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Item 1.01
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Entry into a Material Definitive Agreement.
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On September 23, 2019, Customers Bancorp, Inc. (the “Company”) completed a public offering of $25,000,000 in aggregate principal amount of its 4.50% senior
notes due 2024 (the “Senior Notes”) pursuant to an Underwriting Agreement (the “Underwriting Agreement”), dated as of September 23, 2019, among the Company, Customers Bank, the Company’s wholly owned banking subsidiary (the “Bank”) and Deutsche
Bank Securities Inc., as representative of the underwriters (the “Underwriters”) named therein. The price to the purchasers was 100% of the principal amount of the Senior Notes representing a yield-to-maturity of 4.50%.
The Company estimates that the net proceeds from the Offering, after deducting underwriting discounts and estimated expenses, will be approximately
$24,400,000. The Company expects to use the net proceeds for general corporate purposes, which may include working capital and the funding of organic growth at the Bank. However, the Company also may use a portion of the net proceeds to (i) redeem
shares of its outstanding preferred stock once they become redeemable, (ii) repurchase shares of its common stock, or (iii) fund, in whole or in part, possible future acquisitions of other financial services businesses.
The Company and the Bank made certain customary representations, warranties and covenants in the Underwriting Agreement concerning the Company and the Bank
and the registration statement, prospectus, prospectus supplement and other documents and filings relating to the offering of the Senior Notes. In addition, the Company and the Bank have agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended. The foregoing summary description of the Underwriting Agreement is qualified in its entirety by reference to that agreement, a copy of which is filed as Exhibit 1.1 to
this Current Report on Form 8-K and is incorporated herein by reference.
The Company issued the Senior Notes pursuant to an Indenture dated July 30, 2013 (the “Base Indenture”) entered into with Wilmington Trust, National
Association, as trustee (the “Trustee”), as supplemented by a Third Supplemental Indenture relating to the Senior Notes between the Company and the Trustee dated September 25, 2019 (the “Supplemental Indenture” and collectively with the Base
Indenture, the “Indenture”).
The Senior Notes are the senior unsecured obligations of the Company and will rank equally with all of the Company’s existing and future unsecured senior
indebtedness, will be effectively subordinated to any of the Company’s secured indebtedness, structurally subordinated to the existing and future indebtedness and any preferred equity of the Company’s subsidiaries and senior in right of payment to
any of the Company’s existing or future obligations that are by their terms expressly subordinated or junior in right of payment to the Senior Notes. The Senior Notes will be obligations of Customers Bancorp, Inc. only and will not be obligations
of, and will not be guaranteed by, any of the Company's subsidiaries, including the Bank.
The Senior Notes will bear interest at a rate of 4.50% per year, payable semi-annually on March 25 and September 25 of each year, commencing on March 25,
2020. The Senior Notes will mature on September 25, 2024. The Company may, at its option, at any time on or after the date that is 30 days prior to the maturity date, redeem some or all of the Senior Notes at a redemption price equal to 100% of
the principal amount of the Senior Notes to be redeemed plus accrued and unpaid interest thereon to but excluding the date of redemption. The Senior Notes will not be subject to repayment at the option of the holder at any time prior to maturity
and will not be entitled to any sinking fund.
The Indenture contains several covenants which,
among other things, limit the Company’s and any material subsidiary’s (as defined below) ability to sell or otherwise dispose of certain of such material subsidiary’s equity securities or incur debt secured by certain of such material
subsidiary’s equity securities, and, in addition, limits such material subsidiary’s ability to issue certain of its equity securities and its ability to merge, consolidate or take similar actions. A “material subsidiary” means the Bank or any
successor thereof, or any of the Company’s subsidiaries that is a depository institution and that has consolidated assets equal to 30% or more of the Company’s consolidated assets. The Indenture also contains a number of other customary terms,
covenants and events of default. These and other provisions in the Indenture are subject to a number of exceptions, qualifications and limitations.
The foregoing summary description of the Indenture and the Senior Notes is qualified in its entirety by the terms of the Supplemental Indenture and the form of Senior Note, copies of which are filed as Exhibit 4.1 and 4.2 to this Current Report on
Form 8-K and are incorporated herein by reference.
The offering of the Senior Notes was made pursuant to the Company’s effective registration statement on Form S-3 (Registration Statement No. 333-218483)
previously filed with the Securities and Exchange Commission (the "SEC"), including the prospectus contained therein, and the preliminary prospectus supplement dated September 20, 2019 and final prospectus supplement dated September 23, 2019 filed
by the Company with the SEC relating to the offering of the Senior Notes.
A copy of the opinion of Stradley Ronon Stevens & Young, LLP relating to the Senior Notes is attached as Exhibit 5.1 hereto.