CUSTOMERS BANCORP, INC. (NYSE:CUBI) Files An 8-K Entry into a Material Definitive Agreement

CUSTOMERS BANCORP, INC. (NYSE:CUBI) Files An 8-K Entry into a Material Definitive Agreement

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Item 1.01

Entry into a Material Definitive Agreement.
On March 7, 2017, Customers Bancorp, Inc. (“Customers Bancorp”)
and its subsidiary, Customers Bank (“Customers Bank,” and,
together with Customers Bancorp, “Customers”) entered into a
Purchase and Assumption Agreement (the “Purchase Agreement”)
with Flagship Community Bank (“Flagship”).
Subject to the terms and conditions of the Purchase Agreement,
Customers will sell to Flagship the assets, and Flagship will
assume from Customers the liabilities, of the BankMobile division
of Customers Bank. The purchase price to be paid by Flagship to
Customers is $175,000,000, which is subject to adjustment as
provided in the Purchase Agreement. Customers expects that its
net proceeds on the closing of the transaction will be
approximately $173 million, and expects to realize a pre-tax net
benefit from this transaction of approximately $100 million,
considering the expected purchase price adjustments, fees,
expenses, and the payment of transaction-based compensation of
approximately $24.5 million to certain Customers employees, to
the terms previously disclosed by Customers in its Current Report
on Form 8-K filed December 30, 2016.
The transaction has been approved by the respective board of
directors of Customers Bancorp, Customers Bank and Flagship.
Certain matters related to the transaction must be approved by
the shareholders of Flagship, which will be considered and voted
on at a special meeting of Flagship’s shareholders to be held
not later than May 31, 2017.
The Purchase Agreement includes customary representations,
warranties and covenants of the parties. Customers’ covenants
include, among other things, a requirement to conduct the
BankMobile business in the ordinary course during the period
between the execution of the Purchase Agreement and closing of
the transaction, a prohibition against soliciting proposals
relating to alternative business combination transactions and,
with certain exceptions, a prohibition against engaging in
discussions or negotiations relating to proposals regarding
alternative business combination transactions. In addition,
Customers has agreed to five-year non-competition and
non-solicitation terms, which will prohibit Customers from
engaging or assisting others in engaging in the Business (as
defined in the Purchase Agreement) or owning a material interest
in another entity engaged in the Business, and will generally
prohibit Customers from hiring or soliciting Flagship’s
employees for employment or encouraging them to leave Flagship’s
employment. Flagship’s covenants include, among other things, a
prohibition against soliciting proposals relating to alternative
business combination transactions and, with certain exceptions, a
prohibition against engaging in discussions or negotiations
relating to proposals regarding alternative business combination
transactions.
Completion of the transaction is subject to certain closing
conditions, including (i) receipt of required regulatory
approvals, (ii) Flagship obtaining financing in an amount not
less than $260,000,000, (iii) approval by Flagship shareholders
of certain matters related to the transaction and (iv) certain
other customary conditions.
The Purchase Agreement contains certain termination rights for
both Customers and Flagship. If closing of the transaction does
not occur by September 30, 2017, Customers and Flagship may
mutually agree to extend the closing deadline to March 31, 2018,
provided that Customers makes payment to Flagship of an extension
fee of $100,000 (if the extension is due to the lack of receipt
of regulatory approvals by such date) or $300,000 (if the
extension is for any other reason).
Each party has agreed to indemnify the other for certain breaches
of its representations, warranties and covenants, and with
respect to certain matters relating to the assets being
transferred and liabilities being assumed. In addition, Customers
has agreed to indemnify Flagship’s directors and officers, and
to provide liability insurance for the benefit of those directors
and officers, with respect to any claims relating to the
transactions contemplated by the Purchase Agreement. Customers
also has agreed to pay all of Flagship’s expenses associated
with the transactions contemplated by the Purchase Agreement,
including legal and investment banking fees, provided that all
expenses paid by Customers that are associated with Flagship’s
financing will be reimbursed to Customers upon successful
completion of the financing and closing of the transaction.
At closing, the parties also will enter into a transition
services agreement, to which Customers will provide certain
services to Flagship for a limited period after closing.
The foregoing description of the Purchase Agreement is qualified
in its entirety by reference to the Purchase Agreement, a copy of
which is filed as Exhibit 2.1 to this Current Report on Form 8-K
and is incorporated herein by reference.
The Purchase Agreement and the above description have been
included to provide Customers’ investors with information
regarding the terms of the Purchase Agreement. They are not
intended to provide any other factual information about
Customers, Flagship or any of their respective subsidiaries or
affiliates. The representations, warranties and covenants
contained in the Purchase Agreement were made only for purposes
of the Purchase Agreement as of the specific dates set forth
therein, are solely for the benefit of the parties to the
Purchase Agreement, may be subject to important qualifications
and limitations agreed upon by the parties for the purposes of
allocating contractual risk between the parties instead of
establishing these matters as facts, and may be subject to
standards of materiality applicable to such contracting parties
that differ from those applicable to investors. Investors should
not rely on the representations, warranties and covenants or any
descriptions thereof as characterizations of the actual state of
facts or condition of Customers, Flagship or any of their
respective subsidiaries or affiliates. Moreover, information
concerning the subject matter of representations, warranties and
covenants may change after the date of the Purchase Agreement,
which subsequent information may or may not be fully reflected in
Customers’ public disclosures. Accordingly, investors should
read the representations, warranties and covenants in the
Purchase Agreement not in isolation but only in conjunction with
the other information about Customers that Customers includes in
reports, statements and other filings that it makes with the
Securities and Exchange Commission.
Customers issued a press release dated March 8, 2017 announcing
the execution of the Purchase Agreement. A copy of the press
release is filed as Exhibit 99.1 to this Current Report on Form
8-K and is incorporated herein by reference.
Item 9.01
Financial Statements and Exhibits
(d) Exhibits.
Exhibit
No.
Description
2.1
Purchase and Assumption Agreement dated as of March 7, 2017
among Flagship Community Bank, Customers Bank and Customers
Bancorp, Inc.*
99.1
Press Release dated March 8, 2017.
* The schedules to this agreement have been omitted in accordance
with Item 601(b) of Regulation S-K. The registrant hereby agrees
to furnish a copy of any omitted schedule to the Securities and
Exchange Commission upon request.


About CUSTOMERS BANCORP, INC. (NYSE:CUBI)

Customers Bancorp, Inc. (Customers Bancorp) is a bank holding company engaged in banking activities through its subsidiary, Customers Bank (the Bank). The Company operates in the community banking segment. The Bank provides financial products and services to small and middle market businesses, not-for-profits, and consumers. The Bank also provides liquidity to the mortgage market nationwide through the operation of its loans to mortgage banking companies. It offers a range of traditional loan and deposit banking products, and financial services. The Bank offers a range of lending products, including small business loans, mortgage warehouse loans, multi-family and commercial real estate loans, residential mortgage loans and other consumer loans. It also offers traditional deposit products, including commercial and consumer checking accounts, non-interest-bearing demand accounts, money market deposit accounts, savings accounts and time deposit accounts, and cash management services.

CUSTOMERS BANCORP, INC. (NYSE:CUBI) Recent Trading Information

CUSTOMERS BANCORP, INC. (NYSE:CUBI) closed its last trading session 00.00 at 34.09 with 197,413 shares trading hands.

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