UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 29, 2020
EQUITY BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Kansas | 001-37624 | 72-1532188 | ||
(State or other jurisdiction of incorporation or organization) |
(Commission File Number) |
(I.R.S. Employer Identification No.) |
7701 East Kellogg Drive, Suite 300 | ||
Wichita, KS | 67207 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: 316.612.6000
Former name or former address, if changed since last report: Not Applicable
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:
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | 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 |
Name of each exchange on which registered | ||
Class A, Common Stock, par value $0.01 per share | EQBK |
The Nasdaq Stock Market LLC |
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. |
Notes Offering
On June 29, 2020, Equity Bancshares, Inc. (the Company) entered into Subordinated Note Purchase Agreements (collectively, the Note Purchase Agreement) with certain qualified institutional buyers and institutional accredited investors (the Purchasers) pursuant to which the Company issued and sold $42 million in aggregate principal amount of its 7.00% Fixed-to-Floating Rate Subordinated Notes due 2030 (the Notes). 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 Regulation D thereunder. The Company intends to use the net proceeds from the offering for general corporate purposes, including repayment of approximately $40 million of indebtedness.
In connection with the issuance and sale of the Notes, the Company entered into a Registration Rights Agreement (the Registration Rights Agreement) with the Purchasers. Under the terms of the Registration Rights Agreement, the Company has agreed to conduct an offer to exchange the Notes for subordinated notes with substantially the same terms as the Notes in an offering registered under the Securities Act. If the Company fails to comply with certain of its obligations under the Registration Rights Agreement, it will be required to pay additional interest to the holders of the Notes.
The Notes were issued under an Indenture, dated as of June 29, 2020 (the Indenture), by and between the Company and UMB Bank, N.A., as trustee. The Notes will mature on June 30, 2030. From and including June 29, 2020, 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 interest rate of 7.00% per annum. From and including June 30, 2025, to, but excluding, the maturity date or the date of earlier redemption (the Floating Rate Period) the Company will pay interest on the Notes at a floating interest rate. The floating interest rate will be reset quarterly, and the interest rate for any Floating Rate Period shall be equal to the then-current Three-Month Term SOFR (as defined in the Indenture) plus 688 basis points for each quarterly interest period during the Floating Rate Period. Interest payable on the Notes during the Floating Rate Period will be paid 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 Tier 2 Capital Event, a Tax Event, or Investment Company Event (each as defined in the Indenture). 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 to the extent then required under applicable laws or regulations, including capital adequacy rules or 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 Companys or the Banks bankruptcy, insolvency, reorganization, receivership or other similar proceedings.
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 Companys existing and future subordinated indebtedness, and will be senior to the Companys obligations relating to any junior subordinated debt securities issued to the Companys subsidiary trusts. 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 foregoing descriptions of the Indenture, the Notes, the Note Purchase Agreement and Registration Rights Agreement does not purport to be complete and are each qualified in their entirety by reference to the full text of such agreements, which are attached as Exhibits 4.1, 4.2, 10.1 and 10.2, respectively, and incorporated herein by reference.
Amendment to Loan and Security Agreement
On June 29, 2020, the Company, as borrower, entered into a Fourth Amendment (the Amendment) to its Loan and Security Agreement (the Credit Agreement) and Promissory Notes Modification Agreement with ServisFirst Bank (Lender). The Amendment, among other things, extends the maturity date of the Lenders commitment to lend to the Company to August 15, 2021; modifies the interest rate on each loan made under the Credit Agreement to provide that the interest rate shall be equal to the greater of the prime rate in effect from time to time, or a floor rate of three and one-half percent (3.50%); and amended and restated the form of promissory note for loans made under the Credit Agreement.
The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment, which is attached as Exhibit 10.3 and incorporated herein by reference.
Item 2.03 | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information set forth in Item 1.01 is incorporated herein by reference.
Item 7.01 | Regulation FD Disclosure. |
On June 30, 2020, the Company issued a press release announcing the completion of the offering of the Notes, which is furnished as Exhibit 99.1 and is incorporated herein by reference.
In connection with the offering of the Notes, the Company delivered an investor presentation to potential investors on a confidential basis, a copy of which is furnished herewith as Exhibit 99.2.
The information in this Item 7.01 is being furnished pursuant to Item 7.01 of Form 8-K and shall not be deemed filed for purposes of Section 18 of the Exchange Act, or otherwise subject to liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, unless specifically identified therein as being incorporated therein by reference.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
EQUITY BANCSHARES, INC. | ||||||
DATE: July 1, 2020 | By: | /s/ Brad S. Elliott | ||||
Brad S. Elliott | ||||||
Chairman and Chief Executive Officer |