Umb Financial Corp 8-K, filed Feb 3, 2025
Umb Financial Corp (UMBF)
About this 8-K
Umb Financial Corp filed this 8-K on February 3, 2025, reporting on events of January 31, 2025.
Items reported
- Item 2.01: Completed an acquisition or sale of assets
- Item 2.03: New debt or off-balance-sheet obligation
- Item 3.03: Change to shareholders' rights
- Item 5.02: Director or officer change, or executive pay
- Item 5.03: Charter or bylaw amendment, or fiscal year change
- Item 7.01: Regulation FD disclosure
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Introduction
This Current Report on Form 8-K is being filed in connection with the completion on January 31, 2025 (the “Closing Date”) of the previously announced merger between UMB Financial Corporation, a Missouri corporation (“UMB” or the “Company”) and Heartland Financial USA, Inc., a Delaware corporation (“HTLF”), pursuant to the Agreement and Plan of Merger, dated as of April 28, 2024 (the “Merger Agreement”), by and among the Company, HTLF and Blue Sky Merger Sub Inc., a Delaware corporation and a wholly owned subsidiary of the Company (“Merger Sub”).
Item 2.01. Completion of Acquisition or Disposition of Assets.
Pursuant to the Merger Agreement, on the Closing Date, Merger Sub merged with and into HTLF (the “Merger”), with HTLF surviving the Merger as a wholly owned subsidiary of the Company (the “Surviving Entity”). Immediately following the effective time of the Merger (the “Effective Time”), and as part of a single, integrated transaction, the Surviving Entity merged with and into the Company (the “Second Merger”, and together with the Merger, the “Mergers”), with the Company surviving the Second Merger. On the day immediately following the closing date of the Mergers, HTLF’s wholly owned banking subsidiary, HTLF Bank, merged with and into UMB’s wholly owned banking subsidiary, UMB Bank, National Association (the “Bank Merger”), with UMB Bank, National Association continuing as the surviving bank in the Bank Merger.
Pursuant to the Merger Agreement, at the Effective Time, (i) each share of common stock, par value $1.00 per share, of HTLF (“HTLF Common Stock”) issued and outstanding immediately prior to the Effective Time, other than certain shares held by UMB or HTLF, was converted into the right to receive 0.55 shares (the “Exchange Ratio,” and such shares, the “Merger Consideration”) of common stock, $1.00 par value, of UMB (“UMB Common Stock”), (ii) each share of 7.00% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series E, par value $1.00 per share of HTLF (the “HTLF Preferred Stock”), issued and outstanding immediately prior to the Effective Time was converted into the right to receive one share of the newly created 7.00% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A, par value $1.00 per share, of the Company (the “UMB Preferred Stock”) with such rights, preferences, privileges and powers (including voting powers) as set forth in the Certificate of Designations attached as an exhibit to the Merger Agreement and (iii) each outstanding HTLF depositary share representing a 1/400th interest in a share of HTLF Preferred Stock was converted into a UMB depositary share representing a 1/400th interest in a share of UMB Preferred Stock. Each holder of HTLF Common Stock and HTLF Preferred Stock (and depositary shares in respect thereof) converted pursuant to the Merger who would otherwise have been entitled to receive a fraction of a share of UMB Common Stock and UMB Preferred Stock (after taking into account all shares held by such holder) will instead receive cash (without interest) in lieu of such fractional share in accordance with the terms of the Merger Agreement.
Upon the terms and subject to the conditions set forth in the Merger Agreement, at the Effective Time, each outstanding equity award with respect to HTLF Common Stock was treated as follows:
Restricted Stock Units: Each time-vesting restricted stock unit award of HTLF (each, a “HTLF RSU Award”) that was vested or held by a former service provider or a non-employee director became fully vested and was cancelled and converted automatically into the right to receive the Merger Consideration. Each other HTLF RSU Award was assumed by the Company and converted into a restricted stock unit award with respect to a number of shares of UMB Common Stock determined by multiplying the number of shares of HTLF Common Stock subject to the HTLF RSU Award immediately prior to the Effective Time by the Exchange Ratio (each, an “Assumed RSU Award”). Each Assumed RSU Award continues to have, and is subject to, the same terms and conditions as applied to the corresponding HTLF RSU Award immediately prior to the Effective Time (including the requirement to perform continued services to satisfy applicable time-based vesting conditions, subject to any accelerated vesting on a Qualified Termination (as defined in the Merger Agreement) of the holder’s employment following the Mergers).
Performance-Based Restricted Stock Units: Each performance-vesting restricted stock unit award of HTLF (each, a “HTLF PSU Award”) held by a former service provider became fully vested based on target performance and was cancelled and converted automatically into the right to receive the Merger Consideration. Each other HTLF PSU Award was assumed by the Company and converted (based on target performance) into a time-vesting restricted stock unit award with respect to a number of shares of UMB Common Stock determined by multiplying the number of shares of HTLF Common Stock subject to the HTLF PSU Award immediately prior to the Effective Time by the Exchange Ratio (each, an “Assumed PSU Award”). Each Assumed PSU Award continues to have, and is subject to, the same terms and conditions as applied to the corresponding HTLF PSU Award (other than performance-based vesting conditions) immediately prior to the Effective Time (including the requirement to perform continued services to satisfy applicable time-based vesting conditions, subject to any accelerated vesting on a Qualified Termination of the holder’s employment following the Mergers).
Stock Options: Each stock option to purchase HTLF Common Stock (each a “HTLF Option”) that was vested or held by a former service provider became fully vested and was cancelled and converted automatically into the right to receive the Merger Consideration, reduced by a number of shares required to satisfy the applicable exercise price. Each HTLF Option for which the applicable per share exercise price exceeded the closing price of a share of HTLF Common Stock on the Closing Date was cancelled as of the Effective Time for no consideration. Each HTLF Option that was unvested and held by an active service provider was assumed by the Company and converted into a stock option to purchase a number of shares of UMB Common Stock determined by multiplying the number of shares of HTLF Common Stock subject to the HTLF Option immediately prior to the Effective Time by the Exchange Ratio, at an exercise price determined by dividing the exercise price of the HTLF Option immediately prior to the Effective Time by the Exchange Ratio (each an “Assumed Option”). Each Assumed Option continues to have, and is subject to, the same terms and conditions as applied to the corresponding HTLF Option immediately prior to the Effective Time (including the requirement to perform continued services to satisfy applicable time-based vesting conditions, subject to any accelerated vesting on a Qualified Termination of the holder’s employment following the Mergers).
The foregoing description of the Mergers, the Bank Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is filed hereto as Exhibit 2.1 and incorporated herein by reference.
The total aggregate consideration payable in the Merger was approximately 24 million shares of UMB Common Stock. The issuance of shares of UMB Common Stock in connection with the Merger was registered under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to a registration statement on Form S-4 (File No. 333-280190) filed by the Company with the Securities and Exchange Commission (the “Commission”) and declared effective on July 5, 2024 (the “Registration Statement”). The joint proxy statement/prospectus included in the Registration Statement (the “Joint Proxy Statement/Prospectus”) contains additional information about the Merger Agreement and the transactions contemplated thereby.
The information set forth in the Introduction is incorporated herein by reference into this Item 2.01.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
In connection with the Merger, at the Effective Time, the Company assumed HTLF’s obligations as required by the indentures and certain related agreements with respect to HTLF’s outstanding trust preferred securities consisting of (i) $3,093,000 of its floating rate junior subordinated deferrable interest debentures due September 30, 2032, (ii) $10,310,000 of its floating rate junior subordinated deferrable interest debentures due December 26, 2032, (iii) $7,732,000 of its floating rate junior subordinated debt securities due April 24, 2033, (iv) $7,732,000 of its fixed/floating rate junior subordinated deferrable interest debentures due September 17, 2033, (v) $5,155,000 of its floating rate junior subordinated debt securities due November 23, 2034, (vi) $10,310,000 of its floating rate junior subordinated deferrable interest debentures due December 17, 2033, (vii) $25,774,000 of its floating rate junior subordinated deferrable interest debentures due March 17, 2034, (viii) $5,155,000 of its junior subordinated debt securities due December 15, 2034, (ix) $6,186,000 of its junior subordinated debt securities due December 15, 2034, (x) $7,217,000 of its floating rate junior subordinated debt securities due January 23, 2034, (xi) $11,856,000 of its unsecured junior subordinated deferrable interest notes due September 30, 2035, (xii) $20,619,000 of its junior subordinated debt securities due April 7, 2036, (xiii) $15,464,000 of its junior subordinated debt securities due June 15, 2036, (xiv) $20,619,000 of its fixed/floating rate junior subordinated deferrable interest debentures due September 15, 2037 and (xv) $20,619,000 of its floating rate junior subordinated debt securities due September 1, 2037 (collectively, the “Trust Preferred Securities”). In connection with the Merger, at the Effective Time, the Company also assumed all of HTLF’s obligations as required by that certain Indenture, dated as of December 17, 2014, as supplemented by that certain Second Supplemental Indenture, dated as of September 8, 2021 (collectively, the “Indenture”), with respect to HTLF’s $150,000,000 aggregate principal amount of 2.75% fixed-to-floating rate subordinated notes due September 15, 2031 (the “2031 Notes”).
The supplemental indentures pursuant to which the Company assumed the Trust Preferred Securities and the original indentures pursuant to which the Trust Preferred Securities were issued, and the assignment and assumption pursuant to which the Company assumed the 2031 Notes, as well as the Indenture pursuant which the 2031 Notes were issued, have not been filed herewith pursuant to Item 601(b)(4)(v) of Regulation S-K under the Securities Act. The Company agrees to furnish a copy of such indentures and the Indenture to the Commission upon request.
Item 3.03. Material Modifications to Rights of Security Holders.
On January 31, 2025, in connection with the consummation of the Mergers, UMB filed (i) a certificate of amendment with the Missouri Secretary of State for the purpose of amending its articles of incorporation to effect an increase in the number of authorized shares of UMB Common Stock from 80,000,000 to 160,000,000 and (ii) a certificate of designation to fix the designations, preferences, limitations and relative rights of the UMB Preferred Stock. Additionally, in connection with the issuance of the UMB Preferred Stock, UMB entered into a deposit agreement (the “Deposit Agreement”), dated as of January 31, 2025, by and among UMB, Computershare Trust Company, N.A. and Computershare, Inc., jointly as depositary, and the holders from time to time of the depositary receipts described in the Deposit Agreement.
The description of the UMB Preferred Stock and the UMB depositary shares to be issued in connection therewith under the section of the joint proxy statement/prospectus filed by UMB with the Commission on July 5, 2024 (the “Joint Proxy Statement/Prospectus”) entitled “DESCRIPTION OF NEW UMB PREFERRED STOCK” is incorporated herein by reference.
The foregoing description of the certificate of amendment, the certificate of designation and the terms of the UMB Preferred Stock does not purport to be complete and is qualified in its entirety by reference to the full text of the certificate of amendment and the certificate of designation, which are filed as Exhibits 3.1 and 3.2 to this Current Report and are incorporated by reference herein.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Board of Directors
In accordance with the terms of the Merger Agreement, the size of the board of directors of the Company (the “Board”) as of the Effective Time was increased to consist of a total of 16 directors, including 11 current directors of UMB and five directors of HTLF mutually agreed by UMB and HTLF.
Continued Service of Directors; Election of Directors
The 11 current directors of UMB, each of whom previously served, and continues to serve, as a member of the Board, are as follows: J. Mariner Kemper, Robin C. Beery, Janine A. Davidson, Kevin C. Gallagher, Greg M. Graves, Gordon E. Lansford III, Timothy R. Murphy, Tamara M. Peterman, Kris A. Robbins, L. Joshua Sosland and Leroy J. Williams, Jr.
The five former directors of HTLF mutually agreed by UMB and HTLF, each of whom previously served as a member of the board of directors of HTLF immediately prior to the Merger and was appointed by the Board to fill the vacancies resulting from the increase in the size of the Board referred to above, in each case effective as of the Effective Time, are as follows: John Schmidt, Jennifer Hopkins, Susan Murphy, Margaret Lazo and Brad Henderson (collectively, the “New Directors”). Certain New Directors have also been assigned to serve on certain committees of UMB’s board of directors. In particular, (i) Brad Henderson, Jennifer Hopkins and Susan Murphy have been assigned to serve on the Audit Committee, (ii) Brad Henderson, Jennifer Hopkins, Margaret Lazo and Susan Murphy have been assigned to serve on the Risk Committee, (iii) Margaret Lazo has been assigned to serve on the Compensation Committee and (iv) John Schmidt has been assigned to serve on the Governance Committee.
Other than the Merger Agreement, there are no arrangements between the New Directors and any other person pursuant to which the New Directors were selected as directors. There are no transactions in which any New Director has an interest requiring disclosure under Item 404(a) of Regulation S-K. Non-employee members of the Board, including the New Directors, will be compensated for such service in accordance with UMB’s non-employee director compensation policies.
Amendments to UMB PSU Awards
Effective as of the Effective Time, the Compensation Committee of the Board (the “Committee”) approved certain amendments to the performance share unit awards (“PSUs”) granted to UMB’s named executive officers in 2023 and 2024 (the “2023 PSUs” and “2024 PSUs”, respectively). The 2023 PSUs and 2024 PSUs, as originally granted, were eligible to vest subject to achievement of certain earnings per share and average return on tangible common equity metrics. Following a review of the expected impact of the Merger on such metrics, the Committee determined that the applicable performance metrics were no longer appropriate. As a result, after discussions with the Committee’s independent compensation consultant, the Committee waived the continued applicability of the performance-based vesting conditions for the 2023 PSUs and 2024 PSUs and converted such PSUs into awards of restricted stock units (“RSUs”) that vest at the same time as the service conditions that applied to such PSUs. The 2023 PSUs and 2024 PSUs were converted to RSUs assuming performance at 100% and 194.7% of target, respectively, which reflected the greater of target performance and actual performance through December 31, 2024.
Item 5.03. Amendments to Articles of Incorporation.
In connection with the completion of the Merger and in accordance with the Merger Agreement, UMB’s articles of incorporation were amended to increase the number of authorized shares of UMB Common Stock from 80,000,000 shares to 160,000,000 shares (the “Articles Amendment” and the Company’s articles of incorporation, as amended in accordance with the Articles Amendment, the “Articles of Incorporation”), effective as of the Closing Date.
The foregoing summary of the Articles Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Articles Amendment, a copy of which is filed hereto as Exhibit 3.1 and incorporated herein by reference.
On January 31, 2025, UMB filed a Certificate of Designation to its Articles of Incorporation with the Secretary of State of the State of Missouri, establishing the terms of the UMB Preferred Stock. A copy of the Certificate of Designation relating to the UMB Preferred Stock is filed as Exhibit 3.2 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure.
As a result of the Mergers, HTLF no longer exists as a legal entity separate from UMB and therefore no longer fulfills the listing requirements of the Nasdaq Global Select Market (the “Nasdaq”). On January 31, 2025, the Nasdaq was notified that the Mergers would be effective as of January 31, 2025 and it was requested that the Nasdaq (1) suspend trading of HTLF Common Stock and HTLF Preferred Stock, (2) withdraw HTLF Common Stock and HTLF Preferred Stock from listing on the Nasdaq, in each case, prior to the open of trading on February 3, 2025, and (3) file with the Commission a notification of delisting of HTLF Common Stock and HTLF Preferred Stock under Section 12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As a result, HTLF Common Stock and HTLF Preferred Stock will no longer be listed on the Nasdaq.
In furtherance of the foregoing, UMB, as successor to HTLF, intends to file with the Commission certifications on Form 15 under the Exchange Act requesting the deregistration of HTLF Common Stock and HTLF Preferred Stock under Section 12(g) of the Exchange Act and the corresponding immediate suspension of HTLF’s reporting obligations under Sections 13 and 15(d) of the Exchange Act as promptly as practicable, and to cease filing any further periodic reports with respect to HTLF since it no longer as a result of the Mergers exists as a separate legal entity.
Item 8.01. Other Events
On January 31, 2025, UMB issued a press release announcing the completion of the Mergers. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference herein.
Forward Sale Agreement
As previously reported on the Current Reports on Form 8-K filed on April 29, 2024 (the “April 8-K”) and May 1, 2024 (the “May 8-K”), on April 28, 2024, the Company entered into (i) an underwriting agreement (the “Underwriting Agreement”) with BofA Securities, Inc. and Morgan Stanley & Co. LLC, as representatives for the underwriters named therein (collectively, the “Underwriters”), Bank of America, N.A., acting in its capacity as the forward purchaser (the “Forward Purchaser”), and BofA Securities, Inc. as forward seller (the “Forward Seller”), relating to the registered public offering and sale by the Forward Seller of 2,800,000 shares of UMB Common Stock, and (ii) a forward sale agreement (the “Forward Sale Agreement”) with the Forward Purchaser relating to 2,800,000 shares of UMB Common Stock. Pursuant to the Underwriting Agreement, the Underwriters were also granted a 30-day option to purchase up to an additional 420,000 shares of UMB Common Stock.
On April 30, 2024, the Underwriters exercised in full their option to purchase the additional 420,000 shares of UMB Common Stock pursuant to the Underwriting Agreement and, in connection therewith, the Company entered into an additional forward sale agreement (the “Additional Forward Sale Agreement”) with the Forward Purchaser relating to 420,000 shares of UMB Common Stock, on terms essentially similar to those contained in the Forward Sale Agreement.
The Company intends to physically settle in full the Forward Sale Agreement and the Additional Forward Sale Agreement during the first quarter of 2025 by delivering 3,220,000 shares of UMB Common Stock to the Forward Purchaser. The
Company expects to receive net proceeds from such sale of shares of UMB Common Stock and full physical settlement of the Forward Sale Agreement and the Additional Forward Sale Agreement, before expenses, of approximately $231.8 million, based upon the initial forward sale price of $72.00 per share. The forward sale price is subject to adjustments pursuant to the terms of the Forward Sale Agreement, and the actual proceeds will be calculated pursuant thereto.
The descriptions of the Underwriting Agreement, the Forward Sale Agreement and the Additional Forward Sale Agreement set forth above do not purport to be complete and are qualified in their respective entireties by reference to the terms and conditions of the Underwriting Agreement and the Forward Sale Agreement, which are filed as Exhibits 1.1 and 10.2, respectively, to the April 8-K, and the Additional Forward Sale Agreement, which is filed as Exhibit 10.1 to the May 8-K, and, in each case, incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
The financial statements required by this item will be filed by an amendment to this Current Report on Form 8-K no later than 71 days after the date on which this Current Report on Form 8-K is required to be filed.
(d) Exhibits.
| * | Pursuant to Item 601(a)(5) of Regulation S-K, certain schedules and similar attachments have been omitted. The registrant hereby agrees to furnish supplementally a copy of any omitted schedule or similar attachment to the Commission upon request. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| UMB FINANCIAL CORPORATION | ||
| By: | /s/ Ram Shankar | |
| Name: | Ram Shankar | |
| Title: | Chief Financial Officer | |
Date: February 3, 2025
Exhibit 3.1
AMENDMENT OF ARTICLES OF INCORPORATION
Pursuant to the General and Business Corporation Law of Missouri (the “GBCL”), the undersigned Corporation hereby submits the following Articles of Amendment to its Articles of Incorporation:
| 1. | The name of the Corporation is UMB Financial Corporation (the “Corporation”). |
| 2. | An amendment to the Corporation’s Articles of Incorporation was adopted by the shareholders of the Corporation on August 6, 2024 (the “Amendment”). |
| 3. | The Amendment is set out in full as follows: |
See attached Annex A hereto.
| 4. | Of the 48,744,131 of shares outstanding, 48,744,131 of such shares were entitled to vote on the Amendment. |
The number of outstanding shares of each class entitled to vote on the Amendment as a class were as follows:
| Class |
Number of Outstanding Shares | |||
| Common Stock |
48,744,131 | |||
| 5. | The number of shares voted for the Amendment was 44,385,266. The number of shares voted against the Amendment was 303,577. |
The number of shares of each class voted for and against the Amendment were as follows:
| Class |
Number of Shares Voted For |
Number of Shares Voted Against |
||||||
| Common Stock |
44,385,266 | 303,577 | ||||||
| 6. | The effective time and date of the Amendment will be 11:57 p.m. Eastern Time on January 31, 2025. |
[signature page follows]
IN AFFIRMATION THEREOF, the facts stated above are true and correct:
(The undersigned understands that false statements made in this filing are subject to the penalties provided under § 575.040, RSMo.)
| /s/ Ram Shankar |
| Ram Shankar, Chief Financial Officer |
| January 31, 2025 |
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Annex A
Reference is made to ARTICLE III of the Articles of Incorporation of UMB Financial Corporation, a Missouri corporation, as amended March 6, 2003. The first paragraph of ARTICLE III is hereby amended and restated in its entirety as follows:
“The aggregate number of shares which the corporation shall have the authority to issue is one hundred sixty-one million (161,000,000). One hundred sixty million (160,000,000) of such shares shall be common stock with a par value of one dollar ($1.00) per share, and such common stock shall have no preferences, qualifications, limitations, restrictions or special relative or convertible rights. The remaining one million (1,000,000) shares shall be preferred stock with a par value of one cent ($0.01) per share.”
Except as amended hereby, the Articles of Incorporation of UMB Financial Corporation, as amended March 6, 2003, remains unchanged and in full force and effect.
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Exhibit 3.2
CERTIFICATE OF DESIGNATION
OF
7.00%
FIXED-RATE RESET NON-CUMULATIVE
PERPETUAL PREFERRED STOCK, SERIES A
OF
UMB FINANCIAL CORPORATION
UMB Financial Corporation, a corporation organized and existing under the laws of the State of Missouri (the “Corporation”), in accordance with the provisions of Section 351.180 of the General and Business Corporation Law of Missouri, does hereby certify:
The Board of Directors of the Corporation (the “Board”) duly adopted resolutions on April 28, 2024 (the “Board Resolutions”) and acting in accordance with such resolutions, the Corporation’s Articles of Incorporation, the Corporation’s Bylaws, and applicable law, adopted the following resolution on April 28, 2024, creating a series of Preferred Stock of up to 11,500 shares from the Corporation’s authorized Preferred Stock, which series of Preferred Stock is to be designated as “7.00% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A” (“Series A Preferred Stock”):
RESOLVED, that pursuant to the provisions of the Articles of Incorporation of the Corporation, the Bylaws of the Corporation and applicable law, a series of Preferred Stock, par value $0.01 per share, of the Corporation be and hereby is created, and that the number of shares of such series, and the terms, preferences, privileges, designations, rights, qualifications, limitations, and restrictions thereof, are hereby established as set forth below:
1. Definitions. The following terms used herein shall be defined as set forth below:
“Appropriate Federal Banking Agency” means the “appropriate Federal banking agency” with respect to the Corporation as defined in Section 3(q) of the Federal Deposit Insurance Act (12 U.S.C. Section 1813(q)), or any successor provision.
“Articles of Incorporation” means the Articles of Incorporation of the Corporation, as it may be amended or restated from time to time.
“Business Day” means any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which banking institutions are authorized or required by law or regulation to close in The City of New York.
“Bylaws” means the Bylaws of the Corporation, as they may be amended or restated from time to time.
“Calculation Agent” means HTLF Bank and its successors and assigns, including any successor calculation agent with respect to shares of Series A Preferred Stock duly appointed by the Corporation.
“Common Stock” means any and all shares of common stock of the Corporation, par value $1.00 per share.
“Federal Reserve” means the Board of Governors of the Federal Reserve System and its delegates.
“First Reset Date” means July 15, 2025.
“Five-Year Treasury Rate” means, as of any Reset Dividend Determination Date:
(a) The average of the yields to maturity on actively traded U.S. treasury securities adjusted to constant maturity, for five-year maturities, for the five Business Days immediately preceding the Reset Dividend Determination Date, appearing under the caption “Treasury Constant Maturities” in the most recently published statistical release designated H.15 Daily Update or any successor publication which is published by the Federal Reserve, as determined by the Calculation Agent in its sole discretion; and
(b) If no calculation is provided as described above, then the Calculation Agent, after consulting such sources as it deems comparable to any of the foregoing calculations, or any such source as it deems reasonable from which to estimate the Five-Year Treasury Rate, shall determine the Five-Year Treasury Rate in its sole discretion, provided that if the Calculation Agent determines there is an industry accepted successor Five-Year Treasury Rate, then the Calculation Agent shall use such successor rate. If the Calculation Agent has determined a substitute or successor base rate in accordance with the foregoing, the Calculation Agent in its sole discretion may determine the Business Day convention, the definition of Business Day and the Reset Dividend Determination Date to be used and any other relevant methodology for calculating such substitute or successor base rate, including any adjustment factor needed to make such substitute or successor base rate comparable to the Five-Year Treasury Rate, in a manner that is consistent with industry-accepted practices for such substitute or successor base rate.
The Five-Year Treasury Rate shall be determined by the Calculation Agent on the Reset Dividend Determination Date. If the Five-Year Treasury Rate for any Dividend Period cannot be determined pursuant to the methods described in clauses (a) and (b) above, the dividend rate for such dividend period shall be the same as the dividend rate determined for the immediately preceding dividend period.
“Preferred Stock” means any and all series of preferred stock of the Corporation, including the Series A Preferred Stock.
“Reset Date” means the First Reset Date and each date falling on the fifth anniversary of the preceding Reset Date, which in each case, shall not be adjusted for Business Days.
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“Reset Dividend Determination Date” means, in respect of any Reset Period, the day falling three Business Days prior to the beginning of such Reset Period, subject to any adjustments made by the Calculation Agent as provided for herein.
“Reset Period” means the period from, and including, the First Reset Date to, but excluding, the next following Reset Date and thereafter each period from, and including, each Reset Date to, but excluding, the next following Reset Date.
2. Designation and Number of Shares. There is hereby created out of the authorized and unissued shares of Preferred Stock a series of Preferred Stock designated as the “7.00% Fixed-Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A” (hereinafter called “Series A Preferred Stock”); the authorized number of shares that shall constitute such series shall be 11,500 shares, $0.01 par value per share; and such shares shall have a liquidation preference of $10,000 per share. The number of shares constituting the Series A Preferred Stock may be increased from time to time by resolution of the Board or a duly authorized committee of the Board in accordance with the Articles of Incorporation (as then in effect), the Bylaws (as then in effect), and applicable law up to the maximum number of shares of Preferred Stock authorized to be issued under the Articles of Incorporation (as then in effect), less all unredeemed shares of any other series of Preferred Stock, or decreased from time to time by a resolution of the Board or a duly authorized committee of the Board in accordance with the Articles of Incorporation (as then in effect), the Bylaws (as then in effect), and applicable law but not below the number of shares of Series A Preferred Stock then outstanding. Shares of Series A Preferred Stock shall be dated the date of issue, which date shall be referred to herein as the “original issue date.” Shares of outstanding Series A Preferred Stock that are redeemed, purchased, or otherwise acquired by the Corporation shall be cancelled and shall revert to authorized but unissued shares of the Preferred Stock, undesignated as to series. The Corporation shall have the authority to issue fractional shares of Series A Preferred Stock.
3. Ranking. The shares of Series A Preferred Stock shall rank:
(a) senior, as to dividends and upon liquidation, dissolution, and winding-up of the Corporation, to the Common Stock and to any other class or series of capital stock of the Corporation now or hereafter authorized, issued, or outstanding that, by its terms, does not expressly provide that such class or series ranks pari passu with the Series A Preferred Stock or senior to the Series A Preferred Stock as to dividends and upon liquidation, dissolution, and winding-up of the Corporation, as the case may be (collectively, “Series A Junior Securities”);
(b) on a parity, as to dividends and upon liquidation, dissolution, and winding-up of the Corporation, with any class or series of capital stock of the Corporation now or hereafter authorized, issued, or outstanding that, by its terms, expressly provides that such class or series ranks pari passu with the Series A Preferred Stock as to dividends and upon liquidation, dissolution, and winding-up of the Corporation, as the case may be (collectively, “Series A Parity Securities”); and
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(c) junior, as to dividends and upon liquidation, dissolution, and winding-up of the Corporation, to any other class or series of capital stock of the Corporation now or hereafter authorized, issued, or outstanding that, by its terms, expressly provides that such class or series ranks senior to the Series A Preferred Stock as to dividends and upon liquidation, dissolution, and winding-up of the Corporation, as the case may be.
The Corporation may authorize and issue additional shares of Series A Junior Securities and Series A Parity Securities from time to time without the consent of the holders of the Series A Preferred Stock.
4. Dividends.
(a) Holders of Series A Preferred Stock will be entitled to receive, only when, as, and if declared by the Board or a duly authorized committee of the Board, on each Dividend Payment Date (as defined below), out of assets legally available for the payment of dividends thereof, non-cumulative cash dividends based on the liquidation preference of the Series A Preferred Stock of $10,000 per share. Dividends on each share of Series A Preferred Stock shall accrue at a rate equal to (i) 7.00% per annum on the liquidation preference of $10,000 per share from January 15, 2025 to, but excluding, the First Reset Date and (ii) from, and including, the First Reset Date, during each Reset Period, a rate per annum equal to the Five-Year Treasury Rate as of the most recent Reset Dividend Determination Date, plus 6.675% on the liquidation preference of $10,000 per share. In the event the Corporation issues additional shares of the Series A Preferred Stock after the original issue date, dividends on such shares may accrue from the original issue or any other date specified by the Board or a duly authorized committee of the Board at the time such additional shares are issued.
(b) If declared by the Board or a duly authorized committee of the Board, dividends will be payable on the Series A Preferred Stock quarterly in arrears on January 15, April 15, July 15, and October 15 of each year, beginning on January 15, 2025 (each such day a “Dividend Payment Date”), based on a liquidation preference of $10,000 per share. In the event that any Dividend Payment Date falls on a day that is not a Business Day, the dividend payment due on that date shall be postponed to the next day that is a Business Day and no additional dividends shall accrue as a result of that postponement.
(c) Dividends will be payable to holders of record of Series A Preferred Stock as they appear on the Corporation’s stock register on the applicable record date, which shall be the 15th calendar day before the applicable Dividend Payment Date, or such other record date, not less than 15 calendar days nor more than 30 calendar days before the applicable Dividend Payment Date, as such record date shall be fixed by the Board or a duly authorized committee of the Board.
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(d) A “Dividend Period” is the period from and including a Dividend Payment Date to, but excluding, the next succeeding Dividend Payment Date or any earlier redemption date, except that the initial Dividend Period will commence on and include January 15, 2025 and continue to, but exclude, the next Dividend Payment Date. Dividends payable on Series A Preferred Stock will be computed on the basis of a 360-day year consisting of twelve 30-day months. Dollar amounts resulting from the calculation will be rounded to the nearest cent, with one-half cent being rounded upward. Dividends on the Series A Preferred Stock will cease to accrue on the redemption date, if any, with respect to the Series A Preferred Stock redeemed, unless the Corporation defaults in the payment of the redemption price of the Series A Preferred Stock called for redemption.
(e) Dividends on the Series A Preferred Stock will not be cumulative. If the Board or a duly authorized committee of the Board does not declare a dividend, in full or otherwise, on the Series A Preferred Stock in respect of a Dividend Period, then such unpaid dividends shall cease to accrue and shall not be payable on the applicable Dividend Payment Date or be cumulative, and the Corporation will have no obligation to pay (and the holders of the Series A Preferred Stock will have no right to receive) dividends accrued for such Dividend Period after the Dividend Payment Date for such Dividend Period, whether or not the Board or a duly authorized committee of the Board declares a dividend for any future Dividend Period with respect to the Series A Preferred Stock, the Common Stock, or any other class or series of the Corporation’s Preferred Stock. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend not declared.
(f) Notwithstanding any other provision hereof, dividends on the Series A Preferred Stock shall not be declared, paid, or set aside for payment to the extent such act would cause the Corporation to fail to comply with the laws and regulations applicable to it, including applicable capital adequacy rules of the Federal Reserve or, as and if applicable, the capital adequacy rules or regulations of any Appropriate Federal Banking Agency.
(g) So long as any share of Series A Preferred Stock remains outstanding:
(1) no dividend or distribution shall be declared, paid or set aside for payment, and no distribution shall be declared or made or set aside for payment, on any Series A Junior Securities, other than (i) a dividend payable solely in Series A Junior Securities or (ii) any dividend or distribution in connection with any existing shareholders’ rights plan or the implementation of any future shareholders’ rights plan, or the issuance of rights, stock, or other property under any such plan, or the redemption or repurchase of any rights under any such plan;
(2) no shares of Series A Junior Securities shall be repurchased, redeemed, or otherwise acquired for consideration by the Corporation, directly or indirectly, other than (i) as a result of a reclassification of Series A Junior Securities for or into other Series A Junior Securities, (ii) the exchange or conversion of one share of Series A Junior Securities for or into another share of Series A Junior Securities, (iii) through the use of the proceeds of
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a substantially contemporaneous sale of other shares of Series A Junior Securities, (iv) purchases, redemptions, or other acquisitions of shares of Series A Junior Securities in connection with any employment contract, benefit plan, or other similar arrangement with or for the benefit of employees, officers, directors, or consultants, (v) purchases of shares of Series A Junior Securities pursuant to a contractually binding requirement to buy Series A Junior Securities existing prior to the preceding Dividend Period, including under a contractually binding stock repurchase plan, or (vi) the purchase of fractional interests in shares of Series A Junior Securities pursuant to the conversion or exchange provisions of such stock or the security being converted or exchanged; nor shall any monies be paid to or made available for a sinking fund for the redemption of any such securities by the Corporation; and
(3) no shares of Series A Parity Securities shall be repurchased, redeemed, or otherwise acquired for consideration by the Corporation, directly or indirectly, other than (i) pursuant to pro rata offers to purchase all, or a pro rata portion, of the Series A Preferred Stock and such Series A Parity Securities, if any, (ii) as a result of a reclassification of Series A Parity Securities for or into other Series A Parity Securities, (iii) the exchange or conversion of one share of Series A Parity Securities for or into another share of Series A Parity Securities or Series A Junior Securities, (iv) through the use of the proceeds of a substantially contemporaneous sale of other shares of Series A Parity Securities, (v) purchases of shares of Series A Parity Securities pursuant to a contractually binding requirement to buy Series A Parity Securities existing prior to the preceding Dividend Period, including under a contractually binding stock repurchase plan, or (vi) the purchase of fractional interests in shares of Series A Parity Securities pursuant to the conversion or exchange provisions of such stock or the security being converted or exchanged; nor shall any monies be paid to or made available for a sinking fund for the redemption of any such securities by the Corporation;
unless, in each case, the full dividends for the most recently completed Dividend Period on all outstanding shares of Series A Preferred Stock have been declared and paid or declared and a sum sufficient for the payment thereof has been set aside.
(h) Notwithstanding the foregoing, if dividends are not paid in full, or set aside for payment in full, on any dividend payment date, upon the shares of Series A Preferred Stock and any Series A Parity Securities, all dividends declared upon shares of Series A Preferred Stock and any Series A Parity Securities for such dividend payment date shall be declared on a pro rata basis in proportion to the respective amounts of undeclared and unpaid dividends for the Series A Preferred Stock and all Series A Parity Securities on such dividend payment date. To the extent a dividend period with respect to any Series A Parity Securities coincides with more than one Dividend Period, for purposes of the immediately preceding sentence the Board shall treat such dividend period as two or more consecutive dividend periods, none of which coincides with more than one Dividend Period, or shall treat such dividend period(s) with respect to any Series A Parity Securities and Dividend Period(s) for purposes of the immediately preceding sentence in any other manner that it deems to be fair and equitable in order to achieve
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ratable payments of dividends on such Series A Parity Securities and the Series A Preferred Stock. To the extent a Dividend Period coincides with more than one dividend period with respect to any Series A Parity Securities, for purposes of the first sentence of this paragraph the Board shall treat such Dividend Period as two or more consecutive Dividend Periods, none of which coincides with more than one dividend period with respect to such Series A Parity Securities, or shall treat such Dividend Period(s) and dividend period(s) with respect to any Series A Parity Securities for purposes of the first sentence of this paragraph in any other manner that it deems to be fair and equitable in order to achieve ratable payments of dividends on the Series A Preferred Stock and such Series A Parity Securities. For the purposes of this paragraph, the term “dividend period” as used with respect to any Series A Parity Securities means such dividend periods as are provided for in the terms of such Series A Parity Securities.
(i) Subject to the foregoing, dividends (payable in cash, stock, or otherwise), as may be determined by the Board or a duly authorized committee of the Board, may be declared and paid on the Common Stock and any other class or series of capital stock ranking equally with or junior to Series A Preferred Stock from time to time out of any assets legally available for such payment, and the holders of Series A Preferred Stock shall not be entitled to participate in any such dividend.
5. Liquidation.
(a) Upon any voluntary or involuntary liquidation, dissolution, or winding-up of the Corporation, holders of Series A Preferred Stock are entitled to receive out of the assets of the Corporation available for distribution to shareholders, after satisfaction of liabilities and obligations to creditors, if any, and subject to the rights of holders of any securities then outstanding ranking senior to or on parity with Series A Preferred Stock with respect to distributions of assets, before any distribution or payment out of the assets of the Corporation is made to holders of Common Stock or any Series A Junior Securities, a liquidating distribution in the amount of the liquidation preference of $10,000 per share plus any declared and unpaid dividends prior to the payment of the liquidating distribution, without accumulation of any dividends that have not been declared prior to the payment of the liquidating distribution. After payment of the full amount of such liquidating distribution, the holders of Series A Preferred Stock shall not be entitled to any further participation in any distribution of assets of the Corporation.
(b) In any such liquidating distribution, if the assets of the Corporation are not sufficient to pay the liquidation preferences (as defined below) in full to all holders of Series A Preferred Stock and all holders of any Series A Parity Securities, the amounts paid to the holders of Series A Preferred Stock and to the holders of all Series A Parity Securities will be paid pro rata in accordance with the respective aggregate liquidation preferences of those holders. In any such distribution, the “liquidation preference” of any holder of Series A Preferred Stock or any Series A Parity Securities means the amount otherwise payable to such holder in such distribution (assuming no limitation on the Corporation’s assets available for such distribution), including any declared but unpaid dividends (and, in the case of any holder of stock other than the Series A Preferred Stock on which dividends accrue on a cumulative basis, an amount
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equal to any unpaid, accrued, cumulative dividends, whether or not declared, as applicable). If the liquidation preference has been paid in full to all holders of Series A Preferred Stock and any Series A Parity Securities, the holders of the Corporation’s Series A Junior Securities shall be entitled to receive all remaining assets of the Corporation according to their respective rights and preferences.
(c) For purposes of this Section 5, neither the sale, conveyance, exchange, or transfer of all or substantially all of the assets or business of the Corporation for cash, securities, or other property, nor the merger or consolidation of the Corporation with any other entity, including a merger or consolidation in which the holders of Series A Preferred Stock receive cash, securities, or property for their shares, shall constitute a liquidation, dissolution, or winding-up of the Corporation.
6. Redemption.
(a) Series A Preferred Stock is not subject to any mandatory redemption, sinking fund, or other similar provision. Series A Preferred Stock is not redeemable prior to the First Reset Date. Shares of Series A Preferred Stock then outstanding will be redeemable at the option of the Corporation, in whole or in part, on any Reset Date on or after the First Reset Date, at a redemption price equal to $10,000 per share, plus any accrued and unpaid dividends to, but excluding, the date of redemption. In the event the applicable Reset Date that is the redemption date is not a Business Day, the redemption price shall be paid on the next Business Day without any adjustment to the amount of the redemption price. Holders of Series A Preferred Stock will have no right to require the redemption or repurchase of Series A Preferred Stock. Notwithstanding the foregoing, within 90 days following the occurrence of a Regulatory Capital Treatment Event (as defined below), including prior to the First Reset Date, the Corporation, at its option, may redeem, at any time, all (but not less than all) of the shares of the Series A Preferred Stock at the time outstanding, at a redemption price equal to $10,000 per share, plus any accrued and unpaid dividends to, but excluding, the date of redemption, upon notice given as provided in sub-section (b) below. Any declared but unpaid dividends payable on a redemption date that occurs subsequent to the record date for a Dividend Period shall not be paid to the holder entitled to receive the redemption price on the redemption date, but rather shall be paid to the holder of record of the redeemed shares on such record date relating to the Dividend Payment Date as provided in Section 4(c) above. In all cases, the Corporation may not redeem shares of the Series A Preferred Stock without having received the prior approval of the Federal Reserve or any successor Appropriate Federal Banking Agency if then required under capital rules applicable to the Corporation.
A “Regulatory Capital Treatment Event” means the good faith determination by the Board or a duly authorized committee of the Board that, as a result of (i) any amendment to, clarification of, or change in (including any announced prospective change in), the laws, rules, or regulations of the United States or any political subdivision of or in the United States (including, for the avoidance of doubt, any agency or instrumentality of the United States, including the Federal Reserve and other federal banking agencies) that is enacted or becomes effective after the initial issuance of any
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share of the Series A Preferred Stock; (ii) any proposed change in those laws, rules, or regulations that is announced after the initial issuance of any share of the Series A Preferred Stock; or (iii) any official administrative decision or judicial decision or administrative action or other official pronouncement interpreting or applying those laws, rules, or regulations or policies with respect thereto that is announced after the initial issuance of any share of the Series A Preferred Stock, there is more than an insubstantial risk that the Corporation will not be entitled to treat the full liquidation value of $10,000 per share of the Series A Preferred Stock then outstanding as “Tier 1 Capital” (or its equivalent) for purposes of the capital adequacy rules of the Federal Reserve (or, as and if applicable, the capital adequacy rules or regulations of any successor Appropriate Federal Banking Agency), as then in effect and applicable, for as long as any share of the Series A Preferred Stock is outstanding.
(b) If shares of Series A Preferred Stock are to be redeemed, the notice of redemption shall be given to the holders of record of Series A Preferred Stock to be redeemed by first class mail, postage prepaid, addressed to the holders of record of such shares to be redeemed at their respective last addresses appearing on the Corporation’s stock register not less than 30 days nor more than 60 days prior to the date fixed for redemption thereof (provided that, if the shares of Series A Preferred Stock are held in book-entry form through The Depository Trust Company (“DTC”), the Corporation may give such notice in any manner permitted by DTC). Each notice of redemption will include a statement setting forth (i) the redemption date; (ii) the number of shares of Series A Preferred Stock to be redeemed and, if less than all the shares held by such holder are to be redeemed, the certificate numbers and number of such shares to be redeemed from such holder; (iii) the redemption price; (iv) the place of redemption; and (v) that dividends on the shares to be redeemed will cease to accrue on the redemption date. If notice of redemption of any shares of Series A Preferred Stock has been duly given and if the funds necessary for such redemption have been set aside by the Corporation for the benefit of the holders of any shares of Series A Preferred Stock so called for redemption, then, on and after the redemption date, dividends will cease to accrue on such shares of Series A Preferred Stock; such shares of Series A Preferred Stock shall no longer be deemed outstanding; and all rights of the holders of such shares will terminate, except the right to receive the redemption price described in sub-section (a) above, without interest.
(c) In case of any redemption of only part of the shares of Series A Preferred Stock at the time outstanding, the shares to be redeemed shall be selected (1) pro rata, (2) by lot, or (3) in such other manner as determined by resolution of the Board to be fair and proper and permitted by DTC and the rules of any national securities exchange on which the Series A Preferred Stock is listed.
7. Voting Rights.
(a) Except as provided below and as determined by the Board or a duly authorized committee of the Board or as expressly required by law, the holders of shares of Series A Preferred Stock shall have no voting power, and no right to vote on any matter at any time, either as a separate series or class or together with any other series or class of shares of capital stock, and shall not be entitled to call a meeting of such holders for any purpose, nor shall they be entitled to participate in any meeting of the holders of the Common Stock.
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(b) So long as any shares of Series A Preferred Stock remain outstanding, the affirmative vote or consent of the holders of at least two-thirds of all of the shares of Series A Preferred Stock at the time outstanding, voting separately as a class, shall be required to:
(1) authorize, create, or issue, or increase the authorized amount of, shares of any class or series of capital stock ranking senior to the Series A Preferred Stock with respect to payment of dividends or the distribution of assets upon liquidation, dissolution, or winding up of the Corporation, or issue any obligation or security convertible into or exchangeable for, or evidencing the right to purchase, any such class or series of the Corporation’s capital stock;
(2) amend, alter, or repeal the provisions of the Articles of Incorporation (including this Certificate of Designation), whether by merger, consolidation, or otherwise, so as to materially and adversely affect the powers, preferences, privileges, or rights of Series A Preferred Stock, taken as a whole; provided, however, that any amendment to authorize, create, or issue, or increase the authorized amount of, any Series A Junior Securities or any Series A Parity Securities, or any securities convertible into or exchangeable for Series A Junior Securities or Series A Parity Securities will not be deemed to materially and adversely affect the powers, preferences, privileges, or rights of Series A Preferred Stock; or
(3) complete a binding share exchange or reclassification involving the Series A Preferred Stock, or complete the sale, conveyance, exchange, or transfer of all or substantially all of the assets or business of the Corporation or consolidate with or merge into any other corporation, unless, in any case, the shares of Series A Preferred Stock outstanding at the time of such consolidation or merger or sale either (i) remain outstanding or (ii) are converted into or exchanged for preference securities of the surviving entity or any entity controlling the surviving entity having such rights, preferences, privileges, and powers (including voting powers), taken as a whole, as are not materially less favorable to the holders thereof than the rights, preferences, privileges, and powers (including voting powers) of the Series A Preferred Stock, taken as a whole.
The foregoing voting provisions will not apply if, at or prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding shares of Series A Preferred Stock shall have been redeemed or called for redemption upon proper notice and sufficient funds shall have been set aside by the Corporation for the benefit of the holders of Series A Preferred Stock to effect such redemption.
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(c) If the Corporation fails to pay, or declare and set aside for payment, dividends on outstanding shares of the Series A Preferred Stock or any Series A Parity Securities having voting rights on parity with the voting rights provided to the Series A Preferred Stock (“Special Voting Preferred Stock”) for six or more Dividend Periods, whether or not consecutive (a “Nonpayment Event”), the authorized number of directors of the Corporation shall be increased by two and the holders of the Series A Preferred Stock (along with holders of any Special Voting Preferred Stock then outstanding, voting together as a class based on respective liquidation preferences), shall have the right to elect two directors (hereinafter, the “Preferred Directors” and each, a “Preferred Director”) to fill such newly created directorships; provided, however, that at no time shall the Board include more than two Preferred Directors; provided further that the election of any such Preferred Directors may not cause the Corporation to violate any corporate governance requirement of The Nasdaq Stock Market LLC (or any other exchange on which the Corporation’s securities may be listed). At the request of any holder of Series A Preferred Stock, a special meeting of the holders of Series A Preferred Stock and any such Special Voting Preferred Stock shall be called by the Corporation for the election of the Preferred Directors; provided, however, that if such request for special meeting is received less than 90 days before the date fixed for the next annual or special meeting of the Corporation’s shareholders, such election of Preferred Directors shall be held at such next annual or special meeting of shareholders), followed by such election of such Preferred Directors at each subsequent annual meeting of shareholders until full dividends have been declared and paid (or declared and a sum sufficient for the payment of such dividends has been set aside for payment) on the Series A Preferred Stock for four Dividend Periods after the Nonpayment Event, except as provided by law, subject to re-vesting in the event of each and every subsequent Nonpayment Event.
When dividends have been paid in full (or declared and a sum sufficient for the payment of such dividends has been set aside for payment) on the Series A Preferred Stock for at least four Dividend Periods after a Nonpayment Event, then the right of the holders of Series A Preferred Stock and any Special Voting Preferred Stock to elect the Preferred Directors shall cease (but subject in any case to re-vesting of such voting rights in the case of each and every subsequent Nonpayment Event), and the Preferred Directors shall cease to be qualified as directors, the term of office of all Preferred Directors then in office shall terminate immediately, and the Corporation’s authorized number of directors shall be automatically reduced by the number of Preferred Directors elected pursuant hereto. Any Preferred Director may be removed at any time, with or without cause, by a majority of the outstanding shares of Series A Preferred Stock (along with holders of any Special Voting Preferred Stock then outstanding, voting together as a class based on respective liquidation preferences). If the office of any Preferred Director becomes vacant for any reason other than removal from office as aforesaid, the remaining Preferred Director may choose, by means of written consent, a successor who shall hold office for the unexpired term in respect of which such vacancy occurred, or if none remains in office, by a vote of the holders of a majority of the outstanding shares of Series A Preferred Stock (along with holders of any Special Voting Preferred Stock then outstanding, voting together as a class based on respective liquidation preferences); provided that the filling of any such vacancy may not cause the Corporation to violate any corporate governance requirement of The Nasdaq Stock Market LLC (or any other exchange on which the Corporation’s securities may be listed). The Preferred Directors shall each be entitled to one vote per director on any matter on which directors of the Corporation are entitled to vote.
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(d) The rules and procedures for calling and conducting any meeting of the holders of Series A Preferred Stock (including, without limitation, the fixing of a record date in connection therewith), the solicitation and use of proxies at such a meeting, the obtaining of written consents, and any other aspect or matter with regard to such meeting or such consents shall be governed by any rules that the Board or any duly authorized committee of the Board, in its discretion, may adopt from time to time, which rules and procedures shall conform to the requirements of the Articles of Incorporation (as then in effect), the Bylaws (as then in effect), and applicable law and the rules of any national securities exchange on which the Series A Preferred Stock is listed or traded at the time.
8. Conversion Rights. The holders of shares of Series A Preferred Stock shall not have any rights to convert such shares into shares of any other class or series of securities of the Corporation.
9. Preemptive Rights. The holders of shares of Series A Preferred Stock will have no preemptive rights with respect to any shares of the Corporation’s capital stock or any of its other securities convertible into or carrying rights or options to purchase or otherwise acquire any such capital stock or any interest therein, regardless of how any such securities may be designated, issued, or granted.
10. Certificates. Shares of the Series A Preferred Stock may be represented in the form of uncertificated or certificated shares; provided however, that any holder of Series A Preferred Stock shall be entitled to have a certificate for shares of Series A Preferred Stock signed by, or in the name of, the Corporation, certifying the number of shares owned by such holder.
11. Transfer Agent. The Corporation shall appoint a transfer agent for the Series A Preferred Stock. The Corporation may, in its sole discretion, remove the transfer agent in accordance with the agreement between the Corporation and the transfer agent; provided that the Corporation shall appoint a successor transfer agent who shall accept such appointment prior to the effectiveness of such removal.
12. Registrar. The Corporation shall appoint a registrar for the Series A Preferred Stock. The Corporation may, in its sole discretion, remove the registrar in accordance with the agreement between the Corporation and the registrar; provided that the Corporation shall appoint a successor registrar who shall accept such appointment prior to the effectiveness of such removal.
13. No Other Rights. The shares of Series A Preferred Stock shall not have any rights, preferences, privileges, or voting powers or relative, participating, optional, or other special rights, or qualifications, limitations, or restrictions thereof, other than as set forth herein or in the Articles of Incorporation, or as provided by applicable law.
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IN AFFIRMATION THEREOF, the facts stated above are true and correct:
(The undersigned understands that false statements made in this filing are subject to the penalties provided under §575.040, RSMo.)
| UMB FINANCIAL CORPORATION | ||
| By: | /s/ Ram Shankar | |
| Name: Ram Shankar | ||
| Title: Chief Financial Officer | ||
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Exhibit 99.1
//FOR IMMEDIATE RELEASE//
UMB Financial Corporation Completes Acquisition
of Heartland Financial USA, Inc.
UMB closes largest acquisition in 111-year history, increasing total assets by more than 30%
KANSAS CITY, Mo. (Jan. 31, 2025) – UMB Financial Corporation (Nasdaq: UMBF) announced that it will close the acquisition of Heartland Financial USA, Inc. (Nasdaq: HTLF) today, effective at 11:59 p.m. As a result of this successful completion, UMB’s asset size will increase to approximately $68 billion (based on assets as of Dec. 31, 2024), expanding its geographic footprint from eight to 13 states. The acquisition also increases UMB’s private wealth management AUM/AUA by 32% and significantly expands its retail deposit base.
“Today is a monumental day for our organization as we welcome HTLF customers and associates to UMB,” said Mariner Kemper, chairman and chief executive officer of UMB Financial Corporation. “As the largest acquisition in our company’s history, this new chapter presents a tremendous opportunity to expand our core services and capabilities, while also introducing new communities to our geographic footprint. We are ready and excited to help our customers, existing and new, meet their financial goals.”
For more than a century, UMB has supported customers through delivering comprehensive banking services and asset management across its eight-state footprint and nationally. This acquisition will expand UMB’s banking presence, adding California, Iowa, Minnesota, New Mexico and Wisconsin to the existing footprint, which includes Missouri, Arizona, Colorado, Illinois, Kansas, Nebraska, Oklahoma and Texas. In addition, 104 new branches and 115 ATMs will be added to UMB’s current 93 banking centers and 235 ATMs, dramatically expanding the network for current and new customers.
HTLF, which currently does business as Minnesota Bank & Trust, Wisconsin Bank & Trust, Dubuque Bank & Trust, Illinois Bank & Trust, Bank of Blue Valley, Citywide Banks, Premier Valley Bank, Arizona Bank & Trust, New Mexico Bank & Trust, First Bank & Trust, HTLF Food & AgriBusiness, HTLF Specialized Industries, and HTLF Retirement Plan Services, will operate as a division of UMB prior to the banking centers and systems conversions, which is anticipated to occur in the fourth quarter of 2025, after which time the divisions will operate as UMB. Until that time, customers should continue to bank as they normally do.
UMB is deeply invested in the communities in which it does business, providing support through products, services, and investments as well as corporate and associate giving. UMB is committed to being a strong financial steward and is finalizing its Community Benefits Agreement, which will detail how it will provide support throughout its newly expanded footprint. Specific details will be shared when the plan is finalized.
As previously announced, five HTLF board members now join the UMB Financial Corporation Board of Directors: John Schmidt, Bradley (Brad) Henderson, Jennifer (Jenny) Hopkins, Margaret Lazo and Susan Murphy. With these additions, the UMBF Board grows to 16 board members.
“As we look to the future, we remain excited and true to who we are as an entrepreneurial-minded organization rooted in a more than 111-year history of steadfast commitment to our customers, associates and the communities we serve,” said Kemper.
About UMB
UMB Financial Corporation (Nasdaq: UMBF) is a financial services company headquartered in Kansas City, Missouri. UMB offers commercial banking, which includes comprehensive deposit, lending, investment and retirement plan services; personal banking, which includes comprehensive deposit, lending, wealth management and financial planning services; and institutional banking, which includes asset servicing, corporate trust solutions, investment banking and healthcare services. UMB operates branches throughout Missouri, Arizona, California, Colorado, Iowa, Kansas, Illinois, Minnesota, Nebraska, New Mexico, Oklahoma, Texas, and Wisconsin. As the company’s reach continues to grow, it also serves business clients nationwide and institutional clients in several countries. For more information, visit UMB.com, UMB Blog, UMB Facebook and UMB LinkedIn.
UMB Media Contact:
Stephanie Hollander
Stephanie.Hollander@umb.com
816.729.1027
Cautionary Note Regarding Forward Looking Statements
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder, which statements involve inherent risks and uncertainties. Any statements about UMB’s, HTLF’s or the combined company’s plans, objectives, expectations, strategies, beliefs, or future performance or events constitute forward-looking statements. Such statements are generally identified as those that include words or phrases such as “believes,” “expects,” “anticipates,” “plans,” “trend,” “objective,” “continue,” or similar expressions or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “may,” or similar expressions. Forward-looking statements involve known and unknown risks, uncertainties, assumptions, estimates, and other important factors that change over time and could cause actual results to differ materially from any results, performance, or events expressed or implied by such forward-looking statements. Such forward-looking statements include but are not limited to statements about the benefits of the previously announced business combination transaction between UMB and HTLF (the “Transaction”), including future financial and operating results, the combined company’s plans, objectives, expectations and intentions, and other statements that are not historical facts.
These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. In addition to factors previously disclosed in UMB’s and HTLF’s reports filed with the United States Securities and Exchange Commission (the “SEC”), the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: the risk that the benefits from the Transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in, or problems arising from, general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which UMB and HTLF operate; the ability to promptly and effectively integrate the businesses of UMB and HTLF; the possibility that the Transaction may be more expensive to complete than anticipated, including as a result of unexpected factors or events; reputational risk and potential adverse reactions of UMB’s or HTLF’s customers, employees or other business partners, including those resulting from the completion of the Transaction; the dilution caused by UMB’s issuance of additional shares of its capital stock in connection with the Transaction; and the diversion of management’s attention and time from ongoing business operations and opportunities on merger-related matters.
These factors are not necessarily all of the factors that could cause UMB’s, HTLF’s or the combined company’s actual results, performance, or achievements to differ materially from those expressed in or implied by any of the forward-looking statements. Other factors, including unknown or unpredictable factors, also could harm UMB’s, HTLF’s or the combined company’s results.
All forward-looking statements attributable to UMB, HTLF, or the combined company, or persons acting on UMB’s or HTLF’s behalf, are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements speak only as of the date they are made and UMB and HTLF do not undertake or assume any obligation to update publicly any of these statements to reflect actual results, new information or future events, changes in assumptions, or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If UMB or HTLF update one or more forward-looking statements, no inference should be drawn that UMB or HTLF will make additional updates with respect to those or other forward-looking statements. Further information regarding UMB, HTLF and factors which could affect the forward-looking statements contained herein can be found in UMB’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (and which is available at https://www.sec.gov/ix?doc=/Archives/edgar/data/0000101382/000095017024018456/umbf-20231231.htm) and its subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and its other filings with the SEC, in HTLF’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (and which is available at https://www.sec.gov/ix?doc=/Archives/edgar/data/920112/000092011224000026/htlf-20231231.htm), and its subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and its other filings with the SEC, and the risks described in UMB’s definitive joint proxy statement/prospectus related to the Transaction, which was filed with the SEC on July 5, 2024 (and which is available at https://www.sec.gov/Archives/edgar/data/101382/000119312524175612/d771152d424b3.htm).
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