Current Report Filing (8-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8‑K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of report (Date of earliest event reported): December 28, 2015

Talmer Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Michigan (State or other jurisdiction of incorporation)	001-36308 (Commission File Number)	61-1511150 (IRS Employer Identification No.)

2301 West Big Beaver Rd., Suite 525 Troy, Michigan (Address of principal executive offices)	48084 (Zip Code)

[phone]

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 1.02.  Termination of a Material Definitive Agreement.

    

On December 28, 2015, Talmer Bancorp, Inc. (the “Company” ) issued a press release announcing that its wholly-owned subsidiary, Talmer Bank and Trust (the “Bank”), entered into an early termination agreement with the Federal Deposit Insurance Corporation (“FDIC”) that terminates the Bank’s loss share agreements with the FDIC. Under the terms of the termination agreement, the Bank made a payment of $11.7 million to the FDIC as consideration for the early termination of the loss share agreements. These loss share agreements were entered into by the Bank with the FDIC in 2010 and 2011 in connection with the Bank’s acquisition of assets and assumption of liabilities of four failed banks from the FDIC, as receiver. Certain terms and conditions of the loss share agreements are described under “Business-Loss Share Resolution” in our Annual Report on Form 10-K filed with the SEC on March 26, 2015, which description is incorporated herein by reference. All rights and obligations of the Bank and the FDIC under the loss share agreements have been eliminated under the termination agreement. The press release is filed as Exhibit 99.1 to this report and is incorporated herein by reference.

The foregoing description of the termination agreement does not purport to be complete and is qualified in its entirety by reference to the termination agreement, which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.

In April 2010, as consideration for the Bank’s acquisition of CF Bancorp from the FDIC, as receiver, the Company issued warrants to the FDIC to purchase 390,000 shares of the Company’s Class B Non-Voting Common Stock (the “Warrant”). The Warrant was exercisable for ten years following the date of issuance and had an exercise price of $6.00 per share. Under the terms of the termination agreement discussed above, the parties also agreed to terminate the Warrant. Accordingly, also on December 28, 2015, the Company and the FDIC entered into a warrant termination agreement.

Under the terms of the warrant termination agreement, the Company made a payment of $4.6 million to the FDIC as consideration for terminating the Warrant. The foregoing description of the warrant termination agreement does not purport to be complete and is qualified in its entirety by reference to the warrant termination agreement, which is filed as Exhibit 10.2 hereto and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d)     Exhibits.

Exhibit No.    Description                                            

10.1

Termination Agreement among the Federal Deposit Insurance Corporation, as Receiver of CF Bancorp, Port Huron, Michigan, the Federal Deposit Insurance Corporation, as Receiver of First Banking Center, Burlington, Wisconsin, the Federal Deposit Insurance Corporation, as Receiver of Peoples State Bank, Hamtramck, Michigan, and the Federal Deposit Insurance Corporation, as Receiver of Community Central Bank, Mount Clemens, Michigan, the Federal Deposit Insurance Corporation and Talmer Bank and Trust dated as of December 28, 2015

10.2	Warrant Termination Agreement dated December 28, 2015 entered into between the Federal Deposit Insurance Corporation and Talmer Bancorp, Inc.

99.1	Press Release dated December 28, 2015

    

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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.

		TALMER BANCORP, INC.

Dated: December 28, 2015		By:    /s/ David T. Provost
		David T. Provost
		Chief Executive Officer

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WARRANT TERMINATION AGTtE~Iki~NT THIS WARRANT TERMINATION AGREEMENT (this "A rah erxient") is made 'and entered into as of this 28th day of December, 201 S, by anal between the Federal Deposit Insurat3ce Corporation (the "FDIC") ar~d Talmer Bancorp, Inc., a Michigan corporation {the "Compar~X"), the holding company far Talmer Banlc and Trust, a Michigan state-chartered bank (the "Bank"). ~L~CP~'ALS WI-iEREAS, in connection with the Bank's acquisition of C~ Bancorp from the FDIC, as receiver, the Company issued warrants to purchase 390,000 shares o~ the Company's Class B Non-Voting Common Stock (the "Common Shares") to the ~`DIC pursuant to a Warrant to Purchase Common Sfiocic of First Michigan Bancorp, Inc. dated Aprii 30, 2010 (the "Warrant Agreement"); WHEREAS, the I'DIC has accepted tha Bank's offer for the early termination of the Bank's loss share agree[nents with respect to the Banlc's acquisitio~x of CF Bancorp, fort Huron, Michigan, First Banking Center, Burl'sngton, Wisconsin, Peoples State Bank, Hamtramck, Michigan, and Community Centrat Bank, Mount Clemens, Michigan from the FDIC, as receiver (the "Termination Offer•"), pursuant to a termination agreement entered into between the Banlc, the FDIC, as receiver, of tl~e above-named institutions and the FDIC; WHEREAS, under tk~e terms of Che Termination Offer, the parties desire to terminate the Warrant Agx•eement on the terns and conditions set forth in this Agreement {the "Warrant Termination Transaction"); WHEREAS, the FDIC has not assigned, transferred or otherwise disposed of any right, title or interest in or to the Warrant Agreement or exercised the right to purchase any of the Common Shares pursua~~t to the Warrant Agreement. NOW, THERERORE, in consideration o£ the premises and the agreements set forth below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby aclrnowledged, the parties agree as fol{ows: ARTICLE I PAYMENT ANll TEI2MTNATION 1. Payment of Termination Amount. The closing of the transactions contemplated hereby shall take plane concurrently with the executioza hereof (the "Closing Date"). On the Closing Date, the Company shall pay or cause to be paid to the FDIC by vc~ire transfer in immediately available funds $4,563,000 (the "Termination Amount"). 2. Terirninatian of Warrant Agreement, F,ffective as of the Closing Date and upon payment of the Termination Amount, the Warra~lC Agteeznei~t shall be terminated and cancelled in its entirety and shall be null and void with no further force or effect, and no pa~~ty hereto ar thereto shall have any further rights, duties or obligations under th.e Wazrant Agreement.

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AR.T~CL~, iI REPRESENTATIONS AND WA12R~1.N'~IES OF THE FDIC Tlie FDIC hereby represents and warrants to the Company as of the Closing Dale, ai d sr,~ch representations and wart•anties shall survive the Closing Date, t}aat: 1. Valid and Enforceable Agreement; Authorization, This Agreement has been duly executed and delivered by the FDIC and, assuming the due execution and delivery of this Agreement by all parties thereto, constitutes a legal, valid and binding obligation of the FDIC, enforceable a~aii~st the FDIC in accordance ~c7✓ith its terms, except as limiter! by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other simitat• laws of general applioation affecting enforcement of creditors' rights generally and general principles of equity. The FDIC has duly Taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement and the transactions contemplated hereby. 2, Ownership. The FDIC holds good and valid title to the Warra~~t Agreement free and clear of any liens, charges, claims, pledges, security interests or other encumbrances, whether arising by agreement, operation of lar~v or otherwise, and there are no restrictions on the FDIC°s right to terminate the Warrant Agreement, and the FDIC has ~Zot exercised the right to purchase any of the Common Shares pursuant to the Warrant Agreernetlt. ARTICLE TII REPRESENTATIONS AND WARRANTIES OF THE COMPANY The Company hereby represents and warrants to the FDIC as of the Closing Date, and such representations and wa~•ranties shall survive the Closing Date, that; 1. Valid and Enforceable A~reementi Authorization. This Agreement has been duly executed and delivered by the Company and, assuming the due execution and delivery of this Agreement by the FDIC, constitutes a Legal, valid and binding obligation of the Company, enforceable against the Company in aceordai~ce with its term, except as limited by appticable bankruptcy, insolvency, reorganization, mar~torium, fraudulent conveyance and other similar laws of general applicAtion affecting enforcement of creditors' rights generally and general principles of equity. The Company has duly taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement and the transactions contemplated hereby. ARTICLE ~V MISCELLANEOUS PROVISIUNS 1. Entire Agreement. This Agreement embodies the entire agreement and understanding of the parties hereto with respect fa the subject matter hereof and supersedes all prior written and contemporaneous oral agreements, represe~~ta.tions, warranties, contracts, correspondence, conversations, memoranda and unders~indings between or among tk~e parties or

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any of their agents, representatives or affiliates relative to such subject matter, including, without limitation, any term sheets, emails or draft documents. 2, Assignment; Binding A~eeement. AlI terms and conditions of this Agreement shall be binding on the partres hereto and their successors and assigns. 3. Counterparts. This Agreement may be executed in counterparts, each. of which shall be deemed an original, but both of whioh taken together shall constitute one and the same instrument. Any counterpart or other signature hereupon delivered by facsimile shall be deerr►ed for alf purposes as constituting good and valid execution azld delivery of this Agreement by such Pa~Y• 4. Governtn Lg ,aw. The validity and ef~ecY of fhis Agreement shall be construed and enforced in accordance with, and the rights of the pac~ties shall be governed by, the federal Iaw of the United States, and i~~ the absence of controlling federal law, in accordance with the law of the State of Michiga~i. 5. No Third Paz~ty Beneficiaries ox Other Ria,.hts. Nothing herein shall grant to or create in any person not a party hereto any right to any benefits hcre~.tnder, and na such party shall be entitled to sue any party to this Agreement with respect thereto. 6. Waiver; Consent. This Agreement and its terms may not be changed, atne~ided, waived, germinated, augmented, rescinded or discharged (other than in accordance wrth its terms), in whole ar in part, except by a writing executed by the parties hereto. 7. further Assurances. Each party hereto hereby agrees to execute and delive►•, or cause to b~ executed and delivered, such othea~ documents, instruments and agreements, and take such other actions consistent with the terms of this Agreement as ►nay be reasonably necessary in order to accomplish the transactions cont~znplated by this Agreement. 8. Costs and Expenses. Each patty hereto shalt each pay its own respective costs and expenses incurred in canzlection with the negotiation, preparation, execution and performance of Chis Agreement. . 9. Severability. If any one ox more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, Iegality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. [Si~nadure Page Follows)

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IN V~/ITNESS WT~iERE~F, each of ttae parties hereto has caused this Warrant Termination Agreement to be executed as of the date first above written. TALM~R B CDR , IN'C. By: Name: 0.►tt '~V'b 0~-~" Title: Cat 1 ~' ~ -G X e G.u~¢-~ v~ C~.~-i C ~ FEDERAL DEPOSIT INSURANCE CORPORATION Name: C ~. ~ car"Title: ~ ~~ ~ ~~ ~ ~~

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Exhibit 99.1

For Immediate Release                                For further information contact:

Shellie Maitre

Talmer Bank and Trust

248-498-2858

[e-mail]

TALMER BANCORP, INC. ANNOUNCES EARLY TERMINATION OF

FDIC LOSS SHARE AGREEMENTS AND WARRANT

Troy, MI December 28, 2015 --- Talmer Bancorp, Inc. (“Company”) (Nasdaq: TLMR) today announced that its wholly-owned bank subsidiary, Talmer Bank and Trust (“Talmer”), has entered into an agreement with the Federal Deposit Insurance Corporation (the “FDIC”) that terminates Talmer’s loss share agreements with the FDIC. Talmer entered into the loss share agreements with the FDIC in 2010 and 2011 in connection with its acquisition of assets and assumption of liabilities of four failed banks from the FDIC, as receiver. The Company and the FDIC also agreed to terminate the warrant to purchase 390,000 shares of Talmer’s common stock issued to the FDIC in connection with its first acquisition from the FDIC. Under the early termination agreement, Talmer paid $11.7 million to the FDIC as consideration for the early termination of the loss share agreements, and under the warrant termination agreement, the Company paid $4.6 million to the FDIC as consideration to terminate all outstanding warrants.

The early loss share termination and warrant termination will result in a one-time after-tax charge of approximately $13.9 million, or $0.20 per diluted average share, during the fourth quarter of 2015, resulting from the write-off of the remaining FDIC indemnification asset and FDIC receivable, totaling $33.2 million at September 30, 2015, the $16.2 million total payment to the FDIC, partially offset by the release of both the FDIC warrant payable and FDIC clawback liability, totaling $31.8 million at September 30, 2015. In addition, the early termination eliminates further negative accretion on the FDIC indemnification asset, which totaled $26.4 million for the year ended December 31, 2014 and $22.2 million for the nine months ended September 30, 2015. As a result of the settlement being completed in the fourth quarter, there will be no negative accretion of FDIC indemnification asset reflected in our income statement for the fourth quarter of 2015. The third quarter negative accretion on the FDIC indemnification asset was $4.4 million. Additionally, Talmer will reclassify covered loans, which had a balance of $186.6 million as of September 30, 2015, to uncovered loans, and will reclassify covered other real estate, which had a balance of $5.6 million as of September 30, 2015, to uncovered other real estate.

“We are pleased to have reached an agreement with the FDIC that is a mutually beneficial conclusion to our partnership with the FDIC with respect to our failed bank acquisitions. We view this transaction as a sound financial decision, as our one-time termination expenses will be offset by the elimination of both future negative accretion of the FDIC indemnification asset and loss share administration costs, with an anticipated tangible book value earn-back period of approximately five quarters and the elimination of outstanding warrants from our capital structure. Other additional benefits of loss share termination will include the greater financial transparency and comparability to our peers,” commented David T. Provost, President and Chief Executive Officer of Talmer Bancorp.

The termination of the FDIC loss share agreements has no impact on the yield of the formerly covered loans, which have now been reclassified as uncovered loans. All rights and obligations of the parties under the loss share

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agreements will be eliminated under the early termination agreement. Talmer will now recognize entirely all future charge-offs, recoveries, gains, losses and expenses related to the former covered assets, as the FDIC will no longer be sharing in such amounts. While Talmer expects that its future earnings will be positively impacted by recovering amounts greater than the carrying value of the previously covered assets, such earnings could also be negatively impacted by the recognition of losses and expenses that would have otherwise been covered under the loss share agreements.

About Talmer Bancorp, Inc.

Headquartered in Troy, Michigan, Talmer Bancorp, Inc. is the holding company for Talmer Bank and Trust. Talmer Bank and Trust operates through branches and lending offices in Michigan, Ohio, Illinois, Indiana, Maryland, and Nevada, and offers a full suite of commercial and retail banking, mortgage banking, wealth management and trust services to small and medium-sized businesses and individuals.

Cautionary Note Regarding Forward-Looking Statements

Some of the statements in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “intend,” “plan,” “seek,” “believe,” “expect,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include statements regarding our belief that this transaction is a prudent use of our capital, our expected earn back period and future earnings performance related to the termination of loss share agreements, including our expectation that future earnings will be positively impacted by recovering amounts greater than the carrying value of the previously covered assets. These forward-looking statements are subject to risks, uncertainties and other factors, as well as additional risks and uncertainties contained in the “Risk Factors” and the forward-looking statement disclosure contained in the Company’s Annual Report on Form 10-K for the most recently ended fiscal year, any of which could cause actual results to differ materially from future results expressed or implied by those forward-looking statements. All forward-looking statements speak only as of the date of this press release. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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