CENTRAL FEDERAL CORPORATION (NASDAQ:CFBK) Files An 8-K Entry into a Material Definitive Agreement

CENTRAL FEDERAL CORPORATION (NASDAQ:CFBK) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01

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Entry into a Material Definitive Agreement.

On December20, 2018, Central Federal Corporation (the “Company”) entered into Subordinated Note Purchase Agreements (the “Agreements”) with certain qualified institutional buyers and completed a private placement of $10million of fixed-to-floating rate subordinated notes with a maturity date of December30, 2028 (the “Notes”) to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D promulgated thereunder.

The Notes will initially bear interest at 7.00% per annum, from and including December20, 2018, to but excluding December30, 2023, payable semi-annually in arrears on June30 and December30 of each year. From and including December30, 2023, to but excluding December30, 2028 or the earlier redemption of the Notes, the interest rate will reset quarterly to an interest rate per annum equal to the then current three-month LIBOR (but not less than zero) plus 414 basis points, payable quarterly in arrears on March30, June30, September30, and December30 of each year.The Company may, at its option, redeem the Notes beginning on December30, 2023 and on any scheduled interest payment date thereafter.

The Company intends to use the net proceeds from the sale of the Notes to fund organic growth of CFBank, National Association, the Company’s wholly-owned subsidiary (the “Bank”), support Bank-level regulatory capital ratios, partially repay an outstanding credit facility and/or for other general corporate purposes.The Notes are intended to qualify as Tier 2 capital for the Company for regulatory purposes, and the portion of the proceeds that the Company contributes to the Bank will qualify as Tier 1 capital for the Bank.

Sandler O’Neill + Partners, LP served as sole placement agent for the sale of the Notes.Vorys, Sater, Seymour and Pease LLP served as legal counsel to the Company and Vedder Price served as legal counsel to the placement agent.

The foregoing descriptions of the Agreements and the Notes is not complete and is qualified in its entirety by reference to the form of the Agreements, which is filed as Exhibit 10.1 to this Current Report on Form 8-K, and the form of the Notes, which is filed as Exhibit 10.2 to this Current Report on Form 8-K, both of which are 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 disclosures set forth under Item 1.01 of this current report on Form 8-K are incorporated by reference herein.

CENTRAL FEDERAL CORP Exhibit
EX-10.1 2 cfbk-20181220xex10_1.htm EX-10.1 Exhibit 101 Subordinated Note Purchase Agreement EXHIBIT 10.1 SUBORDINATED NOTE PURCHASE AGREEMENT This SUBORDINATED NOTE PURCHASE AGREEMENT (this “Agreement”) is dated as of December 20,…
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About CENTRAL FEDERAL CORPORATION (NASDAQ:CFBK)

Central Federal Corporation is a holding company of CFBank. CFBank is a savings institution. The Company attracts retail and business deposits from the general public and use the deposits, together with borrowings and other funds, primarily to originate commercial and commercial real estate loans, single-family and multi-family residential mortgage loans and home equity lines of credit. The Company’s customers are small businesses, small business owners and consumers. The loan portfolio consists primarily of commercial, commercial real estate and multi-family mortgage loans, mortgage loans secured by single-family residences and consumer loans. Its primary sources of funds are retail and business deposit accounts and certificates of deposit, brokered certificates of deposit and, to a lesser extent, principal and interest payments on loans and securities, Federal Home Loan Bank (FHLB) advances, other borrowings and proceeds from the sale of loans.

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