Business Context and Reporting Period
This Form 8-K Current Report is filed by Associated Banc-Corp for the period ending September 12, 2016, with the report date of September 15, 2016. The filing documents the amendment to the Company's Articles of Incorporation to establish a new class of preferred stock and the subsequent closing of a public offering of depositary shares representing that stock.
Key Financial Metrics and Capital Structure
The filing details a capital raise through the issuance of preferred equity rather than reporting operational financial metrics such as revenue or net income.
- Instrument: 5.375% Non-Cumulative Perpetual Preferred Stock, Series D.
- Liquidation Preference: $1,000 per share.
- Offering Size: 4,000,000 depositary shares, each representing a 1/40th interest in a share of Series D Preferred Stock.
- Underwriters: Merrill Lynch, Pierce, Fenner & Smith Incorporated and UBS Securities LLC.
- Dividend Restrictions: Upon issuance, the Company's ability to declare or pay dividends on, or purchase, redeem, or acquire common stock is restricted if the Company fails to pay dividends on the Series D Preferred Stock.
The filing text does not provide a clear value for total proceeds, cash flow, debt levels, or liquidity ratios.
Material Changes
The primary material change is the amendment to the Company's Articles of Incorporation filed on September 12, 2016, with the Wisconsin Department of Financial Institutions. This amendment established the terms for the Series D Preferred Stock. Additionally, the Company completed the public offering and sale of the depositary shares on September 15, 2016.
Outlook, Risks, and Unusual Items
Management Commentary and Risks: The filing highlights a specific covenant risk: the Company's flexibility regarding common stock dividends and buybacks is now contingent on the timely payment of dividends on the new Series D Preferred Stock. The stock is non-cumulative, meaning missed dividends do not accumulate for future payment.
Legal Opinions: Godfrey & Kahn, S.C. provided an opinion confirming that the Depositary Shares and Series D Preferred Stock were validly issued, fully paid, and non-assessable.
Investor Verification Checklist
- Verify the total gross proceeds from the sale of 4,000,000 depositary shares in the Prospectus Supplement dated September 7, 2016.
- Confirm the specific terms of the dividend restrictions on common stock in the Articles of Amendment (Exhibit 3.1).
- Review the Deposit Agreement (Exhibit 4.2) for details on the depositary bank (Wells Fargo Bank, N.A.) and receipt terms.
- Check subsequent filings for the actual payment of the first dividend on the Series D Preferred Stock to ensure no restrictions on common stock are triggered.