CITIZENS COMMUNITY BANCORP, INC. (NASDAQ:CZWI) Files An 8-K Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On April 28, 2020, Citizens Community Bancorp, Inc. (the “Company”) filed a Current Report on Form 8-K under Item 5.03 (the “Original Report”), which disclosed that on April 23, 2020 the board of directors of the Company approved an amendment (the “Amendment”) to Article I, Section 10 of its bylaws (the “Bylaws”). The Company is filing this amendment to the Original Report to disclose the board of directors’ rationale for approving the Amendment.
As previously disclosed, before the Amendment, the Bylaws provided that the Company was opted out of the Maryland Control Share Acquisition Act. In general, the Maryland Control Share Acquisition Act limits an “acquiring shareholder’s” right to vote any shares that constitute control shares and are acquired without the approval of>two thirds of the Company’s stockholders. to the Amendment, the Company is, for a period of 18 months from April 23, 2020 through October 23, 2021, opting into the Maryland Control Share Acquisition Act. Under the Amendment, the board of directors of the Company can, prior to an acquisition of shares that constitute control shares, grant voting rights to the control shares.
The board of directors of the Company believes that the Amendment is in the best interest of the Company and its stockholders given recent regulatory and market changes. The Board of Governors of the Federal Reserve System recently adopted a final rule for Control and Divestiture Proceedings (the “New Rule”), which will become effective September 30, 2020. The New Rule will make it easier for certain investors to build equity stakes in bank holding companies without having to register as a bank holding company with the Board of Governors of the Federal Reserve System. Additionally, the coronavirus pandemic and resulting turmoil in national and international equity markets caused a significant decrease in the Company’s stock price. This decrease, combined with the New Rule, make it more likely that the Company could be forced into a strategic transaction at a time when the Company’s stock price does not reflect its inherent value. The board of directors of the Company believes the Amendment gives it the leverage to protect its stockholders during these unprecedented times while also maintaining flexibility to approve, under the appropriate circumstances, a control share acquisition and grant voting rights to the shares acquired in such an acquisition. Given the unique nature of the Company’s current circumstances, the board of directors of the Company also believes that it is not necessary for the Amendment to be permanent, and so it incorporated an eighteen month sunset on the Amendment.
The foregoing description of the Amendment does not purport to be complete and is subject to and qualified in its entirety by the full text of such Amendment, which is filed as Exhibit 3.1 to the Original Report and incorporated herein by reference.
About CITIZENS COMMUNITY BANCORP, INC. (NASDAQ:CZWI)
Citizens Community Bancorp, Inc. is a bank holding company of Citizens Community Federal N.A. (the Bank). The Company is engaged in consumer, small commercial and agricultural banking activities, through the Bank. As of September 30, 2015, it had approximately $460 million in deposits. Through all of its branch locations, in Wisconsin, Minnesota and Michigan, the Bank provides a range of commercial and consumer banking products and services to customers, including online and mobile banking options. It offers a range of loans, such as commercial loans, agricultural loans and residential mortgages. Its Investment portfolio consists of securities available for sale and securities held to maturity. Its primary sources of funds are deposits; amortization, prepayments and maturities of outstanding loans; other short-term investments, and funds provided from operations. As of September 30, 2015, its total gross outstanding loans before net deferred loan costs were approximately $448,100.
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