Item 1.01.
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Entry into a Material Definitive Agreement.
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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 holder.
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 Companys 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.