| SECURITIES AND EXCHANGE COMMISSION |
| WASHINGTON, D.C. 20549 |
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| FORM 8-K |
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| CURRENT REPORT |
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| PURSUANT TO SECTION 13 OR 15 (d) OF THE |
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| SECURITIES EXCHANGE ACT OF 1934 |
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Date of Report (Date of earliest event reported): June 25, 2020 |
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Banner Corporation
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| (Exact name of registrant as specified in its charter) |
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Washington
| 000-26584
| 91-1691604 |
| (State or other jurisdiction | (Commission | (I.R.S. Employer |
| of incorporation) | File Number) | Identification No.) |
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10 S First Avenue, Walla Walla, Washington | 99362
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| (Address of principal executive offices) | (Zip Code) |
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Registrant's telephone number (including area code) (509) 527-3636 |
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| Not Applicable |
| (Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions.
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| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act
| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
Common Stock, par value $.01 per share
| | BANR
| | The NASDAQ Stock Market LLC
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 1.01 – Entry Into A Material Definitive Agreement
Underwriting Agreement. On June 25, 2020, Banner Corporation (the “Company”), entered into an underwriting agreement (the “Underwriting Agreement”) with BofA Securities, Inc. and Piper Sandler & Co. (the “Underwriters”). Pursuant to the Underwriting Agreement, the Company issued and sold $100,000,000 aggregate principal amount of 5.000% Fixed-to-Floating Rate Subordinated Notes due 2030 (the “Notes”) at a public offering price equal to 100% of the aggregate principal amount of the Notes.
The offering of the Notes closed on June 30, 2020. The net proceeds from the sale of the Notes to the Company were approximately $98,000,000, after giving effect to the underwriting discount of 1.5% and estimated expenses of the offering of the Notes. The Company intends to use the net proceeds of the offering for general corporate purposes, which may include providing capital to support its growth organically or through strategic acquisitions, repayment or redemption of outstanding indebtedness, the payment of dividends, financing investments and capital expenditures, repurchasing shares of the Company’s common stock and for investments in the Company’s wholly owned subsidiaries, Banner Bank and Islanders Bank, as regulatory capital.
The Notes were offered and sold pursuant to an effective shelf registration statement on Form S-3 filed with the Securities and Exchange Commission (“SEC”) on June 12, 2020 (Registration No. 333-239159), a base prospectus, dated June 12, 2020 included as part of the registration statement, a preliminary prospectus supplement, dated June 25, 2020 and a final prospectus supplement, filed on June 26, 2020 with the SEC pursuant to Rule 424(b) under the Securities Act of 1933, as amended (the “Securities Act”).
The Underwriting Agreement contains representations, warranties and covenants customary in agreements of this type. These representations, warranties and covenants are not representations of factual information to investors about the Company or its subsidiaries, and the sale of the Notes is not a representation that there has not been any change in the condition of the Company. The Company also agreed to indemnify the Underwriter against certain liabilities arising out of or in connection with the sale of the Notes.
The foregoing description of the Underwriting Agreement is not complete and is qualified in its entirety by reference to the complete text of the Underwriting Agreement, a copy of which is attached as Exhibit 1.1 to this Current Report on Form 8-K and incorporated by reference into this Item 1.01.
Indenture and Notes. The Notes were issued under an Indenture dated as of June 30, 2020 (the “Base Indenture”) by and between the Company and The Bank of New York Mellon Trust Company, N.A, as trustee (the “Trustee”), as supplemented by the First Supplemental Indenture dated as of June 30, 2020 between the Company and the Trustee (the “First Supplemental Indenture”) (the Base Indenture, and the First Supplemental Indenture are referred to collectively as the “Indenture”). The terms of the Notes are set forth in, and such Notes are governed by, the Indenture.
The Notes will mature on June 30, 2030. From and including the original issue date to, but excluding, June 30, 2025 or the date of earlier redemption, the Company will pay interest on the Notes semi-annually in arrears on June 30 and December 30 of each year, commencing on December 30, 2020, at a fixed annual interest rate equal to 5.000%. From and including June 30, 2025 to but excluding the maturity date or the date of earlier redemption, the floating interest rate per annum will be equal to a benchmark rate,
which is expected to be Three-Month Term SOFR (as defined in the Notes), plus a spread of 489 basis points, payable quarterly in arrears on March 30, June 30, September 30 and December 30 of each year, commencing on September 30, 2025. Notwithstanding the foregoing, in the event that the benchmark rate is less than zero, the benchmark rate shall be deemed to be zero.
The Company may, at its option, redeem the Notes (i) in whole or in part beginning with the interest payment date of June 30, 2025, and on any interest payment date thereafter or (ii) in whole but not in part upon the occurrence of a “Tax Event,” a “Tier 2 Capital Event” (each as defined in the Indenture) or the Company becoming required to register as an investment company pursuant to the Investment Company Act of 1940, as amended. The redemption price for any redemption is 100% of the principal amount of the Notes, plus accrued and unpaid interest thereon to, but excluding, the date of redemption. Any redemption of the Notes will be subject to the receipt of the approval of the Board of Governors of the Federal Reserve System (the “FRB”) (or, as and if applicable, the rules of any appropriate successor bank regulatory agency) to the extent then required under applicable laws or regulations, including capital regulations.
There is no right of acceleration of maturity of the Notes in the case of default in the payment of principal of, or interest on, the Notes or in the performance of any other obligation of the Company under the Notes or the Indenture. The Indenture provides that holders of the Notes may accelerate payment of indebtedness only upon the Company’s or Banner Bank’s insolvency, receivership, conservatorship, reorganization or similar proceedings, or if there is a liquidation or winding up of the Company’s business.
The Notes are general unsecured, subordinated obligations of the Company and rank junior to all of its existing and future Senior Indebtedness (as defined in the Indenture), including all of its general creditors. The Notes will be equal in right of payment with any of the Company’s existing and future subordinated indebtedness, and will be senior to the Company’s obligations relating to any junior subordinated debt securities issued to the Company’s capital trust subsidiaries. In addition, the Notes are effectively subordinated to all secured indebtedness of the Company to the extent of the value of the collateral securing such indebtedness. The Notes are structurally subordinated to all of the existing and future liabilities and obligations of the Company’s subsidiaries, including the deposit liabilities and claims of other creditors of the Bank. The Notes are obligations of the Company only and will not be obligations of, and will not be guaranteed by, any of its subsidiaries.
The foregoing descriptions of the Base Indenture, the First Supplemental Indenture, and the Notes are not complete and are each qualified in their entirety by reference to the complete text of the Base Indenture, the First Supplemental Indenture, and the form of the Notes, copies of which are attached as Exhibits 4.1, 4.2, and 4.3, respectively, to this Current Report on Form 8-K and incorporated herein by reference.
Item 2.03 – Creation of a Direct Financial Obligation or an Obligation under and Off-Balance Sheet Arrangement of a Registrant.
The information set forth in Item 1.01 is incorporated herein by reference.
Item 8.01 – Other Events
On June 25, 2020, the Company issued a press release announcing the pricing of its offering of the Notes, which is attached as Exhibit 99.1 hereto.
On June 30, 2020, the Company issued a press release regarding the closing of its underwritten public offering of the Notes. A copy of the press release is attached hereto as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference.
This Current Report on Form 8-K, including the Exhibits hereto, shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Notes in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. Any offering of the Notes is being made only by means of a written prospectus meeting the requirements of Section 10 of the Securities Act.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are being filed herewith and this list shall constitute the exhibit index:
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| | BANNER CORPORATION |
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| Date: June 30, 2020 | By: /s/Peter J. Conner
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| | Peter J. Conner |
| | Executive Vice President and Chief Financial Officer |
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