| Item 1.01 | Entry into a Material Definitive Agreement |
On September 30, 2020, Premier Financial Corp. (the “Company”) completed the issuance and sale (the “Offering”) of $50,000,000 aggregate principal amount of its 4.00% Fixed-to-Floating Rate Subordinated Notes due 2030 (the “Notes”) in a private offering exempt from the registration requirements under the Securities Act of 1933, as amended (the “Securities Act”).
The Offering was completed pursuant to a purchase agreement, dated as of September 25, 2020 (the “Purchase Agreement”), entered into by and among the Company, Premier Bank and Piper Sandler & Co., as representative of the initial purchasers named therein (collectively, the “Initial Purchasers”), for resale in the United States to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act and to certain institutional accredited investors in exempt transactions under the Securities Act.
The Company intends to use the net proceeds from the Offering for general corporate purposes, which may include, without limitation, providing capital to support its growth organically or through strategic acquisitions, repaying indebtedness, financing investments, capital expenditures, repurchasing its common shares and for investments in the Bank as regulatory capital. The Purchase Agreement contains customary representations, warranties and covenants and includes the terms and conditions for the sale of the Notes in the Offering, indemnification and contribution obligations and other terms and conditions customary in agreements of this type.
The Notes were issued under the Indenture, dated as of September 30, 2020 (the “Base Indenture”), as supplemented by the First Supplemental Indenture, dated as of September 30, 2020 (the “First Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), between the Company and U.S. Bank National Association, as trustee.
From and including the September 30, 2020 date of issuance to, but excluding, September 30, 2025, or the earlier redemption date, the Notes will bear interest at an initial fixed rate of 4.00% per annum, payable semi-annually in arrears on March 30 and September 30 of each year, commencing on March 30, 2021. From and including September 30, 2025 to, but excluding the maturity date, September 30, 2030, or earlier redemption date (the “floating rate period”), the Notes will bear interest at a floating rate based on the secured overnight financing rate, plus a spread of 388.5 basis points, payable quarterly in arrears; provided, however, that if the Benchmark rate is less than zero, then the Benchmark rate shall be deemed to be zero.
The Company may, at its option, beginning with the interest payment date of September 30, 2025, and on any interest payment date thereafter, redeem the Notes, in whole or in part, from time to time, subject to obtaining the prior approval of the Board of Governors of the Federal Reserve System (the ‘‘Federal Reserve’’) to the extent the approval of the Federal Reserve is then required under applicable rules of the Federal Reserve, at a redemption price equal to 100% of the principal amount of the Notes being redeemed, plus accrued and unpaid interest thereon to but excluding the date of redemption.
The Notes are general unsecured, subordinated obligations of the Company and are not guaranteed by any of the Company’s subsidiaries. The Notes are junior in right of payment to the Company’s existing and future senior indebtedness.
The Company may redeem the Notes, in whole but not in part, at any time, including prior to September 30, 2025, subject to obtaining the prior approval of the Federal Reserve to the extent the approval of the Federal Reserve is then required under applicable rules of the Federal Reserve, if (i) a change or prospective change in law occurs that could prevent the Company from deducting, in whole or in part, interest payable on the Notes for U.S. federal income tax purposes, (ii) a subsequent event occurs that could preclude the Notes from being recognized as Tier 2 Capital for regulatory capital purposes, or (iii) the Company is required to register as an investment company under the Investment Company Act of 1940, as amended, in each case, at a redemption price equal to 100% of the principal amount of the Notes, plus any accrued and unpaid interest thereon to but excluding the redemption date.
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