Item 1.01. Entry into a Material Definitive Agreement.
On June 30, 2020, County Bancorp, Inc. (the "Company") entered into Subordinated
Note Purchase Agreements (the "Purchase Agreement") with certain institutional
and accredited investors (the "Purchasers") pursuant to which the Company sold
and issued $17.4 million in aggregate principal amount of its 7.00%
fixed-to-floating rate subordinated notes due 2030 (the "Notes"). The Notes were
issued by the Company to the Purchasers at a price equal to 100% of their face
amount. The Company intends to use the net proceeds it received from the sale of
the Notes to support organic growth and for general corporate purposes. The
Purchase Agreement contains certain customary representations, warranties and
covenants made by the Company, on the one hand, and the Purchasers, severally
and not jointly, on the other hand.
The Notes have a stated maturity of June 30, 2030, are redeemable by the Company
at its option, in whole or in part, on or after June 30, 2025, and at any time
upon the occurrences of certain events. Prior to June 30, 2025, the Company may
redeem the Notes, in whole but not in part, only under certain limited
circumstances set forth in the Indenture. On or after June 30, 2025, the Company
may redeem the Notes, in whole or in part, at its option, on any interest
payment date. Any redemption by the Company would be at a redemption price equal
to 100% of the principal amount of the Notes being redeemed, together with any
accrued and unpaid interest on the Notes being redeemed to but excluding the
date of redemption. The Notes are not subject to redemption at the option of the
The Notes will bear interest at a fixed rate of 7.00% per year, from and
including June 30, 2020 to, but excluding, June 30, 2025. From and including
June 30, 2025 to, but excluding the maturity date or early redemption date, the
interest rate will reset quarterly at a variable rate equal to the then current
three-month term SOFR plus 687.5 basis points. As provided in the Notes, the
interest rate on the Notes during the applicable floating rate period may be
determined based on a rate other than three-month term SOFR.
Principal and interest on the Notes are subject to acceleration only in limited
circumstances. The Notes are unsecured, subordinated obligations of the Company,
are not obligations of, and are not guaranteed by, any subsidiary of the
Company, and rank junior in right of payment to the Company's current and future
senior indebtedness. The Notes are intended to qualify as Tier 2 capital of the
Company for regulatory capital purposes.
The Notes were offered and sold by the Company in a private placement
transaction in reliance on exemptions from the registration requirements of the
Securities Act of 1933, as amended (the "Securities Act"), pursuant to
Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D
thereunder. On June 30, 2020, in connection with the sale and issuance of the
Notes, the Company entered into Registration Rights Agreements (the
"Registration Rights Agreement") with the Purchasers. Under the terms of the
Registration Rights Agreement, the Company has agreed to take certain actions to
provide for the exchange of the Notes for subordinated notes that are registered
under the Securities Act and have substantially the same terms as the Notes (the
"Exchange Offer"). Under certain circumstances, if the Company fails to meet its
obligations under the Registration Rights Agreement, it would be required to pay
additional interest to the holders of the Notes.
The Notes were issued under an Indenture, dated June 30, 2020 (the "Indenture"),
by and between the Company and U.S. Bank National Association, as trustee (the
"Trustee"). The Notes are not subject to any sinking fund and are not
convertible into or exchangeable, other than pursuant to the Exchange Offer, for
any other securities or assets of the Company or any of its subsidiaries.
The form of Purchase Agreement, the form of Registration Rights Agreement, the
Indenture and the form of Note are attached as Exhibits 10.1, 10.2, 4.1 and 4.2,
respectively, to this Current Report on Form 8-K and are incorporated herein by
reference. The foregoing descriptions of the Purchase Agreement, the
Registration Rights Agreement, the Indenture and the Notes are summaries and are
qualified in their entirety by reference to the full text of such documents.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information set forth under Item 1.01 above is incorporated by reference
into this Item 2.03.
Item 7.01. Regulation FD Disclosure.
On June 30, 2020, the Company issued a press release announcing the completion
of the offering of the Notes, a copy of which is furnished herewith as Exhibit
In connection with the offering of the Notes, the Company delivered an investor
presentation to potential investors on a confidential basis, a copy of which is
furnished herewith as Exhibit 99.2.
The information contained in this Item 7.01 and Exhibits 99.1 and 99.2 shall not
be deemed to be "filed" for the purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to
the liabilities of such section, nor will such information be deemed
incorporated by reference in any filing under the Securities Act or the Exchange
Act, except as may be expressly set forth by specific reference in such filing.
Cautionary Note Regarding Forward-Looking Statements
This Report includes "forward-looking statements" within the meanings of the
Private Securities Litigation Reform Act of 1995, Section 27A of the Securities
Act, and Section 21E of the Exchange Act, including but not limited to
statements about the anticipated use of net proceeds from the offering, the
Exchange Offer and other matters. Forward-looking statements are subject to
known and unknown risks and uncertainties, many of which may be beyond the
Company's control. The Company cautions you that the forward-looking statements
presented in this Report are not a guarantee of future events, and that actual
events may differ materially from those made in or suggested by the
forward-looking information contained in this Report. Forward-looking statements
generally can be identified by the use of forward-looking terminology such as
"may," "plan," "seek," "will," "expect," "intend," "estimate," "anticipate,"
"believe" or "continue" or the negative thereof or variations thereon or similar
terminology. Factors that may cause actual results to differ materially from
those made or suggested by the forward-looking statements contained in this
Report include those identified in the Company's most recent annual report on
Form 10-K and subsequent filings with the Securities and Exchange Commission.
Any forward-looking statements presented herein are made only as of the date of
this Report, and the Company does not undertake any obligation to update or
revise any forward-looking statements to reflect changes in assumptions, the
occurrence of unanticipated events, or otherwise.
Item 9.01. Financial Statements and Exhibits.
4.1 Indenture, dated June 30, 2020, by and between County Bancorp, Inc. and
U.S. Bank National Association, as trustee.
4.2 Forms of 7.00% Fixed-to-Floating Rate Subordinated Note due 2030
(included as Exhibit A-1 and Exhibit A-2 to the Indenture filed as Exhibit
10.1 Form of Subordinated Note Purchase Agreement, dated June 30, 2020, by and
among County Bancorp, Inc. and the Purchasers.
10.2 Form of Registration Rights Agreement, dated June 30, 2020, by and among
County Bancorp, Inc. and the Purchasers.
99.1 Press Release of County Bancorp, Inc., dated June 30, 2020.
99.2 Investor Presentation of County Bancorp, Inc.
© Edgar Online, source Glimpses