/PRNewswire-FirstCall/ -- Independent Bank Corporation (Nasdaq: IBCP), the holding company of Independent Bank, a
-based community bank (the "Corporation"), announced it has signed an agreement with the U.S. Department of the Treasury as part of the Corporation's capital restoration plan. Under the terms of the agreement, and subject to the completion of certain closing conditions, Treasury will exchange the
of Series A Fixed Rate Cumulative Perpetual Preferred Stock it acquired pursuant to the TARP Capital Purchase Program, plus approximately
in accrued dividends on such shares, for new shares of the Corporation's Series B Fixed Rate Cumulative Mandatorily Convertible Preferred Stock with a liquidation preference equal to
plus the amount of such accrued dividends at the time of the exchange. The Corporation currently expects to complete the exchange with the Treasury within the next 30 days.
The terms of the new convertible preferred stock to be issued to the Treasury are substantially similar to the terms of the preferred stock currently held by the Treasury, except that the new preferred stock is convertible into the Corporation's common stock. The Treasury will have the right to convert the preferred stock into the Corporation's common stock at any time. In addition, the Corporation will have the right to compel conversion of the new preferred stock into shares of the Company's common stock subject to its satisfaction of the following conditions:
- the Corporation receives appropriate approvals from the Federal Reserve;
- the Corporation issues its common stock in exchange for at least $40 million aggregate original liquidation amount of the Corporation's outstanding trust preferred securities;
- the Corporation raises at least $100 million in cash proceeds from the sale of its common stock to investors, other than the Treasury; and
- the Corporation makes the anti-dilution adjustments to the new, convertible preferred stock, if any, required by the terms of such new preferred stock.
Unless the shares of new preferred stock are earlier converted, they will be convertible on a mandatory basis (subject to certain limitations) on the maturity date, which is seven years after their issuance. If the shares of new preferred stock are converted prior to the maturity date, the conversion will occur at a twenty-five percent discount from the stock liquidation value, subject to certain anti-dilution adjustments.