Business Context and Reporting Period
This Form 8-K Current Report was filed by Triumph Bancorp, Inc. on June 16, 2020, with the earliest event reported on June 16, 2020. The filing details the establishment and public offering of a new series of preferred stock to raise capital.
Key Financial Metrics and Capital Structure
The filing focuses on a capital raise rather than operational financial performance metrics such as revenue or net income. Key capital structure details include:
- Instrument: 7.125% Series C Fixed-Rate Non-Cumulative Perpetual Preferred Stock.
- Offering Size: 1,800,000 Depositary Shares sold, with an option for underwriters to purchase up to an additional 270,000 Depositary Shares.
- Ownership Structure: Each Depositary Share represents a 1/40th interest in a share of Series C Preferred Stock.
- Liquidation Preference: $1,000 per share of Series C Preferred Stock (equivalent to $25 per Depositary Share).
- Dividend Rate: 7.125% per annum, payable quarterly in arrears, commencing September 30, 2020.
- Authorized Shares: 51,750 shares of Series C Preferred Stock authorized.
Material Changes
The primary material change is the amendment of the Company's charter to authorize the Series C Preferred Stock and the subsequent closing of the public offering on June 19, 2020. This action alters the Company's capital structure by introducing a new class of senior securities.
Terms, Risks, and Management Commentary
- Seniority: The Series C Preferred Stock ranks senior to common stock and junior to all existing and future indebtedness. It ranks on parity with other preferred stock expressly designated as such.
- Dividend Restrictions: If dividends on the Series C Preferred Stock are not declared and paid for the most recently completed period, the Company cannot declare or pay dividends on, or redeem, its common stock or other junior securities during the next succeeding period.
- Redemption: The stock is perpetual with no maturity date. The Company may redeem it at its option on or after June 30, 2025, or within 90 days of a Regulatory Capital Treatment Event, subject to Federal Reserve approval.
- Voting Rights: Holders generally have no voting rights. However, if dividends are not paid for at least six quarterly periods, holders gain the right to elect two directors to the Board.
- Non-Cumulative: Unpaid dividends do not accumulate; holders are not entitled to undeclared dividends upon liquidation.
Investor Verification Checklist
- Verify the total gross proceeds from the offering of 1,800,000 Depositary Shares and the exercise status of the 270,000 share underwriter option.
- Confirm the Company's current regulatory capital ratios to ensure compliance with Federal Reserve requirements for future redemption.
- Review the impact of the 7.125% dividend obligation on the Company's future cash flow and ability to pay common stock dividends.
- Check for any subsequent filings regarding the election of directors by preferred shareholders if dividend payments are missed.