CONNECTONE BANCORP, INC. (NASDAQ:CNOB) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
Underwriting Agreement
On January 11, 2018, ConnectOne Bancorp, Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting Agreement”) with Keefe, Bruyette & Woods, Inc., as Representative of the Underwriters named therein, with respect to the sale of $75,000,000 of the Company’s 5.20% Fixed-to-Floating Rate Subordinated Notes due February 1, 2028 (the “Notes”).
The Underwriting Agreement includes customary representations, warranties and covenants by the Company. 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 Underwriters against certain liabilities under the Securities Act of 1933, as amended (the “Securities Act”).
Indenture and First Supplemental Indenture
The terms of the Notes are governed by the Indenture, dated as of January 17, 2018 (the “Indenture”), between the Company and U.S. Bank, National Association, as trustee (the “Trustee”), as amended and supplemented by the First Supplemental Indenture, dated as of January 17, 2018 (the “First Supplemental Indenture”), entered into between the Company and the Trustee.
Subordinated Notes
The Notes were offered to a prospectus supplement, dated January 11, 2018 (the “prospectus supplement”), to the prospectus, dated December 4, 2017, filed as part of the Registration Statement on Form S-3 (File No. 333-221705) originally filed with the Securities and Exchange Commission under the Securities Act on November 21, 2017, and declared effective on December 4, 2017.
The offering of the Notes closed on January 17, 2018. The net proceeds from the sale of the Notes to the Company were approximately $73,525,000, after giving effect to the underwriting discount of 1.5% and estimated expenses of the offering of the Notes. The Company intends to use these net proceeds for general corporate purposes, which may include providing capital to support growth of ConnectOne Bank, its wholly owned banking subsidiary (the “Bank”), through organic growth, or through the acquisition of financial institutions or branches thereof, the acquisition of failed institutions from the FDIC or the acquisition of businesses related to banking, repaying indebtedness, financing investments and capital expenditures, repurchasing shares of its common stock and for investments in the its wholly owned banking subsidiary as regulatory capital.
The terms of the Notes are set forth in the First Supplemental Indenture. The Notes will bear interest at 5.20% annually from, and including, the date of initial issuance to, but excluding, February 1, 2023, payable semi-annually in arrears. From and including February 1, 2023 through maturity or earlier redemption, the interest rate shall reset quarterly to an interest rate per annum equal to the then current three-month LIBOR rate plus 284 basis points (2.84%) payable quarterly in arrears. If three-month LIBOR is not available for any reason, then the rate for that interest period will be determined by such alternate method as provided in the Supplemental Indenture.
Interest on the Notes will be paid on February 1 and August 1 commencing August 1, 2018 to but not including February 1, 2023, and from and including February 1, 2023, on February 1, May 1, August 1, and November 1, of each year to but excluding the stated maturity date, unless in any case previously redeemed.
The Notes are unsecured, subordinated and (i) rank junior in right of payment and upon the Company’s liquidation to any existing and all future senior indebtedness (as defined in the First Supplemental Indenture and described under “Description of the Notes” in the prospectus supplement), (ii) rank equally in right of payment and upon the Company’s liquidation with any future unsecured indebtedness the terms of which provide that such indebtedness ranks equally with the Notes, and (iii) rank senior in right of payment and upon the Company’s liquidation to any indebtedness the terms of which provide that such indebtedness ranks junior to the Notes. In addition, the Notes will be effectively subordinated to all of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness and will be effectively subordinated to all of the existing and future indebtedness, deposits and other liabilities and preferred equity of the Bank, and the Company’s other current and future subsidiaries, including, without limitation, the Bank’s liabilities to its depositors, liabilities to general creditors and liabilities arising in the ordinary course or otherwise.
The foregoing summaries of the Underwriting Agreement, the 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 respective documents, which are filed as Exhibits 1.1, 4.1, 4.2 and 4.3, respectively, to this Current Report on Form 8-K and are incorporated herein by reference in their entirety.
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 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description |
| 1.1 | Underwriting Agreement, dated January 11, 2018 by and between the Company and Keefe, Bruyette & Woods, Inc., as Representative, without exhibits. |
| 4.1 | Indenture, dated as of January 17, 2018, between the Company and U.S. Bank, National Association, as Trustee. |
| 4.2 | First Supplemental Indenture, dated as of January 17, 2018, between the Company and U.S. Bank National Association, as Trustee. |
| 4.3 | Form of 5.20% Fixed-to-Floating Rate Subordinated Note due February 1, 2028 (included in Exhibit 4.2). |
| 5.1 | Opinion of Windels Marx Lane & Mittendorf, LLP regarding the legality of the Notes. |
| 23.1 | Consent of Windels Marx Lane & Mittendorf, LLP (included in Exhibit 5.1). |
ConnectOne Bancorp, Inc. ExhibitEX-1.1 2 connectone3368361-ex11.htm UNDERWRITING AGREEMENT,…To view the full exhibit click here
About CONNECTONE BANCORP, INC. (NASDAQ:CNOB)
ConnectOne Bancorp, Inc. is a bank holding company of ConnectOne Bank (the Bank), a New Jersey-chartered commercial bank. The Company operates in community bank segment. The Bank offers a range of deposit and loan products, and services to the general public, small and middle-sized businesses, local professionals, and individuals residing, working and conducting business in its trade area. The Bank, through its subsidiary, Center Financial Group LLC, provides financial services, including brokerage services, insurance and annuities, mutual funds and financial planning. The Bank’s products and services include personal and business checking accounts, retirement accounts, money market accounts, time and savings accounts, credit cards, wire transfers, access to automated teller services, Internet banking, Treasury Direct, ACH origination, lockbox services and mobile banking by phone. It offers safe deposit boxes.
