HMN Financial, Inc. (NASDAQ:HMNF) Files An 8-K Entry into a Material Definitive AgreementItem 1.01Entry into a Material Definitive Agreement.
On May 21, 2018, HMN Financial, Inc. (the “Company”) entered into a Warrant Repurchase Agreement (the “Repurchase Agreement”) between the Company and EJF Financial Services Fund, LP (the “Warrant Holder”) relating to a warrant the Warrant Holder acquired on May 21, 2015 to purchase 277,777.66 shares of common stock from the Company at an exercise price of $4.68 per share (the “Warrant Agreement”). to the terms of the Repurchase Agreement, the Company agreed to repurchase from the Warrant Holder, at a purchase price of $14.32 per warrant, 138,888.66 warrants to purchase common stock of the Company, resulting in an aggregate purchase price of $1,988,885.61 (the “Warrant Repurchase”). The Warrant Repurchase price reflects the difference between the exercise price of the warrants and the closing market price of the Company’s common stock on the date the Repurchase Agreement was executed. The Warrant Repurchase closed on May 22, 2018.
The terms of the Warrant Repurchase and the Repurchase Agreement were approved by the board of directors of the Company. Under the terms of the Repurchase Agreement, the payment of the cash Warrant Repurchase price from the Company to the Warrant Holder was in full satisfaction of any and all obligations owed by the Company to the Warrant Holder with respect to the repurchased warrants. At the closing of the Warrant Repurchase, the 138,888.66 warrants to acquire shares of common stock, which were to expire on December 23, 2018, were cancelled.
Simultaneously with the execution of the Repurchase Agreement, the Warrant Holder exercised its rights to the Warrant Agreement to exercise on a cashless basis the remaining 138,889 warrants at an exercise price of $4.68 per share under the Warrant Agreement. In accordance with terms of the Warrant Agreement, after taking into account the shares withheld to satisfy the cashless exercise option, the Company issued 104,678 shares of common stock and $8.55 in cash for the fractional share to the Warrant Holder on May 22, 2018.
The foregoing description of the terms of the Repurchase Agreement is qualified in its entirety by reference to the full text of the Repurchase Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 9.01.Financial Statements and Exhibits
(d)Exhibits
The following exhibit is being furnished with this Current Report on Form 8-K.
EXHIBIT INDEX
HMN FINANCIAL INC ExhibitEX-10.1 2 ex_115077.htm EXHIBIT 10.1 ex_115077.htm Exhibit 10.1 WARRANT REPURCHASE AGREEMENT THIS WARRANT REPURCHASE AGREEMENT (this “Agreement”) is entered into as of May 21,…To view the full exhibit click here
About HMN Financial, Inc. (NASDAQ:HMNF)
HMN Financial, Inc. (HMN) is a stock savings bank holding company that owns Home Federal Savings Bank (the Bank). The Bank operates retail banking and loan production facilities in Minnesota, Iowa and Wisconsin. The Bank has two subsidiaries, Osterud Insurance Agency, Inc., which offers financial planning products and services, and HFSB Property Holdings, LLC, which acts as an intermediary for the Bank in holding and operating certain foreclosed properties. HMN’s business involves attracting deposits from the general public and businesses and using such deposits to originate or purchase one- to four-family residential, commercial real estate and multi-family mortgage loans, among others. HMN invests in mortgage-backed and related securities, the United States government agency obligations and other permissible investments. HMN serves the southern Minnesota counties of Dodge, Fillmore, Freeborn, Houston, Mower, Olmsted and Winona, and portions of Steele, Goodhue and Wabasha.