PORTER BANCORP, INC. (NASDAQ:PBIB) Files An 8-K Entry into a Material Definitive AgreementItem 1.01
Entry into a Material Definitive Agreement
PORTER BANCORP, INC. (NASDAQ:PBIB) Files An 8-K Entry into a Material Definitive Agreement
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Item 2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
On June 30, 2017, Porter Bancorp, Inc. (the “Company”) entered into a senior secured loan agreement with First Merchants Bank of Muncie, Indiana. The loan agreement and the relatedpromissory note and pledge agreementprovide for a $10 million senior secured term loan maturing on June 30, 2022. Interest is payable quarterly at an interest rate of three-month LIBOR plus 250 basis points through June 30, 2020, at which time quarterly principal payments of $250,000 plus interest will commence. The loan is secured by a first priority pledge of 50% of the issued and outstanding stock of PBI Bank, Inc. (the “Bank”), the Company’s wholly owned banking subsidiary. The Company may prepay any amount due under the promissory note at any time without premium or penalty.
The loan agreement contains customary representations, warranties, covenants and events of default, including the following financial covenants:
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The Company must maintain minimum cash on hand of not less than $750,000 through June 30, 2018, and not less than $2,500,000 thereafter. |
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The Company must maintain a Total Risk Based Capital Ratio at least equal to 9% of risk-weighted assets to June 30, 2018, and 10% thereafter. |
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The Bank must maintain a Total Risk Based Capital Ratio at least equal to 10% of risk-weighted assets to June 30, 2018, and 11% thereafter. |
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Non-performing assets of the Bank may not exceed 2.5% of the Bank’s total assets. |
The Company contributed $9.0 million of the borrowing proceeds to PBI Bank as Common Equity Tier 1 Capital. The remaining $1.0 million of the borrowing proceeds were retained by the lender in an escrow to service quarterly interest payments.
The preceding descriptions of the loan agreement, promissory note and pledge agreement are qualified in their entirety by reference to the terms of those documents, each of which is attached as an exhibit to this report and incorporated herein by this reference.
On July 5, 2017, Porter Bancorp issued a press release announcing the closing of the senior debt transaction. A copy of the press release is attached as Exhibit 99.1 to this report.
| Item 9.01 | Financial Statements and Exhibits. |
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Exhibit Number |
Description of Exhibit |
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1.1 |
Loan Agreement between Porter Bancorp, Inc. and First Merchants Bank dated June 30, 2017. |
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1.2 |
Promissory Note between Porter Bancorp, Inc. and First Merchants Bankdated June 30, 2017. |
| 1.3 | Pledge Agreement between Porter Bancorp, Inc. and First Merchants Bank dated June30, 2017. |
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99.1 |
Press release issued July 5, 2017. |
Porter Bancorp, Inc. ExhibitEX-1.1 2 a51583783ex1_1.htm EXHIBIT 1.1 Exhibit 1.1 LOAN AGREEMENT THIS LOAN AGREEMENT (this “Agreement”) is made and entered into as of June 30,…To view the full exhibit click here
About PORTER BANCORP, INC. (NASDAQ:PBIB)
Porter Bancorp, Inc. is a bank holding company. The Company operates through its subsidiary, PBI Bank (the Bank). The Bank is a community bank with a range of commercial and personal banking products. It offers retail and commercial deposit products. It offers drive-in banking facilities, automatic teller machines, night depository, personalized checks, credit cards, debit cards, Internet banking, mobile banking, treasury management services, remote deposit services, electronic funds transfers through automated clearing house services, domestic and foreign wire transfers, cash management, vault services, and loan and deposit sweep accounts. It operates banking offices in approximately 12 counties in Kentucky. Its markets include metropolitan Louisville in Jefferson County and the surrounding counties of Henry and Bullitt. It serves south central Kentucky and southern Kentucky from banking offices in Butler, Green, Hart, Edmonson, Barren, Warren, Ohio and Daviess Counties.
