| Item 1.01 | Entry in Material Definitive Agreement |
On February 14, 2019, F.N.B. Corporation (the “Corporation”) completed its offering of $120,000,000 aggregate principal amount of its 4.950%Fixed-to-Floating Rate Subordinated Notes due 2029 (the “Notes”). The Notes will be treated as Tier 2 capital for regulatory capital purposes. The offering of the Notes was consummated pursuant to the terms of an underwriting agreement, dated as of February 11, 2019 (the “Underwriting Agreement”) by and among the Corporation, as issuer, and Morgan Stanley & Co. LLC and Sandler O’Neill & Partner, L.P., as representatives of the several underwriters named in Schedule I to the Underwriting Agreement. The Underwriting Agreement contains various representations, warranties and agreements by the Corporation, indemnification rights and obligations of the parties and termination provisions.
The Notes were sold to the public by the Underwriters at a price equal to 100% of the aggregate principal amount of the Notes. The net proceeds to the Corporation from the sale of the Notes, after the underwriting discount, but before estimated transaction expenses, were approximately $118.8 million. The Notes were offered pursuant to the prospectus supplement, dated February 11, 2019, to the base prospectus, dated May 16, 2018, forming a part of the Corporation’s registration statement onForm S-3 (File No. 333-224979) (the “Registration Statement”).
The Notes will mature on February 14, 2029 (the “Maturity Date”). From and including the date of original issuance to but excluding February 14, 2024, the Notes will bear interest at an initial rate of 4.950% per annum, payable semi-annually in arrears on August 14 and February 14 of each year, commencing on August 14, 2019. Unless redeemed, from and including February 14, 2024 to but excluding the Maturity Date, the interest rate will reset quarterly to an annual interest rate equal to the then-current three-month LIBOR rate plus 240 basis points, payable quarterly in arrears on February 14, May 14, August 14 and November 14 of each year, commencing on May 14, 2024. Notwithstanding the foregoing, in the event that three-month LIBOR is less than zero, three-month LIBOR will be deemed to be zero.
The Notes are redeemable in whole or in part beginning on February 14, 2024, and on any interest payment date thereafter, or in whole, but not in part, at any time if: (i) a change or prospective change in law occurs that could prevent us from deducting interest payable on the Notes for U.S. federal income tax purposes; (ii) an event occurs that precludes the Notes from being recognized as Tier 2 capital for regulatory capital purposes; or (iii) the Corporation becomes required to register as an investment company under the Investment Company Act of 1940, as amended, in each case at 100% of the principal amount of the Notes, plus accrued and unpaid interest thereon to but excluding the date of redemption.
Holders of the Notes may not accelerate the maturity of the Notes, except upon the Corporation’s or First National Bank of Pennsylvania’s (our principal banking subsidiary) bankruptcy, insolvency, liquidation, receivership or similar event.
The Corporation intends to use the net proceeds from the sale of the Notes for general corporate purposes, which may include investments at the holding company level, providing capital to support the growth of First National Bank of Pennsylvania and our business, repurchases of our common shares, repayment of maturing obligations and refinancing of outstanding indebtedness (including the redemption of certain callable trust preferred securities issued by one or more of our trust affiliates) and the payment of the cash consideration components of future acquisitions.
