Summary
FIRST CITIZENS BANCSHARES INC /DE/ (FCNCA) filed an 8-K on March 12, 2020, to announce the issuance and sale of 13,800,000 depositary shares. Each depositary share represents a 1/40th interest in a share of 5.375% Non-Cumulative Perpetual Preferred Stock, Series A. This offering effectively raises capital through preferred equity, with each depositary share having a liquidation preference of $25, equivalent to $1,000 per share of Series A Preferred Stock. The filing also details the terms and restrictions associated with this preferred stock. Notably, the ability of FCNCA to pay dividends on its common stock or any other junior stock, or to repurchase such stock, is restricted if the company fails to declare dividends on the Series A Preferred Stock for the most recent dividend period. This structure prioritizes the preferred shareholders' dividend rights and provides a layer of protection for them.
Key Highlights
- 1FCNCA issued and sold 13,800,000 depositary shares representing a 5.375% Non-Cumulative Perpetual Preferred Stock, Series A.
- 2Each depositary share represents a 1/40th interest in a share of Series A Preferred Stock, with a $25 liquidation preference per depositary share ($1,000 per preferred stock share).
- 3The issuance was conducted under a previously disclosed Underwriting Agreement.
- 4A Certificate of Designation was filed, establishing the terms, preferences, and restrictions of the Series A Preferred Stock.
- 5Holders of depositary shares are entitled to proportional rights of the Series A Preferred Stock, including dividend, voting, redemption, and liquidation rights.
- 6Restrictions are in place on FCNCA's ability to pay common stock dividends or repurchase junior stock if Series A Preferred dividends are not paid.
- 7The company entered into a Deposit Agreement with Broadridge Corporate Issuer Solutions, Inc.