an exercise of discretion or judgment by a Purchaser, to the making of a determination or designation by a Purchaser, to the application of a Purchaser’s discretion or opinion, to the granting or withholding of a Purchaser’s consent or approval, to the consideration of whether a matter or thing is satisfactory or acceptable to a Purchaser, or otherwise involving the decision making of a Purchaser, shall be deemed to mean that such Purchaser shall decide using the reasonable discretion or judgment of a prudent lender.

 

7.15          Waiver of Right to Jury Trial. TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THAT THEY MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH ANY OF THE TRANSACTION DOCUMENTS, OR ANY OTHER STATEMENTS OR ACTIONS OF THE COMPANY OR THE PURCHASERS. THE PARTIES HERETO ACKNOWLEDGE THAT THEY HAVE BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED OF THEIR OWN FREE WILL. THE PARTIES HERETO FURTHER ACKNOWLEDGE THAT (I) THEY HAVE READ AND UNDERSTAND THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (II) THIS WAIVER HAS BEEN REVIEWED BY THE PARTIES HERETO AND THEIR COUNSEL AND IS A MATERIAL INDUCEMENT FOR ENTRY INTO THIS AGREEMENT AND (III) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF SUCH TRANSACTION DOCUMENTS AS IF FULLY INCORPORATED THEREIN.

 

7.16          Expenses. Except as otherwise provided in this Agreement, each of the parties hereto will bear and pay all other costs and expenses, including attorneys’ fees, incurred by it or on its behalf in connection with the transactions contemplated pursuant to this Agreement.

 

7.17          Survival. Each of the representations and warranties set forth in this Agreement shall survive the consummation of the transactions contemplated hereby for a period of one year after the date hereof. Except as otherwise provided herein, all covenants and agreements contained herein shall survive until, by their respective terms, they are no longer operative.

 

[Signature Pages Follow]

 

22

 

 

IN WITNESS WHEREOF, the Company has caused this Subordinated Note Purchase Agreement to be executed by its duly authorized representative as of the date first above written.

 

 

COMPANY:

 

TANDEM BANCORP, INC.        

   
   
  Charles M. DeWitt, III
  President and Chief Executive Officer

 

[Company Signature Page to Subordinated Note Purchase Agreement]

 

 

 

 

IN WITNESS WHEREOF, the Purchaser has caused this Subordinated Note Purchase Agreement to be executed by its duly authorized representative as of the date first above written.

 

  PURCHASER:
   
  [INSERT PURCHASER’S NAME]
   
  By:       
    Name: [●]
    Title: [●]
     
  Address of Purchaser (location of Purchaser for purposes of any Form D filing):
   
  [●]
   
  Principal Amount of Purchased Subordinated Note:
   
  $[●]

 

[Purchaser Signature Page to Subordinated Note Purchase Agreement]

 

 

 

 

EXHIBIT A

 

[See attached]

  

A-1

 

  

EXHIBIT B

 

OPINION OF COUNSEL

 

1.            The Company (i) is validly existing and is in good standing under the laws of the State of Georgia, (ii) has the corporate power and authority to carry on its business and to own, lease and operate its properties and assets as described in the Company’s Reports and (iii) is duly qualified or licensed to transact business as a foreign corporation in each jurisdiction in which the nature of such business or the ownership or leasing of such properties requires such qualification or licensing, except where the failure to be so authorized would not, individually or in the aggregate, have a Material Adverse Effect on the Company.

 

2.            The Company has (A) the corporate power and authority to execute and deliver the Transaction Documents to which it is a party and perform its obligations under the Transaction Documents, (B) taken all corporate action necessary to authorize the execution, delivery and performance of the Transaction Documents to which it is a party and (C) validly executed and delivered the Transaction Documents to which it is a party.

 

3.            The Agreement constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as the enforceability thereof may be limited by (i) bankruptcy, insolvency, fraudulent or voluntary conveyance, moratorium, liquidation, reorganization or similar federal or state laws affecting the enforcement of creditors’ rights in general, (ii) general principles of equity, whether applied by a court of law or equity, including the possible unavailability of specific performance, appointment of a receiver or injunctive relief, (iii) the exercise of discretionary powers by any court before which specific performance, injunctive relief or other equitable remedies may be sought, (iv) other equitable remedies and defenses, (v) procedural requirements of law applicable to the enforcement of creditors’ remedies and (vi) judicial discretion inherent in the forum addressing enforceability.

 

4.            The Subordinated Notes, when issued and delivered to and paid for by Purchaser in accordance with the terms of the Agreement, will constitute legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as the enforceability thereof may be limited by (i) bankruptcy, insolvency, fraudulent or voluntary conveyance, moratorium, liquidation, reorganization or similar federal or state laws affecting the enforcement of creditors’ rights in general, (ii) general principles of equity, whether applied by a court of law or equity, including the possible unavailability of specific performance, appointment of a receiver or injunctive relief, (iii) the exercise of discretionary powers by any court before which specific performance, injunctive relief or other equitable remedies may be sought, (iv) other equitable remedies and defenses, (v) procedural requirements of law applicable to the enforcement of creditors’ remedies and (vi) judicial discretion inherent in the forum addressing enforceability.

 

5.            Assuming the accuracy of the representations and warranties of, and compliance with the covenants and agreements by, each of the Purchasers and the Company set forth in the Agreement, it is not necessary in connection with the offer, sale and delivery of the Subordinated Notes to the Purchasers to register the Subordinated Notes under the Securities Act, it being understood that such counsel expresses no opinion as to any subsequent transfer, sale or conveyance of the Subordinated Notes.

 

* The opinion letter of counsel will be subject to customary limitations, qualifications and carveouts.

 

B-1

 

 

SCHEDULE A

 

DIRECT AND INDIRECT SUBSIDIARIES

 

Tandem Bank

 

 

 

 

 

Exhibit 10.28

 

Execution Version

 

CERTAIN CONFIDENTIAL INFORMATION (MARKED BY BRACKETS AS “[***]”) HAS
BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND
(II) IS THE TYPE OF INFORMATION THAT THE REGISTRANT TREATS AS PRIVATE OR
CONFIDENTIAL.

 

STOCK PURCHASE AGREEMENT

 

THIS STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of June 17, 2026 by and among Georgia Banking Company, Inc., a Georgia corporation (the “Company”), each of the shareholders of the Company listed on Schedule I hereto (each, a “Selling Shareholder” and, collectively, the “Selling Shareholders”), and each of the investors identified on the signature pages hereto (individually, a “Purchaser” and collectively, the “Purchasers”).

 

WHEREAS, each Purchaser wishes to purchase, and the Company and the Selling Shareholders wish to sell, upon the terms and conditions stated in this Agreement, that certain number of shares of voting common stock, par value $0.01 per share, of the Company (the “Common Stock”) and non-voting common stock, par value per share $0.01, of the Company (the “Non-Voting Common Stock”) in the aggregate number indicated below such Purchaser’s name on the signature page to this Agreement (such shares of Common Stock and Non-Voting Common Stock sold by the Company, the “Primary Shares,” and such shares of Common Stock sold by the Selling Shareholders, the “Secondary Shares,” and together, the “Shares”);

 

WHEREAS, the Company and the Selling Shareholders have engaged Performance Trust Capital Partners, LLC as their exclusive placement agent (the “Placement Agent”) for the offering of the Shares (the “Offering”); and

 

WHEREAS, the Company and each Purchaser are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 of Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “Commission”) under the Securities Act;

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company, the Selling Shareholders and each Purchaser hereby agree as follows:

 

ARTICLE I
DEFINITIONS

 

1.1           Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall have the meanings indicated in this Section 1.1:

 

“Action” means any Proceeding, inquiry, or notice of violation pending or, to the Company’s Knowledge, threatened against the Company or any of its properties or any officer, director or employee of the Company acting in his or her capacity as an officer, director or employee before or by any federal, state, county, local or foreign court, arbitrator, governmental or administrative agency, regulatory authority, stock market, stock exchange or trading facility.

 

 

 

 

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is controlled by or is under common control with such Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

“Aggregate Purchase Price” means with respect to each Purchaser, the aggregate Purchase Price to be paid for the Shares purchased hereunder indicated below such Purchaser’s name on such Purchaser’s signature page hereto.

 

“Agreement” shall have the meaning ascribed to such term in the Preamble.

 

“Bank” means Georgia Banking Company, a Georgia chartered bank and wholly owned subsidiary of the Company.

 

“Bank Regulatory Authorities” shall mean any governmental agency, authority or instrumentality having supervisory or regulatory authority with respect to the Company and the Bank.

 

“BHC Act” means the Bank Holding Company Act of 1956, as amended.

 

“Board” means the board of directors of the Company.

 

“Business Combination” means a merger, consolidation, statutory share exchange, or similar transaction that requires adoption by the Company’s shareholders.

 

“Business Day” means a day, other than a Saturday or Sunday, on which banks in the City of Atlanta, Georgia are open for the general transaction of business.

 

“Change in Control” means, with respect to the Company, the occurrence of any of the following events:

 

(1)            any Person or “group” becomes a beneficial owner (as defined in Rules 13d-3 of the Exchange Act), directly or indirectly, of 50% or more of the aggregate shares of Common Stock;

 

(2)            the consummation of a Business Combination, unless immediately following such Business Combination more than 50% of the total voting power of the corporation resulting from such Business Combination (the “Surviving Corporation”), or, if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership (as defined in Rules 13d-3 of the Exchange Act) of 100% of the voting securities eligible to elect directors of the Surviving Corporation, is represented by Common Stock that was outstanding immediately before such Business Combination;

 

(3)            the shareholders of the Company approve a plan of liquidation or dissolution of the Company or a sale of all or substantially all of the Company’s assets; or

 

(4)            the Company has entered into a definitive agreement, the consummation of which would result in the occurrence of any of the events described in clauses (1) through (3) of this definition above.

 

“Closing” means the closing of the purchase and sale of the Shares pursuant to this Agreement.

 

2

 

 

“Closing Date” means the Business Day when all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all of the conditions set forth in Sections 2.1, 2.2, 5.1 and 5.2 hereof are satisfied or waived, as the case may be, or such other date as the parties may agree.

 

“Commission” has the meaning set forth in the Recitals.

 

“Common Stock” has the meaning set forth in the Recitals and includes any securities into which the Common Stock may hereafter be reclassified or changed.

 

“Company” shall have the meaning ascribed to such term in the Preamble.

 

“Company Deliverables” has the meaning set forth in Section 2.2(a).

 

“Company Indemnified Person” has the meaning set forth in Section 4.3(a).

 

“Company’s Knowledge” means, with respect to any statement made to the knowledge of the Company, that the statement is based upon the actual knowledge of the executive officers of the Company having responsibility for the matter or matters that are the subject of the statement after reasonable investigation.

 

“Control” (including the terms “controlling”, “controlled by” or “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Covered Persons” has the meaning set forth in Section 3.1(o).

 

“Data Site” means the electronic data site established and maintained in connection with the Offering.

 

“Disqualification Event” has the meaning set forth in Section 3.1(o).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor statute, and the rules and regulations promulgated thereunder.

 

“FDIC” means the Federal Deposit Insurance Corporation.

 

“Federal Reserve” means the Board of Governors of the Federal Reserve System.

 

“Financial Statements” has the meaning set forth in Section 3.1(i).

 

“Fortress” means CF GBC Investors LP, an affiliate of Fortress Investment Group LLC.

 

“GAAP” means U.S. generally accepted accounting principles, as applied by the Company.

 

“Georgia Courts” means the courts of the State of Georgia and the United States District Courts located in the City of Atlanta.

 

“Governmental Entity” means any court, arbitrator, administrative agency or commission, board, bureau or other governmental or Bank Regulatory Authority or instrumentality.

 

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“Indemnified Person” has the meaning set forth in Section 4.3(b).

 

“Information” has the meaning set forth in Section 4.9.

 

“Investor Confidential Information” means each Purchaser’s, its Affiliates’, its investment advisers’ and or its or their control persons’ or equity holders’ nonpublic, proprietary, personal or otherwise confidential information, including the identities of any limited partners, shareholders or members of any Purchaser, any of its Affiliates or any of its investments.

 

“Investor Rights Agreements” means those certain (i) VCOC Letters, by and between the Company and Patriot Financial Partners III, L.P, Bartow Morgan, Jr. and J. Bradford Smith, each dated December 31, 2020, respectively, (ii) Investor Rights Agreements, by and between the Company and Patriot Financial Partners III, L.P, Bartow Morgan, Jr. and J. Bradford Smith, each dated December 31, 2020, respectively, (iii) VCOC Letter, by and among the Company and Financial Hybrid Opportunity Fund LLC (“FHOF”), Financial Hybrid Opportunity SPV I LLC (“FHOS”), Financial Opportunity Fund LLC (“FOF”, together with FHOF and FHOS, “FJ”), dated as of February 9, 2021 and (iv) Investor Rights Agreement, by and among the Company and FJ, dated as of February 9, 2021.

 

“Lien” means any lien, charge, claim, encumbrance, security interest, right of first refusal, preemptive right, mortgage, deed of trust, pledge, conditional sale agreement, restrictions on transfer or other restriction of any kind.

 

“Material Adverse Effect” means any event, circumstance, change or occurrence that has had or would reasonably be expected to have, individually or in the aggregate (i) a material and adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material and adverse effect on the results of operations, assets, properties, business, condition (financial or otherwise), liabilities or prospects of the Company, taken as a whole, or (iii) any adverse impairment to the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document; provided, however, that in determining whether a Material Adverse Effect has occurred, there shall be excluded any effect to the extent resulting from the following: (A) changes, after the date hereof, in GAAP or regulatory accounting principles generally applicable to banks or their holding companies, (B) changes, after the date hereof, in applicable laws, rules and regulations or interpretations thereof by Governmental Entities, (C) actions or omissions of the Company expressly required by the terms of this Agreement or taken with the prior written consent of each Purchaser, (D) changes in general economic, monetary or financial conditions in the United States, (E) changes in global or national political conditions, including any outbreak or escalation or escalation of hostilities, declared or undeclared acts of war, terrorism, epidemics, pandemics, or disease outbreaks, and (F) the public disclosure of this Agreement or the transactions contemplated by this Agreement; except, with respect to clauses (A), (D) and (E), to the extent that the effects of such changes have a disproportionate effect on the Company, the Bank or any of its Subsidiaries, taken as a whole, relative to other similarly situated banks or their holding companies generally.

 

“Material Contract” means any of the following agreements of the Company:

  

(1)            any employment, severance, termination, or consulting agreement with any executive officer;

 

(2)            any arrangement regarding any outstanding debt securities, notes, credit agreement, or other instruments of the Company by which the Company is bound, which, in each case, evidences a material amount of indebtedness of the Company;

 

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(3)            any contract containing covenants that limit in any material respect the ability of the Company or any employee of the Company to compete in any line of business or with any Person or which involve any material restriction of the geographical area in which, or method by which or with whom, the Company may carry on its business (other than as may be required by law or applicable regulatory authorities), and any contract that could require the disposition of any material assets or line of business of the Company;

 

(4)            any material joint venture, partnership, strategic alliance, or other similar contract (including any franchising agreement, but in any event excluding introducing broker agreements), and any contract relating to the acquisition or disposition of any material business or material assets (whether by merger, sale of stock or assets, or otherwise), which acquisition or disposition is not yet complete or where such contract contains continuing material obligations or contains continuing indemnity obligations of the Company;

 

(5)            any real property lease and any other lease with annual rental payments aggregating $100,000 or more;

 

(6)            other than with respect to loans, any contract providing for, or reasonably likely to result in, the receipt or expenditure of more than $250,000 on an annual basis, including the payment or receipt of royalties or other amounts calculated based upon revenues or income;

 

(7)            any contract that by its terms limits the payment of dividends or other distributions by the Company;

 

(8)            any standstill or similar agreement pursuant to which any party has agreed not to acquire assets or securities of another person;

 

(9)            any contract that would reasonably be expected to prevent, materially delay, or materially impede the Company’s ability to consummate the transactions contemplated by the Transaction Documents;

 

(10)          any contract that contains a put, call, or similar right pursuant to which the Company could be required to purchase or sell, as applicable, any equity interests or assets that have a fair market value or purchase price of more than $100,000; and

 

(11)          any agreement that contains any (A) exclusive dealing obligation, (b) “clawback” or similar undertaking requiring the reimbursement or refund of any fees, (C) “most favored nation” or similar provision granted by the Company, or (D) provision that grants any right of first refusal or right of first offer or similar right or that limits or purposes to limit the ability of the Company to own, operate, sell, transfer, pledge or otherwise dispose of any assets or business; and

 

(12)          any other contract, agreement or understanding material to the Company or its operations.

 

“Material Permits” has the meaning set forth in Section 3.1(n).

 

“Non-Voting Common Stock” has the meaning set forth in the Recitals and includes any securities into which the Non-Voting Common Stock may hereafter be reclassified or changed (other than through conversion to Common Stock).

 

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“OFAC” has the meaning set forth in Section 3.1(u).

 

“Offering” has the meaning set forth in the recitals.

 

“Person” means an individual, corporation, partnership, limited liability company, trust, business trust, association, joint stock company, joint venture, sole proprietorship, unincorporated organization, governmental authority or any other form of entity not specifically listed herein.

 

“Placement Agent” has the meaning set forth in the Recitals.

 

“Primary Shares” has the meaning set forth in the Recitals.

 

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

“Purchase Price” means $30 per Share.

 

“Purchaser” has the meaning set forth in the Preamble.

 

“Purchaser Deliverables” has the meaning set forth in Section 2.2(b).

 

“Registration Rights Agreements” means those certain Registration Rights Agreements, by and between the Company and Patriot Financial Partners III, L.P., Bartow Morgan, Jr. and J. Bradford Smith, each dated December 31, 2020, respectively, and that certain Registration Rights Agreement, by and among the Company and the Selling Shareholders, dated as of February 9, 2021.

 

“Regulation D” has the meaning set forth in the Recitals.

 

“Required Notices” has the meaning set forth in Section 3.1(e).

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“Secondary Shares” has the meaning set forth in the Recitals.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Selling Shareholder” and “Selling Shareholders” have the meanings set forth in the Preamble.

 

“Selling Shareholder Indemnified Person” has the meaning set forth in Section 4.3(b).

 

“Shares” has the meaning set forth in the Recitals.

 

“Subsidiary” means any entity in which the Company, directly or indirectly, owns 50% or more of the outstanding capital stock or otherwise has Control over such entity.

 

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“Tax” or “Taxes” mean (i) any federal, state, local or foreign income, gross receipts, property, sales, use, license, excise, franchise, employment, payroll, withholding, alternative or add on minimum, ad valorem, transfer or excise Tax, or any other Tax, custom, duty, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest or penalty, imposed by any Governmental Entity and (ii) any liability in respect of any items described in clause (i) above payable by reason of contract, assumption, transferee or successor liability, operation of law, Treasury Regulations Section 1.1502-6(a) (or any predecessor or successor thereof or analogous or similar provisions of law) or otherwise.

 

“Tax Return” means any return, declaration, report or similar statement filed or required to be filed with respect to any Tax (including any attached schedules), including, without limitation, any information return, claim for refund, amended return or declaration of estimated Tax.

 

“Transaction Documents” means this Agreement, the annexes, schedules and exhibits attached hereto, and any other documents or agreements executed or delivered in connection with the transactions contemplated hereunder.

 

ARTICLE II 

PURCHASE AND SALE

 

2.1            Closing.

 

(a)            Purchase of Shares. Subject to the terms and conditions set forth in this Agreement, each Purchaser shall purchase the number of Shares as indicated below such Purchaser’s name on such Purchaser’s signature page to this Agreement for the Aggregate Purchase Price. The Shares purchased by each Purchaser shall be comprised of Primary Shares and Secondary Shares in the same proportion that the total number of Primary Shares and the total number of Secondary Shares being sold to all Purchasers at the Closing bears, respectively, to the total number of Shares being sold to all Purchasers at the Closing, as determined by the Company in consultation with the Placement Agent (such that each Purchaser shall purchase its pro rata portion of Primary Shares and its pro rata portion of Secondary Shares); provided, to the extent Fortress’ ownership of the Company’s Common Stock would exceed 4.9% of the Company’s total outstanding shares of Common Stock following the Offering, the Primary Shares issued to Fortress shall be comprised of sufficient shares of Non-Voting Common Stock to maintain Fortress’ ownership of the Company’s Common Stock at 4.9% of the Company’s total outstanding shares of Common Stock following the Offering.

 

(b)            Closing. The Closing of the purchase and sale of the Shares shall take place on the Closing Date remotely by electronic means as the parties may mutually agree.

 

2.2            Closing Deliveries.

 

(a)            On or prior to the Closing, the Selling Shareholders shall deliver or cause to be delivered to the Company (for further delivery to the Purchasers, as applicable) the following (the “Selling Shareholder Deliverables”):

 

(i)             this Agreement, duly executed by the Selling Shareholders;

 

(ii)            certificates (if any) representing the Secondary Shares to be sold by such Selling Shareholder hereunder, together with duly executed stock powers or other instruments of transfer, in form reasonably acceptable to the Company and sufficient to transfer such Secondary Shares to the applicable Purchasers free and clear of all Liens (other than restrictions on transfer arising under applicable securities laws); and

 

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(iii)           any other documents, certificates and agreements, reasonably requested by the Company in connection with the transfer of the Secondary Shares to the Purchasers.

 

(b)            On or prior to the Closing, the Company shall issue, deliver or cause to be delivered to each Purchaser and the Selling Shareholders, as applicable, the following (the “Company Deliverables”):

 

(i)             this Agreement, duly executed by the Company;

 

(ii)            the Shares, by delivery of evidence of the Shares registered in the name of such Purchaser or its nominee (per its instructions), or, to the extent requested by such Purchaser, by delivery of one or more stock certificates evidencing the Shares purchased by such Purchaser hereunder, registered in the name of such Purchaser or its nominee (per its instructions); and

 

(iii)           the Selling Shareholders’ pro rata portion of the funds received for the Aggregate Purchase Price for all Secondary Shares sold in the Offering, by wire transfer of immediately available funds in accordance with the Selling Shareholders’ written instructions.

 

(c)            On or prior to the Closing, each Purchaser shall deliver or cause to be delivered to the Company the following (the “Purchaser Deliverables”):

 

(i)             this Agreement, duly executed by such Purchaser;

 

(ii)            the Aggregate Purchase Price, in U.S. dollars and in immediately available funds to the Company, by wire transfer of immediately available funds in accordance with the Company’s written instructions;

 

(iii)           a fully completed and duly executed Accredited Investor Questionnaire in the form attached hereto as Exhibit A;

 

(iv)           a fully completed and duly executed Book Entry Questionnaire in the form attached here as Exhibit B; and

 

(v)            a fully completed and duly executed Form W-9 in the form attached hereto as Exhibit C.

 

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ARTICLE III 

REPRESENTATIONS AND WARRANTIES

 

3.1            Representations and Warranties of the Company. The Company hereby represents and warrants as of the date hereof and as of the Closing Date (except for the representations and warranties that speak as of a specific date, which shall be made as of such date), to each Purchaser that:

 

(a)            Organization and Qualification. The Company is a corporation, duly organized, validly existing and in good standing under the laws of the State of Georgia and is a bank holding company registered under the BHC Act. The Company has the corporate power and authority (including all licenses, franchises, permits and other governmental authorizations as are legally required) to carry on its business as now being conducted, to own, lease and operate its properties and assets as now owned, leased or operated and to enter into and carry out its obligations under this Agreement. The Company does not own or control any Affiliate or Subsidiary, other than the Subsidiaries described in this Section 3.1. The nature of the business of the Company and its activities do not require it to be qualified to do business in any jurisdiction other than the State of Georgia. The Company has no equity interest, direct or indirect, in any other bank or corporation or in any partnership, joint venture or other business enterprise or entity, other than the Bank or as acquired through settlement of indebtedness, foreclosure, the exercise of creditors’ remedies or in a fiduciary capacity, and the business carried on by the Company has not been conducted through any other direct or indirect Subsidiary or Affiliate of the Company other than the Bank.

 

(b)            The Bank is a Georgia chartered bank, duly organized and validly existing under the Laws of the State of Georgia and in good standing under all laws of the State of Georgia. The Bank has the corporate power and authority (including all licenses, franchises, permits and other governmental authorizations as are legally required) to carry on its business as now being conducted, to own, lease and operate its properties and assets as now owned, leased or operated and to enter into and to carry on the business and activities now conducted by it. The Bank is an insured bank as defined in the Federal Deposit Insurance Act. The Bank is duly licensed or qualified to do business in each jurisdiction in which the nature of its business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except when the failure to be so licensed or qualified would not be material. Other than GBC Insurance Services, Inc. or Georgia Business Capital, Inc., the Bank has no equity interest, direct or indirect, in any other bank or corporation or in any partnership, joint venture or other business enterprise or entity, except as acquired through settlement of indebtedness, foreclosure, the exercise of creditors’ remedies or in a fiduciary capacity. The business carried on by the Bank is not conducted through any direct or indirect Subsidiary or Affiliate of the Bank.

 

(c)            Authorization; Enforcement; Validity. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder, including, without limitation, to issue the Shares in accordance with the terms hereof. The Company’s execution and delivery of each of the Transaction Documents and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of the Company, and no further corporate action is required by the Company, its Board or its shareholders in connection therewith. Each of the Transaction Documents has been (or upon delivery will have been) duly executed by the Company and is, or when delivered in accordance with the terms hereof or thereof, will constitute the legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

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(d)            No Conflicts. The execution, delivery and performance by the Company of the Transaction Documents and the consummation by the Company of the transactions contemplated hereby (including, without limitation, the issuance of the Primary Shares) do not and will not (i) conflict with or violate any provisions of the Company’s certificate or articles of incorporation or bylaws, or otherwise result in a violation of the organizational documents of the Company, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would result in a default) under, result in the creation of any Lien upon any of the properties or assets of the Company under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any Material Contract, or (iii) conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and state securities laws and the rules and regulations thereunder, assuming the correctness of the representations and warranties made by the Purchaser herein, of any self-regulatory organization to which the Company or its securities are subject), or by which any property or asset of the Company is bound or affected, except in the case of clauses (ii) and (iii) such as would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(e)            Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority, self-regulatory organization or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than (i) filings required by applicable state securities laws and (ii) the filing of a Notice of Exempt Offering of Securities on Form D with the Commission under Regulation D of the Securities Act and (iii) the notice with respect to the gross-up rights provided to each investor party to one of the Investor Rights Agreements (collectively, the “Required Notices”). The Company is unaware of any facts or circumstances relating to the Company that might prevent the Company from obtaining or effecting any of the foregoing.

 

(f)            Issuance of the Shares. The Primary Shares have been duly authorized and, when issued and delivered to the Purchasers against payment therefor in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable and free of all Liens created by the Company, with the holders thereof being entitled to all rights accorded to a holder of Common Stock or Non-Voting Common Stock, as applicable.

 

(g)            Capitalization. (i) The authorized capital stock of the Company consists of 50,000,000 shares of common stock, consisting of 40,000,000 shares of Common Stock and 10,000,000 shares of Non-Voting Common Stock, of which 9,281,302 of Common Stock are issued and outstanding as of June 12, 2026. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and non-assessable, have been issued in compliance in all material respects with all applicable federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase any capital stock of the Company. (ii) Other than the gross-up rights provided pursuant in the Investor Rights Agreements, none of the Company’s capital stock is subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company. (iii) The Company currently has warrants to purchase 300,956 shares of Common Stock issued and outstanding and warrants to purchase 150,478 shares of Non-Voting Common Stock issued and outstanding. (iv) Other than as described herein and options granted under the Company’s equity incentive plan, there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of the Company, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares of capital stock of the Company or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock of the Company. (v) There are no outstanding securities or instruments of the Company which contain any redemption or similar provisions, and, there are no contracts, commitments, understandings or arrangements by which the Company is or may become bound to redeem a security of the Company. (vi) There are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Shares, other than anti-dilution or similar provisions that have been waived by the respective holders thereof. (vii) The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. (viii) Except as disclosed on Schedule 3.1(aa) and the Registration Rights Agreements, there are no agreements or arrangements under which the Company is obligated to register the sale of any of the securities of the Company under the Securities Act. (ix) Except as disclosed on Schedule 3.1(aa), the Registration Rights Agreements and Investor Rights Agreements are the only contracts, commitments, understandings or arrangements with the Selling Shareholders or other shareholders of the Company to which the Company is a party which grant the shareholders of the Company rights related to their stock.

 

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(h)            Tax Matters. The Company (i) has prepared, on a consolidated basis, and timely filed all foreign, US federal, state and local income and all other Tax Returns, reports and declarations or were required by any jurisdiction to which it is subject and such returns, reports and declarations are true, complete and correct in all material respects, (ii) has paid all Taxes and other governmental assessments and charges owed and due by the Company (whether or not shown on any Tax Return), except those being contested in good faith and with respect to which adequate reserves have been set aside on the books of the Company in accordance with GAAP, (iii) has withheld or collected from each payment made to each of its employees, independent contractors, shareholders, creditors and other third parties the amount of all Taxes required to be withheld or collected therefrom, and has paid the same to the proper authorized depositories or government authorities, (iv) has set aside on its books provisions reasonably adequate for the payment of all Taxes for periods subsequent to the periods to which the above referenced returns, reports or declarations apply and (v) complied with all applicable information reporting requirements in all material respects. On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be paid in connection with the sale and transfer of the Shares to be sold to each Purchaser hereunder will be, or will have been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.

 

(i)            Financial Statements. The Company’s consolidated financial statements as of December 31, 2024 and December 31, 2025 and for the fiscal years ended December 31, 2024 and December 31, 2025, and its unaudited consolidated financial statements as of March 31, 2026 (collectively, the “Financial Statements”) have been prepared in accordance with GAAP applied on a consistent basis throughout the periods indicated, except that the unaudited Financial Statements may not contain all footnotes required by GAAP. The Financial Statements fairly present in all material respects the financial condition and operating results of the Company and the Subsidiaries as of the dates, and for the periods, indicated therein, subject in the case of the unaudited Financial Statements to normal year-end audit adjustments.

 

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(j)            Material Changes. Since December 31, 2025, except with respect to the Agreement and Plan of Merger, dated February 24, 2026, by and between the Company and Tandem Bancorp, Inc., (i) there have been no events, occurrences or developments that have had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, (ii) the Company has not incurred any material liabilities (contingent or otherwise) other than trade payables, accrued expenses and other liabilities incurred in the ordinary course of business consistent with past practice, (iii) the Company has not altered materially its method of accounting or the manner in which it keeps its accounting books and records, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its shareholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, (v) except as described in Section 3.1(g), the Company has not issued any equity securities to any officer, director or Affiliate, and (vi) there has not been any material change or amendment to, or any waiver of any material right by the Company under, any Material Contract under which the Company is bound or subject.

 

(k)            Litigation. There is no Action, pending or, to the Company’s Knowledge, threatened, which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the issuance of the Primary Shares pursuant to the Transaction Documents or (ii) is reasonably likely to have a Material Adverse Effect, individually or in the aggregate, if there were an unfavorable decision. Neither the Company nor any director or 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 nor is any Action, to the Company’s Knowledge, currently threatened. There is no Action by the Company pending or which the Company intends to initiate (other than collection or similar claims in the ordinary course of business). There has not been, and to the Company’s Knowledge there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. There are no outstanding orders, judgments, injunctions, awards or decrees of any court, arbitrator or governmental or regulatory body against the Company or any executive officers or directors of the Company in their capacities as such, which individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

 

(l)            Employment Matters. No labor dispute exists or, to the Company’s Knowledge, is imminent with respect to any of the employees of the Company that would have or reasonably be expected to have a Material Adverse Effect. None of the Company’s employees is a member of a union that relates to such employee’s relationship with the Company, the Company is not a party to a collective bargaining agreement, and the Company believes that its relationship with its employees is good. To the Company’s Knowledge, there is no activity involving any of the employees of the Company seeking to certify a collective bargaining unit or similar organization. To the Company’s Knowledge, no executive officer is, or is now expected to be, subject to or in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of a third party, and to the Company’s Knowledge, the continued employment of each such executive officer does not subject the Company to any liability with respect to any of the foregoing matters. The Company is in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. As of the date of this Agreement, no material employee has given notice to the Company of his or her intent to terminate his or her employment or service relationship with the Company. The Company is in material compliance with all laws concerning the classification of employees and independent contractors and has properly classified all such individuals for purposes of participation in employee benefit plans.

 

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(m)            Compliance. The Company is not (i) in violation of any term or provision of certificate or articles of incorporation or bylaws or similar organizational documents, (ii) in violation of any order of any court, arbitrator or governmental body having jurisdiction over the Company or its properties or assets, or (iii) in violation of, or in receipt of written notice that it is in violation of, any statute, rule, regulation, policy or guideline or order of any governmental authority, self-regulatory organization applicable to the Company, except in each case as would not have or reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

 

(n)            Regulatory Permits. The Company possesses all certificates, authorizations, consents and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct its businesses as currently conducted, except where the failure to possess such certificates, authorizations, consents or permits, individually or in the aggregate, has not and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect (“Material Permits”), and (i) the Company has not received any notice in writing of Proceedings relating to the revocation or material adverse modification of any such Material Permits and (ii) the Company is unaware of any facts or circumstances that would give rise to the revocation or material adverse modification of any Material Permits.

 

(o)            No “Bad Actor” Disqualification. The Company has exercised reasonable care, in accordance with Commission rules and guidance, to determine whether any 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 (each a “Disqualification Event”). To the Company’s Knowledge, no Covered Person is subject to a Disqualification Event, 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 Shares; 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 other than the Placement Agent (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.

 

(p)            Placement Agent Fees. The Company, together with the Selling Shareholders, shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or brokers’ commissions (other than fees or commissions of persons engaged by any Purchaser or such Purchaser’s investment advisor) relating to or arising out of the transactions contemplated hereby. Other than the Placement Agent, the Company has not engaged any placement agent or other agent in connection with the sale of the Shares.

 

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(q)            Private Placement. Assuming the accuracy of each Purchaser’s representations and warranties set forth in Section 3.2 of this Agreement, the accuracy of the information disclosed in the Accredited Investor Questionnaires, no registration under the Securities Act is required for the offer and sale of the Primary Shares by the Company to the Purchasers under the Transaction Documents.

 

(r)            No Integrated Offering. Neither the Company nor any of its Affiliates, nor any Person acting on its or their 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 require registration of the issuance of any of the Shares under the Securities Act, whether through integration with prior offerings or otherwise, or cause this offering of the Shares to require approval of shareholders of the Company for purposes of any applicable shareholder approval provisions. None of the Company, its Affiliates and any Person acting on their behalf will take any action or steps referred to in the preceding sentence that would require registration of the issuance of any of the Shares under the Securities Act or shareholder approval under applicable shareholder approval provisions.

 

(s)            Investment Company. The Company is not required to be registered as, and immediately after receipt of payment for the Shares will not be required to be registered as, an “investment company,” an “affiliated person” of, “promoter” for or “principal underwriter” for, an entity “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

 

(t)            Unlawful Payments. Neither the Company nor any directors, officers, nor to the Company’s Knowledge, employees, agents or other Persons acting at the direction of or on behalf of the Company has, in the course of its actions for, or on behalf of, the Company: (i) directly or indirectly, used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to foreign or domestic political activity; (ii) made any direct or indirect unlawful payments to any foreign or domestic governmental officials or employees or to any foreign or domestic political parties or campaigns from corporate funds; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any other unlawful bribe, rebate, payoff, influence payment, kickback or other material unlawful payment to any foreign or domestic government official or employee.

 

(u)            OFAC. Neither the Company nor, to the Company’s Knowledge, any director, officer, agent, employee, Affiliate or Person acting on behalf of the Company is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Company will not knowingly, directly or indirectly, use the proceeds of the sale of the Primary Shares, or lend, contribute or otherwise make available such proceeds to any other Person or entity, towards any sales or operations in any country sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to any U.S. sanctions administered by OFAC.

 

(v)            Compliance with Money Laundering Laws. The operations of the Company and its subsidiaries are, and, to the knowledge of the Company and its subsidiaries, have been at all times in the past five years, conducted in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or its subsidiaries, threatened.

 

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(w)           No General Solicitation or General Advertising. 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 Shares.

 

(x)            Change in Control. The issuance of the Shares to the Purchasers as contemplated by this Agreement will not trigger any rights under any “change of control” provision in any agreements to which the Company is a party, including any employment, “change in control,” severance or other compensatory agreements and any benefit plan, which results in payments to the counterparty or the acceleration of vesting of benefits.

 

(y)            Disclosure. The Company understands and confirms that each Purchaser will rely on the foregoing representations and warranties in purchasing the Shares. All disclosure provided to the Purchasers regarding the Company, its business and the transactions contemplated hereby, furnished by or on behalf of the Company, when taken as a whole, does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.

 

(z)            Shell Company Status. The Company is not, and has never been, an issuer identified in Rule 144(i)(1).

 

(aa)          No Preferential Rights. Except as set forth on Schedule 3.1(aa), the Company has not granted to any Purchaser any rights, preferences, or benefits with respect to the Shares or the transactions contemplated by this Agreement that are more favorable in any material respect than those granted to any other Purchaser, other than the difference relating solely to the number of Shares purchased or, with respect to Fortress, the issuance of Non-Voting Common Stock contemplated in Section 2.1(a).

 

3.2            Representations and Warranties of the Selling Shareholders. The Selling Shareholders, hereby represent and warrant to the Purchasers and the Company as of the date hereof and as of the Closing Date as follows:

 

(a)            Organization; Authority; Enforcement. The Selling Shareholders are duly organized, validly existing and in good standing under the laws of the jurisdiction of their organization with the requisite corporate, partnership, limited liability company or other power and authority to enter into and to consummate the transactions contemplated by the applicable Transaction Documents and otherwise to carry out its obligations hereunder. The execution and delivery of the Transaction Documents and performance by the Selling Shareholders of the transactions contemplated hereby have been duly authorized by all necessary corporate or, if such Selling Shareholder is not a corporation, such partnership, limited liability company or other applicable like action, on the part of such Selling Shareholder. This Agreement has been duly executed by the Selling Shareholders, and when delivered by the Selling Shareholders in accordance with the terms hereof, will constitute the valid and legally binding obligation of the Selling Shareholders, enforceable against it in accordance with its terms, except (i) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

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(b)            No Conflicts. The execution, delivery and performance by the Selling Shareholders of the Transaction Documents and the consummation by the Selling Shareholders of the transactions contemplated hereby (including the sale and delivery of the Secondary Shares), do not and will not (i) conflict with or violate any provision of the organizational documents of the Selling Shareholder, (ii) conflict with, constitute a default (or an event that, with notice or lapse of time or both, would constitute a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which any Selling Shareholder is a party or by which any property or asset of any Selling Shareholder is bound, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree applicable to any Selling Shareholder or by which any property or asset of any Selling Shareholder is bound, except, in the case of clauses (ii) and (iii), for any such conflict, default or violation that would not reasonably be expected to materially impair or delay the ability of any Selling Shareholder to perform its obligations hereunder.

 

(a)            Filings, Consents and Approvals. No consent, approval, order, authorization or filing with, or notice to, any Governmental Entity or any other Person is required on the part of the Selling Shareholders in connection with the execution, delivery and performance by the Selling Shareholders of the Transaction Documents or the consummation by the Selling Shareholders of the transactions contemplated hereby, other than (i) those that have been obtained or made prior to the Closing and (ii) those the failure of which to obtain or make would not reasonably be expected to materially impair or delay the ability of any Selling Shareholder to perform its obligations hereunder.

 

(b)            Title to Secondary Shares. Each Selling Shareholder is the record and beneficial owner of, and has good and valid title to, the Secondary Shares being sold by such Selling Shareholder hereunder, free and clear of any and all Liens, preemptive rights, rights of first refusal, pledges, security interests, encumbrances, equities, claims, options, proxies, voting trusts or agreements, agreements, limitations on such Selling Shareholder’s voting rights, charges or restrictions of any kind (other than restrictions on transfer arising under applicable securities laws or those arising under this Agreement or the other Transaction Documents). Each Selling Shareholder has properly net exercised its warrant to purchase the shares of Common Stock included in the Secondary Shares. Upon delivery to the Purchasers of the Secondary Shares being sold by the Selling Shareholder hereunder at the Closing in accordance with the terms of this Agreement, good and valid title to such Secondary Shares will pass to the applicable Purchasers, free and clear of all Liens other than restrictions on transfer arising under applicable securities laws or created by or through such Purchasers. No registration under the Securities Act is required for the offer and sale of the Secondary Shares by the Selling Shareholders to the Purchasers under the Transaction Documents.

 

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(c)            Placement Agent Fees. The Selling Shareholders, together with the Company, shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or brokers’ commissions (other than fees or commissions of persons engaged by each Purchaser or its investment advisor) relating to or arising out of the transactions contemplated hereby. Other than the Placement Agent, no Selling Shareholder has engaged any placement agent or other agent in connection with the sale of the Shares.

 

(d)            Acknowledgment Regarding Purchase of Shares. The Selling Shareholders acknowledge and agree that each Purchaser is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby. The Selling Shareholders further acknowledge that each Purchaser is not acting as a financial advisor or fiduciary of the Selling Shareholders (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by such Purchaser or its representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to such Purchaser’s purchase of the Shares.

 

(e)            OFAC. Neither the Selling Shareholder nor, to the Selling Shareholder’s knowledge, any director, officer, agent, employee, Affiliate or Person acting on behalf of the Selling Shareholder is currently subject to any U.S. sanctions administered by OFAC; and the Selling Shareholder will not knowingly, directly or indirectly, use the proceeds of the sale of the Shares, or lend, contribute or otherwise make available such proceeds to any other Person or entity, towards any sales or operations in any other sanctioned by OFAC or for the purpose of financing the activities of any Person currently subject to any U.S. sanctions administered by OFAC.

 

(f)            Compliance with Money Laundering Laws. The operations of the Selling Shareholders are, and, to the knowledge of the Selling Shareholders, have been at all times in the past five years, conducted in compliance in all material respects with applicable financial recordkeeping and reporting requirements of the Money Laundering Laws, and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Selling Shareholders with respect to the Money Laundering Laws is pending or, to the knowledge of the Selling Shareholders, threatened.

 

(g)            Disclosure. The Selling Shareholders understand and confirm that each Purchaser and the Company will rely on the foregoing representations and warranties. All disclosure provided to the Purchasers and the Company regarding the Selling Shareholders and the transactions contemplated hereby, furnished by or on behalf of the Selling Shareholders, when taken as a whole, does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.

 

(h)            Non-Affiliates. No Selling Shareholder is an Affiliate of the Company.

 

(i)            No Preferential Rights. No Selling Shareholder has granted to any Purchaser any rights, preferences, or benefits with respect to the Shares or the transactions contemplated by this Agreement that are more favorable in any material respect than those granted to any other Purchaser, other than the difference relating solely to the number of Shares purchased.

 

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3.3            Representations and Warranties of the Purchasers. Each Purchaser hereby, for itself and for no other Person, represents and warrants as of the date hereof and as of the Closing Date (except for the representations and warranties that speak as of a specific date, which shall be made as of such date) to the Company and the Selling Shareholders as follows:

 

(a)            Organization; Authority.

 

(i)            If Purchaser is an individual, Purchaser has the full right, power, and authority to enter into and to consummate the transactions contemplated by the applicable Transaction Documents and otherwise to carry out his or her obligations hereunder and thereunder.

 

(ii)            If Purchaser is an entity, Purchaser is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with the requisite corporate, partnership, limited liability company or other power and authority to enter into and to consummate the transactions contemplated by the applicable Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and performance by Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or, if Purchaser is not a corporation, such partnership, limited liability company or other applicable like action, on the part of Purchaser. This Agreement has been duly executed by Purchaser, and when delivered by Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of Purchaser, enforceable against it in accordance with its terms, except (i) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

(b)            No Conflicts. The execution, delivery and performance by Purchaser of this Agreement and the consummation by Purchaser of the transactions contemplated hereby will not (i) result in a violation of the organizational documents of Purchaser, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which Purchaser is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to Purchaser, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of Purchaser to perform his, her or its obligations hereunder. Other than securities or blue sky laws of the states of the United States and except as otherwise provided in this Agreement, and assuming the accuracy of the representations and warranties of the Company and the performance of the covenants and agreements of the Company contained herein, no material notice to, registration, declaration or filing with, exemption or review by, or authorization, order, consent or approval of, any Governmental Entities, or expiration or termination of any statutory waiting period, is necessary for the consummation by Purchaser of the transactions set forth in this Agreement.

 

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(c)            Investment Intent. Purchaser understands that the Primary Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities laws and is acquiring the Primary Shares as principal for its own account and not with a view to, or for distributing or reselling such Primary Shares or any part thereof in violation of the Securities Act or any applicable state securities laws, provided, however, that by making the representations herein, Purchaser does not agree to hold any of the Primary Shares for any minimum period of time and reserves the right at all times to sell or otherwise dispose of all or any part of such Primary Shares pursuant to an effective registration statement under the Securities Act or under an exemption from such registration and in compliance with applicable federal and state securities laws. Purchaser is acquiring the Primary Shares hereunder in the ordinary course of its business. Purchaser does not presently have any agreement, plan or understanding, directly or indirectly, with any Person to distribute or effect any distribution of any of the Primary Shares to or through any Person.

 

(d)            Purchaser Status. At the time Purchaser was offered the Shares, Purchaser was, and at the date hereof it is, an “accredited investor” as defined in Rule 501(a) under the Securities Act.

 

(e)            General Solicitation. Purchaser is not purchasing the Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general advertisement.

 

(f)            Experience of Purchaser. Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. Purchaser is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment. Purchaser understands that (i) its investment in the Shares involves a high degree of risk, (ii) no representation is being made by any party (including, without limitation, the Placement Agent) as to the business or prospects of the Company or the future value of the Shares, and (iii) no representation is being made by any party (including, without limitation, the Placement Agent) as to any pro formas, projections, forecasts, illustrations, illustrative examples, or estimates delivered to or made available to Purchaser (or any of its Affiliates, advisors or representatives) related to the Company or the Bank, without limitation, those contained in any investor presentation or otherwise made available on the Data Site.

 

(g)            Access to Information. Purchaser acknowledges that it is Purchaser’s responsibility to conduct its own independent investigation and evaluation of the Company. Purchaser 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 and the merits and risks of investing in the Shares, and any such questions have been answered to its satisfaction; (ii) access to information about the Company and its Subsidiaries and their respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment in the Shares; 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 in the Shares. Neither such inquiries nor any other investigation conducted by or on behalf of Purchaser or its representatives or counsel shall modify, amend or affect Purchaser’s right to rely on the truth, accuracy and completeness of the Company’s representations and warranties contained in the Transaction Documents. Purchaser has sought such accounting, legal and Tax advice as it has considered necessary to make an informed decision with respect to its acquisition of the Shares.

 

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(h)            Brokers and Finders. Other than the Placement Agent with respect to the Company (which fees are to be paid by the Company and the Selling Shareholders), no Person will have, as a result of the transactions contemplated by this Agreement, any valid right, interest or claim against or upon the Company, any Selling Shareholder or any Purchaser for any commission, fee or other compensation pursuant to any agreement, arrangement or understanding entered into by or on behalf of Purchaser.

  

(i)            Independent Investment Decision. Purchaser has independently evaluated the merits of its decision to purchase the Shares pursuant to the Transaction Documents, and Purchaser confirms that it has not relied on the advice of any other Purchaser’s business and/or legal counsel in making such decision. Purchaser acknowledges that the Company has not produced an offering memorandum or other private placement memorandum, prospectus or circular with respect to the Offering. Purchaser understands that nothing in this Agreement or any other materials presented by or on behalf of the Company to Purchaser in connection with the purchase of the Shares constitutes legal, Tax or investment advice. Purchaser has consulted such legal, Tax and investment advisors as Purchaser, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of the Shares. Purchaser understands that the Placement Agent has acted solely as the agent of the Company and the Selling Shareholders in this placement of the Shares and that Purchaser has not relied on the business or legal advice of the Placement Agent or any of its agents, counsel or Affiliates in making its investment decision hereunder, and confirms that none of such Persons has made any representations or warranties to Purchaser in connection with the transactions contemplated by the Transaction Documents. Such Persons, including, without limitation, the Placement Agent, are third-party beneficiaries to this Section 3.2(i). Purchaser has received or had access to all of the information Purchaser deemed necessary in order to make its investment decision with respect to the Shares.

 

(j)            Reliance on Exemptions. Purchaser understands that the Shares are being offered and sold to it in reliance on specific exemptions from the registration requirements of U.S. federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of Purchaser to acquire the Shares.

 

(k)            No Public Market; Governmental Review; Shares Not Insured. Purchaser understands that there is no established market for the Shares and that no public market for the Shares may develop. Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Shares or the fairness or suitability of the investment in the Shares no have such authorities passed upon or endorsed the merits of the Offering of the Shares. Purchaser understands that the Shares are not deposits or other obligations of a depository institution and are not insured by the FDIC, including the FDIC’s Deposit Insurance Fund, or any other governmental agency.

 

(l)            Residency. Purchaser’s residence or office in which its investment decision with respect to the Shares was made is located at the address on Purchaser’s signature page hereto.

 

(m)            Financial Capability. Purchaser has or will have immediately available funds necessary to pay the Aggregate Purchase Price and consummate the Closing, as of the Closing Date, on the terms and conditions contemplated by this Agreement.

 

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(n)            OFAC and Anti-Money Laundering. Purchaser understands, acknowledges, represents and agrees that (i) Purchaser is not the target of any sanction, regulation or law promulgated by OFAC, the Financial Crimes Enforcement Network or any other U.S. Governmental Entity (“U.S. Sanctions Laws”); (ii) Purchaser 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) Purchaser 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) Purchaser’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) Purchaser will promptly provide to 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, Purchaser for the purposes of complying with U.S. Sanctions Laws or applicable anti-money laundering laws or regulations.

 

(o)            No Outside Discussion of Offering. As of the date of this Agreement, Purchaser has not discussed the offering with any other party or potential investors (other than the Company, the Selling Shareholders, the Placement Agent and Purchaser’s authorized representatives, advisors, counsel, and Purchaser’s underlying investors to whom the Company was not identified), except as expressly permitted under the terms of this Agreement or any non-disclosure agreement between the Company and the Purchaser.

 

3.4            The Company, the Selling Shareholders and the Purchasers acknowledge and agree that no party to this Agreement has made or makes any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Article III.

 

ARTICLE IV 

OTHER AGREEMENTS OF THE PARTIES

 

4.1            Acknowledgment of Dilution. The Company acknowledges that the issuance of the Primary Shares may result in dilution of the outstanding shares of Common Stock or Non-Voting Common Stock. The Company further acknowledges that its obligations under the Transaction Documents, including without limitation its obligation to issue the Primary Shares pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other shareholders of the Company.

 

4.2            Legend.

 

(a)            Each Purchaser agrees that all certificates or other instruments, if any, representing the Primary Shares subject to this Agreement will bear a legend and with respect to Primary Shares held in book-entry form, the transfer agent of the Company will record a legend on the share register substantially to the following effect:

 

THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT RELATING THERETO IS IN EFFECT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT OR SUCH LAWS.

 

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(b)            Upon receipt by the Company of an opinion of counsel reasonably satisfactory to the Company to the effect that such legend set forth in Section 4.2(a) is no longer required under the Securities Act and applicable state securities laws, the Company shall promptly cause the legend to be removed from any certificate or instrument or share registrar (as the case may be) representing such Shares, as applicable. The Company shall be responsible for removal of legend costs, including the fees of its legal counsel for issuing a blanket legal opinion.

 

(c)            The Company will use its commercially reasonable efforts to, at the reasonable request of Purchaser, (i) (x) deliver all the necessary documentation to cause Company’s transfer agent to remove all restrictive legends from any Primary Shares that are subject to or have been or are about to be sold or transferred pursuant to an effective registration statement or are being sold pursuant to Rule 144, at the time of sale by the Purchaser or any affiliate of the Purchaser and (y) cause its legal counsel to deliver to the transfer agent the necessary legal opinions required by the transfer agent, if any, in connection with the instruction under clause (x) above upon the receipt of representation letters and such other customary supporting documentation from the Purchaser or its affiliate as requested by (and in a form reasonably acceptable to) such counsel, and (ii) remove any legend from the book entry position evidencing its Shares following the earliest of such time as such Shares are eligible for sale by the Purchaser without restriction as to volume or manner of sale pursuant to Rule 144. The Company shall be responsible for the fees of its transfer agent, its legal counsel (including for purposes of giving the opinion referenced herein) and all Depository Trust Company fees or other fees associated with such issuance.

 

4.3            Indemnification.

 

(a)            Indemnification by the Company of the Purchasers and the Selling Shareholders. The Company will indemnify and hold each Purchaser, each Selling Shareholder and their directors, officers, shareholders, members, partners, employees, agents and investment advisers (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), each Person who controls such Purchaser or Selling Shareholder (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners, employees, agents and investment advisers (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) of such controlling Person (each, an “Company Indemnified Person”) harmless from any and all damages, liabilities, obligations, claims, contingencies, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation (collectively, “Losses”) that any such Company Indemnified Person may suffer or incur as a result of (i) any breach of any of the representations, warranties, covenants or agreements made by the Company in the Transaction Documents, (ii) any Proceeding instituted against a Company Indemnified Person in any capacity, or any of them or their respective Affiliates, by any shareholder of the Company or other third party who is not an Affiliate of such Company Indemnified Person, with respect to any of the transactions contemplated by this Agreement, or (iii) any Proceeding involving the Company arising out of or related to any event, fact, change, occurrence, development or condition prior to the Closing. The Company will not be liable to any Company Indemnified Person under this Agreement to the extent, but only to the extent that, a loss, claim, damage or liability is directly attributable to any Company Indemnified Person’s breach of any of the representations, warranties, covenants or agreements made by such Company Indemnified Person in this Agreement.

 

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(b)            Indemnification by the Selling Shareholders of the Purchasers and the Company. The Selling Shareholders will indemnify and hold each Purchaser, the Company and their directors, officers, shareholders, members, partners, employees, agents and investment advisers (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), each Person who controls such Purchaser or the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners, employees, agents and investment advisers (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) of such controlling Person (each, an “Selling Shareholder Indemnified Person”, together with the Company Indemnified Person, an “Indemnified Person”) harmless from any and all Losses that any such Selling Shareholder Indemnified Person may suffer or incur as a result of (i) any breach of any of the representations, warranties, covenants or agreements made by any Selling Shareholder in the Transaction Documents, or (ii) any Proceeding involving the Selling Shareholders arising out of or related to any event, fact, change, occurrence, development or condition prior to the Closing. The Selling Shareholders will not be liable to any Selling Shareholder Indemnified Person under this Agreement to the extent, but only to the extent that, a loss, claim, damage or liability is directly attributable to any Selling Shareholder Indemnified Person’s breach of any of the representations, warranties, covenants or agreements made by such Selling Shareholder Indemnified Person in this Agreement.

 

(c)            Conduct of Indemnification Proceedings. Promptly after receipt by any Indemnified Person of any notice of any demand, claim or circumstances which would or might give rise to a claim or the commencement of any Proceeding in respect of which indemnity may be sought pursuant to Section 4.3(a) or Section 4.3(b), such Indemnified Person shall promptly notify the Company or the Selling Shareholders, as applicable, in writing and the Company or the Selling Shareholders, as applicable, shall assume the defense thereof, including the employment of counsel reasonably satisfactory to such Indemnified Person, and shall assume the payment of all fees and expenses; provided that the failure of any Indemnified Person so to notify the Company or the Selling Shareholders, as applicable, shall not relieve the Company of its obligations hereunder except to the extent that such failure shall have materially and adversely prejudiced the Company or the Selling Shareholders, as applicable (as finally determined by a court of competent jurisdiction, which determination is not subject to appeal or further review). In any such Proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company or the Selling Shareholders, as applicable, and the Indemnified Person shall have mutually agreed to the retention of such counsel; (ii) the Company or the Selling Shareholders, as applicable, shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Person in such Proceeding; or (iii) in the reasonable judgment of counsel to such Indemnified Person, representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them, provided, however, that the Company or the Selling Shareholders, as applicable, shall not be required to pay for more than two separate counsel for all Indemnified Persons. The Company or the Selling Shareholders, as applicable, shall not be liable for any settlement of any Proceeding effected without its written consent, which consent shall not be unreasonably withheld, delayed or conditioned. Without the prior written consent of the Indemnified Person, neither the Company nor the Selling Shareholders, as applicable, shall effect any settlement of any pending or threatened Proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought hereunder by such Indemnified Person, unless such settlement includes an unconditional release of such Indemnified Person from all liability arising out of such Proceeding.

 

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(d)            Limitation on Amount of Company’s and Selling Shareholders Indemnification Liability.

 

(i)            Tipping Basket. Neither the Company nor the Selling Shareholders will be liable for Losses that are otherwise indemnifiable under Section 4.3(a)(i) and Section 4.3(b)(i) until the total of all Losses under Section 4.3(a)(i) and Section 4.3(b)(i) incurred by the Indemnified Person exceeds 1.5% of the Aggregate Purchase Price of such Indemnified Person (or the related Purchaser), at which point the full amount of all indemnifiable Losses shall be recoverable.

 

(ii)            Maximum. The maximum aggregate liability of the Company and the Selling Shareholders for all indemnifiable Losses under Section 4.3(a)(i) and Section 4.3(b)(i) is the Aggregate Purchase Price of such Indemnified Person (or the related Purchaser) plus all costs and expenses, including without limitation reasonable attorneys’ fees, that may be incurred or paid by the Indemnified Person in connection with an indemnity sought pursuant to Section 4.3(a)(i) or Section 4.3(b)(i).

 

(iii)            The provisions of Section 4.3(d)(i) and (ii) do not apply to (A) claims due to the inaccuracy of any of the representations or breach of any of the warranties of the Company in Sections 3.1(a), 3.1(b), 3.1(c), 3.1(d), 3.1(e), 3.1(f), 3.1(g), 3.1(i), or 3.1(o), (B) indemnification claims involving fraud or knowing and intentional misconduct by the Company, (C) claims due to the inaccuracy of any of the representations or breach of any of the warranties of the Selling Shareholders in Sections 3.2(a), 3.2(b), 3.2(c), 3.2(d), 3.2(e) or 3.1(f), or (B) indemnification claims involving fraud or knowing and intentional misconduct by the Selling Shareholders.

 

(iv)            Exclusive Remedy. The indemnity provided for in this Section 4.3 shall be the sole and exclusive monetary remedy of Indemnified Persons after the Closing for any inaccuracy of any representation or warranty or any other breach of any covenant or agreement contained in this Agreement; provided that nothing herein shall limit in any way any such party’s remedies in respect of fraud by any other party in connection with the transactions contemplated by this Agreement.

 

4.4            Use of Proceeds. The Company intends to use the net proceeds from the sale of the Primary Shares hereunder for general corporate purposes. The Company will not receive any proceeds from the sale of the Secondary Shares.

 

4.5            No Change of Control. The Company shall use reasonable best efforts to obtain all necessary irrevocable waivers, adopt any required amendments and make all appropriate determinations so that the issuance of the Shares to the Purchasers will not trigger a “change of control” or other similar provision in any of the agreements to which the Company is a party, including without limitation any employment, “change in control,” severance or other agreements and any benefit plan, which results in payments to the counterparty or the acceleration of vesting of benefits.

 

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4.6            Filings; Other Actions. Each party agrees, upon request, to furnish the other party with all information (other than Investor Confidential Information) concerning itself, its subsidiaries, Affiliates, directors, officers, partners, and shareholders and such other matters as may be reasonably necessary or advisable in connection with any statement, filing, notice, or application made by or on behalf of such other party or any of its subsidiaries to any Bank Regulatory Authority in connection with this Agreement. Notwithstanding anything in this Section 4.6 or elsewhere in this Agreement to the contrary, (a) each Purchaser shall not be required to provide any materials to the Company that it deems private or confidential; and (b) each Purchaser shall provide information only to the extent typically provided by such Purchaser to such Bank Regulatory Authority and subject to such confidentiality requests as such Purchaser may reasonably seek.

 

4.7            Reasonable Efforts. Each of the Company and each Purchaser agree to use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with such Purchaser in doing, all commercially reasonable things necessary, proper or advisable to consummate and make effective, in the most expeditious manner commercially practicable, the transactions contemplated by the Transaction Documents.

 

4.8            Notice of Certain Events. Each party hereto shall promptly notify the other party hereto of (a) any event, condition, fact, circumstance, occurrence, transaction or other item of which such party becomes aware prior to the Closing that would constitute a violation or breach of the Transaction Documents (or a breach of any representation or warranty contained herein or therein) or, if the same were to continue to exist as of the Closing Date, would constitute the non-satisfaction of any of the conditions set forth in Sections 5.1 or 5.2 hereof, and (b) any event, condition, fact, circumstance, occurrence, transaction or other item of which such party becomes aware that would have been required to have been disclosed pursuant to the terms of this Agreement had such event, condition, fact, circumstance, occurrence, transaction or other item existed as of the date hereof; provided that delivery of any notice pursuant to this Section 4.8 shall not modify the representations, warranties, covenants, agreements or obligations of the parties (or remedies with respect thereto) or the conditions to the obligations of the parties under this Agreement. Notwithstanding the foregoing, neither party shall be required to take any action that would jeopardize such party’s attorney-client privilege.

 

4.9            Confidentiality. Each party to this Agreement will hold, and will use commercially reasonable efforts to cause its respective subsidiaries and their directors, officers, employees, agents, consultants and advisors to hold, in strict confidence, unless disclosure to a Governmental Entity is reasonably necessary or appropriate in connection with any necessary regulatory approval, or request for information or similar process, or unless compelled to disclose by judicial or administrative process or, based on the advice of its counsel, by another requirement of law or the applicable requirements of any Governmental Entity (in which case, the party permitted to disclose such information shall, to the extent legally permissible and reasonably practicable, provide the other party with prior written notice of such permitted disclosure so that such other party may seek confidential treatment of such information from the applicable Governmental Entity), all nonpublic records, books, contracts, instruments, computer data and other data and information (collectively, “Information”) concerning the other party hereto furnished to it by such other party or its representatives pursuant to this Agreement (except to the extent that such information can be shown to have been (a) previously known by such party on a nonconfidential basis, (b) in the public domain through no fault of such party, (c) later lawfully acquired from other sources by the party to which it was furnished or (d) independently developed or conceived by such party without use of such Information), and neither party hereto shall release or disclose such Information to any other person, except its Affiliates, and to its and their respective directors, officers, employees, partners, investors, potential investors, auditors, financial advisors, other consultants and advisors with the express understanding that such parties will maintain the confidentiality of the Information and, to the extent permitted above, to Governmental Entities; provided, however, that (i) each Purchaser is permitted to disclose Information to auditors and bank and securities regulatory authorities without prior written notice to the Company in connection with any audit or examination that does not explicitly reference the Company or this Agreement and (ii) each Purchaser may identify the Company and the number and value of such Purchaser’s security holdings in the Company in accordance with applicable investment reporting and disclosure regulations or internal policies without prior notice to or consent from the Company.

 

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4.10            Conduct of Business. From the date hereof until the earlier of the Closing Date or the termination of this Agreement in accordance with its terms, except as contemplated by the Transaction Documents, the Company will: (a) operate its business in the ordinary course consistent with past practice, preserve intact the current business organization of the Company; (b) use commercially reasonable efforts to retain the services of their employees, consultants and agents; (c) preserve the current relationships of the Company with material customers and other Persons with whom the Company has and intends to maintain significant relations; (d) pay all applicable federal, state, local and foreign Taxes when due and payable (other than those Taxes the payment of which the Company challenges in good faith in appropriate proceedings and which are fully reserved for to the extent required by GAAP); (e) maintain, renew, keep in full force and effect and preserve its rights, franchises and licenses and all permits necessary for the conduct of the business of the Company as currently conducted; (f) comply with all orders, writs, and decrees applicable to it and to the conduct of its business and operations, maintain all of its operating assets in their current condition (normal wear and tear excepted); (g) refrain from taking or omitting to take any action that would constitute a breach of Section 3.1(j); and (h) refrain from (i) declaring, setting aside or paying any distributions or dividends on, or making any distributions (whether in cash, securities, or other property) in respect of, any of its capital stock, (ii) splitting, combining or reclassifying any of its capital stock or issuing or authorizing the issuance of any other securities in respect of, in lieu of or in substitution for capital stock or any of its other securities, and (iii) purchasing, redeeming or otherwise acquiring any capital stock, assets or other securities or any rights, warrants or options to acquire any such capital stock, assets or other securities, other than acquisitions of investment securities in the ordinary course of business.

 

4.11            No Additional Issuances; No Side Letters. Between the date of this Agreement and the Closing Date, the Company shall not (i) except for the Primary Shares being issued pursuant to this Agreement and any shares related to equity awards granted under the Company’s equity incentive plan, issue or agree to issue any additional shares of Common Stock, Non-Voting Common Stock or other securities or (ii) except as set forth in Schedule 3.1(aa), enter into any side letter, understanding, agreement, or other arrangement with any Purchaser or any other person that would provide such person with rights or benefits relating to the Shares that are materially more favorable than those provided to the Purchasers generally, unless the Company offers substantially the same rights or benefits to all Purchasers.

 

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ARTICLE V 

CONDITIONS PRECEDENT TO CLOSING

 

5.1            Conditions Precedent to the Obligations of Each Purchaser to Purchase Shares. The obligations of each Purchaser hereunder to purchase the Shares at the Closing are subject to the satisfaction, at or prior to the Closing Date, of each of the following conditions (any or all of which may be waived in whole or in part by such Purchaser in its sole discretion with respect to its obligations):

 

(a)            Representations and Warranties of the Company and the Selling Shareholders. The representations and warranties of the Company and the Selling Shareholders contained in this Agreement shall be true and correct (without giving effect to any limitation as to “materiality” or “Material Adverse Effect” set forth therein) as of the date hereof and as of the Closing Date as though made on and as of the Closing Date (except to the extent that any such representation or warranty is expressly made as of a specified date, in which case such representation or warranty shall be true and correct as of such specified date), except where the failure of such representations and warranties to be so true and correct would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(b)            Performance by the Company. The Company and the Selling Shareholders shall have performed in all material respects all covenants and agreements required to be performed by them under this Agreement at or prior to the Closing.

 

(c)            No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction, nor shall there have been any regulatory communication, that prohibits the consummation of any of the transactions contemplated by the Transaction Documents or restricts each Purchaser or any of such Purchaser’s Affiliates from owning or voting any Shares of the Company in accordance with the terms hereof.

 

(d)            Consents. All Required Notices and all other consents, waivers, authorizations and approvals of any Governmental Entity or any other Person required to be obtained by the Company or the Selling Shareholders in connection with the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby shall have been obtained and shall be in full force and effect.

 

(e)            Company Deliverables. The Company shall have delivered the Company Deliverables in accordance with Section 2.2(b).

 

(f)            Selling Shareholder Deliverables. The Selling Shareholders shall have delivered the Selling Shareholder Deliverables in accordance with Section 2.2(a).

 

(g)            Termination. This Agreement shall not have been terminated in accordance with Section 6.14 herein.

 

(h)            Bank Regulatory Issues. The purchase of such Shares by each Purchaser shall not, at the time of Closing, (i) cause such Purchaser or any of its Affiliates to violate any banking regulation, (ii) require such Purchaser 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 (iii) cause such Purchaser, together with any other person whose Company securities would be aggregated with such Purchaser’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 such Purchaser and such other Persons) would represent more than 9.9% of any class of voting securities of the Company outstanding at such time. For purposes of this Section 5.1(i), the term “Affiliate” shall have the meaning under the BHC Act and the Federal Reserve’s Regulation Y.

 

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(i)            Material Adverse Effect. No Material Adverse Effect shall have occurred since the date of this Agreement.

 

(j)            No Change in Control. The Company shall not have agreed to enter into or entered into (i) any agreement or transaction in order to raise capital, or (ii) any transaction that resulted in, or would result in if consummated, a Change in Control of the Company.

 

5.2            Conditions Precedent to the Obligations of the Company and the Selling Shareholders to sell the Shares. The obligations of the Company and the Selling Shareholders to consummate the transactions contemplated by this Agreement at the Closing are subject to the satisfaction, at or prior to the Closing Date, of each of the following conditions (any or all of which may be waived in whole or in part by the Company and the Selling Shareholders in their sole discretion):

 

(a)            Representations and Warranties. The representations and warranties made by each Purchaser in Section 3.3 hereof shall be true and correct as of the date when made, and as of the Closing Date as though made on and as of such date, except for representations and warranties that speak as of a specific date.

 

(b)            Performance. Each Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by such Purchaser at or prior to the Closing Date.

 

(c)            No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction, nor shall there have been any regulatory communication, that prohibits the consummation of any of the transactions contemplated by the Transaction Documents.

 

(d)            Purchaser Deliverables. Each Purchaser shall have delivered its Purchaser Deliverables in accordance with Section 2.2(c).

 

(e)            Termination. This Agreement shall not have been terminated in accordance with Section 6.14 herein.

 

ARTICLE VI

MISCELLANEOUS

 

6.1            Fees and Expenses. The parties hereto shall be responsible for the payment of all expenses incurred by them in connection with the preparation and negotiation of the Transaction Documents and the consummation of the transactions contemplated hereby. The Company and the Selling Shareholders shall pay all amounts owed to the Placement Agent relating to or arising out of the transactions contemplated hereby. The Company shall pay all stamp Taxes and other Taxes and duties levied in connection with the sale and issuance of the Primary Shares to the Purchasers.

 

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6.2            Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements, understandings, discussions and representations, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. At or after the Closing, and without further consideration, the Company, the Selling Shareholders and each Purchaser will execute and deliver to the other such further documents as may be reasonably requested in order to give practical effect to the intention of the parties under the Transaction Documents.

 

6.3            Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via e-mail (provided the sender receives e-mail notification or confirmation of receipt of an e-mail transmission) at the e-mail address specified in this Section 6.3 prior to 5:00 p.m., Eastern time, on a Business Day, (b) the Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service with next day delivery specified, or (c) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as follows:

 

If to the Company:      Georgia Banking Company, Inc.
  1776 Peachtree Street NW, Suite 300
  Atlanta, GA 30309
  Attn: Bartow Morgan, Jr.
  Email: [***]
 
With a copy to: Troutman Pepper Locke LLP
  600 Peachtree Street, NE, Suite 3000
  Atlanta, GA 30308
  Attn: James Stevens
  Email: [***]
 
If to the Selling Shareholders: at the address set forth under such Selling Shareholders name on the signature page to this Agreement
 
If to a Purchaser: at the address set forth under such Purchaser’s name on the signature page to this Agreement

 

or such other address as may be designated in writing hereafter, in the same manner, by such Person.

 

6.4            Amendments; Waivers; No Additional Consideration. No amendment or waiver of any provision of this Agreement will be effective with respect to any party unless made in writing and signed by an officer or a duly authorized representative of such party. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

 

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6.5            Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement or any of the Transaction Documents.

 

6.6            Successors and Assigns. The provisions of this Agreement shall inure to the benefit of and be binding upon the parties and their respective successors and permitted assigns. This Agreement, or any rights or obligations hereunder, may not be assigned (i) by the Company without the prior written consent of the Purchaser or the Purchasers whose rights or obligations would be affected by such assignment, or (ii) by any Purchaser without the prior written consent of the Company and the Selling Shareholders; provided that any Purchaser may assign its rights hereunder, in whole or in part, to any Affiliate of such Purchaser; provided further that any such transferee of a Purchaser shall agree in writing to be bound by the terms and conditions of this Agreement that apply to such Purchaser.

 

6.7            No Third-Party Beneficiaries. Other than with respect to the Placement Agent as set forth herein, this Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than Indemnified Persons.

 

6.8            Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of Georgia applicable to contracts made and to be performed entirely within such State. Each party agrees that all Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective Affiliates, employees or agents) may be commenced on an exclusive basis in the Georgia Courts. Each party hereto hereby irrevocably submits to the non-exclusive jurisdiction of the Georgia Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such Georgia Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

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6.9            Survival. The representations, warranties, agreements, and covenants contained herein shall survive the Closing and the delivery of the Shares as follows: (i) the representations and warranties of the Company set forth in Sections 3.1(a), 3.1(b), 3.1(c), 3.1(d), 3.1(e), 3.1(f), 3.1(g) and 3.1(p) shall survive indefinitely, (ii) the representations and warranties of the Company set forth in Section 3.1(h) shall survive for the applicable statute of limitations, and (iii) all other representations and warranties of the Company set forth in Sections 3.1 shall survive for a period of 12 months following the Closing and the delivery of the Primary Shares. All representations and warranties of the Selling Shareholders set forth in Sections 3.2(a), 3.2(b), 3.2(c), 3.2(d) and 3.2(e) shall survive indefinitely and (ii) all other representations and warranties of the Selling Shareholders set forth in Sections 3.2 shall survive for a period of 12 months following the Closing and the delivery of the Secondary Shares.

 

6.10          Counterparts. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

 

6.11          Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

6.12          Replacement of Shares. If any certificate or instrument evidencing any Shares is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and the execution by the holder thereof of a customary lost certificate affidavit of that fact and an agreement to indemnify and hold harmless the Company for any losses in connection therewith. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Shares. If a replacement certificate or instrument evidencing any Shares is requested due to a mutilation thereof, the Company may require delivery of such mutilated certificate or instrument as a condition precedent to any issuance of a replacement.

 

6.13          Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers, the Company and the Selling Shareholders may be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agree to waive in any action for specific performance of any such obligation (other than in connection with any action for a temporary restraining order) the defense that a remedy at law would be adequate.

 

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6.14          Termination. This Agreement may be terminated and the sale and purchase of the Shares as between the Company and the Selling Shareholders and any Purchaser or the Purchasers may be abandoned at any time prior to the Closing:

 

(a)            by the written consent of the Company, the Selling Shareholders and the Purchasers;

 

(b)            by the Company or any Purchaser, upon written notice to the other 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;

 

(c)            by any Purchaser, upon written notice to the Company and the Selling Shareholders, solely with respect to such Purchaser, if there has been a breach of any representation, warranty, covenant or agreement made by the Company or the Selling Shareholders in this Agreement, or any such representation or warranty shall have become untrue after the date of this Agreement, in each case such that a closing condition in Section 5.1(a) or Section 5.1(b); or

 

(d)            by the Company or by the Selling Shareholders (solely with respect to the sale of Shares by such Selling Shareholder), upon written notice to any Purchaser, solely with respect to such Purchaser, if there has been a breach of any representation, warranty, covenant or agreement made by such Purchaser in this Agreement, or any such representation or warranty shall have become untrue after the date of this Agreement, in each case such that a closing condition in Section 5.2(a) or Section 5.2(b) would not be satisfied with respect to such Purchaser.

 

6.15            Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under this Agreement and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

 

6.16            Adjustments in Stock Numbers and Prices. In the event of any stock split, subdivision, dividend or distribution payable in shares of Common Stock or Non-Voting Common Stock (or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly shares of Common Stock or Non-Voting Common Stock), combination or other similar recapitalization or event occurring after the date hereof and prior to the Closing, each reference in this Agreement to a number of shares or a price per share shall be deemed to be amended to appropriately account for such event.

 

6.17            Publicity. Except as may be required by applicable law, neither the Company, the Selling Shareholders nor any representative of either of the Company or the Selling Shareholders (including the Placement Agent) will issue any press release or public statement that identifies any Purchaser or any investment advisor to any Purchaser, or otherwise makes any public statement with respect to any Purchaser or any investment advisor to any Purchaser, without the prior written consent of such Purchaser. Any such press release or public statement required by applicable law shall only be made by the Company, the Selling Shareholders or the Placement Agent after reasonable notice and opportunity for review by the applicable Purchaser or Purchasers.

 

32

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

  GEORGIA BANKING COMPANY, INC.,
  a Georgia corporation
   
  By:  
    Bartow Morgan
    Chief Executive Officer

 

 

 

 

SELLING SHAREHOLDERS:

 

FINANCIAL HYBRID OPPORTUNITY FUND LLC,   FINANCIAL HYBRID OPPORTUNITY SPV I LLC,
a Delaware limited liability company   a Delaware limited liability company

 

  FJ CAPITAL MANAGEMENT LLC,     FJ CAPITAL MANAGEMENT LLC,
  Managing Member     Managing Member
         
  By:                   By:          
  Name:       Name:  
  Title:       Title:  

 

FINANCIAL OPPORTUNITY FUND LLC,   Address for Notice:
a Delaware limited liability company    

 

      c/o FJ Capital Management LLC
      7901 Jones Branch Drive Suite 210
  FJ CAPITAL MANAGEMENT LLC,   McLean, VA 22102
  Managing Member   Tel: 703-331-5500
      Attn: Martin Friedman and Jeffrey Kashdin
      Email: [***] and [***]
       
      With a copy to:
  By:               
  Name:   Stuart | Moore | Staub
  Title:   641 Higuera Street, Suite 302
      San Luis Obispo, CA 93401
      Attn: Richard J. Perry, Jr.
      Email: [***]

 

 

 

 

SELLING SHAREHOLDERS CONTINUED:

 

STRATEGIC VALUE INVESTORS, LP,  
a Delaware limited partnership  
   
   
By:                
Name:    
Title:    
   
Address for Notice:  
   
 
 
 
 
Attn:    
Email:    
   
With a copy to:  
 
 
 
 
Attn:    
Email:    
   

 

 

 

 

PURCHASER:  
   

 

  By:  
  Name:
  Title:

 

  Number of Shares Purchased:  
  Aggregate Purchase Price:
  Address for Notice:  
   
   
   
   

 

 

 

 

SCHEDULE I

 

Selling Shareholders

 

Selling Shareholders  Number of
Secondary Shares
To be Sold
 
Financial Hybrid Opportunity Fund LLC   298,911 
Financial Hybrid Opportunity SPV I LLC   185,937 
Financial Opportunity Fund LLC   426,008 
Strategic Value Investors, LP   383,958 
Total   1,294,814 

 

 

 

 

EXHIBIT A

 

ACCREDITED INVESTOR QUESTIONNAIRE

 

(ALL INFORMATION WILL BE TREATED CONFIDENTIALLY)

 

To:     Georgia Banking Company, Inc. (the “Company”)

 

This Investor Questionnaire (“Questionnaire”) must be completed by each potential investor in connection with the offer and sale of shares of the Company (collectively, the “Shares”). The Shares are being offered and sold by the Company without registration under the Securities Act of 1933, as amended (the “Securities Act”), and the securities laws of certain states, in reliance on the exemptions contained in Section 4(a)(2) of the Securities Act and on Regulation D promulgated thereunder and in reliance on similar exemptions under applicable state laws. The Company must determine that a potential investor meets certain suitability requirements before offering or selling Shares to such investor. The purpose of this Questionnaire is to assure the Company that each investor will meet the applicable suitability requirements. The information supplied by you will be used in determining whether you meet such criteria, and reliance upon the private offering exemptions from registration is based in part on the information herein supplied.

 

This Questionnaire does not constitute an offer to sell or a solicitation of an offer to buy any security. Your answers will be kept strictly confidential. However, by signing this Questionnaire, you will be authorizing the Company to provide a completed copy of this Questionnaire to such parties as the Company deems appropriate in order to ensure that the offer and sale of the Shares will not result in a violation of the Securities Act or the securities laws of any state and that you otherwise satisfy the suitability standards applicable to purchasers of the Shares. All potential investors must answer all applicable questions and complete, date and sign this Questionnaire. Please print or type your responses and attach additional sheets of paper if necessary to complete your answers to any item.

 

PART A.     BACKGROUND INFORMATION

 

Name of Beneficial Owner of the Shares:

  
   

 

Business Address:

 

 

(Number and Street)

 

 

(City)       (State)       (Zip Code)

 

Telephone Number: (___)________________________________

 

If a corporation, partnership, limited liability company, trust or other entity:

 

Type of entity: 

 

1

 

 

Accredited Investor Questionnaire

 

Was the entity formed for the purpose of investing in the Shares? 

 

Yes ____      No ____

 

Taxpayer Identification No. ____________________________________________________________

 

The state in the United States in which you made your investment decision:__________________________________

 

 

If an individual:

 

Residence Address:  

 (Number and Street)

 

 

(City)       (State)       (Zip Code)

 

Telephone Number: (___)_____________________________________________________________________________________________________

 

Age:__________            Citizenship: ____________

 

Where registered to vote: _______________

 

The state in the United States in which you maintain your residence:____________________

 

Are you a director or executive officer of the Company?

 

Yes ____      No ____

 

Social Security Number: ____________________________________

 

2

 

 

Accredited Investor Questionnaire

 

 

PART B.      ACCREDITED INVESTOR QUESTIONNAIRE

 

In order for the Company to offer and sell the Shares in conformance with state and federal securities laws, the following information must be obtained regarding your investor status. Please initial each category below applicable to you as a Purchaser of Shares.

 

--------  1.A 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;

 

--------  2.A broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934;

 

--------  3.An investment adviser registered pursuant to Section 203 of the Investment Advisers Act of 1940, as amended, or registered pursuant to the laws of a state;

 

--------  4.An investment adviser relying on the exemption from registering with the Commission under section 203(l) or (m) of the Investment Advisers Act of 1940, as amended

 

--------  5.An insurance company as defined in Section 2(a)(13) of the Securities Act;

 

--------  6.An investment company registered under the Investment Company Act of 1940, as amended;

 

--------  7.A business development company as defined in Section 2(a)(48) of the Investment Company Act of 1940, as amended;

 

--------  8.A Small Business Investment Company licensed by the Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958;

 

--------  9.A Rural Business Investment Company as defined in Section 384A of the Consolidated Farm and Rural Development Act of 1961, as amended;

 

--------  10.A 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;

 

--------  11.An 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 adviser, 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;

 

--------  12.A private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940, as amended;

 

--------  13.An organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, partnership, or limited liability company not formed for the specific purpose of acquiring the Shares, with total assets in excess of $5,000,000;

 

--------  14.A trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Shares, whose purchase is directed by a sophisticated person who has such knowledge and experience in financial and business matters that such person is capable of evaluating the merits and risks of investing in the Company;

 

--------  15.A natural person whose individual net worth, or joint net worth with that person’s spouse or spousal equivalent, at the time of his or her purchase exceeds $1,000,000 (see Note 15 and 16 below);

 

--------  16.A natural person who had an individual income in excess of $200,000 in each of the two most recent years, or joint income with that person’s spouse or spousal equivalent in excess of $300,000 in each of those years, and has a reasonable expectation of reaching the same income level in the current year (see Note 15 and 16 below);

 

3

 

 

--------  17.An executive officer or director of the Company; and

 

--------  18.An entity in which all of the equity owners qualify under any of the above subparagraphs. If the undersigned belongs to this investor category only, list the equity owners of the undersigned, and the investor category which each such equity owner satisfies.

 

--------  19.An entity, of a type not listed in Categories 1 through 14 or 18 above, that was not formed for the specific purpose of acquiring the Shares and owns “investments” (as defined in Rule 2a51-1(b) under the Investment Company Act of 1940, as amended) in excess of $5,000,000

 

--------  20.A natural person holding in good standing one or more of the following professional licenses:

 

(a)General Securities Representative license (Series 7);

 

(b)Private Securities Offerings Representative license (Series 82), and

 

(c)Investment Adviser Representative license (Series 65);

 

--------  21.A “family office” (as defined in Rule 202(a)(11)(G)-1 under the Investment Advisers Act of 1940, as amended):

 

(a)with assets under management in excess of $5,000,000,

 

(b)that is not formed for the specific purpose of acquiring the Shares, and

 

(c)whose prospective investment is directed by a person who has such knowledge and experience in financial and business matters that such family office is capable of evaluating the merits and risks of the prospective investment in the Company; or

 

--------  22.A “family client” (as defined in Rule 202(a)(11)(G)-1 under the Investment Advisers Act of 1940, as amended) of a family office meeting the requirements in Category 21 above and whose prospective investment in the issuer is directed by such family office pursuant to clause (c) of Category 21.

 

Notes to 15 and 16. For the purposes of calculating “joint net worth” under paragraph 15, joint net worth can be the aggregate net worth of the investor and spouse or spousal equivalent, and assets need not be held jointly to be included in the calculation. Reliance on the joint net worth standard does not require that the securities be purchased jointly.

 

For purposes of calculating net worth under paragraph 15:

 

(a)The person’s primary residence shall not be included as an asset;
(b)Indebtedness that is secured by the person’s primary residence, up to the estimated fair market value of the primary residence at the time of the sale of the Shares, shall not be included as a liability (except that if the amount of such indebtedness outstanding at the time of sale of the Shares exceeds the amount outstanding 60 days before such time, other than as a result of the acquisition of the primary residence, the amount of such excess shall be included as a liability); and
(c)Indebtedness that is secured by the person’s primary residence in excess of the estimated fair market value of the primary residence at the time of the sale of the Shares shall be included as a liability.

 

The term “spousal equivalent” under paragraphs 15 and 16 means a cohabitant occupying a relationship generally equivalent to that of a spouse.

 

 

 

 

A.FOR EXECUTION BY AN INDIVIDUAL:

 

Date:_________________________, 2026 By:  

 

  Print Name:  

 

B.FOR EXECUTION BY AN ENTITY:

 

Date:_________________________, 2026 Entity Name:  

 

  By:  
  Print Name:  
  Title:  

 

C.ADDITIONAL SIGNATURES (if required by partnership, corporation or trust document):

 

Date:_________________________, 2026 Entity Name:  

 

  By:  
  Print Name:  
  Title:  

 

Date:_________________________, 2026 Entity Name:  

 

  By:  
  Print Name:  
  Title:  

 

[SIGNATURE PAGE TO ACCREDITED INVESTOR QUESTIONNAIRE]

 

 

 

 

EXHIBIT B

 

BOOK ENTRY QUESTIONNAIRE

 

BOOK ENTRY REGISTRATION INSTRUCTIONS

 

Name:                                                                 
   
Additional Name if Tenant in Common or Joint Tenant:  
   
   
   
Mailing Address  
   
   
   
   
   
Social Security Number or other Taxpayer Identification Number:_____________________________________________  
Number of shares to be registered in above name(s): __________________  

 

Legal form of ownership:

 

¨ Individual   ¨ Joint Tenants with Rights of Survivorship
¨ Tenants in Common   ¨ Uniform Gift to Minors
¨ Individual Retirement Account   ¨ Trust
¨ Other        

 

 

 

 

EXHIBIT C

 

FORM W-9

 

[Attached]

 

 

 

 

Schedule 3.1(aa)

 

Concurrent with this Agreement, the Company will enter into a Registration Rights Agreement with Fortress and each Purchaser purchasing 50,000 or more in Shares, and an Investor Rights Agreement with Fortress, each substantially in the form of such agreements that the Company has entered into with its other significant equity investors and pursuant to which, subject to the terms and conditions thereof, the Company will grant mandatory registration rights to Fortress and piggyback registration and offering participation rights to Fortress and the other Purchasers party thereto, and nominate for election an individual appointed by Fortress to serve on the board of directors of the Company.

 

 

 

Exhibit 10.29

 

 

CONFIDENTIAL

 

Georgia Banking Company, Inc

1776 Peachtree Rd NW, Suite 300
Atlanta, GA 30309

Attn: Board of Directors

September 2, 2026

 

Ladies & Gentlemen:

 

This letter and placement agent agreement (the “Agreement”) confirms the engagement of Performance Trust Capital Partners, LLC (“Performance Trust”) by Georgia Banking Company, Inc. (the “Company”) to act as financial advisor in connection with the Company’s evaluation of a public offering (“Offering”), including the proposed registration for resale, of equity securities (the “Securities”) of the Company (the “Transaction”) to one or more investors (“Investors”).

 

1.Scope of Engagement and Services

 

As the Company’s financial advisor regarding the Transaction, Performance Trust may provide certain expertise and administrative and other services to the Company in connection with the Transaction; however, the parties hereto acknowledge and agree that Performance Trust will not identify potential investors or engage in marketing the Transaction to such investors or serve in any other capacity as the Company’s placement agent for the Transaction. In connection with and in furtherance of the foregoing, Performance Trust will assist the Company pursuant to this Agreement by providing the following mutually agreed upon general financial advisory services, if requested:

 

(a)            advise and assist the Company in identifying and evaluating strategic and/or other transactional alternatives available to the Company regarding a public offering and developing approaches relating to any decided-upon course of action; and

 

(b)            assist the Company in the preparation of a prospectus, confidential investor presentation, or other marketing materials to be used in connection with the Transaction (“Offering Materials”), it being understood that the contents of the Offering Materials shall be the sole responsibility of the Company.

 

Any new or expanded engagement beyond what is expressly described herein will require the parties’ agreement and may require the parties to enter into additional documentation to reflect such new or expanded engagement. In no event shall Performance Trust be obligated to purchase the Securities for its own account or for the accounts of its customers.

 

2.Agreements, Covenants, Representations, and Warranties of the Company

 

(a)            During the period of Performance Trust’s engagement hereunder, (i) the Company will not, and will cause its affiliates not to, discuss the Transaction (or any placement or sale of Securities) with any third parties (except through Performance Trust) and will promptly notify Performance Trust if it receives any inquiry concerning the Transaction; and (ii) represents, and warrants to, and covenants with, Performance Trust that it has not employed and will not employ any broker, placement agent (other than Performance Trust), or other person in connection with the Transaction.

 

(b)            The Company shall (i) fully cooperate with Performance Trust, (ii) promptly furnish to Performance Trust any and all due diligence materials, proposals, copies of any financial reports, any information and data concerning the Company relevant to the Securities or the Transaction, and the terms and conditions of the Offering, (iii) such other information concerning the business and financial condition of the Company and its affiliates, including Georgia Banking Company (the “Bank”) (such other information, the “Information”), and (iv) provide Performance Trust with full access to the Company’s officers, directors, employees, appraisers, independent accountants, legal counsel, and other consultants and advisors (collectively, “Company Representatives”) that Performance Trust may from time to time reasonably request.

 

 

 

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(c)            The Company acknowledges and agrees that the Offering Materials are its own work product and that Performance Trust may rely on all Information furnished by the Company to Performance Trust for use in connection with the Transaction and further represents and warrants that, at all times during any Offering of the Securities, the Offering Materials will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading. The Company agrees that if, at any time prior to the closing date, any of the agreements contained in the preceding sentence would be incorrect if the Offering Materials were being furnished, and such representations were being made, at the closing date of the Offering, the Company will promptly notify Performance Trust and supplement the Offering Materials so that such representations will be correct in all material respects as of the closing date.

 

(d)            The Company agrees to cause to be furnished to Performance Trust, on the closing date of the Offering, copies of such opinions of counsel and other documents, letters, certificates, and opinions provided to Investors in the Securities as Performance Trust may reasonably request and that any such opinions of counsel and certificates shall be addressed to, or may be expressly relied upon by, Performance Trust. The Company agrees to advise Performance Trust prior to closing of the Transaction of all developments known to the Company materially affecting the Company or the accuracy of the Offering Materials. The Company hereby agrees that at each closing Performance Trust shall be entitled to rely on the representations and warranties made by the Company to Investors in the purchase or subscription agreement related to the sale of such Securities.

 

3.Compensation and Expenses

 

(a)            Compensation. In consideration of the services provided by Performance Trust pursuant to this Agreement, Performance Trust will receive reimbursement of expenses (as set forth below) and indemnification. No fee will be due or payable by the Company in connection with the Transaction.

 

(b)            Expenses. Upon Performance Trust’s request from time to time, the Company agrees to promptly reimburse Performance Trust for all out-of-pocket expenses incurred by Performance Trust (including fees and disbursements of counsel, and of other consultants and advisors retained by Performance Trust) in connection with the matters contemplated by this Agreement, including, without limitation, (i) any such expenses arising from Performance Trust being requested to participate in any legal or regulatory proceeding and (ii) travel, food, and lodging costs. The Company also agrees to reimburse Performance Trust for all out-of-pocket expenses incurred by Performance Trust in connection with the establishment, maintenance, and use of any electronic data room and the obtaining of CUSIP numbers, if applicable, in connection with the Transaction, and all such expenses shall be billed by Performance Trust as separate line items; provided, however, that such data room and CUSIP expenses shall be payable in addition to, and shall not be included in, or counted against, any cap or other limitation on expense reimbursement set forth herein. All such expenses shall be reimbursable even if a Transaction contemplated by this Agreement is not consummated. Should it be necessary for Performance Trust or any of its representatives to appear before any administrative, judicial, governmental, or regulatory authority in connection with a Transaction for performing the services, the Company will provide additional compensation at Performance Trust's standard hourly rates for such services plus all reasonable out-of-pocket expenses, including, without limitation, reasonable attorneys' fees and charges. The Company’s obligation to pay Performance Trust the foregoing fees and reimburse Performance Trust for its expenses as set forth herein shall not be subject to counterclaim or set-off or otherwise affected by any claim or dispute the Company may have involving Performance Trust or any other party.

 

 

 

Page 3 of 9  

 

(c)            As is customary, the Company and the Bank will bear all other expenses incurred in connection with the Transaction, including, without limitation, the cost of any third-party service providers including, but not limited to, compliance with blue-sky laws. In the event that Performance Trust incurs any such expenses on behalf of the Company or the Bank, the Company and the Bank will promptly reimburse Performance Trust for such expenses.

 

4.Term and Termination

 

This Agreement shall remain in effect until earlier of the closing of a Transaction or its termination by either party. Either party may terminate this Agreement at any time, with or without cause, upon 10 calendar days’ prior written notice to the other party. Notwithstanding the foregoing, the provisions of Sections 2 (Covenants, Representations, and Warranties of the Company), 3 (Compensation and Expenses), 5 (Confidentiality), 6 (Disclosures), 7 (Use of Financial Models), 8 (Indemnification), 10 (Binding Effect), 11 (Governing Law), 12 (Entire Agreement), 13 (Independent Contractor; Non-Exclusive Relationship), and Appendix A and Appendix B shall survive termination. Any notice of termination must be provided in writing (email being sufficient).

 

5.Confidentiality

 

Performance Trust will maintain in confidence all Information provided by the Company and will not disclose any such Information to any person or entity (other than to Performance Trust’s and its affiliates’ officers, employees, counsel, consultants or advisors who are participating in the engagement or otherwise have a need to know the information in order for Performance Trust to provide the services under this Agreement (collectively, “Performance Trust Representatives”)) unless (a) such information is in the public domain, (b) such information was in Performance Trust’s possession prior to being furnished to Performance Trust by the Company and is not subject to a confidentiality agreement, (c) the Company authorizes Performance Trust to disclose such information, including without limitation, as set forth in Appendix B and for the use in marketing materials, presentations, or Offering Materials, or (d) Performance Trust is required by any law, regulation, order, or rule of any governmental, regulatory, or supervisory authority to disclose such information, including to establish any due diligence defense.

 

6.Disclosures

 

Performance Trust is a full-service securities firm engaged in securities trading and brokerage activities and provides investment banking and financial services. In the ordinary course of business, Performance Trust may at any time hold long or short positions, and may trade or otherwise effect transactions, for its own account or the account of its customers, in debt or equity securities of the Company, its affiliates, or other entities that may be involved in the Transaction.

 

Performance Trust and its affiliates may, from time to time, perform various investment banking and financial services for other clients who may have conflicting interests with respect to the Company or the Transaction. Specifically, Performance Trust may be engaged by other clients who are currently being, or in the future may be, considered as potential Investors in the Offering. Performance Trust will not use confidential information obtained from the Company pursuant to this engagement in connection with the performance by Performance Trust of services for other counterparties. The Company also acknowledges that Performance Trust has no duty to disclose to the Company, or use for the Company’s benefit, any information acquired while providing services to any other party, engaging in any transaction or carrying on any other business.

 

 

 

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Furthermore, the Company acknowledges that Performance Trust and Performance Trust Representatives may have fiduciary or other relationships whereby Performance Trust or Performance Trust Representatives may exercise voting power over securities of various counterparties, which securities may from time to time include securities of the Company, potential purchasers of the Securities, or others with interests in respect of the Transaction. The Company acknowledges that Performance Trust and Performance Trust Representatives may exercise such powers and otherwise perform their functions in connection with such fiduciary or other relationships without regard to Performance Trust’s or Performance Trust Representatives’ relationship to the Company hereunder.

 

In addition to the disclosures contained in this Section 6, in providing the services under this Agreement, Performance Trust makes the disclosures contained in Appendix B hereto. The Company has discussed the disclosures provided under this Agreement in this Section 6 and in Appendix B and has consulted with its own internal and external advisors with respect to legal, tax, and accounting matters.

 

If the Company has any questions or concerns about the disclosures contained herein, the Company agrees to make those questions or concerns known immediately to Performance Trust.

 

7.Use of Financial Models

 

The financial models and presentations used by Performance Trust in performing its services hereunder have been developed by and are proprietary to Performance Trust and are protected under applicable copyright law. The Company and the Bank will not reproduce or distribute all or any portion of such models or presentations without the prior written consent of Performance Trust.

 

8.Indemnification

 

In connection with Performance Trust’s engagement pursuant to this Agreement, the Company agrees to the provisions with respect to indemnifying Performance Trust and other matters set forth in Appendix A to this Agreement, which forms an integral part of this Agreement and has the same force and effect as if expressly set forth in the body of this Agreement. The Company understands that if Performance Trust is asked to act for the Company in any other formal additional capacity relating to this engagement but not specifically addressed in this Agreement, such activities shall constitute separate engagements and the terms of any such separate engagements will be embodied in one or more separate written agreements as mutually agreed. The indemnity provision in Appendix A shall apply to any such separate engagements unless superseded by an indemnity provision set forth in a separate agreement applicable to any such additional engagement and shall remain in full force and effect regardless of any completion, modification, or termination of Performance Trust’s engagement.

 

9.Press Release

 

Notwithstanding anything to the contrary herein, following the completion of the engagement, Performance Trust shall have the right to produce marketing “pitch” materials and place advertisements in financial and other newspapers or public forums, in each case at its own expense describing its services to the Company hereunder; provided such marketing “pitch” materials and advertisements do not violate any provisions of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”).

 

10.Binding Effect

 

This Agreement will be binding upon Performance Trust, the Company and their respective successors. No waiver, amendment, or other modification of this Agreement shall be effective unless in writing and signed by each party to be bound. If any legal provision in this Agreement shall be invalid, illegal, or unenforceable, the validity, legality, and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby.

 

 

 

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11.Governing Law

 

This Agreement and any claim, controversy or dispute arising under or related to this Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the conflicts of laws principles thereof. Each of the parties hereby irrevocably waives any right to trial by jury in any action, proceeding, or counterclaim (whether based upon contract, tort or otherwise) in connection with any dispute arising out of this Agreement or any conduct in connection with, or matters contemplated by, this Agreement. Each of the parties hereto irrevocably agrees that, except as otherwise set forth in this paragraph, any state or federal court sitting in New York County, the State of New York shall have exclusive jurisdiction to hear and determine any suit, action or proceeding and to settle any dispute arising out of or relating to this Agreement and, for such purposes, irrevocably submits to the jurisdiction of such courts. The Company hereby agrees that service of any process, summons, notice or document by hand delivery or registered mail addressed to the Company, shall be effective service of process for any suit, action or proceeding brought in any such court. The Company irrevocably and unconditionally waives any objection to the laying of venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding has been brought in an inconvenient forum. The Company agrees that a final judgment in any such suit, action or proceeding brought in any such court shall be conclusive and binding upon the Company and may be enforced in any other court to whose jurisdiction the Company is or may in the future be subject. The Company further agrees that nothing herein shall affect Performance Trust’s right to effect service of process in any other manner permitted by law or to bring a suit, action or proceeding (including a proceeding for enforcement of a judgment) in any other court or jurisdiction in accordance with applicable law.

 

12.Entire Agreement

 

This Agreement is the entire agreement of the parties and supersedes all prior or contemporaneous written or oral negotiations, correspondence, agreements, and understandings regarding the subject matter hereof.

 

13.Independent Contractor; Non-Exclusive Relationship

 

Performance Trust is and will hereafter act as an independent contractor and not as an employee, fiduciary or agent of the Company, and nothing in this Agreement may be interpreted or construed to create any employment, partnership, joint venture, fiduciary, agency or other relationship between Performance Trust and the Company. The Company acknowledges and agrees that this Agreement will not restrict Performance Trust from serving as a financial advisor or from providing any other investment banking or broker-dealer services to other clients.

 

[Remainder of page left intentionally blank.]

 

 

 

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Performance Trust looks forward to working with the Company on this engagement. Please confirm that the foregoing is in accordance with your understanding and agreement by signing and returning to Performance Trust the duplicate of this Agreement.

 

  Sincerely,
   
  Performance Trust Capital Partners, LLC
   
  By: /s/ William F. Brackett
    William F. Brackett, Managing Director  

 

The undersigned hereby agrees to the above terms as of the date first written above.

 

Georgia Banking Company, Inc.  
   
By: /s/ Bartow Morgan, Jr.  
  Bartow Morgan, Jr., CEO & Director  

 

The undersigned hereby agrees to the above terms as of the date first written above, solely with respect to the obligations set forth under Section 2(b) (Agreements, Covenants, Representations, and Warranties of the Company), Section 3(c) (Compensation and Expenses), Section 7 (Use of Financial Models), Section 8 (Indemnification) and Appendix A, and the survival of each pursuant to Section 4 (Term and Termination) to the extent that such terms apply to the Georgia Banking Company.

 

Georgia Banking Company  
   
By: /s/ Bartow Morgan, Jr.  
  Bartow Morgan, Jr., CEO & Director  

 

 

 

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Appendix A

 

Indemnification Provisions

 

To the fullest extent permitted by applicable law, each of the Company and the Bank agree, jointly and severally, to indemnify and hold harmless Performance Trust, its affiliates and respective officers, directors, employees, agents, and each other entity or person, if any, controlling Performance Trust or any of their affiliates within the meaning of either Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended (each, an “Indemnified Person”) from and against any and all losses, claims, damages, penalties, fines, forfeitures, or liabilities (or actions in respect thereof) (collectively, “Liabilities”), to which any such Indemnified Person may become subject arising out of or in connection with this Agreement; and shall reimburse the Indemnified Person for any legal or other expenses reasonably incurred (as they are incurred) by such Indemnified Person in connection with investigating, responding to, or defending any of the foregoing; provided however, the Company shall not be obligated to indemnify and hold harmless an Indemnified Person to the extent such Liabilities are finally judicially determined to have resulted solely from the gross negligence or willful misconduct of such Indemnified Person. Each of the Company and the Bank also agree that no Indemnified Person shall have any liability (whether direct or indirect, in contract, tort, or otherwise) to either the Company or the Bank for or in connection with this Agreement, or any Transaction contemplated thereby, except to the extent that any liability for Liabilities or expenses incurred by the Company are finally judicially determined to have resulted solely from the gross negligence or willful misconduct of such Indemnified Person. Notwithstanding anything to the contrary in the foregoing, the indemnification obligation shall not apply to the Bank to the extent that the Bank’s federal or state banking regulators determine in writing that such obligation is prohibited by Section 23A or Section 23B of the Federal Reserve Act or Regulation W promulgated thereunder.

 

Notwithstanding anything herein to the contrary, the Company acknowledges and agrees that Performance Trust and any Indemnified Person may from time to time receive subpoenas, civil investigative demands, examination requests, or other inquiries (collectively, “Regulatory Inquiries”) from governmental, judicial, supervisory, self-regulatory, or regulatory authorities, including, without limitation, the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, the U.S. Department of Justice, federal or state banking regulators, or any other similar authority (each, a “Regulator”). The Company further acknowledges that (i) Performance Trust and any Indemnified Person may be legally prohibited from providing notice of, or disclosing the existence, scope, or content of, any such Regulatory Inquiry until such time as the applicable Regulator permits such notice or disclosure; and (ii) compliance by Performance Trust or any Indemnified Person with any such Regulatory Inquiry, including responding, testifying, producing documents or information, or otherwise cooperating with a Regulator (collectively, “Regulatory Cooperation”), shall not constitute a breach of this Agreement or a waiver of any rights hereunder.

 

To the fullest extent permitted by applicable law, Liabilities and reasonable expenses incurred by any Indemnified Person arising out of or relating to any Regulatory Inquiry or Regulatory Cooperation shall be subject to the indemnification and reimbursement obligations set forth in this Appendix A; provided, however, that the Company shall have no indemnification obligation to the extent such Liabilities are finally judicially determined to have resulted solely from the gross negligence or willful misconduct of such Indemnified Person.

 

If the foregoing indemnification shall for any reason be unavailable to any Indemnified Person or insufficient to hold it harmless, then, to the extent permitted by applicable law, the Company and the Bank, on the one hand, and Performance Trust, on the other hand, shall contribute to the aggregate Liabilities and expenses of the nature contemplated herein in such proportions as is appropriate to reflect the relative benefit to the Company and the Bank, on the one hand, and Performance Trust, on the other hand, received or proposed to be received by the Company from this Agreement or the services, or if such allocation is not permitted by a court of competent jurisdiction, then on a basis appropriate to also recognize the relative fault of the Company and Performance Trust in connection with any events or actions giving rise to the Liabilities as well as any other relevant equitable considerations.

 

 

 

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Notwithstanding the foregoing provision to the contrary, the total contribution of Performance Trust shall not exceed the total fees paid to it by the Company under this Agreement. The relative benefits received by the Company and the Bank on the one hand and Performance Trust on the other hand in connection with this Agreement shall be deemed to be in the same respective proportions as the benefits received by the Company (and the Bank) bear to the total fees received by Performance Trust under this Agreement. For purposes of this Appendix A, each officer or director of each party to this Agreement, and each person, if any, that controls a party to this Agreement within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as such party.

 

Promptly after receipt by an Indemnified Person of notice of any claim or the commencement of any action, such Indemnified Person shall, if a claim in respect thereof is to be made against the Company or the Bank, notify the Company or the Bank in writing of the claim or the commencement thereof; but the omission to so notify the Company shall not relieve the Company or the Bank from any liability it may have to any Indemnified Person except to the extent that it has been materially prejudiced by such failure. For the avoidance of doubt, an Indemnified Person shall have no obligation to provide notice to the Company to the extent such notice is restricted, delayed, or prohibited by applicable law, regulation, or directive of a Regulator in connection with a Regulatory Inquiry, and any delay or failure to provide notice for such reason shall not relieve the Company of its indemnification obligations except to the extent the Company is materially prejudiced thereby and such prejudice is not attributable to such legal prohibition. In case any such action is brought against any Indemnified Person and it notifies the Company or the Bank of the commencement thereof, the Company and the Bank shall be entitled to participate therein and, to the extent that, by written notice delivered to each Indemnified Person promptly after receiving the aforesaid notice from an Indemnified Person, the Company and the Bank elect to assume the defense thereof, it may participate with counsel satisfactory to each Indemnified Person; provided, however, that if the defendants in any such action include both an Indemnified Person and the Company or the Bank and the Indemnified Person or parties shall reasonably have concluded that there may be legal defenses available to it or them and/or other indemnified parties that are different from or additional to those available to the Company, the Bank, the Indemnified Person or parties shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such Indemnified Person or parties. Upon receipt of notice from the Company or the Bank to such Indemnified Person of its election so to assume the defense of such action and approval by the Indemnified Person of such counsel, the Company and the Bank shall not be liable to such Indemnified Person under this paragraph for fees of separate counsel, unless (i) such Indemnified Person shall have employed separate counsel (plus any local counsel) in connection with the assertion of legal defenses in accordance with the proviso to the immediately preceding sentence, (ii) the Company and the Bank shall not have employed counsel satisfactory to such Indemnified Person to represent such Indemnified Person within a reasonable time after notice of commencement of the action, or (iii) the Company or the Bank shall have authorized the employment of counsel for such Indemnified Person at the expense of the Company or the Bank. The Company acknowledges that it shall not have the right to participate in, assume the defense of, or otherwise control any Regulatory Inquiry, nor shall it require any Indemnified Person to contest or resist any Regulatory Inquiry, if doing so would violate applicable law or the direction of a Regulator. Neither the Company nor the Bank shall be liable for any settlement of any proceeding effected without its written consent, which consent shall not be unreasonably withheld, but if settled with such consent or if there shall be a final judgment against the Indemnified Person, the Company and the Bank, on a joint and several basis, agree to indemnify the Indemnified Person from and against any Liabilities by reason of such settlement or judgment. Neither the Company nor the Bank shall, without prior written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party and indemnity could have been sought thereunder by such Indemnified Person, unless such settlement (i) does not include a statement as to or admission of, fault, culpability or a failure to act by or on behalf of any such Indemnified Person, and (ii) includes an unconditional release of such Indemnified Person from all liability on claims that are the subject matter of such proceeding.

 

 

 

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Appendix B

 

Disclosures

 

Performance Trust is not undertaking to provide any advice relating to legal, regulatory, accounting, or tax matters. In furtherance thereof, the Company acknowledges and agrees that (a) it and its affiliates have relied and will continue to rely on the advice of their own legal, tax and accounting advisors for all matters relating to the Transaction and any other matters, and (b) neither it, nor any of its affiliates, has received, or has relied upon, the advice of Performance Trust or any of its affiliates regarding matters of law, regulation, taxation or accounting.

 

The Company acknowledges and agrees that Performance Trust’s engagement pursuant to this Agreement does not constitute an agreement or a commitment, express or implied, by Performance Trust or any of its affiliates to provide any type of financing to the Company or in connection with any Transaction. In performing the services hereunder, Performance Trust is not assuming any responsibility for the decision of the Company or any other party to pursue (or not to pursue) any business strategy or to effect (or not to effect) a Transaction.

 

The Company acknowledges that various employees of Performance Trust employees own shares of capital stock of the Company, which amount of shares is, in aggregate, de minimis. This creates a conflict of interest because Performance Trust may be incentivized to seek a lower (or higher) price for the Securities in the Placement to maximize (or minimize) the value such employees’ investment in GBC.

 

By signing this Agreement and continuing with the engagement hereunder, the Company acknowledges and understands the conflicts described above and consents to Performance Trust’s dual placement agent and financial advisory roles and Performance Trust’s resulting obligation to share confidential information with each Transaction party. The Company further represents that it has had the opportunity to be, or has been, represented by counsel in giving the waivers contained in this Appendix B.

 

 

 

 

 

EXHIBIT 21.1

 

LIST OF SUBSIDIARIES

 

Georgia Banking Company, Inc., a Georgia corporation, owns, either directly or indirectly, 100% of the stock of the following subsidiaries:

 

Subsidiary Name State of Incorporation
Georgia Banking Company State of Georgia

 

 

EXHIBIT 23.1

 

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

We hereby consent to the inclusion in this Registration Statement on Form S-1 of Georgia Banking Company, Inc. of our report dated July 28, 2026, with respect to our audits of the consolidated financial statements as of December 31, 2025 and 2024, and for each of the years in the two-year period ended December 31, 2025.

 

We also consent to the reference to us under the heading “Experts” in the Prospectus.

 

/s/ Wipfli LLP    
     
Atlanta, Georgia    
October 2, 2026