| Item 1.01. | Entry Into a Material Definitive Agreement. |
On September 15, 2020, Independent Bank Group, Inc. (the “Company”) completed the issuance and sale (the “Offering”) of $130,000,000 aggregate principal amount of its 4.00% Fixed-to-Floating Rate Subordinated Notes due 2030 (the “Notes”). The Offering was completed pursuant to the prospectus, filed with the Securities and Exchange Commission as part of the Company’s Registration Statement on Form S-3 (File Number: 333-239125) (the “Registration Statement”), dated June 12, 2020, as supplemented by a preliminary prospectus supplement dated September 10, 2020 and a final prospectus supplement dated September 10, 2020, and free writing prospectuses, each dated September 10, 2020. In connection with the Offering, the Company entered into an Underwriting Agreement, dated as of September 10, 2020 (the “Underwriting Agreement”), with Keefe, Bruyette & Woods, Inc. and Piper Sandler & Co. The Notes were sold at an underwriting discount of 1.50%, resulting in net proceeds of approximately $128,050,000 before deducting expenses of the Offering. The Company intends to use the net proceeds from the Offering for general corporate purposes, including to increase its consolidated capital to support growth through acquisitions and continued organic growth.
The Notes were issued under the Indenture, dated as of June 25, 2014 (the “Base Indenture”), between the Company and Wells Fargo Bank, National Association, as trustee (the “Trustee”), as supplemented by the Third Supplemental Indenture, dated as of September 15, 2020 (the “Third Supplemental Indenture” and the Base Indenture as supplemented thereby, the “Indenture”), between the Company and the Trustee.
From and including the date of issuance to, but excluding, September 15, 2025 or the date of earlier redemption, the Notes will bear interest at a fixed rate of 4.00% per year, payable semi-annually in arrears on March 15 and September 15 of each year, commencing on March 15, 2021. Thereafter, from and including September 15, 2025, to, but excluding, the maturity date, September 15, 2030, or the date of earlier redemption, the Notes will bear interest at a floating rate per year equal to a Benchmark, which is expected to be Three-Month Term SOFR (each as defined in the Indenture), plus 388.5 basis points, payable quarterly in arrears on March 15, June 15, September 15 and December 15 of each year, commencing on December 15, 2025. Notwithstanding the foregoing, if the Benchmark is less than zero, then the Benchmark shall be deemed to be zero.
The Notes are the Company’s unsecured, subordinated obligations and (i) rank junior in right of payment and upon liquidation to any of the Company’s existing and future Senior Indebtedness (as defined in the Indenture), whether secured or unsecured; (ii) rank equal in right of payment and upon liquidation with any of the Company’s existing and future subordinated indebtedness the terms of which provide that such indebtedness ranks equally with promissory notes, bonds, debentures and other evidences of indebtedness of types that include the Notes; (iii) rank senior in right of payment and upon liquidation with the Company’s existing junior subordinated debentures underlying outstanding trust preferred securities and any indebtedness the terms of which provide that such indebtedness ranks junior to promissory notes, bonds, debentures and other types of indebtedness that include the Notes; and (iv) is effectively subordinated to all of the existing and future indebtedness, deposits and other liabilities of Independent Bank and the Company’s other current and future subsidiaries, including, without limitation, Independent Bank’s liabilities to depositors in connection with the deposits in Independent Bank, its liabilities to general creditors and its liabilities arising during the ordinary course or otherwise.
The Notes may be redeemed at the Company’s option under certain circumstances, as described in the Indenture.
The foregoing summary of the terms of the Underwriting Agreement, the Indenture and the Notes does not purport to be complete and is subject to, and qualified in its entirety by, the full text of (i) the Underwriting Agreement, (ii) the Base Indenture, (iii) the Third Supplemental Indenture and (iv) the form of the Notes, each of which is attached hereto as an exhibit and is incorporated herein by reference.
-2-
