Business Context and Reporting Period
This Form 8-K Current Report is filed by Associated Banc-Corp for the period ending September 13, 2011. The filing details significant capital structure changes, including the issuance of new debt and preferred equity, and the repayment of government assistance received during the financial crisis.
Key Financial Metrics and Capital Transactions
- Senior Notes Issuance: Completed the public sale of $130,000,000 aggregate principal amount of 5.125% Senior Notes due 2016 on September 13, 2011.
- Preferred Stock Issuance: Completed the sale of 2,600,000 Depositary Shares (representing 1/40th interest each) in 8.00% Perpetual Preferred Stock, Series B, on September 14, 2011.
- TARP Repayment: Repurchased all 262,500 remaining shares of Fixed Rate Cumulative Perpetual Preferred Stock, Series A, from the U.S. Treasury on September 14, 2011.
- Repayment Cost: Total purchase price for Series A Preferred Stock was $263,557,292, including $1,057,292 in accrued and unpaid dividends.
Material Changes and Corporate Actions
The filing reports a material modification to the rights of security holders. Upon the issuance of the Series B Preferred Stock, the Company's ability to declare or pay dividends on, or purchase, redeem, or acquire shares of its common stock is now subject to restrictions if the Company fails to pay dividends on the Series B Preferred Stock. Additionally, the Senior Notes issued are a qualified re-opening of notes issued in March 2011 and trade interchangeably with the existing $300,000,000 outstanding notes.
Outlook, Risks, and Contingencies
The filing does not provide specific forward-looking guidance, revenue projections, or management commentary regarding future operating performance. The primary risks disclosed relate to the new covenants restricting common stock dividends and repurchases contingent on the payment of Series B Preferred Stock dividends. The Company has obtained legal opinions confirming the valid issuance of the Senior Notes and Depositary Shares.
Investor Verification Checklist
- Verify the total proceeds received from the $130 million Senior Notes offering and the 2.6 million Depositary Shares.
- Confirm the exact date the restrictions on common stock dividends and repurchases became effective (September 14, 2011).
- Review the Articles of Amendment (Exhibits 3.1 and 4.1) for specific terms regarding the Series B Preferred Stock dividend restrictions.
- Check the press release (Exhibit 99.1) for any additional details on the TARP repayment impact on the balance sheet.