XML 42 R22.htm IDEA: XBRL DOCUMENT v3.3.0.814
Subsequent Event
9 Months Ended
Sep. 30, 2015
Subsequent Events [Abstract]  
Subsequent Event

(13)         Subsequent Event

 

On November 9, 2015, Mid Penn entered into agreements with investors to purchase $7,500,000 aggregate principal amount of its Subordinated Notes due 2025 (the “Notes”).  The Notes, when issued, will be treated as Tier 2 capital for regulatory capital purposes.  Closing of the offering is expected to occur on December 9, 2015. 

 

The Notes will bear interest at a rate of 5.15% per year for the first five years and then float at the Wall Street Journal’s Prime Rate plus 0.50%, provided that the interest rate applicable to the outstanding principal balance will at no times be less than 4.00%.  Interest will be payable quarterly in arrears on January 1, April 1, July 1 and October 1 of each year, beginning on January 1, 2016.  The Notes will mature on December 9, 2025 and are redeemable in whole or in part, without premium or penalty, at any time on or after December 9, 2020, and prior to December 9, 2025.  Additionally, Mid Penn may redeem the Notes in whole at any time, or in part from time to time, upon at least 30 days notice if:  (i) a change or prospective change in law occurs that could prevent Mid Penn from deducting interest payable on the Notes for U.S. federal income tax purposes; (ii) an event occurs that precludes the Notes from being recognized as Tier 2 capital for regulatory capital purposes; or (iii) Mid Penn becomes required to register as an investment company under the Investment Company Act of 1940, as amended, in each case at 100% of the principal amount of the subordinated notes, plus accrued and unpaid interest thereon to but excluding the date of redemption. 

 

Holders of the Notes may not accelerate the maturity of the Notes, except upon Mid Penn’s or the Bank’s bankruptcy, insolvency, liquidation, receivership or similar event.

 

Also on November 9, 2015, Mid Penn called for redemption all of its issued and outstanding shares of its Series B Preferred Stock on December 9, 2015, at a price equal to $1,024.67 per share, which is equal to $1,020.00 per share plus an amount equal to declared but unpaid dividends, if any, to the date fixed for redemption.

 

Mid Penn intends to use the proceeds from the offering of the Notes to redeem the Series B Preferred Stock with the balance available for general corporate purposes, including the redemption, if approved by the appropriate federal banking regulators, of all of its issued and outstanding SBLF Preferred Shares, which are held by the U.S. Department of Treasury and issued pursuant to its Small Business Lending Fund program.